Italian controlled ISP Tiscali staggered under another blow today when its accountants refused to sign off on the final 2008 numbers. When you tally up all the things that are going wrong for Tiscali, it looks pretty grim. They are desperately trying to refinance debt amid this economic storm, and have been trying to sell off their UK division. But nobody is willing to pay the $500-600M they want or simply need for it, a sale to BSkyeB having already fallen through. Refinancing right now is all but impossible, and you know it's not going well when interest payments get suspended. Banks don't make standstill agreements unless the alternatives are far worse. We've seen this story a few times already this year at Nortel and Charter, will Tiscali be the next victim of the recession?
But many on this side of the pond don't know anything about Tiscali other than that it is an ISP and sounds Italian, so it's time for a quick summary. They came out of the liberalization of the Italian telecom sector back in the late 90s, and grew rapidly as an alternative ISP across the continent. At one time they were in some 15 markets - offering DSL and other services often over the top of other people's networks. But to get that big they took on too much debt and the margins just weren't there. So for the past few years they have been going in exactly the opposite direction. They now only have two markets left - the UK and Italy. If they sell the UK division, they will have come full circle and will be simply an alternative Italian ISP.
They still have the Tiscali International Network [UPDATE: Ooops, I was wrong, they sold it two months ago!], which is a top-10 IP backbone in terms of size and scope according to Renesys. But as often happens, traffic doesn't necessarily translate into revenues, which according to their financial documents are below €40M annually and just a few percent of the company's total turnover for this division. One might speculate that they could sell it to help out with their debt issues, but it's just not big enough to make a difference.
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