|
KPNQwest to keep network alive
09:20 Monday 10th June 2002
Reuters
|
 |
Europe's largest data network will be kept afloat if enough customers pay outstanding bills by Monday night's deadline
Bankrupt KPNQwest will probably be able to keep its data network running for the next few weeks after enough of its customers indicated they would pay outstanding bills.
The telecoms firm's trustees have set a Monday night deadline for KPNQwest's clients to pay up the amounts they owe, warning that if not enough funds were collected by then, Europe's largest fibre-optic data network would have to be shut down.
"After marathon talks over the last few days it looks like all pieces are in place," a source close to KPNQwest's administration has told Reuters.
"A management team has put together a plan to keep the network running and if all the clients who have committed themselves to pay do pay, then there will be enough funds to keep it up until the end of June if not longer," he said.
The source warned that the management's plan still had to be officially approved by KPNQwest's trustees.
KPNQwest collapsed a week ago after failing to unload some assets to give it time to sell its network, which spans 18 countries from Portugal to Finland.
It sought creditor protection earlier in May after its supervisory board, including representatives of main owners, Dutch KPN and US-based Qwest Communications, resigned.
Earlier on Sunday things looked more uncertain with the support from KPN, also KPNQwest's largest client, up in the air. KPN had even shut off KPNQwest's cell phones before turning them back on on Sunday, the source said.
The source declined to indicate the amount needed to prevent the unprecedented network shutdown, but said the 23m euros (£15m) owed by KPN was by far the largest outstanding bill. "KPN has indicated it would pay a small portion of that," the source said.
In everyone's interest
KPN's spokesman was not immediately available for comment, but said earlier on Sunday that KPN, which has provided some short-term funds to keep KPNQwest liquid, was committed to pay its share, provided that other clients also pay up.
"It's in everybody's interest to keep the network running," KPN spokesman Marinus Potman said. He added that he was unaware whether the firm had turned off KPNQwest's cell phones.
KPNQwest, a shining star in the heady days of the technology boom, imploded in just a few months under the weight of its debt after it and a slew of other firms aggressively built networks but found the market saturated with overcapacity when the expected growth in Internet traffic failed to materialise.
KPN, whose key customers such as air carrier KLM and brewer Heineken use KPNQwest's network, and other firms have scrambled to find alternative providers to avoid an interruption in service.
On Friday KPN signed a deal with Britain's Colt Telecom to supply its clients with backup services.
KPNQwest's administrators, Eddy Meijer and Jan van Apeldoorn, have spent the last several days seeking to convince the firm's key employees to stay on and customers to give them funds to finance the operation for the next few weeks.
They are also in talks with several parties interested in buying parts of KPNQwest's network, whose value would drop drastically if it were to go dark.
Any proceeds are expected to go to cover a part of KPNQwest's bank loans, with nothing left for its battered owners of its bonds and equity. The firm once had a market value of 42bn euros.
Networks and networking products have seen huge innovation and growth in the last few years. High bandwidth LANs and Storage Area Networks are now in common use. ZDNet UK's Networking Central keeps you up to date with the latest news and views.
Have your say instantly, and see what others have said. Go to the ZDNet news forum.
Let the editors know what you think in the Mailroom.
|
