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KPNQwest shuts down network
update The skeleton staff of bankrupt telecommunications group KPNQwest pulled the plug on its data network Wednesday after its trustees made little progress in talks to sell its remains to one of its founders, KPN. "The network has now been shut down," said head of operations Jos van der Klauw. The shutdown brings the curtain down on what used to be Europe's largest data network that spanned 18 countries from Finland to Portugal and carried as much as a half of all Internet traffic in the region. The remaining Dutch employees of KPNQwest, which collapsed at the end of May, walked off last week after their last paychecks ran out, but left the fibre-optic network in limbo in hopes that KPN was nearing a deal to snap up key remnants. KPNQwest's court-appointed trustees had managed to keep a substantial part of its network running for nearly two months, preventing a possible disruption in Europe's Internet traffic and giving customers--shocked by the company's swift collapse--time to switch to other providers. "I expect impact on Internet traffic to be small now," Van der Klauw said. "We shall see in the next few hours." KPNQwest was declared bankrupt after its parents and main clients, KPN and U.S. phone carrier Qwest, terminated financial support as the firm faced shrinking revenue, in large part caused by a capacity glut and an insurmountable debt pile. Trustee Eddy Meijer declined to comment, and KPN, which owns 40 percent of KPNQwest's worthless equity and was its largest client, said there was nothing new in the discussions. The two parties did not meet Wednesday. KPN, which had said it wanted to buy the west European part of the network as well as a connection into Britain, has declined to disclose how much it is bidding. But sources close to the talks have said it offered some $19.9 million earlier this month before a part of the network was sold to Telia, the Nordic region's biggest telecommunications group. Telia has also expressed interest in buying the west European parts of KPNQwest's fibre-optic network, but the bankrupt firm's trustees have said KPN was the only serious bidder. The network owned by KPNQwest once had a market capitalization of more than $42 billion but is now valued at a mere $4 million. Story Copyright © 2001 Reuters Limited. All rights reserved.
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