Shares in Viridian, the parent group of Northern Ireland Electricity, rose by 52p (66 cents) on the Dublin Exchange yesterday, following confirmation that it is to provide telecommunications services.
Viridian's shares also rose by 22p sterling (321/2 cents) in London when it was announced that it is to form a joint venture with British telecom group Energis to target the corporate market in Northern Ireland. The two companies will spend £20 million initially in the first three years and say they will provide up to 200 jobs.
The network will initially cover the greater Belfast area, but a Viridian spokesman said the company would serve all of Northern Ireland, using other companies' infrastructure where it does not provide its own.
The joint venture - a 50:50 project - will use Northern Ireland's electricity structure to deploy the new network which will be launched in the latter half of this year. Building is to begin next month.
It is estimated that the total business - including British government business in the North - is worth in excess of £250 million sterling a year and substantial growth has been forecast in advanced data and Internet services.
The new company will focus on the corporate market, seen as far more lucrative than the residential market, initially and will deploy the latest broadband technology. However, a Viridian spokesman said the new company would also be monitoring the Republic to see whether opportunities existed here.
The joint venture will link up with Energis's existing network in Britain and will carry various services including advanced frame Relay and ATM as well as Internet services.
Energis was formed in 1993 by the National Grid and concentrates exclusively on the business sector. Its network is built mainly along the National Grid's electricity pylon infrastructure and it has more than 6,500 kilometres of fibre optic cable. Its turnover last year was £168 million sterling and its customers include the BBC, Boots, DHL, Renault and the Mirror Group Newspapers. It also carries traffic for other operators such as Colt and MCI/WorldCom, according to a spokeswoman.
The advantage of using Viridian's electricity cables and pylons to run the fibre along is that it obviates the need to dig up streets and is much quicker to roll out. Viridian is Northern Ireland's largest company by turnover and has two main businesses - Northern Ireland Electricity and Viridan Capital.
It is understood that around 90 per cent of the corporate market in the North is currently held by British Telecom. Three months ago, Telecom Eireann announced that it was entering the Northern Ireland market and would spend £50 million over the next five years, establishing the company and the infrastructure it needs to compete.
Meanwhile, the Republic has also seen a telecoms company and an electricity company combine to provide telecommunications services. The ESB and British Telecom formed Ocean, a joint venture company, last year. It too is strongly targeting the corporate market.
