Tiscali, the internet service provider, has reduced its profit and revenue forecasts for the year and said it would review its business plan for the fourth quarter as it admitted it had lost 37,000 broadband customers in the UK in the last three months.

The group, which has yet to find a buyer after putting itself up for sale at the end of March, predicted profit before interest and financial charges would be between €220 million and €230 million (£180 million), compared with its previous €290 million estimate.

It also trimmed its 2008 revenue target down to between €1 billion and €1.1 billion from an estimated €1.3 billion in November last year, blaming the changes on the weakness of the pound against the euro.

The revised targets may force the group's management to reassess what the company is worth amid growing speculation offers will not match its aspirations.

Tiscali has already missed a self-imposed deadline of June 30 to finalise a bid.

According to industry sources, the sale process has become stagnant after a string of companies opted out because the price was set too high.

Vodafone, which was eyeing both Tiscali’s UK and Italian operations, has withdrawn from the bid. Carphone Warehouse and BskyB had both considered buying the UK business, which accounts for 69 per cent of Tiscali’s overall revenues, but are thought to have lost their enthusiasm.

Press reports last month speculated that Italian rival Fastweb, controlled by Switzerland's Swisscom, was the most likely contender.

Reporting its half year figures today, Tiscali blamed “higher competitive pressure” in the second quarter for the slowdown in growth compared with the first three months of the year.

The group lost 37,000 broadband customers in the UK, putting it at risk of losing its position as the UK’s fourth largest broadband provider to rival BSkyB. Tiscali now has a total of 1,838,000, while BSkyB, which is part owned by News Corporation, parent company of The Times, added 200,000 customers in the last quarter, bringing its total to 1,628,000.

BT is still the market leader, with 4,500,000 customers, up 103,000 in the second quarter, followed by Virgin Media with 3,836,100, an increase of 54,000, and Carphone Warehouse’s TalkTalk, which has 2,754,000, up 44,000.

In a statement Tiscali said: “In view of the developments within the business environment and the strategic review process still underway, Tiscali’s Board of Directors intends to review the Business Plan in the fourth quarter of this year."

The group reduced its first-half net loss to €57.2 million from €73.4 million the year before. First-half profit before interest and financial charges was up 55 per cent to €95.8 million.

Tiscali’s shares, which have lost around 30 per cent of their value in the last 12 months, closed down 1.55 per cent, at €1.52.

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