The prospect of going out of business is slipping away for Kosc. "A business continuity plan will be proposed by Kosc's management and massively supported by Altitude Infrastructure," explains David El Fassy, the president of this group specialising in the deployment of fibre optics in rural areas.

The offer will be placed on Monday on the desk of the receiver, who will have to choose between it and possible disposal plans presented by other candidates, such as Bouygues Telecom, which has long been presented as a potential buyer.

"We propose to maintain the business and the services provided to customers. We are backed by Altitude, an extremely experienced family group used to providing wholesale only services. And we pay the company's liabilities. This is by far the best solution," argues Yann de Prince, Kosc's founding president.

As part of the continuation plan, the debts of 40 million euros would be renegotiated. And an agreement would be sought with SFR to settle any dispute.

The fact remains that the company is burning cash. The former shareholders - the OVH group and Caisse des Dépôts - had agreed to provide 4 million euros at the beginning of December to ensure operations during the recovery phase. The administrator knows that this cash box will soon be empty.

Faced with this cash flow problem, Altitude Infrastructure promises to invest 100 million euros in Kosc over the next five years. A large part of this contribution will be made out of own funds.  "Acquiring new customers is expensive, explains David El Fassy. Kosc's technical infrastructure is now efficient and supplies a lot of companies. Kosc's market is ahead of him. Our business plan foresees a return to operational equilibrium in 2022."

The existence of this continuation plan should reassure Kosc's employees, the dozens of customer operators, the companies that they themselves supply, and also the elected representatives of the Senate and the Assembly, who have taken up the challenge in recent months to criticise the Competition Authority's action on the corporate telecoms market. Indeed, faced with the very unsatisfactory access of SMEs to optical fibre and high prices, in a context of Orange and to a lesser extent SFR domination, the parliamentarians called for the rescue of the Kosc model. The rescue is on its way.

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Source : Les Echos

Kosc Telecom was the solution devised by the public authorities to bring more competition to the business telecoms market. Just three years after its launch, Kosc is expected to file for bankruptcy leaving a slate of 120 million euros.

After the merger with SFR, Kosc acquired part of the activities of Numericable (Completel). Bpifrance had injected 9 million euros and OVH was also a shareholder via a contribution "in industry". The idea was to make Kosc the third man in the lucrative telecom business market, 85% owned by Orange and SFR.

In 2018, Caisse des Dépôts et Consignation had in turn promised to provide 20 million euros to Kosc. It was without counting on a grain of sand: a lawsuit lost to SFR and the threat of having to pay it 20 million euros. For the Caisse, the risk was too high and decided to withdraw from the case, leading to the fall of the telecom operator.

A new game should be played at the helm of the commercial court, with potential buyers. Indeed, the telecoms sector has evolved since 2016 and Free and Bouygues Telecom have in turn launched themselves into the business market. Bouygues' subsidiary would also be a serious candidate for the takeover of Kosc, and would therefore be favoured by OVH.

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Source : Le Figaro

The wholesale-only operator Kosc is in the spotlight. Its president, Yann de Prince, confirmed that there are only a few weeks left to find a solution to his financial problems at his hearing in early October by the Senate.

"As the company had not yet reached operating balance, and could not therefore in principle convince the court of its ability to continue its activity, it was logical that we should proceed, not with a suspension of payment, but with outright liquidation," explained the director of the alternative wholesale operator.

"The process I have initiated gives the company a very short period of time, two months, to try to overcome its difficulties," he said. Yann de Prince mandated the Rothschild investment bank in early September to "find investors or any partner who could help save or take over the company".

"The outcome of the process initiated at the beginning of September is set for the end of October 2019. It may be extended for a further two months. Its main condition is the payment of the next salaries. This payment itself depends on a new commitment by shareholders or the lifting of SFR's seizures. If one or the other does not come true, we will probably no longer avoid the pitfall of liquidation," said Kosc's boss.

Facing serious cash flow problems, the operator has indeed seen its horizon darken considerably in recent weeks. The operator is uncertain following the Competition Authority's unfavourable decision concerning the takeover of Completel's DSL network, previously held by SFR, and the withdrawal of one of its major investors, Banque des territoires.

"Kosc is in a blocking situation at this time. On September 27, 2019, using the ADLC's decision as an instrument in the middle of a discussion process with creditors, SFR proceeded to a protective seizure of the company's accounts and all trade receivables. As a result, Kosc no longer has any liquidity. Bailiffs regularly come to our offices. From the end of October, it will face the problem of salary payments unless our shareholders intervene further," said Kosc's Director of Financial Control and Regulatory Affairs.

It is now time for an emergency. "Kosc's situation is now simple: either in the coming weeks, the shareholders will be sufficiently convinced and will decide to provide sufficient funds to allow the company to regain a certain margin of manoeuvre, necessary for the implementation of a sustainable solution, or the company will be liquidated or sold," explained its president.

Especially since OVH, one of its historical investors, could well play the role of the girl of the air since the telecom activities are no longer a priority for him.
But the operator has no shortage of contenders for its takeover. The operator's president thus stated "Despite a most unfavourable situation, despite the urgency with which these possible partners are asked to position themselves, sixteen[candidates] have already expressed themselves" by specifying that they are mainly industrial partners.

Bouygues Telecom and Iliad could be candidates for this takeover. This information should still be taken on a conditional basis, but it might seem plausible when both operators have views on this lucrative market.

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Source : ZDNet

After many technical and legal setbacks last year, the horizon is finally clear for Kosc. In mid-June, Banque des territoires (Caisse des Dépôts) invested 20 million euros in the capital of a new subsidiary, Kosc Infrastructures, in order to contain the operator's network assets. Guénaël Pépin reviews with the operator these last months in an article from Nextinpact.

While wholesale offers for operators are tending to become more widespread, hopes are essentially focused on Kosc. Indeed, the company, co-founded in 2016 by OVH, aims to break the duopoly of Orange and SFR in this market. To access the local loops of major operators and thus cover the whole of France, Kosc must connect its network to hundreds of NROs. In practice, it recovers Completel's national network to connect to Orange and SFR's local networks. Through these various networks, the company hopes to become a single control point for professional operators.

However, Kosc did not have the financial resources. 100 million over five years to cover the entire private deployment area. The financing of Caisse des Dépôts was therefore necessary. "The investment by the Bank of the Territories makes it possible to finance the implementation of the 100% fibre coverage strategy in the private zone" confirms Kosc. The creation of the Kosc Infrastructures subsidiary allows Caisse des Dépôts to limit its control to major infrastructure decisions. As for Kosc, this allows it to better link its private deployments with future contracts with RIPs. After a year and a half of competition between public and private infrastructure funds, the company's choice "naturally" turned to a RIP concession model. "Caisse des Dépôts was able to make us a financial offer that matched our ambitions. Beyond the financial aspect, she brings us the expertise of her teams who benefit from an excellent understanding of market issues, due to her experience working alongside RIPs" assures Antoine Fournier, General Manager of Kosc.

However, the operation almost failed. Indeed, one of the investment conditions of the Bank of the Territories was the proper technical and legal functioning of Kosc. However, several technical and organizational problems with SFR, when the assets were transferred, took them to court. "Not all the disputes with SFR are behind us, so we don't want to express ourselves any further on the subject. All we can say is that our partners have largely congratulated us on our perseverance during the legal battles of recent months. Just because Kosc is under legal pressure from a powerful player does not mean that Kosc bends" the company says.
 
Despite its disputes with SFR, the network is now operational. The company has around thirty customer operators and has been online since mid-July with more than 2 million eligible catches throughout the country. Even the competition from Bouygues, SFR and Orange on the "bitstream fibre" offers does not worry the operator. "Thanks to the mobilisation of Kosc Telecom teams, there is now a first bitstream fibre offer and your question shows that the market is finally opening up! It is so much better for our operator customers" adds Antoire Fournier. Kosc does not intend to stop there as it now installs itself in "neutral" data centers to open access to its backbone links, its professional fiber collection and enterprise fiber.

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Source : Nextinpact