Some of you might know that, before I came to OXID, I used to work as a Network Operator at the Network Management Center (NMC) of HL komm. HL komm is a local ISP/network carrier that is mostly active in the areas of Saxony, Saxony-Anhalt and Thuringia, Germany.
Although I personally don’t like their marketing strategy very much (Knut, where did the “Globish” = English HL komm website which we were talking about go?), I still feel bound to say a few words about my ex-employer after seeing the current discussions in the (local) press and municipal authorities. You see, once again, HL komm is on the sale block.
What is HL komm?
HL komm, founded in 1997, was spun out from Leipzig municipal public services, merged three years later with 3H (Halle) and TelSA (Naumburg), and then opened operations in Halle, Chemnitz and Dresden in 2005/2006. Today, they employ more than 100 people and own a network of 1.800 kilometers of optical glass fiber cable. Approximately 30 other carriers and backbone providers use HL komm’s so called “last mile”. Also, they serve a number of global players as well as SME clients in the region.
It is worth noting at this point that employees at HL komm are not working for the city council. They are paid and treated just like in a free enterprise company.
The biggest challenge I see in HL komm’s business development of the last few years is the “fiber-to-the-home” project. HL komm is mounting optical fiber to certain houses and homes to connect even private users to the IP broadband via Citylan. This is good for Leipzig, also known as the “Media City“.
To complete the picture, here is an image video (German) made by the HL komm guys:
Now for the news: HL komm is about to be sold by the Leipzig city council.
Why would they do this?
Rationale for selling HL komm
Let’s look at the numbers. The yearly turnover of HL komm today is about 40 million EUR, the profit comes to 4-6 million. In the past ten years, HL komm supported the City of Leipzig with 36 million EUR. Leipzig city council undoubtedly thinks that a highly profitable enterprise like HL komm could be sold quickly to any investor for a certain amount of money. There are already some interested parties like Versatel, enviaM and the German Telekom. All of them are internally called “grasshoppers”.
What is the likely result of such a sale? At the end of the day, HL komm might be restructured entirely. The present office could become a pure sales office, engineers could be forced to go to another city and the NMC could simply be replaced by a call center. A lot of jobs could be lost.
Of course, the technology, the entire equipment and the business idea could be taken over by somebody else. But wait, isn’t a city council responsible for the entire infrastructure of a city? In addition to building streets, disposing of waste and looking after the public toilets, doesn’t it also need to provide high-quality Internet access? After all, this is a critical element of the infrastructure of a city that wants to see itself as a media-city in 2011.
Looking only at the figures, Leipzig should instead think about selling the zoo, or maybe the conservatory.
What do you think? Should HL komm be sold?