Pipex pays £36m for a Bulldog and a Toucan

Pipex is aiming to boost its customer base and mobile capability with the acquisitions of Bulldog Broadband and Toucan.

Pipex has bought Bulldog's residential and small business broadband customer base and rights to the Bulldog brand in a £12m all-cash deal with C&W. In addition to this Pipex has signed a wholesale deal to use C&W's unbundled local loop network, giving it access to 800 exchanges.

Pipex has also come to an agreement to buy Toucan from IDT Telecom for £20m in cash and £4m in stock. The deal has yet to be finalised.

Bulldog has 110,000 customers - 90 per cent of whom subscribe to a broadband, voice and wholesale line rental package - and Toucan provides voice, mobile and broadband services to 185,000 customers.

The two deals will give Pipex a broadband and voice customer base of 1.14 million, with more than half of those on broadband.

Pipex CEO Mike Read told silicon.com the acquisitions are part of the company's plan to offer triple-play - voice, broadband and mobile - in the UK by the end of 2007.

He said: "Inside Toucan there is a mobile virtual network operator [MVNO] so overnight we become a mobile operator."

Read said both deals will add volume to Pipex's customer base and that the Toucan acquisition will give Pipex access to a good sales channel and a customer service centre in Sligo, Ireland.

He admitted Bulldog has had service problems in the past but said he does not envisage that to cause any more problems.

Read said: "Bulldog has provided various service level agreements and I think Bulldog is over the worst. I will very proactively manage Bulldog."

Integrating the back-office systems is expected to take around 12 months.

Chris Williams, communications expert at utility price comparison service uSwitch.com, said the Pipex acquisitions will add to the competitive nature of the market.

He said in a statement: "I think we will see more acquisitions taking place in the communications market and a number of big players will take control of the smaller providers. It will be interesting to see how this impacts on the choices available to consumers."