Alchemy has acquired Geo from Hutchinson Whampoa for £62m. For comment see The Times 6th Feb 08 Alchemy digs deep in broadband sewer deal. Regent, where I serve as an NED, acted for Hutchinson Whampoa in this transaction. Indeed, I have also known Jon Moulton of Alchemy for many, many years.
Hutchinson, who of course also own the mobile operator 3, bought Geo in 2003 and put it together with operations from Thames Water and Lattice. Geo owns thousands of miles of fibre optic cables laid along side gas mains and through the sewerage system. It supplies its services to the likes of Carphone Warehouse and Tiscali.
On the surface this deal, which has attracted little press comment, might appear a bit run-of-the-mill. We all remember the enormous investment companies made in laying fibre optic cables in the 1990s which then lay under-utilised for years.
The main 'problems' in the past were that;
- broadband at 1,2,4 even 8mb could easily and cheaply be fed along the copper cables we all had coming into our homes.
- nobody could think of any practical reason why homes would need more bandwidth
- homes that couldn't get broadband (or fast speed connections), because they were too far from the exchange. were deemed uneconomical and left out of the broadband party.
But the last year or so has seen a revolution brewing
- suddenly 8mb is really not good enough. If you want HDTV - or even decent on-demand normal TV services - streamed into your home you need 100mb
- contention issues plague even those with a broadband link. After 6.00pm in my own home, after all the kids in neighbouring homes are back from school, my broadband slows to the point where it is often impossible even to view Youtube
- all the exciting new applications are data-rich; soaking up more and more bandwidth
- WiMax promises to overcome the last mile link into our homes; by-passing the need to go copper (or BT) at any point.
So suddenly Geo, with its thousands of miles of fibre optic cables and its expertise in laying cables alongside any of the current utility services, becomes an exciting prospect. Demand (ie huge requirement for data rich applications) meets technology (ie WiMAX) meets existing utility (ie fibre optic cables in the sewers). All the ducks/ducts in a row!
Geo will be a 'wholesale' operator - building the network but leaving the retail offerings to others like Carphone Warehouse, 3UK and Tiscali.
Hutchinson, who of course also own the mobile operator 3, bought Geo in 2003 and put it together with operations from Thames Water and Lattice. Geo owns thousands of miles of fibre optic cables laid along side gas mains and through the sewerage system. It supplies its services to the likes of Carphone Warehouse and Tiscali.
On the surface this deal, which has attracted little press comment, might appear a bit run-of-the-mill. We all remember the enormous investment companies made in laying fibre optic cables in the 1990s which then lay under-utilised for years.
The main 'problems' in the past were that;
- broadband at 1,2,4 even 8mb could easily and cheaply be fed along the copper cables we all had coming into our homes.
- nobody could think of any practical reason why homes would need more bandwidth
- homes that couldn't get broadband (or fast speed connections), because they were too far from the exchange. were deemed uneconomical and left out of the broadband party.
But the last year or so has seen a revolution brewing
- suddenly 8mb is really not good enough. If you want HDTV - or even decent on-demand normal TV services - streamed into your home you need 100mb
- contention issues plague even those with a broadband link. After 6.00pm in my own home, after all the kids in neighbouring homes are back from school, my broadband slows to the point where it is often impossible even to view Youtube
- all the exciting new applications are data-rich; soaking up more and more bandwidth
- WiMax promises to overcome the last mile link into our homes; by-passing the need to go copper (or BT) at any point.
So suddenly Geo, with its thousands of miles of fibre optic cables and its expertise in laying cables alongside any of the current utility services, becomes an exciting prospect. Demand (ie huge requirement for data rich applications) meets technology (ie WiMAX) meets existing utility (ie fibre optic cables in the sewers). All the ducks/ducts in a row!
Geo will be a 'wholesale' operator - building the network but leaving the retail offerings to others like Carphone Warehouse, 3UK and Tiscali.
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