KPNQwest confusion continues

Amid reports that its network is beginning to shut down, bids for KPNQwest are still thin on the ground

Ebone, a part of the bankrupt KPNQwest network, was reported to have been partially turned off on Tuesday morning. Meanwhile, the leading bids are looking shaky, although the network is now virtually certain to be broken up.

"We hope to announce a sale of part of the KPNQwest network today," said a source close to the sale process. However, the source admitted that this was a hope rather than an expectation. Since the network, Europe's largest fibre backbone, went bankrupt in May, Bear Stearns has been trying to sell it. Efforts to sell it as a single entity failed last week, due to the complexity of dealing with liquidators in many European countries, and the fact that long-distance bandwidth has crashed in price.

Ebone is one part that might be sold, although if it is truly being switched off, its value is likely to fall rapidly as the few remaining customers are forced to leave post haste. The main bid known in public is from the so-called Oakley consortium of the UK, which has visited Ebone's site in Brussels, but so far this group has not submitted a formal bid.

Trimoteur, the Dutch investment group which was expected to bid for the whole network has likewise not issued a formal bid --- it apparently failed to buy the assets of KPNQwest's French subsidiary before the Friday deadline set by the French liquidator, and its bid for the whole network was much lower than expected, apparently consisting of 60 million euros, only 20 million of which would be paid up-front.

The fall-out is affecting other service providers, and is expected to result in more regionalised telecoms in Europe. Fibernet, the UK alternative provider, was reported by the Financial Times on Friday, to have pulled out of France and Germany, rather than find a replacement for the transmission service which was provided by KPNQwest.

ZDNet UK is awaiting confirmation from Ebone of its network status.

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