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Executive summary

Colt provides data connectivity products and services from simple broadband access to complex managed networking solutions to support businesses and wholesale carriers across Europe, Asia and North America. Our services are dedicated to business and wholesale customers so our network investment is focused on the cities and information hubs (such as business parks, financial districts and major data centres) where our customers do business. Our network addresses the connectivity needs of the SME to the multinational through a combination of local access and international breadth.

Value proposition

Colt operates in 28 countries across Europe, Asia and North America with metropolitan area networks in 47 major cities as well as direct fibre connections into more than 22,000 buildings worldwide. This combination of local depth and international breadth means we can provide appropriate solutions from basic point-to-point services and Internet access to end-to-end managed network solutions, all with the business grade quality of services and increasing flexibility our customers require.

Our services

  • Managed networking (for example ethernet private networks and IPVPN)
  • Bandwidth services (including high speed services, Internet access and cloud inter-data centre connectivity)

Our customers

We directly serve the connectivity needs of medium to large business customers and wholesale carriers. We serve the needs of small and medium sized (SME) businesses through our distribution channels (resellers, agents, distributors and other service providers). We also offer industry tailored solutions for the information intensive users in our key industry verticals:

  • Capital markets/financial services
  • Media services
  • Mobile network operators (mobile backhaul)
  • Cloud service providers

2014

Colt network expansion in 2014 focused on providing connectivity for key partners and verticals, while expanding on past investment successes to build further capacity and reach. We introduced growth initiatives including wireless backhaul to mobile network operators as well as targeted plans to fill empty space in network-ready buildings and data centres. In Ireland, the continued demand for low latency connectivity across the Irish Sea funded a second PoP and a new fibre ring in Dublin. In the Netherlands we extended the existing Long Distance Network (LDN) to Utrecht, Den Bosch and Eindhoven and connected seven key partner and customer data centres. We added new low latency connectivity between Madrid, Lisbon and Porto to meet wholesale and enterprise demand on these key routes. We connected 24 new third-party data centres across Europe, with a focus on the UK market, and with the acquisition of KVH we now connect 521 third-party data centres globally. Over 900 new customer buildings were connected to the Colt network, bringing total on-net buildings to over 21,000 across Europe with a further c.1,500 added with KVH. We continue to be recognised for our leading ethernet services, winning seven awards at the Metro Ethernet Forum including Best Retail and Wholesale Provider in the EMEA region as well as Best Service of the Year in APAC.

For 2014, Network Services revenues grew 1.2% (2013: 0.1%), with the continuing decline of legacy SDH compensated by sustained strong growth in managed networking. EBITDA declined 6.0% to €234.8m (2013: €249.8m) as margins were pressured by a change in the revenue mix and increased provisioning of off-net business with the growth in managed networking.

Strategy

The strategy for Network Services is to drive maximum return on investment through:

  • Focus on key markets: (1) Industries: Targeting industries which are intensive users of information and communication services and which require services and solutions that match with our core network services offering. Targeting multi-country businesses that will benefit from our reach and international connectivity. Targeting customers who will benefit from our local infrastructure. We also target valuable wholesale customers such as carriers. (2) Locations: Optimising the location and depth of our metropolitan area networks, to ensure we are physically present where our customers most need us in cities and hubs and provide sufficient depth of presence to meet their needs.
  • Focus on customer experience: Offering relevant services and solutions for all our target customers, which leverage our network reach and depth, low latency and service security capabilities.
  • Focus on asset use: Ensuring we maximise our reach and relevance to customers locally so that we maximise the profitable use of our network. We do this through local targeting and sales, street by street and building by building.

Revenue (€m)

Revenue

EBITDA (€m)

EBITDA

Capital expenditure (€m)

Capital expenditure

Revenue from Fibre Infrastructure Services (€m)

Revenue from Fibre Infrastructure Services

Revenue per connected building (€)

Revenue per connected building