Veteran internet service provider PSINet Inc has spun out a subsidiary called PSINet Telecom Ltd, its first move in a push into the corporate telecoms market, backed by the international and domestic telecommunications license award to it by the Federal Communications Commission. The company won’t say when it will launch its telecoms offerings, but says it will announce its plans for corporate IP services including IP telephony, by year- end. PSINet plans to expand rapidly in Europe and is looking for a partner there to give it access to a fiber optic backbone network so it can offer international telephony to businesses. The company has been clawing itself back from losses for over three years now, and its future looks to be in better shape following the deal it cut last July with Austin, Texas-based, IXC Communications Inc. IXC exchanged 40,000 miles of OC-12, 622Mbps optic fiber in the US for 20% of PSINet’s shares, worth $240m. PSINet’s shareholders bought this deal rather than an take an unsolicited $400m all cash offer for the company from US Internetworking Inc. Herndon, Virginia-based PSINet gets the first 10,000 miles of the fiber mid year, with the rest coming on line during 1998 and 1999. The new backbone will be used to supplement its existing 45Mbps backbone.
