[Britain's Colt Telecom Gears Up To Take On Italian Market]
MILAN -(Dow Jones)- Colt Telecom Group PLC faces a tough but familiar road as it begins laying fiber-optic lines in Milan and looks toward tackling Italy's newly opened telecom market.
London-based Colt (COLTY), which is controlled by Fidelity Investments, has built a niche empire by ringing major European cities with it state-of-the-art fiber-optic networks and offering tailor-made sophisticated voice and data communications services for large corporate clients.
The company aims to become Milan's leading alternative telecom provider for business, much as it has in London, Paris and Frankfurt. Colt also has operations in Munich, Hamburg, Berlin and Zurich and plans to enter Brussels, Amsterdam, Duesseldorf and Madrid by the end of this year.
In Italy, the company faces a huge, expensive infrastructure build-out contingent on pending permits and new regulations in a country notorious for bureaucratic delays. In addition, Colt will square off with former state-run monopoly Telecom Italia SpA and a growing list of new operators.
Earlier year, Italy ended Telecom Italia's (TI) monopoly over the country's fixed-line service. In March, Italy's Ministry of Communications gave Colt a license to operate and develop a fixed-line telecom network in Milan. In April, Colt received a second license to operate public voice telecom services throughout Italy.
Colt set up shop in Milan last November and hired Achille De Tommaso to run its Italian foray. De Tommaso had held top positions at fixed-line competitor Infostrada, Bell Canada International, Cable & Wireless Europe and the former joint venture Stet/Montedison.
De Tommaso said Colt plans to start building its network this summer and to begin delivering services by the end of the year. He said he is about 70% optimistic the necessary regulations and permits will be in place in time for Colt to keep to its timetable.
James Barford, a telecoms analyst at Lehman Brothers in London, says Colt's target deadline is feasible. He noted that Colt has dealt with difficult markets in the past and is known for securing large corporate customers with excellent client services and speedy installation.
"Their track record gives a lot of credibility to what management says is possible," Barford said.
In Italy, Colt plans to offer intercity, national and international voice, data and Internet services. The company also boasts 99.99% network availability and easy interconnection with other telecom networks.
Big selling points are Colt's high-tech fiber optic network and services tailor-made for banks, stockbrokers, financial information providers and in Milan, designers and fashion houses, De Tommaso said.
Colt hasn't officially lined up any Milan clients yet, but expects to have a number of international client agreements in place by the time the Milan operations are up and running, De Tommaso said. In other cities, Colt counts among its clients the London Stock Exchange, Midland Bank, Mercedes Benz and Banque Francaise de Tresorerie.
Should delays persist in the build-out of its network, Colt says it could start up operations with indirect services by connecting with Telecom Italia's network and offering lower prices. De Tommaso said an interconnection deal with Telecom should be in place by the end of October. The government has been trying to get the former monopoly to lower the fees it charges rival carriers to link up to its network.
While Colt hasn't drawn up a price list for Milan, De Tommaso said Colt needs to be 25% to 30% less expensive than other operators in order to be competitive.
Eventually, Colt plans to compete head on with Telecom Italia for local interconnection business by forming deals with competing fixed-line operators Infostrada, Wind and Albacom.
"There's nothing in the works now, but we definitely plan to pursue them," he said. |
