Global Crossing's aggressive plan to gain a strong foothold in Europe became even more aggressive with the $1.65-billion purchase of Racal Telecom's U.K. network. Reaching more than 2000 cities and towns across the United Kingdom, the 7300-km network comes with established rights-of-way along railway lines. The deal strengthens Global Crossing's foothold in Europe by providing some welcome backhaul capabilities.
Racal Electronics plc, Racal Telecom's parent company, expected the deal to boost the position of its overall business portfolio, which includes defense and industrial electronics, transportation services, and other joint ventures. Global Crossing gets a huge addition to its Pan European Crossing network, now nearing completion, that will connect 24 major European cities to its Global Crossing Network by September 2000.
The Racal network is also under construction, though nearing completion. It is an Internet-protocol (IP)-centric network that boasts the latest technologies, including Synchronous Digital Hierarchy (SDH), dense wavelength-division multiplexing (DWDM), Asynchronous Transfer Mode (ATM), and frame relay. The network was originally mapped to come within 5 km of 70% of all U.K. business customers by 2001.
"The Racal network will enable Global Crossing to accelerate its pan-European strategy by giving unparalleled access to 70% of the U.K.'s business customers," says Tom Casey, vice chairman of Global Crossing. "It provides us with a highly advanced network that services the demands of the U.K. government, transport, defense industry, and corporate clients."
The Racal network is also the primary source of MCI WorldCom's U.K. network capacity, and Racal has significant carrier relations with Cable & Wireless, NTL, and Telewest. Global Crossing also gained the workforce to manage and operate its new network, including 600 engineers and operational staff and 120 sales and support people.
The acquisition is another piece of Global Crossing's strategy to become the first worldwide next-generation carrier.
"We're actively looking to complement our undersea network with terrestrial links globally," says Casey. "Global Crossing is very focused on becoming the leading pan-European operator, and we believe that our global connectivity, combined with our deep penetration of the U.K and its markets, will enable us to do that."