BT and BSkyB Jostle at AOL UK Auction

13 June 2006

As the deadline for expressions of interest in AOL's UK arm expired yesterday (Monday), satellite broadcaster BSkyB and telecoms giant BT were favourites to emerge as front runners.

US media titan Time Warner hung a 'for sale' notice on its profitable British internet division earlier this month, following its hiring of investment bank Citigroup, also briefed to explore options for the European AOL operation [WAMN: 09-May-06].

AOL is the third largest ISP in the UK - with 2.2 million customers - after BT and recently merged cable operators NTL and Telewest.

Competition in the broadband market has become increasingly fierce as a number of cellphone companies and market-leading retail chain Carphone Warehouse offer cut-price-deals to win business [WAMN: 13-Apr-06].

AOL is reportedly seeking around £1 billion ($1.84bn; €1.46bn) for the UK service but is unlikely to achieve that figure, with £660 million seen as a more realistic offer.

However, analysts believe that an acquisition attempt by BT - which plans to offer bundled TV and internet services this autumn - could prompt a regulatory review.

News Corporation-controlled BSkyB, meanwhile, bought the broadband provider Easynet for £211m last year. It is also considering a "free" broadband service to existing satellite subscribers when it launches its new service this summer.

Data sourced from; additional content by WARC staff