Smiles despite setbacks

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The Independent Online
Dick Brown still has a big smile on his face after 18 months as chief executive of Cable & Wireless, but after this year onlookers are wondering why.

The company's dependence on Hong Kong as its biggest source of profit is in question after Chinese authorities did not include the British firm in a sale in October of shares in the Hong Kong arm of the country's largest phone company.

That must have disappointed Mr Brown, who in July said it was "very possible" Cable & Wireless would buy a stake in the company as part of a drive to penetrate the Chinese market. He said he saw it and China Telecommunications, parent of China Telecom Hong Kong, eventually becoming equal partners in Hong Kong Telecom through an asset swap.

That doesn't look likely at the moment. Still, Cable & Wireless's shares have risen 29 per cent since the arrival of the 50-year-old veteran of the US telecommunications industry raised confidence he would turn around a company that staggered through a series of policy U-turns and strategy changes under previous management.

"The previous management was spreading itself too thinly - Dick Brown gets full support for focusing the company," says Doug Hawkins, telecoms analyst at Nomura Research Institute.

His plan for Cable & Wireless is to focus on businesses the company can control, and to sell out of those it can't. That resulted in the company's exit from a joint venture with Veba in Germany this year. It also drove its merger of Mercury Communications with three British cable companies to compete against British Telecom and BSkyB.