Either Viatel (VYTL) is grossly underpriced or KPNQwest is way overvalued. Currently trading at 38, Viatel, a global provider of telecommunications services, has operations and assets in Europe much like those of KPNQwest. Yet Viatel's market cap is a mere $1.2 billion compared with KPNQwest's $19 billion. KPNQwest, which went public on Nov. 8 at 20 and now trades at 44, is a venture jointly owned by Koninklijke KPN of the Netherlands and Qwest Communications of the U.S. KPNQwest provides telecom service through its fiber-optic network connecting 39 major European cities. Viatel also has a fiber-optic system in Europe linking 30 cities.
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