C&W's new network is under budget and ahead of schedule

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The Independent Online

Cable & Wireless has completed the roll-out of its new UK network three months ahead of schedule and more than 15 per cent under budget. The company will now focus on moving more large customers on to its new network to ward off competition from rivals such as BT.

John Pluthero, the C&W chief executive, said completing the roll-out of its advanced network was a "nice milestone in our turnaround in the UK".

Over the past 18 months, C&W has invested £55m in building a core national network with 13 metropolitan rings that connect to its local telecoms infrastructure. The cost is £10m less than the £65m it had pencilled in for the roll-out as part of its £190m investment in upgrading the network. Mr Pluthero said the saving was a result of the greater purchasing power and greater scale of the combined C&W and Energis companies.

Mr Pluthero joined C&W when the company bought Energis last year. He said the roll-out of its advanced new network has been achieved three months ahead of its plans despite the disruption of integrating the assets of the two companies.

The chief executive also said the turnaround plan for the UK business remained on track and reiterated that the company was winning more than half of the contracts it had recently tendered for. As a result of significant cost-cutting and restructuring actions, the UK business is now targeting revenue of £2bn and a double-digit operating margin by 2010.

However, Mr Pluthero said he has been surprised that so few corporate customers had decided to migrate to new internet-protocol, or IP, based networks that enable more advanced data services and cheaper basic functions such as voice calls. C&W has only one corporate customer that has fully migrated to IP-based services. "The speed of the take-up is not quite what people thought it would be but I expect a greater degree of urgency this year," Mr Pluthero said.

C&W UK is conducting yet another radical overhaul of the business after years of turmoil. Mr Pluthero is its sixth head in the past 10 years.

After restructuring the Energis business, he has wasted no time in adopting a similar recovery strategy for the combined group. C&W has shed tens of thousands of customers over recent months as it focuses on its 3,000 largest and most attractive clients while investing in improving its customer service and sales functions and sharpening up its product line.

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