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Broadband Operators Sharing Capacity

With the goal of connecting more countries in Europe, operators Utfors and Pangea are making crossover deals to prepare fiber cable for future broadband usage.

The Swedish broadband operator Utfors is selling an additional duct and fiber cable in the broadband ring to Pangea, a European telecommunications operator. Pangea is developing a state of the art communications network linking seven countries in Northern Europe and Scandinavia.

In addition, Pangea is purchasing dark fiber from Uteb East AB, which is half-owned by Utfors and owns the sea cable between Sweden and Finland. Utfors is in turn buying dark fiber in the section of Pangea4s broadband network that links Copenhagen and many other large Danish cities with Hamburg.

These collaborative deals will serve as a cornerstone in Utfors expansion in Denmark and will allow it to add another 1,000 km to its planned broadband network, bringing the total to 5,500 km. By the end of this year, Utfors will complete its own 4500 km long broadband fiber optic data and telephony network. The broadband network connects the 50 largest towns and cities of southern and central Sweden with Oslo, Copenhagen and Helsinki.

Utfors also sold two ducts in the Swedish broadband network via Uteb AB, of which it owns half, to KPNQwest.

In total these contracts represents a sales value to Utfors, including Uteb and Uteb East AB, exceeding US$80 million.

"This is an excellent deal, and it is wholly in line with the company's strategy. We see it as evidence that our business concept is sound. Utfors will be able to free up major resources for the operator business and for further expansion," says Jan Werne, chief executive officer at Utfors.

"The agreement with Pangea is only one of many now under way. Together with the KPN-Qwest agreement, it means that we are ahead of schedule." Pangea is based in Hamilton, Bermuda but also has offices in Rye, New York and Amsterdam. Utfors is a Swedish Internet operator that delivers IP-based, high-speed services to companies.

The company forecasts net sales of more than SEK 700 million (US$83 million) in 2000. The major shareholders are Norsk Vekst and Litorina Kapital.

Utfors is along with Bredbandsbolaget, two new and main competitors to the government owned telco and ISP Telia. These two new operators have been important also to the new trend in Sweden with monthly flat rate for users. With own cable network they can stress the price level on market.