28th Feb 2006 07:00
Announcement 28 February 2006 CABLE & WIRELESS UK BUSINESS UPDATE Cable and Wireless plc (Cable & Wireless) is today (28 February 2006) hostingan event for analysts and investors at its offices in Reading. John Pluthero,Chairman of the UK (including Bulldog, US, Europe and Asia), will present onthe UK business, including local loop unbundling. Richard Lapthorne, GroupChairman, will introduce the event. Other members of the UK senior managementteam, including Jim Marsh, Chief Executive of the UK and Emanuele Angelidis,Chief Executive of Bulldog, will be in attendance and available for thequestion and answer session. The main themes covered will be: * The ambition to serve the UK's largest users of telecoms services with high quality managed IP services supported by a great service experience; * The detailed plans for integration and recovery of the UK business; * The reinvention agenda to achieve this ambition; * Progress of local loop unbundling (LLU) and Bulldog; and * Confirmation of a future UK business with the objective of about ‚£2 billion revenue and double digit operating margin. John Pluthero, Chairman of the UK said: "We have already made significantprogress on integration in the relatively short amount of time we have had. Weknow what we want to do and, from our track record at Energis, have proven wecan do it. Today, we are sharing our plans for the UK and our approach toexecution. Customers are crying out for a better experience from theirtelecommunications supplier and we intend to give them just that. I amconfident that we can execute our plans successfully and achieve the objectiveof about ‚£2 billion revenue and EBITDA of about ‚£400 million, sufficient todeliver a double-digit operating margin."As part of the reshaping of its UK business, Cable & Wireless will say it plansto reduce its customer base from a total of approximately 30,000 customers toabout 3,000 large corporate customers and public institutions. With its clearfocus on larger customers, Cable & Wireless will say that it is targeting ashift in its business mix such that retail revenues will comprise about 70% ofUK revenues (about 50% currently) and that 60% of revenue will be managed IPservices whereas voice comprises 60% of revenues today. The Company alsoenvisages that gross margins in the UK will rise to about 40% compared withabout 33% today.Cable & Wireless expects that, by concentrating on fewer, larger customers andreducing complexity in its products, systems and processes, it can set newstandards for customers' service experience while, at the same time, reducingcosts. As part of the reduction in costs, the Company expects that UK headcount(Cable & Wireless UK and Energis) will fall from more than 5,500 to between2,500 and 3,500 over the next 4 to 5 years. It will also confirm that netheadcount will be reduced by more than 350 in the second half of 2005/06.Cable & Wireless will update the market on the cost savings derived from themerging of Cable & Wireless UK with Energis. These are expected to be greaterthan ‚£40 million on an annualised run rate basis by the end of March 2006.Cable & Wireless will say that during 2005/06, the merger of Cable & WirelessUK with Energis will produce capital expenditure savings of about ‚£3 million.Cable & Wireless will confirm its commitment to Next Generation Network (NGN),which is viewed as an important element of the turnaround strategy and isindeed already in progress with over ‚£50 million of capital expenditure in 2005/06. The Company will stress the importance of LLU as a strategic asset in thecontext of NGN, delivering IP to its target customers. However, the pace ofchange for NGN will be driven by customer demand and dual networks will beneeded in the medium term.In its update on Bulldog, Cable & Wireless will say that, by February 2006,total customer numbers at Bulldog were 107,000 (101,000 consumer and 6,000business) with average monthly revenue per consumer user in January 2006 of ‚£36. The Company will also confirm the target number of unbundled exchanges for30 September 2006 of 800, maintaining its position as the market leader infully unbundled local loop provision.Cable & Wireless will state that, by 30 September 2006, the monthly operatingcost run rate will reduce by ‚£5 million per month - or 9% compared withNovember 2005 - and customer numbers will reduce to 18,000 by September 2006.The event will be webcast live on cw.com. You can register for the webcast at http://events.ctn.co.uk/ec/cableandwireless/156/. An on-demand version of thewebcast will be available from Wednesday 1 March.There will also be a listen-only audio facility on +44 (0)1452 561 395. Pleasequote "Cable & Wireless UK business update" and register from 10:30am onTuesday 28 February. A recording will be available for seven days after theevent on +44 (0)1452 55 00 00, access number 5759612#.For further information:Investor RelationsAshley Rayfield Director, Investor Relations +44 (0)20 7315 4460 Craig Thornton Manager, Investor Relations +44 (0)20 7315 6225MediaClare Waters Director of Communications & Public +44 (0)20 7315 4088 Affairs Steve Double Group Head of Media Communications +44 (0)1344 726 946 Press Office Cable & Wireless +44 (0)1344 818 888 Rollo Head Finsbury +44 (0)20 7251 3801 Alice Macandrew Finsbury +44 (0)20 7251 3801About 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 .Forward-looking statementsThis announcement contains forward-looking statements that are based on ourcurrent expectations or beliefs, as well as assumptions about future events.These forward-looking statements can be identified by the fact that they do notrelate only to historical or current facts. Forward-looking statements oftenuse words such as anticipate, target, expect, estimate, intend, plan, goal,believe, will, may, should, would, could or other words of similar meaning.Undue reliance should not be placed on any such statements because, by theirvery nature, they are subject to known and unknown risks and uncertainties andcan be affected by other factors that could cause actual results, and Cable &Wireless' plans and objectives, to differ materially from those expressed orimplied in the forward-looking statements.There are several factors which could cause actual results to differ materiallyfrom those expressed or implied in forward-looking statements, including:changes in the global, political, economic, business, competitive, market andregulatory forces, changes in communication and information technology, futureexchange and interest rates, changes in tax rates and future businesscombinations or dispositions.Forward-looking statements speak only as of the date they are made. Cable &Wireless undertakes no obligation to revise or update any forward-lookingstatement contained in this announcement, regardless of whether thosestatements are affected as a result of new information, future events orotherwise.No statement in this announcement is intended to be a profit forecast and nostatement in this announcement should be interpreted to mean that earnings pershare for Cable & Wireless for the current or future financial year wouldnecessarily match or exceed the historical published earnings per share ofCable & Wireless.ENDCable & Wireless PLCRelated Shares:
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