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Cable & Wireless PLC
Type Public
Founded circa 1860
Headquarters Bracknell, England, UK
Key people Richard Lapthorne (Chairman)
Tony Rice and John Pluthero (Joint Managing Directors)
Industry Telecommunication
Revenue £3,646 million (2009)[1]
Operating income £458 million (2009)[1]
Net income £226 million (2009)[1]
Employees 13,510 (2008)
Website www.cw.com

Cable & 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. It remains a significant player in the UK telecoms market and in certain overseas markets, especially in the former British colonies of the Caribbean, where it was formerly the monopoly incumbent. It is also the main supplier of communication in the British South Atlantic, including Saint Helena and the Falkland Islands. It is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index.

Contents

History

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.[2] In 1869, Pender founded the Falmouth, Gibraltar and Malta Cable Company and the British Indian Submarine Telegraph Company, which connected the Anglo-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.[3]

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.[4]

The Eastern Telegraph Company network in 1901

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.[5]

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.[5] 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, which operated the UK's domestic telecommunications monopoly.

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.[6] Part of the privatisation included the granting of a licence for a UK telecommunications network, Mercury Communications Ltd, as a rival to British Telecom. It was established as a subsidiary of Cable & Wireless.[7]

In 1986, the U.S. long distance industry was deregulated, and many new companies launched into the equal access market. A company called TDX Systems, based in Falls Church, VA, was one of these, with a footprint between Washington, DC and New York. TDX carried data (analog modem up to digital DS3), and built its own telephone switches at its engineering facility in Chantilly, VA. TDX voice switches, called "SSTs" (satellite switching terminal) were centrally controlled nationwide by Perkin-Elmer mainframes in Falls Church, VA, and were some of the first long distance switches to utilize least-cost routing, follow-on account codes and PINs. For a short time TDX touted a position of being one of the primary providers of phone and data service for the World Trade Center. By 1987 TDX was rapidly expanding its leased fiber network westward, and by mid 1987 Cable and Wireless Communications plc had completed its purchase of the TDX network. For most of the late eighties, the long distance company was named Cable & Wireless Communications, Inc, and the fiber / data business was named Cable & Wireless Management Services, Inc., until the two divisions were merged. The CWCI U.S. network expanded nationwide throughout the late eighties and nineties, serving all major and some smaller markets.

In 1997, Mercury was merged with three cable operators in the UK (Vidéotron, Nynex, and Bell Cablemedia and renamed Cable & Wireless Communications.[8] Later that year Cable & Wireless bought a 49% of the Panamanian INTEL (Instituto Nacional de Telecomunicaciones): it is now the largest communications carrier in that country.[9]

In 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 had merely operated a long distance telephone business and a small internet service.[10]

The following year - in August 1999 - Cable & Wireless Global was formed to build global IP and IP MPLS networks with a strategy to sell global IP services to corporates.[11]

In December 2000, Cable and Wireless purchased Hyperlink-Interactive.[12]

In 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.[13]

In May 2002 Cable and Wireless purchased Guernsey Telecoms from the States of Guernsey[14] and in November 2002 Cable and Wireless announced their withdrawal from the U.S. corporate market. US telephone operations were sold to Primus Telecom.[15]

In 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.[16]

In August 2005 Cable & Wireless bought Energis for £674m as a reverse takeover in terms of management: John Pluthero was appointed from Energis to head the UK business with Francesco Ciao departing by April 2006.[17]

In December 2005 Cable & Wireless cancelled its American Depositary Receipts programme, voluntarily delisting from the New York Stock Exchange.[18]

In February 2007 Cable & Wireless sold its web arm which focussed on systems for the UK government, the Web Technology Group[19], and later in March sold its cabling business Allnet.[20]

In October 2008 Cable & Wireless completed the purchase of Thus plc which is now known as "Thus, a Cable&Wireless business".[21]

Operations

Cable & Wireless 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.

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[22] 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 Irish-owned cellular multi-national, 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, Turks and Caicos Islands, Anguilla and Guernsey (where it operates under the brandname Sure), while in Bermuda it provides international communications only; local services there are provided by the Bermuda Telephone Company.

Cable & Wireless HKT

Cable & 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.

References

See also

External links

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