More of KPNQwest network to be shut down

Another chunk of bankrupt KPNQwest's pan-European fibre-optic network is to shut down this week after a group of phone companies...

Another chunk of bankrupt KPNQwest's pan-European fibre-optic network is to shut down this week after a group of phone companies ended their financial support of the operation last Friday.

The companies, led by the Dutch company Koninklijke KPN, all used KPNQwest's network but have found alternative carriers, according to KPN.

The move comes two weeks after the lights went out on KPNQwest's Ebone network because the bankrupt company's court-appointed liquidators did not get an offer they could accept. The Ebone network covered large parts of Europe.

Some 45 employees in The Hague, Netherlands, who maintain the affected part of the KPNQwest network that runs through Germany, Belgium and the Netherlands, as well as an undersea link to the UK, will be paid until the end of the week. "I expect it to end then," said a KPN spokesman.

A final decision to pull the plug lies with KPNQwest's liquidators, but it is unlikely that they will be able to find the cash to keep the network up. Traffic on the network is low, as most customers have switched away.

The liquidators last week sold parts of KPNQwest's network in France and Italy to Telia International of Stockholm for £2m, and all of KPNQwest Finland to Helsinki Internet company Jippii for £1.6m.

KPNQwest in its heyday had a market capitalisation of more than £27bn. The company operated an 18-country, 25,000km network, Europe's largest fibre-optic network.

A financial scandal surrounding KPNQwest, meanwhile, seems to be unfolding. The company's court-appointed liquidators last week disclosed that the net loss for 2001 was €110m higher than originally indicated to investors, raising fears that KPNQwest was inflating its bottom line.

The documents published by the liquidators also suggest that KPNQwest was aware of its worsening financial situation in February and March, weeks before informing investors.

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