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Tiscali Merges With Video Networks
By: MarkJ - 14 August, 2006 (8:50 AM)

Over the weekend Reuters has finally confirmed that Tiscali UK will merge its UK operations with privately owned Video Networks International (HomeChoice) to increase the content it provides to customers.

Video Networks, which offers TV, broadband and telephone services under the Homechoice brand, will contribute its British operations in exchange for 11.5 percent of Tiscali UK, and may increase the stake to 20 percent if profit targets are met. After three years, Tiscali will have the right to buy -- and the British company will have the right to sell -- Video Network's stake in Tiscali UK.

The agreement allows Tiscali to become a "triple play operator" in the UK -- offering broadband, telephone and television to its clients, Tiscali Chief Executive Tommaso Pompei said in a statement.

"The triple play offer in the UK will be launched by the end of the year and will be immediately followed by the launch of the service in Italy and then in the other markets," Pompei said.

Following this merger, Tiscali will be able to offer all of its clients Homechoice's library of movies, music videos and pay TV channels. Tiscali may also benefit from HomeChoice's existing unbundled broadband network; due to technical differences it is unclear whether this will be reciprocal (wed assume it would be).

Video International was among the first companies to offer TV over a broadband connection, but it has struggled to reach critical mass. Its service is available to about 2.4 million households, mostly in London, but it had only 45,000 subscribers as of June.

Typically more details will not doubt be revealed in due course.

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