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Metromedia Launches Metropolitan Fiber In Europe
By Emily Bourne
15 February 2000
"We're not a telecoms company, we're a construction company." So said Metromedia Fiber Network International's managing director Vince Galluccio today as he officially launched the company into Europe.
The carriers' carrier today laid its European foundations, by opening strategic offices and announcing that its metropolitan fiber networks will be completed in 16 cities by the middle of 2001.
"There's a glut of city to city networks," said Galluccio. "[Not many other companies are] building metropolitan systems."
Metromedia, a New York based carriers' carrier, builds broadband fiber optic networks in major business districts. Its customers are carriers (Bell Atlantic, Cable & Wireless), ISPs (PSINet, AOL) and large companies.
Typically, carrier customers are looking to establish a presence in a new market, Galluccio said. "We can sell them a network at a lower cost than they would build it themselves."
The company has announced build-out in 50 U.S. cities, one Canadian and 16 European markets. Currently, 12 U.S. networks are operational, and the company estimates that build-out will be complete in 2003.
The company said its pricing model was an advantage in attracting custom and investment. Its fiber has a fixed price anywhere in the world, and the customer undertakes to buy a specific amount, but not in specific locations. The customer then has three years to decide where it wants to deploy the fiber.
Galluccio said Metromedia used ribbon fiber developed by Lucent which had to be imported from the U.S., carrying up to 864 strands. he said. Metromedia maintains the fiber it deploys but doesn't operate it, and it does not build long haul networks.
Galluccio said the company was the first to spot the niche of high-bandwidth metropolitan networks. He added that potential rivals were slowed by barriers to entry: "construction competency, cash , expertise, focus, investment community belief in you."
"With the exception of MCI WorldCom, Colt, nobody's building this type of infrastructure in the cities we're building in," said Gareth Davies, the company's vice president and general manager, western Europe.
The first European customers to be connected will be in London in March. The other cities announced today are: Amsterdam, Berlin, Brussels, Cologne, Dusseldorf, Frankfurt, Geneva, Hamburg, Hanover, Milan, Munich, Paris, Stuttgart, Vienna and Zurich. The company will invest $500 million in Europe this year.
Bell Atlantic took a 10% stake in Metromedia in October 1999, with the option to increase the stake by up to 9.9%, with no board representation.
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