MCI WorldCom confirms interest in PostGEM

MCI WorldCom, which has jumped from being one of several smaller telecommunications players in the Irish market to one of the largest after a major network upgrade announced this week, has confirmed an interest in acquiring PostGEM, the telecommunications arm of An Post.

"I wouldn't rule it out. We've got fairly strong links with PostGEM already," said MCI WorldCom Ireland chief executive Mr Sean Melly yesterday. "It would offer us a quick start, but that would want to happen fairly quickly."

PostGEM would be an attractive acquisition because the company already has a strong portfolio of Irish corporate customers which MCI could absorb. Additionally, Mr Melly acknowledged that, while MCI has a global frame relay telecommunications network, the company lacks that sort of presence in Ireland. PostGEM, on the other hand, has a national frame relay network here.

PostGEM is currently a customer of UUNET, the global Internet services giant which is owned by MCI WorldCom. UUNET supplies a range of services, including voice services which PostGEM sells on to its own customers.

PostGEM also connects to the Internet backbone through a UUNET connection, or "point of presence", in New York. With its recent network expansion in Ireland, UUNET will now be able to offer a less costly direct link to the Net backbone from Ireland instead.

Last week MCI WorldCom Ireland announced it would offer a 90 Megabit-per-second (Mbps) fibre-optic connection to UUNET's global Internet backbone, which nearly doubles Ireland's existing bandwidth capacity.

Industry sources confirm the total capacity of all Internet service providers (ISPs) in Ireland at present is about 50Mbps. However, other ISPs are also in the process of network upgrades. The new UUNET-branded connection will offer two separate 45Mbps lines to UUNET's Internet backbone in Britain, making MCI WorldCom Ireland a "tier 1" provider, one which can link straight to the backbone and offer certain guarantees for quality of service.

One of the 45Mbps lines is already live, running over the fibre cable the telecommunications company NTL has placed undersea to Britain. The second line will use capacity on Telecom Eireann's recently completed Solas fibre link to Britain.

It is understood PostGEM has been seeking a buyer for some time and industry sources believe the company is considering selling off its Internet service provision division, Ireland On-Line, separately. Mr Melly noted that MCI would be unlikely to have an interest in directly entering the consumer Internet service provision market. Instead, the company sees itself as "the ISP of the ISPs", he said. In that role, the parent company already provides global Internet connectivity to ISPs Indigo and TINet, both owned by Telecom Eireann, and PostGEM and Ireland On-Line.

However, Mr Melly noted that the upgrade meant those customers could now opt for a local connection with MCI WorldCom Ireland and avoid the cost of an international link. He believes Telecom's ISPs will probably choose a mixture of international lines from Telecom and local access from UUNET.

UUNET has also provided the network for Gateway Computer's Gateway.net free Internet access service in the US and Britain. It is understood UUNET will supply the Gateway.net free access service in Ireland as well, when it is launched in the second half of the year.