Sky is said to be in exclusive talks with Italian communications group Tiscali over its £450million UK assets.
According to reports, BSkyB is looking to take on Tiscali's UK assets to create a company that could become the UK's largest broadband provider
In a statement to the Milan stock market Tiscali said that "following Consob's [the bourse's regulator] request, Tiscali clarifies that it is currently holding talks with the BSkyB Group in relation to certain UK assets".
The Financial Times has reported today that the deal would see Sky make an offer of £450million for the 1.84million UK Tiscali broadband
Currently, the UK's largest broadband provider is BT broadband
, the second largest is Virgin Media broadband
, and analysts say that if the deal goes through, it could give Sky broadband
sufficient scale to do a wholesale deal with BT for fast broadband access, and to compete with rival Virgin for the fastest broadband speed.
Tiscali has been up for sale since February, and originally Carphone Warehouse, the UK's third largest broadband provider, was in talks to take on its UK customers, but recently pulled out.
This, said analysts, was good news for Sky, because if Carphone Warehouse had bought Tiscali, Sky would have been significantly behind the big three.
But now, they are predicting that Sky could become the biggest player in the UK broadband market by the end of the year.
© Fair Investment