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C&W flogs US retail voice biz

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ComputerWire: IT Industry Intelligence

Cable & Wireless Plc plans to sell its US retail customer base to a subsidiary of Primus Telecommunications Group Inc for $32m, as part of the restructuring of its US operations to focus on data and internet services.

Subject to approval by relevant regulatory authorities in the US, the cash deal is expected to be completed by January 2003, when the majority of C&W's 35,000 client base (made up of mostly small to medium-sized businesses) should be migrated over to Primus's retail business network.

Primus is an ISP based in McLean, Virginia that offers bundled internet, e-commerce, web hosting and voice services. The sale is expected to double the size of its retail business.

According to a C&W spokesperson, the traditional voice business climate has proved to be extremely tough, making a loss for C&W over the last couple of years. The London, UK-based carrier has issued three profit warnings in the last 18 months, and is expected to issue an update on trading conditions later this week. On the plus side, C&W is cash rich, with a net cash pile of approximately 2.6bn pounds ($4.01bn) as of March.

C&W still has a strong presence in web hosting, following its acquisitions of Digital Island and Exodus, and provides data services to enterprises in the US, as well as international voice services to carriers.

© ComputerWire

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