Norwegian households have better and faster Internet connections than Norwegian businesses. Broadnet intends to remedy this by offering superior services through its extensive fiber network.
Broadnet is one of Norway’s leading providers of fiber based data communication. The company is the result of the merger between telecom group Ventelo and dark fiber provider InFiber. The two companies were acquired by EQT funds in 2011 and 2012.
The combined group is separated into two distinct companies, Broadnet for datacom services and Ventelo for voice services. The two companies are independent from each other but organized under a joint holding company.
“The merger is largely done by now but as always with mergers it is an ongoing process. We have now merged organizations and commercial systems, and over the coming two years we will integrate and modernize network and production platform. We will end up with one of the most modern networks in Europe,” says Martin Lippert, CEO of Broadnet.
With 24 000 kilometers of fiber network connecting 90 cities, Broadnet operates one of two optical nationwide fiber backbone networks in addition to substantial regional and local networks. Historically, focus has been on the more densely populated Oslo area and south-east Norway where a substantial portion of Norwegian population and business premises are located. Broadnet mainly serves the corporate market, but also taps into the residential market branded as Homenet.
Based on fiber access Broadnet offers services such as VPN, Internet, Ethernet and Dedicated Capacity to both end-customers and the wholesale market. Broadnet has branded its fiber focus in the datacom market as FIBERCOM. The customer base spans from SME’s to the largest Norwegian enterprises in addition to other domestic and international telecom operators.
The overall corporate datacom market in Norway is still growing on a yearly basis, but B2B fiber migration is still lacking behind the residential market.
“Norwegian businesses are lagging both other countries and Norwegian households in their capacity and quality of their data connections. As the total fiber penetration in the consumer-market is approximately 50%, a mere 14% of Norwegian businesses have installed fiber connections.”, says Martin Lippert.
Fiber connections are a lot faster, possible to upgrade and more stable and reliable than the DSL copper network technology often used by many companies today.
“Total B2B datacom market in 2012 was around NOK 5 billion and we estimate our share of the overall market to around 25%. As demand for speed and quality is soaring, time is really on our side in this process and we just have to concentrate on delivering the best and most cost efficient service in the market”.
The Norwegian fiber market is very fragmented with many local and regional players typically owned by municipalities or local utility companies. Hence acquisitions constitute an important opportunity for Broadnet, combined with Broadnet’s own fiber network build out.
“Broadnet’s network is constantly evolving and is being expanded through annual investments of several hundreds of millions of Norwegian kroner each year. In a competitive market like Norway a combination of cooperation with other infrastructure owners, network build-out and acquisitions of smaller players provide the best pay-back in an Infrastructure game. Our business model, backed by EQT’s capital and advisor network gives Broadnet a unique position and great advantage towards competitors,” says Martin Lippert.