Colt plans to establish itself as a large metro fiber provider in the United States by leveraging a mix of its own network facilities and assets it will rent from other providers.
Carl Grivner, CEO of Colt, said in a recent Financial Times report (sub. req.) that it will consider options to “build or buy” network assets in major cities including New York, Chicago, San Francisco and Virginia.
The service provider, according to the Financial Times, expects to kick off its U.S. expansion in 2018.
While Colt may be the latest European service provider to seek its fortunes in the U.S. business services market, the company isn’t the first. Cable & Wireless made a multibillion-dollar investment by purchasing other fiber providers before the market crashed in 2001.
Cloud, IoT growth
Colt comes to the U.S. table with a main ingredient for success: Grivner, a CEO who has knowledge of the U.S. market via his previous work for Cable & Wireless, and as the CEO of XO Communications.
Grivner is confident about Colt's U.S. expansion because of the rapid growth of internet of things (IoT) applications and cloud services.
“I don’t think it is going to take a pause,” Grivner said. “The growth has caught up to the hype.”
News of Colt’s pending expansion got the attention of Wells Fargo analyst Jennifer Fritzsche, who said that the environment for competitive fiber providers looking to expand is not the same as it was during the telecom boom of the late 1990s.
“We would argue things are a lot different now than they were then,” Fritzsche said in a research note. “The “build it - it will come” model was one which came a few years too early.”
Laying the foundation
Colt’s plans to build a mixed network in the U.S. should not be a great surprise. In November 2016, Colt said it was expanding its North American sales and support teams.
While the focus was to leverage type 2 facilities from other carriers, Colt’s initial foray into the United States could challenge AT&T and Verizon, attracting more multinational customers that need local and international connectivity services.
As a Pan-European provider, Colt operates in 20 countries across Europe and Asia. One of its first moves was to open two regional offices: one in Chicago and another in Jersey City, New Jersey.
“The North American market is immensely important to Colt and we are working to triple our sales force in the region,” said a Colt spokesperson to FierceTelecom in an e-mail. “Our US operation focuses on serving the needs of multi-national companies such as OTT players and financial services firms that have HQs in the US and need a strong go to market presence in Europe and Asia.”
The spokesperson added that “we also target US companies who have requirements for connections in their Europe and Asia hubs.”
This article was updated on June 26 with additional information from Colt.