World Online becomes a telco

When is an ISP a telco? World Online goes big time
Written by Jane Wakefield, Contributor

World Online transformed itself Wednesday from ISP to telecommunications company in an effort to make the most out of the Internet.

The change in direction -- announced as part of the firm's Q2 results -- will see World Online concentrating its efforts on consumer access and its portal. It will rely heavily on its network which now runs through 15 European countries.

The strategy is the brainchild of new chairman James Kinsella who replaced the much criticised Nina Brink in June. According to a World Online spokeswoman the new direction will allow World Online to "go back to basics".

"We are expanding and developing our network," she says. "Utilising and maximising the network will allow us to offer services like Internet-enabled TV, music and streaming content."

World Online is acquiring telco licences in seven different countries in Europe and plans six more by the end of the year. It has already launched ADSL services in Denmark and the Netherlands and plans rollouts in France and the UK in the third quarter.

World Online's financial results for the second quarter topped analysts' estimates with revenues of 55.4m euros (£34.25m), up 37 percent from the first quarter. Analysts expected revenues of around 50m euros.

For the first six months of the year World Online reported a net loss of 219.3m euros, compared with 11.8m euros for the same period in 1999. Costs rose to 73.4m euros for the second quarter, up significantly from 35.6m euros in Q1. World Online attributed the increased costs mainly to unmetered access promotions in the UK and France.

The French unmetered offering -- now concluded -- has resulted in a significant increase in time spent online, but the company did not comment on response to the UK promotion, which it is continuing to monitor.

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