Vodafone 'planning Tiscali takeover'

The growing drive towards convergence may force Vodafone to get its chequebook out

Speculation is growing that Vodafone is preparing to buy one of the UK's fixed-line telecommunications operators.

The Sunday Telegraph reported that Vodafone has identified Tiscali as a possible takeover target, as part of a push to expand its product offering. Bulldog, Cable & Wireless's broadband ISP, is said to be another option, despite its track-record of poor customer service. Vodafone described the reports as "speculation".

Vodafone currently just offers mobile services — unlike rivals such as Orange, which is aggressively pushing a strategy where it offers both fixed-line and mobile services. With convergence such a hot issue in today's telecoms market, Vodafone is under growing pressure to become more than just a mobile player.

Last month, some analysts argued that the company should even consider bidding for BT.

The mobile operator has been conducting a major strategic review of its future over recent months, and is expected to reveal its conclusion next month. An acquisition of a fixed-line operator would help Vodafone to widen its product range.

However, it could also decide to simply buy and resell wholesale fixed-line services, or even move into the fixed broadband market itself through local-loop unbundling.