CABLE & WIRELESS (CW.).

Investors Chronicle, November, 2005

Cable & Wireless (C&W) has hit a rough patch after a profit warning last month caused its shares to crash. The telecoms operator is struggling to manage the shift from its old networks onto next generation, or internet protocol (IP)-based, networks. That resulted in a slump in first-half profits as customers switching to IP-based products renegotiated lower prices. "We are in a poor economic phase in the migration, given that we are delivering new services, to a large extent, on a legacy cost base," admits chief executive Francesco Caio.

In a bid to rationalise the market, and accelerate its shift to next-generation services over IP networks, C&W has bought rival Energis for GBP630m in cash, and deferred consideration of up to GBP80m, which separately reported...

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