European Internet giant Ebone poised for closure

14 June 2002 Staff at the Ebone data network centre in Brussels – which plays a crucial role in keeping Europe’s Internet backbone running – have threatened to shut it down altogether at 5pm British time, after parent-company KPNQwest failed to guarantee their future and continue paying their salaries.

The Ebone network is estimated to carry a quarter of Europe’s Internet traffic. If Ebone shuts down, widespread disruption is anticipated. At the least, analysts predict bottle-necks and a slowing down of data traffic across the continent.

KPNQwest – a joint venture between Dutch telecoms carrier KPN and America’s Qwest Communications, set up in April 1999 – acquired Ebone, which has 350 employees, just a few months ago. KPNQwest was declared bankrupt last week, but about 100 staff at Ebone volunteered to work without pay to keep the network up and running.

The future of KPNQwest is hanging in the balance as well – the company is in the hands of administrators in the Netherlands and is expected to be dismantled. A Belgian bankruptcy court has ruled that KPNQwest’s local subsidiary should dismiss all its employees, including those working at Ebone.

Furthermore, an irrevocable shutdown of Ebone’s backbone is a distinct possibility, since it is deemed unlikely that its network will be sold as a single unit and in a way acceptable to its employees. KPNQwest has already told larger clients to find another provider, but smaller customers may be driven out of business as a result.

KPNQwest runs Europe’s largest fibre-optic network and Ebone is a major constituent of its European Internet backbone, since it handles data traffic on behalf of major telecoms companies. Several buyers have shown interest in buying parts of KPNQwest’s operations.

The company claims that up to 40 bids are being prepared and that rival groups such as Cable &Wireless and BT in the UK and US giant AT&T will be among the bidders.

Infoconomy news:
KPNQwest kept afloat until end of the month (12 June 2002)

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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