Viva Tiscali: Italians take on the big battalions of broadband in Britain

Two years ago, the Italian internet service provider Tiscali boasted that, by about now, it would rival Freeserve and AOL in the UK. At the trough of the technology slump, the idea was dismissed by analysts as fanciful; the perceived wisdom was that only the biggest companies would survive.

And so it proved. The UK market is today dominated by the big three: BT, Freeserve and AOL. But Tiscali, a name barely known in the UK outside its 1.4 million customer base, is now putting up a genuine challenge to the established giants. Created by bolting together nine different companies - including World Online, Liberty Surf and Line-One - Tiscali took its boldest step last week by offering a cut-price broadband package.

Rivals rubbished it as a fudge because, while three times faster than old-fashioned dial-up internet access, it isn't as quick as "true" broadband. But at £15.99 a month, the product is aimed squarely at AOL and BT customers who pay roughly the same amount of money for unlimited dial-up internet access.

"I've been quite amused by the debate surrounding our launch. As far as I am concerned, this is broadband. We know that there is latent demand out there for this product," says Mary Turner, the chief executive of Tiscali UK, who was promoted to the post earlier this month.

The launch will herald a new push by Tiscali to become the UK's number three internet company in 12 to 18 months. If it is to meet its target then Tiscali will need to double its customer numbers from 1.4 million to nearly 3 million. And Ms Turner admits it may need to buy more companies to meet this goal. "If there is a good purchase out there, we will make it," she says.

Tiscali - which plans to launch another three products, including a wi-fi (wireless broadband) device before Christmas - also realises that it must improve its branding.

The marketing strategy will be ramped up, Ms Turner says. The company has bought a database of electronic addresses and, over the next few weeks, Tiscali will send out emails advertising its new products. "We will certainly not be spamming," she says. "All the people we will email have opted in" to receiving marketing material.

Tiscali will also promote its brand on web pages before it launches, she says, "a big advertising campaign" in around three months.

Like most internet firms operating in the UK, Tiscali has a long list of gripes about how BT has been allowed to maintain its stranglehold on the UK market. In particular, Ms Turner says that BT "has made every effort to restrict" competition, and this has prompted Tiscali to lobby MPs, the telecoms regulator, Oftel, and even the e-commerce minister, Stephen Timms.

But in a perverse sort of way, the old restrictions may just have played into Tiscali's hands. With signs of the markets now opening up to genuine competition, its push in the UK could be well timed.

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