According to a report in the UK’s Guardian, there could be a pile of pan-European infrastructure on the table soon. After yet another reorganization of its business model, some analysts apparently think Fidelity may be finally ready to sell Colt, which it has long held a majority stake in. So just to speculate idly, who might show up for such an auction?
Vodafone would surely take a look. With all that cash following the Verizon Wireless transaction, they’d have to. And Colt’s combination of metro and intercity fiber, colocation, and cloud-base services would probably fit quite well with Vodafone’s enterprise division — not to mention the potential backhaul synergies with its various European wireless holdings.
Level 3 would also certainly be at the table, as I have speculated in the past. While in the US I think they aren’t likely to make any inorganic moves right now, Colt’s assets and scale would give them a combined European asset and customer base that would match what they have in the US and probably at a bargain when it comes to multiples.
Then there is the billionaire factor, as there are two fellows with big wallets making waves in Europe although not necessarily in fiber and colo yet. Naguib Sawiris is looking for assets, and of course Carlos Slim’s America Movil has been very active as well. Either one could easily see Colt as a bargain.
The remainder would probably be other large European telecommunications carriers. The two most likely there are probably Deutsche Telekom, which is working on the GTS deal still, or Teliasonera, whose international carrier division has been increasingly aggressive. Orange and Telefonica don’t seem to be on that path.
It’s probably too big a jump for other pan-European independent operators like Interoute. And from Asia I don’t see Tata or NTT looking for that deep a fiber and enteprise presence in Europe. Other US-based network operators also seem unlikely, although AT&T could buy it out of petty cash if they were to look up from the wireless biz.
Anybody have any other candidates?
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Categories: Datacenter · Mergers and Acquisitions · Metro fiber
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I am surprised you left them off but Zayo who on their last earnings call talked specifically of European M&A possibilities. I don’t think Colt wants to sell to Zayo though.
I think Altice & Hutchison may have some interest but are otherwise engaged but Liberty Global may be the 4th most likely after L3, VOD and Zayo in my rank ordering. As my #5, I am going AT&T who I think is their largest customer was also the group behind the reported 2009 merger approach that spiked the stock.
Lower on the list for me would be NTT, Cogent, Tata(who bid for C&W), Verizon and TW rounding out my bench.
Heh, yep I probably should have mentioned Zayo in there somewhere. I suppose I don’t really believe they’re ready to drop $2-3B in Europe yet, but I could certainly be wrong!
Zayo would probably sooner buy the likes of euNetworks or Geo
I would have thought Tata Communications would be a contender, they have the traffic but no route to market in UK or Europe as of yet so cannot reach their customers.
Well, I’m not sure what you mean. They have core fibre of their own (TGN WER and TGN NER), TGN, 4-5 of their own datacentres and around 45 PoPs in the region. Last mile is not exactly hard to buy after that point, there is a reasonable choice…
Sorry, that should read “(TGN WER and TGN NER), TGN Atlantic, …”
Hi,
While last mile supposedly is easy to buy it doesn’t give Tata the end-to-end low latency service transparency they offer their customers, and that would be an end to the SLA. Also you’d be surprised how little last mile there is when it comes to actually getting a fibre into the office – if you are on floor 22, that means 65 days to get a tail laid up thru a riser assuming its in the road already.
Peter
Interesting topic, here are my thoughts:
Level3: Didn´t COLT and Level3 already worked together when they built up their European fiber footprints around the year 2000? As far as I remember, Level3 uses ducts of COLT´s German Ring and COLT received fibers/ducts(?) in parts of Level3´s west european ring.
This would mean, that some parts of the two networks already use the same routes. So would it really be useful for Level3 to take over COLT? Don´t forget: Level3 already has a lot of fiber in Europe after the acquisition of Global Crossing. In my opinion, it wouldn´t be good for the competition in the European fiber market, if Level3 would buy one more network.
C&W/Vodafone: Is it right, that ex-C&W uses dark fiber from the former “Global Crossing” for important parts of its network in Western Europe? Maybe it could be interesting for C&W/Vodafone to have it´s own fiber cables and ducts, so I could image that C&W/Vodafone buys COLT.
Tata: They have a fiber footprint in Europe with two own undersea cables (WER and NER). But who is the supplier for the terrestrial fiber cables in Europe? Is this a heritage of the old Teleglobe Backbone which used fiber and wavelengths from Viatel and KPN(Qwest)?
Any news about the sale of Colt? It is now 8 month later and nothing really happened, or did I miss something?
Does anyone also have the feeling the COLT infrastructure has gotten worse since 2014? Latency has increased as well as packet loss and not to speak about their support which is really awful and incompetent. There where also quite a lot of small (and longer) service failures this year which never happened in the past.
Just to precise here I am a long time COLT IP Access customer, being with them now since nearly 10 years.