Cable and Wireless (LSE: CW.) is a British telecommunications company. In the mid-1980s, it became the first company in the UK to offer an alternative telephone service to British Telecom (via subsidiary Mercury Communications, merged into C&W in 1997). The company later offered cable TV to its customers, but it sold its cable assets to NTL in 2000. The company re-entered the FTSE 100 Index in December
2006, after relegation from it to the FTSE 250 Index in June 2006.
Cable and Wireless traces its history back to a number of British telegraph companies founded in the 1860s, and cites Sir John Pender as the founder. In 1869, Pender founded the Falmouth, Gibraltar and Malta Cable Company and the British Indian Submarine Telegraph Company, which connected the Ango-Mediterranean cable (linking Malta to Alexandria using a cable manufactured by one of Pender's companies) to Britain and India, respectively. The London to Bombay telegraph line was completed in 1870, and in 1872 the three companies were merged with the Marseilles, Algiers and Malta Telegraph Company to form the Eastern Telegraph Company, with Pender as chairman.
The Eastern Telegraph Company expanded the cable length from 8,860 miles on its founding to 22,400 miles just 15 years later. The Company steadily took over a number of companies founded to connect the West Indies and South America, leading to a name change to The Eastern and Associated Telegraph Companies.
With increasing competition from companies using radio communications such as Marconi's Wireless Telegraph Company, it was decided in 1928 to merge the communications methods of the British Empire into one operating company, initially known as the Imperial and International Communications Ltd, and changed to Cable and Wireless Limited in 1934.
Following the Labour Party's victory in the 1945 general elections, the government announced its intention to nationalise Cable and Wireless, which was carried out in 1947. While the company would remain in being as a government-owned company, continuing to own assets and operating telecommunication services outside the UK, all assets in the UK were integrated with those of the Post Office.
In 1979, the Conservative Party government led by Margaret Thatcher began privatising the nationalised industries, and the history as a private company made Cable and Wireless an early candidate. Privatisation was announced in 1980, with Cable and Wireless privatised in November 1981. Part of the privatisation included the granting of a licence for a UK telecommunications network, Mercury Communications Ltd, as a rival to British Telecom. In 1997, Mercury was merged with three cable operators in the UK (Videotron, Nynex, and Bell Cablemedia) and renamed Cable & Wireless Communications.
Current and historical markets
Historically, Cable and Wireless has had a strong market presence in many current and former British colonies where it provided local telephone service. It was awarded the 1996 Worldaware Business Award for its long term commitment to developing Cable links in the Pacific region (especially Fiji, Vanuatu, Tonga and the Solomon Islands). The company had a virtual monopoly amongst the colonies in the Caribbean region. In recent years, their market share has somewhat diminished with the dismantling of their regional monopoly and the introduction of more competition in the Caribbean, particularly from Digicel. The company was also the main fixed line operator in Hong Kong until the sale of Hong Kong Telecom to PCCW.
The company remains the main fixed-line provider in the British Virgin Islands, Cayman Islands, Panama, Macau, Maldives, Monaco, Seychelles, the Falkland Islands, St. Helena and Guernsey, where it operates under its own brand name Sure Mobile, while in Bermuda it provides international communications only; local services are provided by Bermuda Telephone Company.
Market position and power
Market share data, Sept 2005Under the stewardship of CEO Graham Wallace, Cable and Wireless turned from a cash-rich company with a world-wide presence and 20 billion pounds in the bank to a service provider with a small cash reserve, struggling to survive in its home market, the UK, and a few legacy overseas operations. Under Wallace the company entered into a costly buying spree, trying to control the global IP & Internet market with its acquisition of INSNET in July 1999 along with 18 other mainland Europe ISPs, at inflated prices. In 2000 it pulled out of the UK consumer market, selling its assets to NTL. C&W remains the 3rd biggest supplier of IP services to FTSE350 customers behind BT and MCI/Verizon. However, with recent cable company consolidation it can no longer claim its position as the second largest UK fixed player. The fortunes of the international wholesale telecoms division of C&W UK is significant - accounting for over one third of UK revenues. Indeed, its international wholesale voice operation and European IP (AS1273) remain sizable, but commercially struggling.
Following acquisition of Energis in August 2005, C&W strengthened its UK position but still have only half the Internet Access corporate market share of former incumbent (BT). Former CEO Francesco Caio publicly stated the aim of making C&W the preferred alternative to BT in the UK. John Pluthero, on his accession in the Energis management takeover, modified this to be the leading UK IP services company.
C&W also bought Bulldog Communications in the UK, providing it with an LLU network as well as a consumer broadband Internet service provider. During aggressive expansion it gained a poor reputation for provisioning and customer service. Falling new sales and a strategy change led C&W to sell the brand and customer base to Pipex in September 2006. It continues to own, and wholesale on, the LLU capability.
Cable & Wireless maintains an ownership footprint in many of the small "empire colonies" such as West Indies, Maldives, Seychelles, Panama. Whilst OPTUS in Australia and HKT in HongKong were sold in 2000, C&W Int remains a sizable and profitable operation and has added some assets including Guernsey and Monaco. Pressure from increasing competition has been compensated by mobile and broadband revenue growth.
For the past year, the company has operated, under chairman Richard Lapthorne, separate P&Ls for C&W UK and C&W International.
Cable & Wireless HKT
Cable and Wireless HKT was the Hong Kong operations of British-based telecom firm Cable & Wireless and was established in the then British colony in 1934. It was not until 1981 that the unit formally registered as a
Hong Kong company, Cable and Wireless (Hong Kong) Limited. In 1988 Cable and Wireless (Hong Kong) Limited merged with Hong Kong Telephone Company as Hong Kong Telecom. It was renamed as Cable and Wireless HKT International in 1998. CWHKT was acquired by PCCW Limited in 2000.
Recent events timeline
1997 Cable & Wireless bought the 49% of the Panamanian INTEL (Instituto Nacional de Telecomunicaciones). It is now the largest communications carrier in the country.
1998 MCI Communications and WorldCom merged to create MCI WorldCom, the company's existing US subsidiary Cable and Wireless
USA, Inc. purchased the MCI tier 1 backbone in the U.S. Prior to 1998 Cable & Wireless USA operated a long distance telephone business and a small internet service.
August 1999 Cable & Wireless Global formed to build global IP and IP MPLS networks with a strategy to sell global IP services corporates.
November 2001 Cable and Wireless USA purchased bankrupt co-location provider Exodus Communications for $800 million dollars, the operations were merged with the previously acquired Digital Island and renamed Cable and Wireless America.
May 2002 Cable and Wireless purchase Guernsey Telecom from the States of Guernsey.
November 2002 Cable and Wireless announced their withdrawal from the U.S. corporate market. US telephone operations were sold to Primus Telecom
December 2003 Cable and Wireless America, Inc. filed for Chapter 11 bankruptcy.
March 2004 SAVVIS Communications Corporation purchased Cable and Wireless America for $155 million
US Dollars via the Chapter 11 creditor protection process, and assumed liabilities of about $12.5 million US Dollars and assets including the former MCI IP backbone AS3561.
August 2005 C&W bought Energis for £674m.with a reverse takeover in terms of management. John Pluthero appointed from Energis to head the
UK business with Francesco Ciao departing by April 2006.
December 2005 C&W cancelled its American Depositary Receipts programme, voluntarily delisting from the
British boat smashes record
Around the world in 74 days:
the Adventurer arrives
There have been scenes of
jubilation in Gibraltar with a British sporting triumph being
In a depressing sporting week for the nation, the British power
boat, Cable and Wireless Adventurer, has broken the world record for
circumnavigating the globe.
And it is the first boat trip around the world in less than the 80
days of Jules Verne's classic novel.
The vessel, which cost more than �2m to build, reached
Gibraltar at 1100 GMT on Friday - 74 days, 20 hours and 58 minutes
after leaving the British colony.
This figure was eight days quicker than the old record held by the
U.S. ship Triton since 1960.
A spokeswoman for the attempt said the crew were celebrating in
traditional nautical fashion.
She said: "Some dived in the water when they finally got home
- others were pushed."
Bosworth and Project Leader Jock Wishart celebrate
Back on dry land, project leader Jock Wishart, 46, announced:
"I'm mentally drained but this has been an amazing
The 14-strong crew, aged between 22 and 60, had to do running
repairs to the vessel during the voyage as well as coping with high
temperatures and bad weather.
They visited 13 ports in 11 countries - including Hong Kong,
Honolulu, Kingston in Jamaica and New York.
Mr Wishart, from Kingston-upon-Thames, in south London, said:
"We had four or five difficult moments but everyone got on well.
There were no rows at all.
"I'm thrilled that Britain has this record as well as the
world landspeed record."
The youngest crew member was Sarah Aynesworth, 22, a Bristol
University student from Yorkshire, whose previous sea experience
extended to a rowing boat.
The oldest were Bill Mackay, from Glasgow, and Alan Goodwin, a
grandfather and company director from Hayling Island, Hampshire.
The Adventurer was designed by Nigel Irens, one of the world's
leading multihull engineers.
He based it on a 19th century concept invented by Newcastle marine
engineer Sir Charles Parsons.
Sir Charles used the design to create the Turbinia which achieved a
speed of 34.5 knots when it successfully gatecrashed Queen Victoria's
1897 Diamond Jubilee Review of the Fleet at Spithead.
The Adventurer - built by shipbuilders Vosper Thornycroft - will
now undergo maintenance before becoming part of the British pavilion
at EXPO '98 in Lisbon.
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