Failed 3G Bidder Files for Bankruptcy

The Dutch high speed landline company, Versatel Telecom has filed for bankruptcy protection to speed up the conversion of its substantial debts to equity. The company had bid for a 3G license in The Netherlands, but withdrew from the 3G auction after the government failed to take action against Telfort, which it alleged had sent it a "threatening letter" over bidding levels.

Had the company won a 3G license, it's debts would have been even higher and could have brought the company down even sooner. Such a collapse of a 3G license holder could have had a negative impact on all the other license holders. There is no suggestion though that its lack of a 3G license lead to the current problems, these are generally related to the massive overcapacity in the European broadband market.

Versatel said in a press statement it already has the support of bondholders who own 65% of its debt for the move into bankruptcy protection.'"

Posted to the site on 20th June 2002