Dick Brown, chief executive, added that C&W was also focusing on a possible alliance in the US, where the telecoms industry is consolidating through a handful of huge mergers, the latest being the $62bn (pounds 37bn) SBC-Ameritech deal.
Speaking as C&W reported a 13 per cent increase in pre-tax, pre-exceptional profits last year to pounds 1.6bn, Mr Brown said the Italian alliance could see Telecom Italia take an interest in some of C&W's US and Caribbean operations.
Together the two companies will handle 17 billion minutes of international calls a year, making it the world's second biggest international operator. The alliance will have access to 140 large urban markets around the world and Mr Brown said it would probably target an additional 60.
Mr Brown said it was possible C&W would chose to "dance with an elephant" as he describes the merged US telecoms operators. However, other options were to grow organically or launch a bid. C&W has a $1bn of sales in the US and is its sixth largest long-distance carrier, concentrating on the small to medium business sector.
Robert Lerwill, finance director, said C&W might acquire part of Bell Canada's 14.9 per cent stake in Cable & Wireless Communications, which the Canadian group has decided to sell. C&W has a controlling 53 per cent stake in the four-way cable television and telephone operator created a year ago.
C&W is also looking at a flotation late this year or early next year of Optus, the Australian telecoms business in which it has a 49 per cent stake.Reuse content