Euro Carriers Combine Fiber Forces

Ten of Europe's national and regional network operators have joined forces to offer a set of wholesale and enterprise services in a bid to take on the continent's bigger, more established players. (See UPC Gets euNetworks Capacity).

The new euro-one alliance says the combined network of its initial members runs to 85,000 kilometers, connecting more than 350 cities in Europe and North America at about 1,000 points of presence and 350 data centers that are on-net.

The North American coverage comes courtesy of Hibernia Atlantic , which manages 80 transatlantic wavelengths and connectivity up the east coast of the U.S. and Canada. (See Hibernia Adds NY POPs.)

The only other cross-border member of the collective is the group's instigator, euNetworks Group Ltd. , a wholesale carrier headquartered in Frankfurt that operates its own fiber network that runs from Germany to Ireland via the Netherlands, Belgium, France, and the U.K.

EuNetworks, a relative newcomer to the market, has constructed its network through a series of cut-price acquisitions, including the purchase in July 2006 of a 5,424-kilometer network formerly run by Viatel, which spent €650 million (US$874 million) digging the network in the bubble years. EuNetworks is believed to have paid only a few tens of millions of euros for that infrastructure. (See EuNetworks Launches and GV Signs MOU for Viatel Assets.)

The other eight members all operate networks in their home countries:

• e|net – Ireland
• Exatel – Poland
• Fibrelac – Switzerland
• Geo Networks Ltd. – U.K.
• Jazztel plc – Spain
• Neo Telecoms – France
• Net4Net – Czech Republic
• Retelit – Italy

Euro-one's members say they will be able to offer long-haul and intra-city services, including wavelengths, Ethernet, IP, and dedicated fiber, with a single service-level agreement (SLA) and a single bill. It's unclear to what extent the back-office systems of the members have been aligned or connected, if at all, as the spokespeople for the new alliance couldn't be reached as this article was published.

What is clear, though, is that the group and its lead member, EuNetworks, believe it's possible to win a greater share of business against the likes of Colt Technology Services Group Ltd , Interoute Communications Ltd. , Level 3 Communications Inc. (NYSE: LVLT), and Verizon Enterprise Solutions by providing a united face to carriers, ISPs, and large enterprises.

And there is business to be won. In its annual report for 2006, EuNetworks said it signed up 47 customers during the year. However, these are not major deals -- the total value of contracts signed was €43 million, and for the full year the operator reported revenues of €24 million and earnings before interest, tax, depreciation and amortization (EBITDA) of €7 million.

EuNetworks is, though, picking up the sort of business that normally would be won by the established wholesalers and national incumbents. For example, it just announced a metro capacity deal with pan-European cable operator UPC Broadband for dedicated infrastructure in Amsterdam. (See UPC Gets euNetworks Capacity.)

For euro-one to make its mark, though, the group may need to attract further members that can extend the collective's reach into Scandinavia and Eastern Europe, including Russia and the former CIS states.

— Ray Le Maistre, International News Editor, Light Reading