Cable and Wireless has acquired the Internet Network Services Group, one of the UK's largest independent Internet service providers, for an undisclosed sum as part of a strategy to build up its IP network capacity.
INS claims to be the country's third largest ISP, based on traffic volumes and provides permanent connectivity to around 1,500 customers, including large corporates and other ISPs.
INS offers services including Web hosting, Virtual Private Networks, Extranets and Intranets and is the country's largest supplier of bandwidth to the education sector.
Cable and Wireless officials said the move would enhance the quality and range of IP services it was able to offer to customers but could supply few details about how the INS business would be integrated with its own.
A spokesman for Cable and Wireless said it was too early to say if the service would be re-branded or whether any jobs would be lost.
"I don't think there's any talk of anything at the moment - we've only just taken it over," he said.
Analysts say the move is further evidence of large scale consolidation in the volatile ISP market.
IDC research manager James Eibisch said INS had been a hotly rumoured takeover target of late.
"I've been saying for a long time that the larger ISPs are partnering closely with telcos or being acquired by telcos or becoming telcos themselves," Eibisch said. ISP and telco convergence was likely to continue as both groups attempted to stake their claim for ownership of the emerging voice over IP market.
"[Cable & Wireless] are building up their backbone business which is where they will focus more in the future," Eibisch said.
Middle tier corporate ISPs were likely to be next on the shopping list for acquisitive telcos, he added.
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