C&W stakes future on IP upturn

UK telecom-turned-web company Cable & Wireless claims demand for internet-based services is on a steadily upward curve despite turbulence in many key global markets.

C&W has gambled on a massive surge in business use of Internet Protocol (IP) and other data technologies, shedding consumer-focused operations around the world to concentrate on serving corporate customers.

Unveiling pre-tax profits of £3.4bn for the year to March, C&W said IP and data traffic now accounts for almost half the revenue of its global operating division, the core internet business that has seen strong demand for more — and increasingly complex — services.

As well as providing access to its global internet backbone, C&W wants to offer business customers a range of e-commerce and other web-based services.

As part of this strategy it has embarked on what is claimed to be the telecoms industry’s largest Voice over IP (VoIP) programme, replacing its old network with one able to support voice, data and IP applications simultaneously.

C&W said that when it is completed in three years’ time, the VoIP network will give companies access to a range of new e-business applications such as advanced video conferencing.

The sale of large business interests around the world has allowed C&W to build up a £7bn war chest. Chief executive Graham Wallace has come under fierce pressure to either spend the money or return it to investors, who are already reeling from the fall in share price which followed a profits warning earlier this year.

C&W recently spent $340m buying Digital Island, a US company specialising in managed internet services for business customers.

Wallace said the company would look for further acquisitions, particularly in the US, at a time when the depression of high-tech stocks could leave some bargain buys available.

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