RealTime IT News

Czech ISP Cesnet Acquired by Tele Danmark Joint Venture

Contactel Ltd, a joint venture between Danish telco Tele Danmark and Czech telecom company Ceske Radiokomunikace, won a bid to acquire a majority stake in Czech ISP Cesnet.

Cesnet serves about 8,000 dial-up customers as well as about 600 leased lines. It ranks with Internet On Line and VOL as the top ISPs in the country.

The proposed acquisition applies to the commercial part of Cesnet only. The academic network TEN-155 which is operated in the Czech Republic by Cesnet will be retained, as well as its services for universities. Cesnet will effectively, if not soon absolutely, be divided into two parts.

The actual terms of the contract between Contactel and Cesnet are still negotiated. The price is also unknown; Czech analysts estimate relatively high sum between 200 and 500 million CZK (US$6 to 14.5 million).

Cesnet is the last ranking Czech ISP without foreign capital. The most important foreign player in the Czech ISP market is KPNQwest, which controls three major local providers: EUnet Czechia, Luko-Czech Net and Internet On Line, which it runs through its stake in the principal Czech telco Cesky Telecom. VOL is owned by Italian entrepreneurs, while local cable companies, which are also prospective ISPs, are in the hands of Dutch capital.

Contactel is one of the expected favorites of the Czech telecommunication sector once the market is liberalized, a move which is due by the end of this year. Contactel and another local company, Aliatel, are currently preparing to compete with existing monopoly of Cesky Telecom.

Cesnet was founded in 1996 as the association of Czech universities and Academy of Sciences. The primary purpose of Cesnet was to provide Internet access and other computational services to the schools and universities, but soon a commercial branch was launched. Cesnet reached revenues of approximately 180 million CZK (US$5.2 million) last year.