Qwest To Buy Icon CMT
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Icon will be acquired by Qwest in an all-stock deal valued at roughly $185 million. Qwest said the purchase will serve to help the firm further penetrate the business Web hosting and Web-enabling market.
Icon, based in Weehawken, NJ, provides Web hosting, Internet connectivity and professional services for businesses and corporations.
Icon reported revenues in 1997 of $52 million, and estimated its 1998 revenues would reach approximately $80 million. Clients include Icon Bear Stearns, Merrill Lynch, CBS, Swissotel and Pfizer.
Qwest said it will mark its entry into the Web hosting market by establishing 10 major CyberCenters for customer hosted applications. The company expects to open CyberCenters in San Francisco, Los Angeles, New York, and Washington, D.C. by the year's end. Centers in Seattle, Dallas, Chicago, Detroit, Atlanta and Miami will be open in 1999.
Qwest also announced today that it will initiate the first broad scale deployment and activation of a massive Internet Protocol (IP) nationwide network. Qwest said its OC-48 network will deliver usage-based billing and pricing to its clients who will be able to access virtually unlimited bandwidth to support multimedia, e-commerce and data applications without the cost of a dedicated leased line.
The new services complement Qwest's Macro Capacity Fiber Network, the company said, and by offering commercial availability of the OC-48 in November, 1998, Qwest is providing customers with second-generation IP services while competing networks remain under construction.
The new transport services and applications will offer service level agreements including 100 percent network availability. In addition, Qwest said the new IP services will feature high-speed dedicated Internet access with speeds up to OC-48, IP-based VPN services and an expansion of its Q.Talk voice over IP network service.
Qwest also announced it created a National Accounts division to sell its IP-based services and disclosed that its first customer, NY-based commercial real estate concern Rudin Management Company Inc., signed a two-year, $36 million agreement to receive live OC-48 architecture on the Qwest IP backbone.
Billing the transaction as one of the largest IP agreements to date, Qwest said under terms of the contract Rudin tenants will receive OC-48 services "direct to the doormat" at select Rudin locations.
"With the introduction of our OC-48 IP network, we are driving the development and availability of web-enabled and e-commerce applications at performance and pricing levels that will significantly enhance the productivity of business solutions," said Joseph P. Nacchio, president and CEO of Qwest.
Qwest (NASDAQ:QWST) was up +1 1/8 to 29 15/16 in early trading on today's news.