Pipex, which is chaired by millionaire Peter Dubens, said today it had made a "significant downward adjustment to the number of Bulldog customers acquired."

After re-adjustment, Pipex, Britain’s fifth-biggest internet service provider, calculated its total broadband customer base at the end of December, as 570 000 - the same as when the group last updated the market in September.

The total was 30,000 less than some analysts had predicted.

Mr Dubens said: "We have had to do a clear-up of the Bulldog customer base."

The clean-up involves expelling customers who are for example receiving the Bulldog service but not being billed.

The group has agreed with Cable&Wireless, he said, to reduce the initial agreed amount it will pay for Bulldog from £12.5 million to less than £10 million.

Investec said it saw the customer base revision as "largely immaterial."

The total number of "real" Bulldog customers acquired will be revealed at Pipex’s preliminiary results in April.

Details about the subscriber reision were unveiled in Pipex’s full-year trading update, in which it said that trading for the year is in line with market expectations.

Revenues at the business, which provides internet hosting and domain names as well as broadband for residential and small business customers, were up 122 per cent year-on-year to just under £300 million, including acquisitions.

The acquisitive group is on track to have 100 exchanges unbundled by the end of the first quarter of 2007, with 75 more expected to be finished by the end of the year.

The migration of customers onto the unbundled exchanges is also on track, with 20,000 customers transferred by the end of 2006.

Pipex is competing in a broadband market which is becoming ever more fierce following aggressive new offerings from big-name players like Carphone and Orange.

Last week a trading update from Carphone Warehouse showed a sharp slowdown in the number of customers it is picking-up.

In an interview with The Times yesterday, Mr Dubens said he was to launch a review of the business, in a move deemed to set the clock ticking on a sale of some or all of the company.

Pipex has long been regarded as takeover target with Carphone, BT and BSkyB all likely buyers.

Despite the growing competition on the high-street Pipex, which sells broadband through Phones 4 U stores, said that the outlook for the business "remains favourable" with underlying growing in broadband "encouraging" for 2007.

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