Interoute Buys KPN’s German Fiber, Conduit

February 22nd, 2011 by · 2 Comments

Pan-European network operator Interoute (news) bolstered its German presence with a major infrastructure purchase.  They are buying the German fiber and conduit assets of KPN, which will add some 3600km route miles to their own extensive network in the company.  More specifically, the deal sends 2 ducts, 96 fiber pairs, 27 ILAs, plus KPN's dark fiber customers to Interoute, with KPN leasing back 4-5 fiber pairs to support their lit customers in Germany.

KPN has never really leveraged these assets, which I believe derive from the old KPNQwest buildout and liquidation.  This deal will let them focus on the managed and value added services they prefer by outsourcing the underlying infrastructure.  Meanwhile, Interoute will have a substantially more diverse and resilient presence in Germany, including perhaps more low latency firepower.  A solid chunk of Interoute's current fiber also derives from the KPNQwest fiasco, so in a way this is a reunion of sorts.  To the left is a quick look at the combined network map of the two German footprints.

I hadn't realized that KPN was looking to unload these fiber assets, but Interoute is certainly a logical acquirer for them.  Other pan-European wholesale network operators like Colt and Level 3 have been less aggressive lately, and TeliaSonera seems more focused on the IP and managed layers than on this level of infrastructure.

This deal should also be viewed alongside Interoute's recent partnership with Telefonica, in which Telefonica is outsourcing the infrastructure layer of its European network.  Clearly Interoute is making some inroads with the incumbent European carriers, who seem more interested in their wireless coverage than their fiber footprints.  Might they make a similar move on all or part of TeliaSonera International Carrier?

Categories: Internet Backbones · Mergers and Acquisitions

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