Anyone who's interested in power companies becoming service providers will find this article interesting. Energis is a subsidary of The National Grid Group, which earlier had absorbed London Electric. Their goal is to penetrate BT's UK market.
Financial Times, April 3, 1998
Energis teams with France Telecom and Deutsche Telecom:
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Energis in œ100m joint venture
By Alan Cane
Energis, the telecommunications group in which the National Grid holds a majority stake, is to set up a œ100m joint venture with Deutsche Telekom and France Telecom, Europe's two largest operators. It will give the foreign groups unprecedented access to UK business customers.
The three will establish a "property company", Metroholdings, which will build local telecoms networks in UK cities, beginning with London, Birmingham and Manchester. Energis will hold a 50 per cent stake and the others 25 per cent each.
Energis already owns a national fibre optic communications network carried over the National Grid and, in London, through the tunnels of the Underground.
Local networks with direct connections to customers are vital for operators attempting to win market share in overseas territories because they are expensive to construct and existing networks are usually in the control of the incumbent operator - in the UK, British Telecommunications.
The chief target for the partnership will be BT's 70 per cent share of the œ14bn UK business telecoms market.
Deutsche Telekom and France Telecom will work together to penetrate the UK market. They intend to use the network to give Global One, their international alliance with Sprint of the US, better access to multinational business customers in the UK. Fran‡ois Comet, vice-president, alternate networks, of France Telecom said: "We will offer business customers high-quality services at competitive prices."
BT was yesterday unperturbed by the development, pointing out that Metroholdings would only be doing what it was already doing in France and Germany with its Cegetel and Viag Interkom alliances.
Mike Grabiner, Energis chief executive, said Metroholdings planned to build metropolitan networks in eight or nine UK business centres. Energis would have responsibility for the design and construction of the network and would take a management fee. It would also charge its European partners for carrying their traffic over its national long-distance network. No details were given, but Mr Grabiner said the payments would be "material to Energis".
Energis' shares leaped 106p, or 19 per cent, to 665p.
The deal will provide Energis with traffic for its national optical fibre network - one of the most advanced of its kind - and allow Deutsche Telekom and France Telecom direct access at low cost to business customers in the UK. Energis has about 1.5 per cent of the UK business telecoms market but its network is using only about 25 per cent of capacity.>>>
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