The National Grid Plc, which owns the UK’s vast network of high voltage power lines, is to sell a minority stake in its wholly- owned telecoms subsidiary, Energis Plc, through a global offering of new ordinary shares. Full details of the offer have not yet been disclosed, but a 25% stake is expected to be floated by December this year, giving the company an estimated market value of 1bn pounds. Formed in 1993, Energis is now the UK’s third biggest fixed line telecommunications service provider (behind British Telecommunications Plc and Cable and Wireless Plc). In the year to June 30 the company grew revenue by 127% to 97m pounds, producing net losses of 54.2 pounds. Revenue is forecast to grow at a compound rate of 25% and the company hopes to be profitable in four to five years time. Energis operates a network of over 5,000 kilometers of fiber optic cable, the majority of which sits high on top of National Grid’s cross-country electricity pylon network, wrapped around the earth cable. National grid has invested around 575m pounds in Energis to date, including 337m pounds on construction of the network, and flotation of the company will necessitate a formal agreement between the two stating how much National Grid will charge Energis for the use of its pylons. The low cost base, gained from not having to dig its cables into the ground, allows Energis to undercut BT by a claimed 10%. The fiber optic network is based exclusively on synchronous digital hierarchy (SDH) technology, allowing Energis to provide high bandwidth capacity to its 35,000 business sites. The company already carries 60% of the UK’s internet traffic.
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