Atlantic sinks under pressure of debts

Customers face potential loss of service

Customers of broadband provider Atlantic Telecom face a potential loss of service, as administrators seek a buyer for the debt-ridden operator.

The Aberdeen-based firm laid off 245 staff last week on the advice of administrators PricewaterhouseCoopers (PwC).

Atlantic delivers broadband communications and web hosting to small to medium sized enterprises in the UK, Germany and The Netherlands. Its strongest hand is in broadband fixed wireless access, particularly in the Greater Manchester area.

Customers of Atlantic's fixed wireless networks in Glasgow, Edinburgh, Aberdeen, Dundee and Manchester, plus a DSL network in Manchester, could be affected.

Iain Bennet, partner at PwC and joint administrator at Atlantic, said that operations will continue as normal for now and that discussions are underway with "several interested parties" with a view to selling the entire business.

But Zeta Tsatsani, senior consultant at Ovum, said the prospects were not good. "I think someone will come in to buy the assets, and that will be the end of it. It incurred a huge amount of debt building out its networks," she explained.

Atlantic won a 28GHz licence to increase its wireless offering, but has not rolled out any services. The company's former executive chairman, Graham Duncan, is planning a last-ditch effort to rescue the business.

Atlantic is official sponsor of the 2002 Commonwealth Games, but Gerry Pennell, director of technology for the event, said it had contingency plans in place.