The European Commission has given the thumbs-up the the creation of the Hermes joint venture by 10 European railway companies and telecommunications companies from the US and the UK, according to a Commission spokesperson in Brussels. The new company, Hermes Europe Railtel, will build a pan-European telecommunications network dedicated to the cross-border transport of traffic primarily along the rights of way of the railway tracks. Last year, the venture managed to raise the money needed from its shareholders to make the proposed networks viable (CI 2,718). The venture includes GTS Hermes Inc – a subsidiary of Global TeleSystems Group Inc – 10 European national railways and Racal- BR Telecommunications Ltd – Racal-BRT, a member of the Racal Electronics Plc group. The network will be used by public network operators, carrier consortia, cellular telephone companies and other authorized telecommunication operators. During its start-up period Hermes will supply cross-border basic transport capacity (point-to-point), competing with the alternative traditional system operated by public telephone operators. The Commission considers that although Hermes may initially have a high share of this market, its potential competitors are equally or more powerful. They include national public telephone operator operators, existing telecommunications consortia and potential alliances between telecommunications operators and the owners of such infrastructure as national energy and water undertakings. The Commission has therefore decided that the concentration will not result in a dominant position and is compatible with the common market.
