CityNet raises $275 million to build last-mile fiber optic networks

April 12, 2001
Apr. 12, 2001--CityNet Telecommunications, Inc., a provider of last-mile broadband infrastructure, announced it has closed a second round of equity worth $175 million, with an additional $100 million in debt financing.

CityNet Telecommunications, Inc., a provider of last-mile broadband infrastructure, announced it has closed a second round of equity worth $175 million, with an additional $100 million in debt financing.

The Carlyle Group leads the group of five premier investment funds, including Berkshire Partners, Trimaran Capital Partners, Great Hill Partners and Fay Richwhite. CityNet's first round of investment was $100 million in April 2000, and included investments by Telecom Partners, Crescendo Ventures and CIBC Capital Partners.

Founded in 1999, CityNet deploys last-mile fiber optic networks through a city's existing sewer system, avoiding many of the problems associated with traditional trenching construction. CityNet installs fiber networks and then leases them to telecommunications companies, Internet and network service providers and others that offer high-speed services. CityNet is the first broadband infrastructure company to deliver this last-mile dark fiber solution on a wholesale basis.

The last-mile is the gap in an all-fiber optic broadband network - currently occupied by older and slower copper wires - between end-user buildings and the much larger "beltway" fiber optic networks that circle around and through cities. Bridging this last mile gap has been a major obstacle to the fast and cost-effective deployment of broadband service. CityNet's mission is to begin unclogging the copper bottleneck by replacing it with the gold standard of broadband communications mediums: fiber optics.

Typically, one of the greatest obstacles to the rapid deployment of broadband Internet, voice and data services is the need to rip-up streets to lay fiber optic cable, a critical problem in cities. CityNet is able to avoid the problems associated with trenching, by deploying its last-mile fiber optic networks through a city's sewer pipes using SAM, CityNet's computer-controlled robot. CityNet's exclusive partner Ka-Te Systems AG of Zurich, Switzerland manufactures the robots.

CityNet uses another patented, fiber deployment technology, for larger, man-accessible sewer pipes, made by its exclusive partner CableRunner North America LLC, a subsidiary of the Vienna, Austria Water & Sewer Agency. To help CityNet manage the design and construction of its networks, the partners with other last-mile partner, including Alcatel, which provides the fiber cables, special conduit and other connectivity solutions; and Carter & Burgess, an architecture, engineering, and construction management firm in the U.S..

CityNet has already signed license and access agreements with three cities -- Indianapolis, IN, Albuquerque, NM and Omaha, NE. The company has just signed an agreement with its first European city, which it will be officially announcing within the next few weeks. CityNet is negotiating similar agreements with approximately 28 other U.S. and European cities.

About CityNet:

Founded in 1999, CityNet is a broadband infrastructure company that builds carrier-class last-mile fiber optic networks. For more information, visit www.citynettelecom.com.

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