European Telecom, Web Rush Continues

NEW YORK – American telecom and Internet companies are continuing their year-long rush into Europe unabated even as continental companies launch into neighboring markets to stir the competitive stew. A few recent examples:

On March 5 Global TeleSystems Group of McLean, VA, announced completion of a $5-billion takeover of the London-based Esprit Telecom Group to form one of Europe’s largest private telecom companies.

“The completion of this merger puts the combined company firmly on track for becoming Europe’s premier provider of a wide range of end-user and carrier communications services,” a company statement said.

“The merger capitalizes on GTS’ position as the leading alternative network operator in Europe and on Esprit Telecom’s position as one of Europe’s largest independent pan-European telecom services provider.”

The combined company will operate in 20 countries across Europe and service 35,000 business customers in Western Europe alone. It also has Europe’s largest cross-border fiber optic network – 12,000 operational kilometers.

While the focus is on Western Europe, the new company has strong representation in middle and Eastern Europe where a separate division handles business in the countries of the former Soviet Union.

GTS is a leading alternative telecom supplier in such major cities as Moscow, St. Petersburg and Kiev, the capital of the Ukraine, as well as in Budapest and Prague. The company expects to have “points of presence” in 50 European cities by the end of 1999.

Last month, Hackensack, NJ-based IDT announced purchase of Orion Telekom BV, a provider of telecom value added services in the Dutch market. The acquisition is designed to give IDT access to KPN NV, the leading Dutch telecom.

“Getting a connection through the Dutch PTT is hard,” IDT spokeswoman Sarah Hofstetter said, “so we bought Orion because that made more sense than waiting on line to get into the Dutch market.” Orion has the needed connection.

Yoav Krill, senior vice president of Global Networks, called the acquisition “an excellent strategic move” because it cut the average waiting time for international carriers of 9 to 18 months to a matter of weeks.

“We’ll be able to offer services in 4-6 weeks, which is unbelievable in terms of turn around time,” Hofstetter said

IDT has been in the UK for the last 18 months offering pre-paid debit phone cards to businesses and consumers through forty other British wholesale carriers.

Hofstetter said IDT plans to target France next but refused to discuss any other expansion plans.

Atlanta-based WordlPort Communications announced last month that its Dutch subsidiary, EnerTel, entered into a relationship with GTE Internetworking that will enable it to expand its Internet and data product portfolio to 150 countries worldwide.

In a licensing deal with British Telecom Walnut Creek, CA- based Commerce One has won a foothold in the UK market. The US company is providing BT with its Commerce Chain Solution electronic procurement software.

BT will use it to “establish a major UK business-to-business electronic marketplace for indirect goods,” a Commerce One statement said. Indirect goods include items vital to running a business such as travel, computers, stationery and maintenance.

Moving in the other direction is Hamburg-based Netlife GmbH, an e-commerce and banking software vendor. It plans to open an office in the City of London, the UK’s financial center. It hired a startup staff of 15.

Finally, Gobal One, the Brussels-based joint venture among Deutsche Telekom, France Telecom and Sprint, launched a new service this month – Global Web Hosting – to its portfolio of IP solutions.

The new service will build and handle web operations for its customers including rapid construction of high performance Web sites.

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