A report came out over in the UK this past weekend suggesting that one of the UK’s largest independent fiber assets could be sold in the next quarter or two. Geo, which was bought from Hutchison Whampoa by Alchemy Partners five years ago for £62M, is apparently on the block and the price tag could reach £200M.
Geo operates a dark fiber network throughout the sewers of London, and an intercity network following the gas pipelines across Britain that nowadays stretches over 3000km. The map to the left comes from a 2009 map I had lying around, but has surely evolved since, including a recent ring across the Irish Sea to Dublin.
Consolidation talk in the European telecom and fiber sectors has been on the rise, but most of the press tends to go to the larger consumer-oriented European telecoms. Yet Geo’s fiber footprint could be a significant shift for a network operator in search of greater depth in the UK.
So who might that be? Let’s quickly run through a list of possible suitors (and feel free to add others in the comment section below!):
Vodafone - With C&W in hand, it’s always possible that Vodafone could look to bolster their footprint with Geo’s dark fiber. Certainly they have the resources, but I suspect they’ve got what they want in the UK right now and are looking elsewhere.
Level 3 - More likely than Vodafone, but following the Global Crossing purchase Level 3 doesn’t really need Geo’s fiber and conduit that much and is probably looking more for assets in continental Europe (e.g. GTS Central Europe). That being said, if the price were right I’m sure they’d make a move.
Zayo - Actually this looks like something Dan Caruso and crew could really sink their teeth into. First, they like dark fiber assets – both for the dark fiber business itself and for what else they can do after lighting some of it. And secondly, it would be very complementary to the former AboveNet footprint in London plus the expansion ring over to Frankfurt. Sooner or later you have to figure they’ll do something along these lines, and this would be a target of the right size and shape.
Digiweb - After their acquisition of Viatel and the VTLWaveNet fiber and conduit assets, Geo would be a logical followup. The two footprints look good together, and would give the Irish-based operator a more complete pan-European footprint to work with. Whether they have the financial firepower to make such a deal happen is another question though.
euNetworks - This is also an excellent fit in terms of assets. euNetworks has a deep London footprint but could really do something with Geo’s conduit and fiber assets to complement their Dublin and London depth. It would be a big deal for euNetworks though, they’d need some help from those private equity backers of theirs.
Interoute - This is another fiber operator with a pan-European presence that basically ends in London that could be interested in expanding north and west at the fiber and conduit level. Interoute has had a dual expansionary focus on fiber and cloud-based ICT services in recent years, and Geo could fit well into the former camp.
Colt - While its name derives from a UK acronym (City of London Telecommunications), Colt’s overall UK presence is actually somewhat thin beyond London as compared to its depth in the rest of the continent. Buying Geo could change that quickly, although there’s no indication that Colt is in the market for more fiber at this time.
Virgin Media, EasyNet, or another UK-focused network operator – Any of these are possible of course, although I don’t know much about what types of assets each is currently focused on.
America Movil - Carlos Slim seems rather more interested in traditional telecommunications assets so far, but I suppose you never know. It would be a drop in the bucket for him if he were interested, however.
Any others out there? I don’t see any of the US or European incumbents being interested, as they are preoccupied elsewhere, nor does it seem likely there is the appetite for such a thing in Asia.