Digiweb merger with Viatel creates pan-European fibre player

15 May 2013

Digiweb founder and CEO Colm Piercy

Digiweb has merged with Viatel, a London-based telecoms operator, creating a telecoms operator that will connect 34 Western European cities over an 8,500km fibre network.

The merged entity will have a combined workforce of 200 and annual revenues of US$78m. The combined group generates operating profits exceeding US$10m annually.

Investors in Viatel, including Morgan Stanley, are rolling their investment in Viatel into Digiweb Group and are investing additional equity to fund the introduction of new services.

Viatel has invested US$1.5bn in constructing a low-latency 8,500km fibre network connecting 34 European cities.

Dublin-headquartered Digiweb will now deliver an extensive range of managed voice and data services over metro fibre networks in 12 of Europe’s largest cities and financial centres and at 185 points of presence over wholly-independent fibre in eight countries.

In addition, the expanded network also operates two diverse submarine cables and connectivity to Ireland, the UK, continental Europe and close proximity to African and Asian fibre landing stations.

Challenging the status quo

The expanded group’s carrier and wholesale business will operate under the Viatel and VTLWavenet brands, while the enterprise and retail business divisions will trade as Digiweb.

As part of the merger, Viatel CEO Lucy Woods will join the board of Digiweb.

Digiweb was founded by its CEO Colm Piercy in 1997 and in 2012 he was named Ernst & Young Industry Entrepreneur of the Year. The company provides multi-site MPLS data networks, IP and traditional voice services, as well as data centre services to enterprise, wholesale and government sector clients.

“We see a strong opportunity for cross-border consolidation in the telecoms sector in Europe in parallel with the explosion in high bandwidth connectivity demand, and this transaction is the first step in positioning our group to take advantage of those trends,” Piercy said.

“Digiweb has always had a philosophy of challenging the status quo and we plan on stepping that up following this marriage of Digiweb’s entrepreneurial culture with Viatel’s service and network excellence, and the combined expertise of our enlarged team,” he said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years