Viatel gets $50m to target larger SMEs

Viatel has raised between $50m and $60m from its main shareholders to target European mid-sized businesses – which are currently being badly served by their providers, according to the company.

They are also the fastest growing sector of the telecoms market – set to jump 21 per cent to £23.5bn by 2005/6.

"Universally these companies are fed up with the service that they get from their providers, according to our research," said Lucy Woods, Viatel CEO. "They don't like to be served by call centres who don't know, or care, who you are – at some of them you talk to a machine, not a person."

Woods, a veteran of BT and Worldcom, sympathises with the neglected: "We are a small company now. There is no sense of urgency about fixing the problems of small people."

The telco will be using the cash to build a sales force and service its $3m a month overheads. Woods said that if the company found potential acquisitions it would bring them to the attention of its shareholders, led by top US bank Morgan Stanley.

Viatel will be able to offer some price advantage as it is debt-free after emerging from Chapter 11 bankruptcy protection early in 2002, but Woods said the company would be leading on its quality of service and would avoid any serious discounting wars.

The telco has a network and data centres stretching from London through Germany and Switzerland to the South of France. It has around 10,000 users acquired with the purchase of two ISPs last year: one based in the South-East of England and the other in Switzerland.

And Viatel still has a clutch of customers left over from the glory days when it had 1,000 major users and revenues of $700m.