Carphone Warehouse purchases Tiscali

Mobile phone retailer Carphone Warehouse has purchased internet service provider Tiscali for £236 million.

In a deal that will create the UK's largest home broadband supplier, Carphone Warehouse has paid £236 million for internet service provider Tiscali.

The mobile phone retailer, which also offers broadband services through its TalkTalk brand and owns AOL UK, said the combined business would have 4.25 million subscribers.

Carphone Warehouse told the BBC that the company would eventually have a single brand, representing 25 per cent of market for home broadband services.

Its chief executive Charles Dunstone said Tiscali's fit with TalkTalk is "perfect" and described said Carphone Warehouse knows the business well.

"We very much welcome Tiscali's UK customers and staff to TalkTalk," he added. "Together we intend to continue leading the way in UK broadband."

Tiscali was close to reach commercial agreements with BSkyB earlier this year, but talks over a possible takeover collapsed.

The internet service provider has been grappling with large debts of around €600 million (£537 million) and has been under pressure from the banks to sell its UK assets.

Commenting on the deal, Mary Turner, chief executive of Tiscali UK, said it is good news for the firm's customers who will benefit from value and "award-winning" customer service.

"Internet use continues to grow very rapidly with customers expecting to enjoy an ever-increasing diversity of content," she remarked. "The enlarged TalkTalk is perfectly positioned to meet and anticipate these demands."

Last month, Carphone Warehouse confirmed its intention to demerge the TalkTalk brand and run the two firms as separately listed companies - a mobile phone retail business and a broadband provider.