Formus Broadband to close down with loss of 71 jobs

 

Formus Broadband, the Dublin-based company issued with one of four local loop broadband licences in 1999, will cease operations.

The company, which employed 71 people, has been in intensive discussions with third parties since Wednesday of last week. But the board decided on Tuesday that the company could not be saved and so informed staff.

A statement was issued yesterday.

It was not clear last night what will happen with the licence granted to the company. It is understood the crucial issue will be whether the company is wound up or bought out.

Industry sources said the talks with third parties aimed to secure at least £5 million (€6.35 million), which it was believed the firm needed to keep afloat this year after its parent, Formus Communications, in Denver, Colarado, decided it would no longer fund the Irish operation. The groups involved in the talks included Broadnet, the company linked with Mr Declan Ganley, which was an unsuccessful applicant for a licence in 1999.

Formus was informed by its parent on Monday week of its decision to restructure its European operations. The discussions with third parties began on Wednesday and were abandoned on Monday.

"This has been a difficult time for all involved in our operation here" a spokesman said. A spokeswoman for the Office of the Director of Telecommunications Technology said the closure was regrettable. It is in discussion with Formus Broadband on what should happen next with the licence.

The licence was one of four broadband licences awarded in 1999 - the other successful applicants being Esat, Eircom and Princes Holdings (now Chorus). The fee paid was £215,000 and the company was paying an annual licence fee of £67,000.

Formus Broadband was involved in broadband wireless technology, offering data transmission and Internet access. It had started operations in Dublin 2 and 4.

Last year the company's parent planned to launch itself on the Nasdaq but changed its mind because of the worsening climate for tech and telecom stocks.