Broadband battle begins amid market meltdown

NEWS Colt, KPNQwest and MSIWorld will be the only survivors of the broadband market meltdown, according to the CEO of KPNQwest. President and CEO Jack McMaster told silicon.com: "I don't think it's a winner-takes-all market, there's room for two or three players but our advantage is our network link to North America." He added that if customers choose to go elsewhere for hosting and broadband services they should ask for a receipt. The comments came at the opening of the company's third Cybercentre in Thurrock, Essex. The other two are already up and running in Paris and Munich. McMaster said the centre is the most powerful base for ASP and ebusiness solutions in Europe and predicted it will be reach 75 to 80 per cent of its capacity by the end of 2002. This is despite naming only one customer today: search company Fast Search & Transfer. However, McMaster said he was positive about the market and added "co-location in cyber-hosting centers is the future". Nick Harmen, analyst at Ovum said although McMaster's assessment of competition was "limiting it slightly", he agreed the future was rosy for broadband hosting companies. He added: "In the long term this looks fairly solid but in the short term it will be interesting in terms of financial viability which players survive... Major players in the sector do have a major advantage." The cybercentre cost E60m (£36m) to build but is expected to bring in E250 (£151m) yearly when it is full. All three cybercentres operate alongside 13 other smaller centres of between 100 and 500 square meters and today's opening means the pan-European network reaches 41 cities. The target is 50 by the end of the year. KPNQwest reported revenues of E460m (£279m) in fiscal 2000 and has predicted revenues of E780m (£473m) for fiscal 2001.