Demon Internet, the UK's largest independent ISP, is seeking a strategic partner in the telecoms industry to catapult it into the next millennium.
The announcement prompted speculation that Orange and Deutsche Telekom were both interested.
Cliff Stanford, Demon's managing director, confirmed the company was looking for a partner for its "next stage of development". He added: "We are entering a new era for ISPs in Europe and therefore it is imperative that Demon has the right strategic partner to take advantage of the growth in the market and the forthcoming liberalisation in European telecoms."
It is expected that the partner will take a small stake in Demon, helping finance a major marketing initiative in Europe. Although Demon officials would not confirm this, it is well known the company is planning to expand into Europe.
Giles Donovan, business development manager at ISP Net Benefit, said Demon's move heralded a new trend. "There have been rumours that BT will be starting an 0800 (freefone) scheme for the Internet next year. ISPs are going to have to ally themselves with the Telcos. Those that don't are either too small or not ambitious."
Ben Knox, managing director of London ISP Direct Connection, is undecided on whether such partnerships are a good idea. He said: "On the one hand there are the cultural differences, but on the other it could cause problems for the smaller ISPs as they won't be able to match the special deals offered by the bigger companies."
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