First link opens in telecoms network

THE FIGHT for dominance in the European telecom market intensified as Esprit Telecom, the Reading-based operator, opened a new high-speed link between Paris and London.

The link, which is the first part of a network which will Esprit hopes eventually stretch across most of Europe, demonstrates the growing demand for cross-border telecom services.

Graham Halls, Esprit's UK managing director, pointed out that business telecom users are increasingly demanding telecom networks which link seamlessly across national borders. However, national operators such as British Telecom find it hard to offer these services.

"Previously if I wanted to buy a telephone circuit I'd have to buy half a circuit from BT and got to France Telecom to provide the other half," he said, adding that Esprit's strategy was to consider Europe as a single market.

Esprit now plans to build other loops stretching through Belgium, the Netherlands, France, Germany and Spain. They should be ready for launch next year.

The London-Paris link employs the latest "self-healing" fibre-optic technology. This allows Esprit to offer a range of services including high-speed data transmission and video conferencing at substantially cheaper rates than are currently on offer.

Some analysts expressed concern that Esprit had not actually laid its own cable. Instead, the company pieced the link together by buying bits of cable from other operators such as Racal Telecom and the French motorway operator. It then uses advanced computer systems to operate the network.

However, Esprit insists that building its own network would have delayed the group's entry into the market, giving other operators a chance to jump in. "If we had laid our own cable it would have added taken 18 months longer to get it ready," said Jim Reynolds, chief operating officer.

Esprit's move demonstrates the opportunities in continental Europe for fast-moving telecom operators. Yesterday Colt Telecom, the US-funded group which is building local networks in major European cities, reported a 34 per cent increase in first-quarter revenues.

Colt, which already has a local network in the City of London, plans to build high-speed fibre-optic "rings" in 12 European business centres. It is in talks to buy a network in Amsterdam from Telecom Noord West, a subsidiary of a local electricity company, for pounds 41m.

Shares in Colt yesterday surged 257.5p to 1940p as Morgan Stanley, the stockbroker, issued an upbeat recommendation. In the past year, the shares have soared from less than 300p.

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