Northern broadband firm thrown a lifeline

Customers of Omne Communications should continue to receive high-speed Internet and digital TV services

UK digital television and broadband service provider Omne Communications has been saved from closure.

BDO Stoy Hayward, the administrators who were called into the company last May, announced on Friday they had secured a deal that would ensure Omne's future.

Another firm -- CLS Holdings Plc -- have agreed to buy 75.5 percent of Omne. According to BDO Stoy Hayward, this means all of Omne's customers will continue to receive services.

"We have had to make some tough decisions to turn the fortunes of Omne around, but we have maintained a full service to all customers and retained 30 percent of the workforce," said David Hill, joint administrator and partner at BDO Stoy Hayward.

"Omne's core business was robust and we received overwhelming support from creditors and shareholders throughout the administration," said Hill. "The case of Omne demonstrates that a business can survive even in an unfavourable economic climate."

As ZDNet UK reported in 2001, Omne was planning to construct a cable network between South Glasgow and Lancaster. This would have allowed it to offer high-speed Internet access, digital TV and telephone services to an estimated 325,000 homes and 25,000 businesses in areas such as Ayrshire, Dumfries and Galloway, Cumbria and Morecambe.

However, the administrators were summoned in May 2002, after Omne had spent an estimated £70m on this network. At the time, it was understood that the firm had failed to secure necessary extra funding.

The government has welcomed the news that Omne has been saved.

"Today's update on OMNE Communications is very encouraging. It is good news both for OMNE's customers, who will continue to receive a strong and competitive service, and for the telecommunications industry as a whole. Seeing small telcos such as OMNE able to thrive in a difficult economic environment is yet more grounds for renewed optimism in the technology sector," said e-commerce minister Stephen Timms in a statement.

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