Carphone Warehouse boss considers Project Canvas deal

Dunstone had previously questioned the business sense of becoming a TV provider, but Carphone Warehouse's acquisition of Tiscali appears to have brought about a U-turn.

Following the completion of the Tiscali deal, Dunstone's firm has inherited the assets of the Tiscali TV, which provides its 50,000 customers with Freeview and video-on-demand, a small-scale equivalent of the service proposed by Project Canvas.

Dunstone, quoted in the Financial Times, said: "We might say Canvas isn't the answer and we will go and reinvigorate Tiscali TV."

Project Canvas is currently awaiting BBC Trust approval before it can go ahead. The Trust said in June that the venture's partners had not provided enough in-depth information. Partners include the BBC, ITV and BT.

Carphone Warehouse rival BT launched its own on-demand TV service in 2007, called BT Vision, but last month the venture's CEO, Dan Marks, stepped down from his role.

Carphone Warehouse confirmed it was to buy the UK assets of Italian-owned Tiscali in a £236m cash deal, which was completed last week.

Carphone Warehouse, which provides broadband under its TalkTalk brand has taken on Tiscali's 1.45m UK broadband and 300,000 dial-up customers.

TalkTalk is now the UK's largest resident broadband provider and second overall behind BT, with 4.25m customers and a 25% market share.

The agreement came 18 months after Tiscali first set out to sell its UK business.

The £236m price is less than half the £550m bid Carphone Warehouse made last year, which was rejected by Tiscali.