Dutch telecoms operator KPN is back in business with a strategy said to be far less ambitious but far more realistic than that of its joint venture with former partner Qwest Communications International.
KPNQwest filed for bankruptcy protection early last year after running out of money from its ambitious four-year expansion. Now KPN EuroRings has officially opened its doors for business in Germany after launching in the Netherlands earlier this year.
"We're more narrowly focused than KPNQwest," said vice president Henjo Groenewegen. "We're not going to try to be everything to everybody everywhere. We have a select range of services that we aim to provide reliably, at competitive prices and in select markets."
Groenewegen added the company would target wholesale customers, such as fixed-line carriers and ISPs, and both small and medium-sized enterprises and multinationals. Its service portfolio will range from internet access, IP-VPN and asynchronous transfer method as well as synchronous digital hierarchy, IP transit and wavelengths.
Those services will run over infrastructure largely acquired from KPNQwest, consisting of 8,000km of fibre cable, with links to other major European business hubs.
"We aren't offering collocation services or building gigantic datacentres or linking every major European business hub with our own fibre as KPNQwest did," said EuroRings marketing director Gerben Wijbenga.
"Initially, we will focus on customers in the Netherlands and Germany with services that we can provide competitively and, above all, profitably."
Although the wholesale market will continue to be shaped by low commodity prices, this business generates a steady flow of revenue necessary to run the business, according to Groenewegen. But the company's primary focus, he said, will be on the more lucrative corporate market.
"I'm not saying that corporate customers are willing to throw money at broadband services," Groenewegen said. "Like everyone, they're keeping a close eye on their operational expenditures. But they're prepared to pay more for quality and stability, especially for their business-critical applications."
The decision by KPN to re-enter Europe's severely bruised IP broadband market comes as most of the existing players battle for survival. Several have filed for bankruptcy protection, including Global Grossing and Interoute, while others, like Telia and Cable & Wireless, have begun to retrench.
It is also unclear whether WorldCom will remain in Europe after investing billions to build long-distance and metropolitan fibre-optic networks around the region.