Freenet (O3) owners raising capital to expand, hunt other players

19 Jul 2013

Ukrainian ISP Freenet, which uses the ‘O3’ brand, has announced a USD31 million increase in its authorised capital in a statement on its website. Freenet also reported that it had 90,000 fixed broadband internet subscribers at the end of June 2013, up from an estimated 77,000 twelve months earlier, making it the ninth largest Ukrainian ISP by users. Freenet operates in eight cities over a network covering around 600,000 households in 4,500 high rise buildings.

Freenet’s general director Victor Frolov told Forbes.ua that shareholders Alexander and Sergei Buriakov provided the capital injection to pay off USD26 million debts and invest an additional USD5 million in network development, while the brothers have reportedly taken joint majority ownership (‘more than 95%’) of the ISP by buying out a 40%-plus stake previously held by Igor Voronov as well as other minority stakeholders. Mr Frolov says Freenet is aiming for over 300,000 customers in the next two-three years, and will be looking to attract additional funding to assist its expansion, as well as actively hunting for network operators to acquire. He added that the company will focus on development in existing cities under its coverage footprint, both in terms of organic growth and merging neighbouring networks. Over the past two years Freenet disclosed that it has assimilated 24 small broadband providers, each serving subscriber bases ranging from a few hundred to several thousand. Frolov stated that extra investment will enable the firm to raise the scale of acquisitions, and he would like to buy a company with 10,000-15,000 subscribers, with several potential targets already identified.

Ukraine, Freenet (O3)