Hutchison Whampoa Group, the owner of the UK mobile operator 3UK, has sold its UK optical fibre networking company to a private equity group.
London-based Alchemy is better known for distress buy-outs and the provision of later stage development capital. However in this case it insists that Geo in good financial health. It is "exceeding its targets and is being acquired with a significant cash balance," said the group.
Indeed, speaking to Techworld, Chris Smedley, Geo's chief executive, pointed out that Geo is cash flow positive, and is expected to turn in a profit this year. "We turned over revenues of roughly £4 million in 2006, £11 million in 2007, and are expecting something in the region of £35 to £40 million this year," said Smedley.
"Alchemy has not previously owned large data networking companies," said Smedley, "but they liked the fact we build bespoke networks for large organisations."
Geo says that its ability to design and build a bespoke dedicated fibre network package for clients, allows organisations to own and control their own data networks, so security, high bandwidth and resilience are in their hands, rather than a third party supplier. Geo also offers fully managed networks, dark fibre, lit fibre and co-location services. "We are not wedded to any one technology. We build an end-to-end platform for a customer," said Smedley.
Geo has its own 2,500km (or 1,553 miles) optical fibre network across the UK, located adjacent to the national mains gas pipeline. Geo also owns an 80km (50 mile) fibre network built deep underground in Thames Water’s sewer network in London. "It was dark fibre, it was perfect," said Smedley of the London network.
The location of these networks means little downtime. "Farmers don't tend to put sharp objects in the ground near a gas pipeline," said Smedley. "We have only had two outages in three years on the national route, and we have never had outage on our London network."
Customers include the Carphone Warehouse, Tiscali and somewhat predictably, 3UK. Others include CSC, Fujitsu Services, Lancaster University, VTesse Networks, London Internet Exchange and Telecity Redbus.
Another customer is the Welsh Assembly. One of the reasons Geo was awarded the contract to build the Fibrespeed network (a 200 to 300 kms open access network that runs from Manchester to Anglesey across North Wales) was its experience in building new networks.
Yet this demonstrates how little useable dark fibre is left in the ground nowadays, and that at some point soon, people are going to have to start digging cable trenches again.
"I absolutely agree with that," said Smedley. "A lot of people built optical fibre networks, but you count on one hand how many people are running them now, its not a lot. Yet there is unprecedented demand for (fibre) networks."
"The importance of dedicated fibre, especially for big players, is only just being uncovered," he added. "Demand for optical fibre is going to grow and grow, especially in places where there is no access at the moment."