Could Carphone become an IPTV player?

European retailer Carphone Warehouse may be reconsidering its position following the acquisition of Tiscali UK in May.

With the £236m acquisition of the Italian ISP’s UK operation, Carphone has bought itself a technically sound IPTV platform, but analysts wonder whether that is enough to justify a foray into the TV space.

Multiplay bundles have been noted by analysts for their ARPU (average revenue per user) increasing potential and it seems plausible Carphone chief Charles Dunstone is at least considering adding IPTV to his cheap broadband and fixed line telephony offerings.

Tiscali acquired the platform from HomeChoice, a UK-based IPTV pioneer that failed to make a go of the business—a scenario that didn’t change with Tiscali in charge.

And industry analyst Ovum reckons the odds aren’t good for Carphone to make a go of the IPTV business either. The UK pay TV market is already very competitive and dominated by Sky and Virgin Media, with much of the rest mopped up by BT.

“For Carphone Warehouse to succeed it will basically have to develop a strategy that would shake up the UK TV industry as it did with the UK broadband industry, which is a much harder proposition,” said Michael Philpott, principal analyst at Ovum.

But Philpott noted that Carphone has also made public its intention to spin off TalkTalk once the financial markets pick up, which leads to the consideration of whether a triple play company would be more valuable, or would the investment required to make the TV part successful mean that Carphone Warehouse would be better to sell that part off separately now? “A tough decision, and we suspect Dunstone may edge for the latter,” said Philpott.

Read telecoms.com’s analysis of the acquisition of Tiscali UK by Carphone Warehouse