Category Archives: Colt

Colt gears up for cloud with new CTO appointment

Network Function VirtualisationColt has announced that its newly appointed Chief Technology Officer Rajiv Datta is to be given the brief to drive the service provider’s future cloud strategy.

Datta’s duties are described as ‘the creation of next generation of products and services, including SDN-based networks and digital customer experience’.

Datta has joined Colt’s Executive Leadership team to be led by Carl Grivner who took over as CEO on 1 January. Datta was recruited from AboveNet Communications, where he was chief operating officer for the fibre infrastructure provider as its annual revenues grew from $190m to $500m. New Colt CEO Grivner said Datta was recruited for his track record of transforming business.

Competition from cloud-based services such as Skype has affected the revenues for all European telcos, according to Reuters, which reported how Colt exited the wholesale market for voice calls in 2014.

However, according to a recent report from the European Telecoms Network Operators’ Association (ETNO), the year 2016 should see a return to growth in this sector, thanks in part to a thinning out of players, such as Colt, which also took the decision to pull out of the IT services market.

With an estate of 34 carrier-neutral data centres in Europe and seven managed facilities in Asia Pacific, Colt is to concentrate on cloud and data centre services. However, the data centre market is entering its own phase of consolidation and in November BCN reported market leader Equinix had bought its rival TelecityGroup. In this climate the change management skills of Datta will be invaluable, according to Colt CEO Grivner.

“Rajiv’s track record of transforming business performance will be invaluable in creating the levels of focus, speed and innovation that we need,” he said.

Getronics buys Colt’s Managed Cloud business

IT services provider The Getronics Group has bought Colt’s Managed Cloud business to add it to a portfolio that includes Getronics, GWA and Connectis. Service provider Getronics said it will now extend the range of offering to a client based it previously serviced on behalf of Colt.

The deal includes the acquisition of Colt’s cloud technologies and support services across the UK, France, Germany, Spain, the Netherlands, Belgium, Italy, India, Romania and Switzerland. The Getronics family of companies will now run the managed cloud services supplied to Colt’s customer base, using Colt’s own network, voice and data centre capabilities.

Colt Managed Cloud has 600 customers across multiple verticals including financial services, media and government. It employs staff working across operations, transition and engagement, presales, service management and support functions.

The Getronics Group, owned by Aurelius since its acquisition in 2012, has previously acquired the Spanish application services divisions of Thales, Telvent and Steria Iberica and NEC’s unified communications direct sales and services divisions in four countries. The Colt Managed Cloud was named as a market leader in Cloud enabled Hosting for three consecutive years by analyst Gartner, in its Magic Quadrant reports.

The Getronics Group has 6,000 employees in 18 countries across Europe, Asia Pacific & Latin America. The IT service provider division of the group has had a long running arrangement with Colt to run its services to its clients and the deal represents a formal transfer of ownership, according to Getronics CEO Mark Cook. “Today’s announcement demonstrates our commitment to offering the latest, best of breed IT services to our customers. We are looking forward to welcoming the transferring customers and employees into the Getronics family in the new year,” said Cook.

The financial terms of the deal are undisclosed.  The completion of this transaction is subject to regulatory and competition clearances and compliance with local labour laws.

Colt bows to competition, exits IT services

Colt is bowing out of the increasingly saturated IT services market

Colt is bowing out of the increasingly saturated IT services market

In a bid to increase profitability Colt announced this week that the company would exit the IT services market and put greater focus on its “core” services including its network, voice and datacentre services.

The company said its “managed exit” from the IT services market would also allow it to focus on offering datacentre services (colocation, cloud) and optimise use of its assets.

“Our IT services business would continue to need considerable investment in the short-to-medium term in order to deliver profitability and we do not believe this business can compete and grow successfully with a level of risk that is acceptable,” the company said in a statement Tuesday.

“Colt will continue to honour existing customer contracts through to termination, but will no longer seek new business.”

“The recent performance of IT Services has shown few signs of improving in accordance with the targets we set to deliver appropriate profit and cash returns in the medium term.”

The company anticipates the move will save about €25m annually, though it expects to incur cash and non-cash impairment charges of €45m to €55m and around €90m, respectively. Revenue from IT services is expected to decline €20m annually will become immaterial by 2018, it said.

“The fundamentals of our core network services and voice services businesses remain solid, and we are driving improvements in our datacentre services business. We are taking decisive action to become a more focused and disciplined organisation which we believe will accelerate the performance of our Core Business,” said Rakesh Bhasin, Colt chief executive.

“Overall, we believe the prospects for the Group are good and I am confident that, with the recent changes we have made within the senior management team, we will be able to deliver improved profitability and cash returns,” he added.

Colt still owns and will continue to operate its 22 carrier neutral datacentres in Europe and 7 in the Asia Pacific region (including those acquired through Japanese IT services provider KVH last year), though its goal of moving away from IT services may also mean a pivot towards becoming more of a systems integrator, which – like the IT services market – is quite competitive, and it isn’t entirely clear how the company intends to differentiate from other large incumbents in this space.

Fidelity bid for Colt doesn’t convince directors

Fidelity Investments, which is already the majority shareholder in Colt Group, has bid to acquire the remaining stock of the telecoms and cloud provider, but Colt directors are unconvinced.

The relationship between the two companies is intimate and has been from the very beginning. Fidelity provided the cash to form Colt back in 1992, to provide telecoms services in London. It soon expanded across Europe but in 2001, together with a lot of other telecoms and tech companies, encountered problems requiring a further injection of capital from Fidelity.

For some reason, despite holding its current majority position since then, Fidelity has decided it’s time for Colt to be wholly private once more. “As founders and majority shareholders of Colt, Fidelity is pleased to announce the continuation of its commitment to the business through returning the group to private ownership,” said Cyrus Jilla, President of Eight Roads, the proprietary investment arm of Fidelity.

“We typically hold our proprietary investments outside the financial services industry, such as Colt, in the private domain. This transaction allows us to hold our investment in Colt consistent with this strategy while providing an attractive and certain value for the current Colt independent shareholders.”

The independent directors of Colt, who are there to protect the interests of its shareholders, have publicly acknowledged the offer of 190p per share from Fidelity, but reckon it’s too low.

“The independent directors believe that the offer undervalues the company and its prospects and accordingly they consider that the financial terms of the offer are not fair to the independent shareholders of Colt,” said their statement.

“The independent directors believe that the financial terms of the offer may be considered by some shareholders to be acceptable in the circumstances, and accordingly make no recommendation to shareholders whether or not to accept the offer.

“Over the course of 2015, the management of Colt has been working on a plan to refocus the company’s activities and significantly improve its financial performance. The Board has provisionally approved a new business plan and further details will be announced in due course.”

Colt’s shares were trading at around 156p before the bid and jumped straight up to 190p, implying the market thinks Fidelity’s bid is likely to be accepted.