Feeds

Cable & Wireless comes out of hiding

Dull but worthy new idea. But will it work

  • alert
  • submit to reddit

Top 5 reasons to deploy VMware with Tegile

Having spent the last year licking its wounds and thinking about the future, Cable & Wireless yesterday took the opportunity to map out its plans alongside its annual results.

So what is the non-dynamic but solid CEO Graham Wallace up to? Well, number one, C&W's consumer days are over ("a nightmare", he admitted).

Well-publicised cock-ups damaged business while producing very little return. So, the company has either sold off or is selling off all consumer items.

No consumers, so that leaves business. Big business or little business?

ASP - it did for Cleopatra, will it do for C&W?
Small to medium-sized business - and lots of it. Doing what? Renting out software over the Internet - you know, the infamous ASP model. It has partnered with Compaq and SMEs will be approached through the Big Q's network of VARs. The information will be carried through C&W own, bloody big global network which it's been laying for years (US is done, UK very soon).

It is also reorganising globally. C&W will be C&W Global from the end of the month. It has gone to great lengths this year to buy back all the chunks it sold off previously. The vision with this 100 per cent-owned C&W is that it will lead by example and tie everything up through the Web.

So the results were as follows (year-on-year). Gross Profit up 121 per cent to 4 billion but Gross Profit before goodwill (the selling of its consumer side) down 24 per cent to 1.1 billion. Revenue up 16 per cent to 9.2 billion; earnings before interest etc. down 8 per cent to 2.5 billion. Gearing down from 87 per cent to 16 per cent (!).

It's clear that C&W is dead set on its chosen course. The consumer sell-off has wiped its debt and Graham claims to have 4.3 billion in cash with which to pursue its "aggressive" expansion (IP boys and network integrators, no traditional telcos).

Question is: will this concentrated focus prove the making or breaking of C&W as a world leader?

Foundation garments

One thing it does have is infrastructure. It has infrastructure coming out of its ears. Big, fat pipes all across the globe, a multitude of ISPs, a couple of network integrators, and thousands of techies and employees at its disposal. As foundations go, this is a pretty solid one.

And that is precisely C&W's problem. As Graham went on about ASP and how this was how his enormous multi-billion pound company was going to expand on loads of little companies paying little monthly fees each, we smelt a rat.

Truth is, C&W has a massive infrastructure and little to put on it. Plus, the thing that everyone does know about ASP is that no one is really doing it at the moment.

Not only that, but if you are to believe Graham, the company has rested its entire future on this plan. It hasn't of course - why on earth would he be trusting his company on a ragbag crew of VARs (who all secretly hate whinging, ignorant SMEs anyway)?

Put that in your pipe and smoke it

The big money will come from renting out the pipes - IP and data traffic will go up by 90 per cent and 20 per cent respectively, according to C&W. Sexy it's not, but money is money.

But why should C&W suddenly start making loads of money and grow faster than the market (as Graham claims it will)? Especially when you consider that the company's components have being underperforming for years - look at the figures again, if it weren't for the sell-off, it would look very shaky.

Well, Gray tells us, it's precisely because they ARE components. With C&W Global this will all change and the group hugging itself should whack a few pence on earnings per share. A cynic would say that the company's board had foreseen a possible hostile takeover. With its bad publicity, C&W's share price was being knocked for no good reason.

If the shares were to hit a certain level, you buy the company and are then sitting on a worldwide network of pipes - instant market entry. By buying back all of the company's parts and tying it together, Graham may make C&W too big a mouthful for all but the world's top few companies.

Your starter for 10

Our conclusion: that Mr Wallace is a smart cookie. The troubling thing about it all though was the surreal press conference setup. Graham and his three cronies (Lance, Mike and Andy) were behind a long, wooden desk, sat side by side with their own mikes and plaques. Just after realising the whole room was a big microphone (so phone-in journalists could hear), it suddenly dawned - they looked exactly, I mean, exactly, like some returning University Challenge winners from 1975 - serious, knowledgeable expressions - the whole works. It was a whole lot funnier after that. ®

Internet Security Threat Report 2014

More from The Register

next story
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
YARR! Pirates walk the plank: DMCA magnets sink in Google results
Spaffing copyrighted stuff over the web? No search ranking for you
In the next four weeks, 100 people will decide the future of the web
While America tucks into Thanksgiving turkey, the world will be taking over the net
Microsoft EU warns: If you have ties to the US, Feds can get your data
European corps can't afford to get complacent while American Big Biz battles Uncle Sam
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
prev story

Whitepapers

Choosing cloud Backup services
Demystify how you can address your data protection needs in your small- to medium-sized business and select the best online backup service to meet your needs.
Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.