C&W logs on to broadband for growth

Cable &Amp; Wireless expects to generate revenues of £250m a year from a push into the market for high-speed internet access, the company said yesterday.

Cable &Amp; Wireless expects to generate revenues of £250m a year from a push into the market for high-speed internet access, the company said yesterday.

The move will involve an £85m capital investment programme over this year and next, plus £60m of operational funding. Francesco Caio, the chief executive of C&W, said the company would not rely on its own telecoms network, but would connect to BT's local exchanges to gain access to retail and business consumers.

High-speed broadband internet access is forecast to become the normal way homes and businesses are connected, with consumers making voice calls and transmitting and receiving data such as music, films and games via the internet.

C&W is taking advantage of local loop unbundling (LLU), the process by which BT has to open its local exchanges so competitors can install their own equipment to connect to end users. BT's prices for doing this have fallen under the supervision of Ofcom. The entry of C&W into LLU could provide a boost to broadband take-up. It will put pressure on BT to deliver on its commitment to co-operate with the telecoms industry to enable further investment.

Mr Caio refused to give predictions of how many customers it hoped to sign up to its broadband services, which will be marketed through Bulldog, the company it bought in May.

It recently launched a 4MB broadband connection that includes telephone calls. However, he said C&W had placed orders with BT for about 250 exchanges to be converted for C&W's use and expected to have a network of the country's 400 key exchanges running by the end of 2005. This would give it access to 30 per cent of the broadband market, Mr Caio said. "The Telecoms Adjudicator is at work and Ofcom's Strategic Review has identified LLU as an important element. We look at BT as a supplier."

Using LLU would give C&W an economic advantage over its existing network arrangements, Mr Caio said. "Growth rates in broadband have exceeded 100 per cent a year in many European countries and continue to accelerate," he added. "We will exploit this opportunity on a phased basis to ensure that our investment is geared towards customer-driven take-up."

The growth in demand for broadband was offsetting a decline in fixed-line networks, he said, which is why C&W was pushing into the market.