TECOM looks west with investment in Interoute

The Dubai Technology, E-Commerce and Media Free Zone (TECOM) has announced a US$144 million investment in Interoute, a pan-European voice and data network operator.

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By  Diana Milne Published  November 6, 2005

The Dubai Technology, E-Commerce and Media Free Zone (TECOM) has announced a US$144 million investment in Interoute, a pan-European voice and data network operator. Coming just weeks after rumours circulated that TECOM would be announced as the UAE’s second operator, the deal diminishes any further possible speculation, giving the firm connectivity across European and US markets. Part of Dubai Holding, TECOM will receive a significant minority share in Interoute in return for the investment. TECOM currently provides communications services to the corporates in Dubai’s free zones, and sources have revealed that it will be imminently confirmed as the strategic investor behind the UAE’s second all-licence operator. Using technology from Chinese vendor ZTE, TECOM is reportedly trialling a GSM/ UMTS network. TECOM has also recruited contractors to build a multi-million dollar facility in Jebel Ali linking it to the Falcon System, a high-speed submarine network that FLAG Telecom is planning to launch later this year. These two activities, coupled with the investment in Interoute, make a compelling case that TECOM is indeed lined up to become the second operator in the UAE. Last month Interoute acquired Via Networks and the PSINet Europe assets, giving the company a combined customer base of 19,000 corporates, every European incumbent and the largest US and Asian carriers. According to Interoute’s Dut-ch country director, Berend Jan van Manen, Interoute wants to grow in the west, while TE-COM wants to grow in the east, so the partnership will allow the two to help each other with their expansion plans. Aside from its deal with Interoute, TECOM is already lined up to be among the bidders for a 35% stake in Tunisian incumbent Tunisie.

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