22nd Jul 2005 10:07
Cable and Wireless plc Chairman's remarks - Annual General Meeting 2005 "As I wrote in the Annual Report 2004/5 was a very encouraging year for Cable &Wireless because of the sheer quality of achievement from our management team.Delivering on the promises made in June 2003, management completed our exitfrom the US and Japanese markets, re-focusing the Group on markets where wehave a relevant presence. Driven by our customer focus, we also improvedoperations and tightened cost control while progressing opportunities to investin growth services such as IP, broadband and local loop unbundling."We have been encouraged by the objectives and direction of the Ofcom StrategicReview and by its achievement in winning a commitment from BT to accept andadhere to clear, legally enforceable obligations. The review to date reinforcesthe strategic direction Cable & Wireless has chosen in both local loopunbundling ("LLU") and the build out of a Next Generation Network. In decidingto accept undertakings in lieu of an Enterprise Act referral Ofcom hasdemonstrated the shortcomings of previous voluntary agreements. To ensure asustainable competitive future for this industry, it is now vital that theundertakings accepted by Ofcom fully deliver conditions in which there can besufficient incentive for deep infrastructure investment and in whichsustainable competition and innovation can be secured. We are reviewing theproposed undertakings in detail against these objectives."Our strategy across all our businesses is to pursue profitable revenue streamsand cash generative margins, while continuing to reduce operating costs andcontrol capital expenditure. The overall revenue number is secondary to theseconsiderations."Market conditions remained challenging in the UK. Our National Telcos areperforming satisfactorily. At a Group level, trading for the first quarter of2005/6 was in line with our expectations and management maintains its Groupoutlook for the year to 31 March 2006."In the UK, as customer demand for migration to IP services continues to grow,so the downward pressure on our legacy revenue intensifies. Carrier Servicescontinues to account for almost half of UK revenue. As anticipated, theoutpayments and network cost savings, identified in our initial UK network andoperations review, are doing no more than offsetting the impact of ongoingpricing pressure on legacy margins."In line with our timetable, we expect to see the cost savings derived from thereorganisation of the UK business, Corporate Centre and European operationflowing through in the second half of the year."In broadband, over the last few weeks, Bulldog has begun to improve customerprovisioning. We are encouraged by comments and feedback from customers who areexperiencing its 8meg broadband and telephone services."However, in the area of provisioning in particular, the level of serviceremains inconsistent as we work with BT - after their relatively recentintroduction of automated procedures - to enhance the quality and accuracy withwhich telephone lines are transferred to the Bulldog network.This, together with the interest in our new services, has resulted in higherthan expected call volumes to Bulldog customer support. We have recruited andtrained further customer support staff, in line with our plans, and introducedautomated tracking systems to reduce call volumes. We expect to see materialimprovements over the summer. We will provide further detail on LLU operationalmetrics at our interim results in November."We continue to develop our mobile and broadband services across the NationalTelcos, while at the same time reviewing our cost base. In the Caribbean we arerolling out shared service platforms to provide standardised billing,procurement and supply chain management, as well as centralised regulatory andother support functions across the region. We continue to explore opportunitiesto extend these initiatives to other National Telcos."At the beginning of September, we will provide both our restated results forthe full year 2004/5 on an IFRS basis and a summary of the effect of IFRS onthe Group outlook comments provided in our preliminary results 2004/5. We willannounce our interim results to 30 September 2005 on 8 November 2005."We remain active in the area of corporate development and we are approachingthe stakeholders of Energis concerning a possible acquisition. We cannot becertain that a transaction will result and a further announcement will be madein due course."EndsIt is possible that this announcement could or may contain forward-lookingstatements that are based on current expectations or beliefs, as well asassumptions about future events. These forward-looking statements can beidentified by the fact that they do not relate only to historical or currentfacts. Forward-looking statements often use words such as anticipate, target,expect, estimate, intend, plan, goal, believe, will, may, should, would, couldor other words of similar meaning. Undue reliance should not be placed on anysuch statements because, by their very nature, they are subject to known andunknown risks and uncertainties and can be affected by other factors that couldcause actual results, and Cable and Wireless plc's plans and objectives, todiffer materially from those expressed or implied in the forward lookingstatements.Certain important factors that may cause actual results to differ materiallyfrom those contained in such forward looking statements include (but are notlimited to): business risks such as technological changes or network failures;unforeseen changes in regulation and government policy; risks specific to thetelecommunications industry such as the adverse affects of competition andprice pressures; and legal risks.Cable and Wireless plc undertakes no obligation to revise or update any forwardlooking statement contained within this announcement, regardless of whetherthose statements are affected as a result of new information, future events orotherwise.Contacts:Investor Relations:Louise Breen Director, Investor Relations +44 20 7315 4460Virginia Porter VP, Investor Relations +1 212 239 3581Craig Thornton Manager, Investor Relations +44 20 7315 6225Media:Lesley Smith Group Director of Corporate & Public Affairs +44 (0) 20 7315 4064Steve Double Group Head of Media Communications +44 (0) 1344 726 946About Cable & WirelessCable & Wireless is one of the world's leading international communicationscompanies. It provides fixed and mobile voice, data, IP (Internet Protocol) andbroadband services to business and residential customers, as well as servicesto other telecoms carriers, mobile operators and providers of content,applications and internet services.Cable & Wireless' principal operations are in the United Kingdom, theCaribbean, Panama, Macau and Monaco. For more information about Cable &Wireless, go to www.cw.com .ENDCable & Wireless PLCRelated Shares:
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