Worldwide Fiber plans IPO

Worldwide Fiber, a fiber-optic networking start-up that recently lured Microsoft's chief financial officer to take over the helm, announced its intention to offer stock in the company by mid-year.

The company, which constructs networks for other communications carriers, gained notoriety last month when Greg Maffei joined Vancouver-based Worldwide as its chief executive.

Worldwide plans to offer shares on Wall Street as well as in Canada and Europe during the first half of the year, though details about the size of the offering, precise timing, per share pricing, and the investment banks that will serve as underwriters have not yet been determined, according to a spokeswoman for the firm. The company plans to use the proceeds to complete its North American and European networks and to develop related Internet and data services.

The move is unlikely to come as a surprise to many communications industry observers. When Worldwide added Maffei as chief executive, the company granted him a $77.5 million loan in order to buy a stake. The generally capital-intensive nature of the business also pointed to a likely initial public offering.

Worldwide is building a 22,000-mile fiber-optic network in North America with plans to sell bandwidth capacity to Internet service providers and major businesses. The company also plans to build an undersea trans-Atlantic network and another in Europe for a total of nearly 38,000 miles of fiber worldwide.

The company will file a preliminary prospectus with federal regulators in about a week, according to a spokeswoman.

Worldwide has received a great deal of attention since naming Maffei to its top post. The executive's star power, coupled with the seemingly insatiable demand for fiber optic bandwidth capacity, is likely to lead to investor excitement.

Based on continued booming demand for Internet access and data services, investors have boosted the share prices of similar emerging carrier companies, such as Qwest Communications International and Level 3 Communications, over the past two years.

A successful IPO could make Maffei's decision to leave Microsoft, the world's largest software company, a little easier. Maffei may have left behind as much as $64 million in stock options to join Worldwide Fiber.

Although market demand for bandwidth is extremely high, the sector is becoming increasingly crowded. In addition to Qwest and Level 3, Worldwide Fiber faces competition from Global Crossing, Williams Communications, Broadwing, Enron Communications and a handful of other upstart firms, many of which also are expanding into Europe, as well as Asia and Latin American nations.