Pipex Broadband

Pipex was the UK's first commercial internet provider, and for most of its life that mattered. It helped wire the country up to the internet in the early 1990s when almost no one else was doing it, built much of the infrastructure that still underpins the web today, and trained a generation of engineers who went on to shape the UK's broadband industry. By the time it sold its consumer broadband arm to Italian firm Tiscali in 2007, none of that history was protecting its customers from some of the worst service levels in the sector. The brand was gone within a year. The company behind it took longer to unwind.

The beginning: the UK's first commercial ISP, 1990–1995

Pipex began as The Public I.P. Exchange Ltd, founded by Peter Dawe through his Cambridge-based company Unipalm in 1990. At the time, commercial internet access did not exist in the UK. Most networks were government or academic; getting a business online meant negotiating access to systems designed for universities and research institutions. Pipex changed that. In 1992 it opened a 64 kilobit-per-second leased line [a dedicated telephone connection used to carry data at a fixed speed] to UUNET in the United States, and a separate link to JANET [the Joint Academic Network used by UK universities], becoming the first UK company to provide paid commercial internet services over both.

One of Pipex's earliest customers was Demon Internet, which used the Pipex network to deliver dial-up [a connection method using the ordinary phone line and a modem] access to consumers across the country. The BBC was another early client; Pipex's transatlantic line provided the connection that allowed www.bbc.co.uk to launch. In November 1994, Pipex's chief technical officer Keith Mitchell arranged a meeting with BT that led directly to the creation of the London Internet Exchange [LINX, the central hub where UK internet traffic is routed between different networks]. Pipex donated a network switch to get it started. That exchange still operates today and handles a substantial share of all internet traffic in the UK.

In 1994 Unipalm floated on the London Stock Exchange. In November 1995 the company was sold to American firm UUNet for £150 million, becoming UUNet/Pipex. UUNet was subsequently absorbed into WorldCom, then MCI, then Verizon. The Pipex name survived each ownership change, though its relationship to those parent companies grew increasingly distant. Eventually, the Pipex brand was bought back by a private investor, David Rickards, and Pipex Internet Ltd was reborn as an independent company.

The consumer broadband years: packages and pricing

Pipex began investing seriously in consumer broadband [internet delivered over a standard phone line at speeds far faster than dial-up] in January 2002, committing £2 million to connect 40,000 DSL [Digital Subscriber Line; the technical standard behind ADSL broadband] customers. That same year the company broke the £30 price barrier for broadband, a reduction that was noted by industry observers as a meaningful step towards making the service accessible to ordinary households.

By the mid-2000s Pipex was offering tiered packages aimed at different usage levels. Its entry-level product carried a monthly download allowance, while higher-tier plans branded as Pipex Midi carried a 15GB cap. Unlimited use was available at a premium, though what "unlimited" meant in practice was subject to a Fair Use Policy [a set of undisclosed limits that could result in your service being throttled or suspended if you downloaded too much]. When Pipex began sending warning letters in 2007 to customers it considered heavy users, it declined to tell them what usage level had triggered the concern, or what a safe level of downloading would look like. Customers who ignored two warning letters had their broadband suspended.

The company also ran a bundled home phone and broadband product under the Pipex HomeCall brand, typically priced at around £29.99 a month for broadband, line rental and some inclusive calls. Separately acquired brands Toucan and Bulldog Broadband were folded into the group in 2006; these customers were often on slightly different terms and pricing structures, which added to the confusion when billing went wrong.

A significant proportion of Pipex's network ran over BT's wholesale infrastructure. It also used local loop unbundling [a process where an internet provider installs its own equipment directly in the BT telephone exchange, cutting out BT's wholesale layer and typically improving speed and cost], and from 2006 it gained access to Cable & Wireless's unbundled network covering around 800 exchanges when it acquired the Bulldog Broadband customer base.

The acquisitions and the problems they brought

Between 2003 and 2006 Pipex grew quickly through purchase. GX Networks acquired Pipex in October 2003 and immediately renamed itself Pipex Communications plc. The group then acquired HomeCall in early 2006, followed by Bulldog Broadband from Cable & Wireless for £12 million and Toucan from IDT Telecom for £24 million in September 2006. By the end of 2006 it had 570,000 broadband customers and a total base of around 1.14 million across all services. Revenues in the broadband division had more than doubled year on year.

The growth was untidy. Each acquisition brought its own billing system, customer database, support processes and technical infrastructure. Staff and customers both found themselves navigating a patchwork of systems that had not been designed to work together. Forum threads from the period document billing errors, incorrect charges for services no longer being received, accounts that could not be closed despite repeated requests, and MAC codes [a security number used to switch broadband provider without losing service] that were withheld or incorrectly generated. A former Pipex employee, posting anonymously at the time of the Tiscali sale, noted that corporate and residential customer records shared the same database instance, and described the billing department as a source of serious ongoing problems.

The complaints were not confined to technical forums. Ofcom [the communications regulator] received a steady flow of complaints about Pipex through this period, covering everything from misleading unlimited broadband claims to problems cancelling contracts. Customers reported being told mid-contract that their upgrade to a faster service had created a new 12-month commitment they had never agreed to. Others found that calling the cancellation department produced a referral back to customer care, and calling customer care produced a referral back to cancellations.

The sale to Tiscali, 2007

Pipex put its consumer and small business broadband business up for sale in early 2007. Several potential buyers looked at the asset; most found the complexity of integrating Pipex's mixed infrastructure too expensive to be worth the price being asked. Tiscali, an Italian internet company that was itself struggling to grow its UK presence, ultimately agreed to pay £210 million for the broadband and voice division in July 2007. The deal was announced on Friday 13th July. It gave Tiscali around two million UK broadband customers in total. Reaction from existing Pipex customers was not warm. Forum posters at the time noted that Tiscali's own reputation for customer service was comparable to, or worse than, Pipex's.

The sale covered only the home broadband and voice businesses. Pipex's wireless internet division (operating under the Pipex Wireless name, and building a WiMAX [a wireless broadband technology designed to cover towns and cities without cables] network in cities including Milton Keynes) was renamed Freedom4 in October 2007. The business broadband unit became Vialtus in February 2008. The parent company, Pipex Communications plc, reverted to its original GX Networks name in March 2008. The Pipex name, having been sold to Tiscali along with the consumer business, was no longer available to any of the remaining entities.

What happened after: Tiscali, TalkTalk and beyond

Tiscali itself did not last long as an independent company. The Carphone Warehouse acquired Tiscali UK in June 2009 and migrated its customers, including former Pipex subscribers, to its TalkTalk brand in 2010. Some customers had been with Pipex, under its various names, for years; many discovered the change only when a letter arrived or when their bill changed. Several reported being charged cancellation fees they disputed, having never agreed to a contract with TalkTalk in the first place.

A further transfer followed. In early 2012 Global 4 Communications acquired a residual database of old Pipex and Bulldog customers who had not been absorbed into the mainstream TalkTalk base. Those customers were moved to Global 4's consumer subsidiary, Home Telecom, from February 2012. By that point the Pipex name had been dormant for years. The legal entity Pipex Broadband Limited was dissolved on 24 May 2012.

The other half of the story: business and wireless

The part of Pipex that is hardest to follow is the part that did not go to Tiscali. Freedom4, the former wireless division, bought both the Vialtus business broadband unit and the Daisy Group [a UK business telecoms company] in July 2009, using a reverse takeover [a transaction in which a smaller company effectively takes over a larger listed one] to bring all three under the Daisy name. That line of the Pipex family tree is today part of Daisy Communications, a business telecoms provider that remains active.

In summary

Pipex's place in the history of the UK internet is real and not in dispute. It helped connect the country, built infrastructure that still matters, and for a period in the 1990s it was genuinely one of the most important companies in British technology. What it could not do, in its later years, was turn that history into a working consumer broadband business. The acquisitions piled up faster than the systems could handle them, complaints accumulated, and the company ended up being sold to a buyer whose own track record offered customers little comfort. Most of those customers have since passed through two or three further brands; some may still be on direct successors of that original Pipex account without ever having chosen to be.