Another broadband player goes down the toilet

Lattice, the utility company which was once part of British Gas, has written off £250m from the value of its telecoms business and may close it altogether if a buyer cannot be found.

The business, called 186k, was launched in October 2001 into a telecoms carrier market which was already suffering from overcapacity - rival Atlantic Telecom had been put into administration just three weeks earlier.

Lattice invested £400m to build 186k, stringing fibre optic cables through the gas delivery network of Lattice's subsidiary, Transco.

186k also offers broadband access services through London's sewage network, through a joint venture with Thames Water called Urband.

The £250m adjustment brings the valuation of the business down to a meagre £100m.

186k was put up for sale in April, the same month Lattice announced it was to merge with electricity distribution company National Grid.

National Grid's own telecoms venture, Energis, was launched earlier than 186k, but has also fallen on hard times and is currently looking for a buyer for some or all of its operations.

Lattice also published its final results, which cover a 15-month period as it changes its reporting schedule from December to March.

Quarterly pre-tax profit for the group as a whole was down to £204m from £459m for the same quarter the year before, with operating losses in the telecoms business up to £87m from £43m.

The loss left the group with a £111m operating loss for the three months to 31 March 2002, down from last year's profit of £459m.