Three of the companies interested in buying Viatel’s pan-European and transatlantic fibre network in which over $1bn has been invested are US energy giants.

Enron, Williams Communications, a subsidiary of interstate pipeline company Williams, and Dynegy have all requested details of the business which is considering offers after seeking Chapter 11 bankruptcy protection in the US.

They are part of the growing trend for US utilities to buy European telecoms networks, which last year saw Dynegy buy Iaxis from administrators PwC for around $200m.

Analysts at London-based researchers Ovum believe El Paso, a New-York listed natural gas company, is also interested in acquiring telecoms capacity in Europe. El Paso said in February it plans to spend $2bn in capital over the next four years on developing El Paso Global Networks, its telecommunications arm.

Enron Broadband Services, which already trades telecoms bandwidth bought from other carriers in Europe, recently looked at Viatel's UK leased-line and modem business which is being sold separately through Ernst & Young, but the business is now expected to be sold to a UK telecoms company.

Speaking at an Ovum roundtable briefing, Marcello Romano of Enron Broadband Services said: "If it turns out that I can buy network capacity at lower cost by acquiring a company, I would definitely consider it."

Steven Pearson, a PwC partner involved in the Iaxis sale, said: "Trading on the margin is where the money is to be made in businesses trading commodities, such as fuel. So buying cheap telecoms capacity and trading it fits quite neatly." Dynegy is involved in trading but not in trading telecoms bandwidth as yet and Williams Communications has a bandwidth trading arm.

Most of the significant moves by US energy companies into European telecoms began last year. That is when Enron Broadband Services set up its "pooling points" for bandwidth trading, when Dynegy bought Iaxis and when Williams Communications moved into Europe.

"Williams has bought/swapped dark fibre from Telia and may be waiting for an acquisition to come along," says Sue Uglow, research director, industry structure, at Ovum.

Why are US utilities interested in the European telecoms market? "They are able to use their cash flow and pragmatism to get exposure to historically high growth rates in the telecoms sector," says Stephen Young, principal consultant at Ovum. He expects them "to seek to acquire the cheap assets that will become available as pan-European operators go out of business in the next 12-18 months."

Benefits for the utilities include access to stable cash flows and, in some cases, access to billing expertise. There are also some similarities between utilities and European telcos. Like the electricity industry, telecoms requires high outlay to build the network in the first place, and the incremental cost of services declines over time.

However, there are potential negatives too. "Regulators may take a dim view of US utilities with European power and telecoms interests that try and bundle services to extend their dominance in one sector to another," says Mr Young.

"There is also the question of whether users really care who owns the telecoms assets. Utilities could just resell others' bandwidth." In addition, utilities may find it challenging to run telecoms companies because they do not have all the expertise required.

For telcos, interest from US utilities is not entirely unwelcome. They have cash, experience of complex financing deals, quick access to rights of way (in some countries), and experience of trading commodities, which could help telcos increase asset utilisation.

The trend for utilities to buy or operate telcos or participate in joint ventures is not new. But previously it was European utilities getting involved in telecoms in their home market. "Power, water, gas and even sewer companies' activities have proliferated in European telecoms markets at the country level since liberalisation in the late 1990s," says Ms Uglow. For example, Italian electricity company Enel has taken a majority stake in fixed-line telecoms company Wind.

But she believes utilities are better equipped to trade in the wholesale telecoms market, selling capacity to other carriers, than to retail services to consumers. Meanwhile, with telecoms companies facing high levels of debt, she suggests: "Telecoms companies could divest their networks to companies like Enron and just do the retailing and value-added services part."