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UPDATE UK ISP Breathe Networks Acquired in a Management Buy Out

Posted: 23rd Jul, 2009 By: MarkJ
UK ISP Breathe Networks Group, which has this week been in the news following a slew of largely ZetNet related email problems and a sudden broadband platform migration (here), confirms to ISPreview that a management buyout has indeed taken place. This may at least be partly responsible for the recent disruption to the provider’s services.

It's understood that the situation arose after ZetNet, which is one of two ISPs operated by Breathe (the other being Fast4), was forced to enter Administration on July 16th. ZetNet is known to have been going through a difficult management restructure towards the end of 2008, which followed its earlier acquisition (original news).

Steve Kaye, Managing Director of Breathe Internet - the new owner(s), informed ISPreview:

"It's no secret that Breathe has had a turbulent past. The expansion plans of the group were ambitious but that ambition over took what was practical, achievable and reflective of the current economy. The absolute primary objective for us now is to take the business back to basics focus on what were good at, build upon a number of prominent brands in the UK internet industry but mostly repair what has caused our customers challenges in the past.

More important than any level of investment is about bringing in the right skill to manage every aspect of the business effectively and enact positive plans for improvement. The new business is not only well financed but financed and managed by people with considerable industry experience. We’re excited and confident about the challenge ahead and are looking forward to exhibiting the capability of the new Breathe Internet".

So what of the email problems and other service disruption? According to Kaye, most of the problems were indeed caused "whilst a number of services were consolidated," though many customers will be frustrated that the true extend of the situation was not communicated to them sooner.

The new management claims that the situation was "absolutely not our intention" and that details provided as part of Zetnet's acquisition did not correctly identify all customers with a dependency on the migrated systems.

Steve Kaye added:

"As a result, a number of customers were left with limited or without service for which we would like to express our most sincere apologies. With the additional head count within our support team as of tomorrow we are expecting to bring a resolution to all outstanding issues within the coming days.

I would like to take this opportunity to thank all Breathe staff including those at ZetNet for their relentless dedication to our business during this challenging time. Whilst there has been much speculation we intend on retaining the ZetNet brand and the returning the customer service value is has always stood for since 1994."

Breathe's new CTO, Nick Pulsford, confirmed that the provider is already beginning to implement improvements to its support infrastructure. Customers can apparently expect to feel the benefit of this from tomorrow.

UPDATE @ 13:06

The Register has a very interesting take on this story and one that appears to differ quite a lot from the 'official line':


The story claims that Breathe and not ZetNet has applied to be struck off the UK Register of Companies (on Tuesday). It also notes that Breathe had not paid its bills to Spider Networks Ltd. for email services, thus the ISP moved to a different operator and hence all the recent problems. We had been contacted by Spider earlier in the week but they have not yet responded to our reply.

Apparently The Register also called the ISPs London office only to find it was empty with the answering individual being unsure of whether anybody would return. Its common knowledge that Breathe's former CEO, Marcus East, left the business earlier this year, although details remain scarce as to why.

We would surmise, given the time line, that Breathe's PR blurb today is the latest move to follow on from all this. The plot, as they say, thickens.

UPDATE @ 16:49

Here's a new statement we have just been sent from Spider Networks:

Spider Networks Ltd.

"We have just been informed from the ISPreview that Breathe have completed a management buyout. As a creditor of the old Breathe company Spider Networks has a significant claim. We were not informed of this buyout by the administrator and will be investigating further.

Spider was contracted by old Breathe to supply email services for a number of their customers excluding ZetNet. We became aware through many customer complaints last weekend that their emails had been migrated to another email provider resulting in the loss of all their past emails, folders and address books. We stepped in quickly to allow users to access their old data.

We have had a very positive response from users who have thanked us for allowing them access to their important information."

UPDATE @ 24th July - 7:41am

The Register has posted a new story after speaking with Steve Kaye, which appears to confirm a lot of the original news items Press Release:

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