Tessellis buys Go Internet in B2B push

The Italian company on Monday announced that, after a brief delay, it has completed all the conditions required for the deal to go ahead and will own more than 30% of Go Internet following a Reserved Capital Increase scheduled for the end of the month.

The names of the companies in question may well not be familiar. Go Internet is a business services provider, selling fibre and fixed wireless based offerings through a couple of subsidiaries in Italy. And Tessellis is still better known by its previous moniker – and extant retail brand in Italy – Tiscali.

Tiscali has been through a period of major change and transformation is still in the works, the company having made it clear that it is looking to leave behind its traditional telco roots and style itself as a digital player, much like many of its peers. The firm merged with fixed wireless operator Linkem in 2022, a move that gave rise to the establishment of the Tessellis name for the group from the start of last year.

Last month Jefferies Financial Group revealed it has taken an indirect controlling stake in Tessellis. Specifically, Jefferies has acquired the majority of voting rights in Opnet, which in turn holds 59.26% of Tessellis's share capital.

Tessellis operates under the leadership of Davide Rota, founder of Megabeam Italia, a WiFi operator that eventually became Linkem. It is now incumbent on Rota to guide Tessellis through this next phase of its development.

"This move is fundamental to the development of our B2B business," Rota said in a statement, when Tessellis first announced the Go Internet buy in November.

"We are happy to undertake this journey with the management of the Go Internet Group which has the managerial capacity and fundamental know-how to jointly develop offers and services dedicated to businesses," Rota said.

The company has not made further comment on the part the Go Internet business will play in its B2B push, but the rationale for the deal outlined late last year still stands. And Tiscali needs all the help it can get if it is to build any scale in the business services segment of the market.

None of the Tessellis companies feature in Italian regulator Agcom's latest market ranking for broadband and ultrabroadband lines in the business sector. The Tiscali brand comes in fifth place in the residential market, but its 4.2% share is not enough to trouble the big players. Tiscali has shares of 1.4% and 3.2% respectively in the FTTC and FTTH markets – comprising both consumer and business customers – but again, these figures leave it some way behind its larger rivals.

In fixed wireless access Tiscali has a much stronger presence, claiming a 19% market share as of the end of 2023. However, all is not as rosy here as it might seem. Firstly, this remains a very small market with just 2.1 million accesses in total. And secondly, that figure represents a sizeable fall of 7.8 percentage points over 12 months, which is cause for concern for the operator in a rising market.

Go Internet will not give Tessellis instant scale. Far from it. The company posted revenues of €5.1 million as of mid-2023 and earnings of around €0.6 million. This is a small outfit. But the merged company has a cohesive plan – to target the business services and public administrations market – and that at least is a step in the right direction.