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PSINet launches new campaign

Despite intense competition, PSINet plans to expand into Europe and says it will post positive earnings in the first half of next year.

In spite of increasing competition, PSINet (PSIX) today laid plans for its expansion into Europe and said it will post positive earnings in the first half of next year.

The company's stock closed up 2-1/2 to close at 13 on today's announcement.

The announcements show that PSINet is looking to expand after restructuring earlier this year to focus on its commercial Net business. PSINet's European expansion is also another example of the rush by U.S. ISPs to continents where new online markets are less crowded and growing at a faster rate than those in the United States.

Other ISPs are taking similar measures to sidestep competition in the cutthroat consumer market dominated by the likes of American Online and CompuServe. Some have started to move away from the market served by the major providers. Netcom recently announced it would drop its "all you can eat" flat-rate pricing and focus on higher-priced, higher-quality service in the business sector.

PSINet said it plans to post positive earnings for the first time in the first half of 1997. The company defined those as earnings before interest, taxes, depreciation, and amortization, or EBITDA, a common financial benchmark.

PSINet also disclosed that PSINet Europe has started Internet access service to "several beta-test" customers in Europe. It will begin providing service in London, Brussels, Frankfurt, Germany, and Monaco starting in the first half of next year. Internet equipment and carrier selection will be announced early next year.

PSINet also said it signed pacts with more than 20 U.S. ISPs to use the company's modems, routers, and network to provide service.