Reasons behind a BT move for Pipex

Networks and customers are a prized possession: Cable and Wireless bought out Bulldog broadband, Sky swallowed Easynet last October, Telewest and NTL came together in a not-too-surprising merger.

Now, rumour has it, the ex-monopoly that is British Telecom is set to grab broadband ISP Pipex. The proposed reason behind a deal is that Pipex is one of the two UK operators to possess a license to develop WiMAX networks.

At £350m, this may seem like a bargain especially since Pipex, which acquired Nildram and Freedom2surf last October, is one of the better Internet Service Providers out there and also one of the top five biggies with nearly 300,000 customers.

The purchase would not only mean a welcome injection of customers to British Telecom but would also cut out potential competition for the last mile connection.

This leaves Hong-Kong based PCCW, which operates Now.com, as the only independent WiMAX operator. Now.com has neither the clout nor the financial muscle to take on British Telecom in this fight, although a potential takeover cannot be ruled out.

WiMax is set to become the more viable alternative to wi-fi with Intel and many other vendors on the brink of releasing a flood of products in 2006. Broadband access can be maintained at distances of up to 50 km for fixed stations and 15 km for mobile ones.