Fibernet shuts European network

The telecoms company Fibernet is to shut the bulk of its French and German operations after its major network supplier in those regions, KPNQwest, went into administration.

The telecoms company Fibernet is to shut the bulk of its French and German operations after its major network supplier in those regions, KPNQwest, went into administration.

"The suspension of certain operations in Germany and France is clearly a difficult decision. However, it is the correct decision to take for the long-term future of the company overall," it said.

Fibernet, which is based in Basingstoke, is maintaining a service in Frankfurt but is suspending national operations in Germany as well as "a substantial part of and possibly all" operations in France.

"Having examined our potential to replace KPNQwest assets in these territories, Fibernet does not believe that the current economic conditions justify such additional capital expenditure at this time," it said. KPNQwest's cables make up more than 80 per cent of Fibernet's network infrastructure in Europe.

The pull-out from these territories will see the company write down the value of its assets in each country, resulting in a total exceptional charge, including restructuring fees, of £75m this year. It expects to save about £9m a year.

Nevertheless, Fibernet, which has about £46m of cash, was upbeat on its prospects in the UK, saying it had won orders worth £18.1m in the three months to 31 May. It won new business from companies including Citigroup, HSBC, The Co-operative Bank, NTL, Fujitsu and Verizon.