BT plans to float web hosting arm

BT has announced plans to float its web-hosting business next year.

Ignite, BT's business-to-business web hosting operation, was created after the telecom giant split into six internal units two months ago.

Ignite is a combination of its Syntegra and Syncordia systems integration operations and also owns 70,000km worth of pan-European network backbone and the company's internet protocol (IP) network.

"Ignite is only two months old, but has generated £3m revenue," claimed Vernon Irvin, president of BT web-hosting.

BT is now in talks with investment bankers to advise on the unit's spin-off.

Ignite's annual sales are estimated at £4bn per year but, as a standalone unit, could carry a market capitalisation of £10bn, claimed Irvin.

BT owns 80 per cent of the UK narrowband market, but only 20 per cent of the broadband network capacity available in the country, according to analyst Frost & Sullivan.

BT is also extending its existing relationship with AT&T, through their joint venture Concert, building a global Internet data centre network.

They will invest £1.25bn over the next three years, with 25 centres due to go online this year offering co-location, web-hosting application and professional networking services, - competing with firms such as KPNQwest.

The combined IP backbone network is expected to reach more than 850 cities in 60 countries and represent more than 2200 points of presence by 2003.

First published in Computing