Versatel scales back DSL. ADSL death arrive in Europe:
Versatel scales back DSL
By Maija Pesola in London
Published: December 29 2000 14:57GMT | Last Updated: December 29 2000 15:06GMT
Versatel, the Dutch telecoms company, on Friday said it would buy the rest of VersaPoint, its high-speed internet joint venture, from its US partner NorthPoint and scale back the unit's European ambitions.
Versatel said it would buy the remaining 50 per cent stake for E7m ($6.5m) in cash, considerably less than the $50m NorthPoint invested in the company in March.
Versatel also said the company, which had planned to roll out digital subscriber lines throughout Europe, would confine its network to Belgium, the Netherlands and Northwestern Germany.
The move echoes a decision in October by rival KPNQwest to scale back its pan-European high-speed internet plans in order to achieve profitability a year sooner than initially expected.
The agreement to sell its share of the venture will free NorthPoint from an obligation to provide an additional E25m funding for VersaPoint. This will come as a relief for the company, which has faced increasing financial problems since its planned $800m merger with Verizon Communications was called off. In late November Northpoint restated its third-quarter results and in early December announced a 19 per cent staff reduction.
The withdrawal of NorthPoint's E25m finding creates increased pressure for Versatel, but it is believed that the company, which has E1.4bn in cash, will not have trouble funding the scaled-back roll-out. |
