Qwest goes Dutch over European fibre IP network
US telco partners with the Netherlands' KPN in $700 million JV
US telecommunications company Qwest is to extend its high-capacity fibre-optic IP-based network to Europe through a joint venture with Dutch telco KPN. The two companies are investing $700 million in existing assets in the JV, which will be ownded equally and called KPNQwest. KPN will be providing its Europe-wide fibre backbone, EuroRings Trans European; Qwest will be folding EUNet, the London-based European ISP it acquired in April, into the new company. A transatlantic link will bring the two partners' own networks together. KPNQwest will employ 700 staff, and begin its service next January. Its parents expect the business to generate revenue of $400 million in its first year of operation and to grow on average 40 per cent annually. The JV's first customers will comprise KPN and EUNet clients (84,000 of them). It will initially sell carrier services, including dark fibre, and add IP-based services next Spring. Eventually, it will also offer voice, frame relay and ATM-based services. Qwest shot to fame in the US with its plan to build its own nationwide fibre-optic network based on Internet protocols, a move that put it way ahead of rival telcos, who are bring their own networks up to date bit by bit. The company's gameplan has always called for expansion across the Atlantic, hence the purchase of EUNet. However, said president and CEO Joseph Nacchio, Qwest plans were limited by EUNet's own bandwidth limitations. The KPN deal provides Qwest with the bandwidth it it needs, he said. ®
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