C&W targets broadband growth
TELECOMS giant Cable & Wirless has set its sights on capturing a larger share of the burgeoning broadband market as it reported its first profit for three years.
The company will speed up the roll-out of its Bulldog internet service, taking it from 30% to 50% of the UK population in the next two years.
The move will lead to an increased investment programme but the chance to grow the customer base rapidly in an intensely competitive marketplace.
Bulldog was acquired by C&W in May 2004 in an £18.6m deal and gives the company control of the valuable 'last mile' between the national network and the customer's home.
C&W has undergone a painful restructure in the past two years, shedding thousands of jobs and pulling out of the US market. As it reported full-year pre-tax profits of £337m for the year to 31 March, compared with losses of £224m last year, chairman Richard Lapthorne said it would pay shareholders a dividend of 3.8p a share.
Lapthorne said the company had 'delivered on promises' it made in June 2003, describing the past 12 months as a time of transition. He added: 'By the end of the year, the chief executive and his new team were no longer preoccupied with the issues of the company's past, and had turned confidently to face the future.'
The move towards broadband comes as the company said its traditional telecoms market continues to suffer from excess capacity and severe price competition. 'Performance improvement will come from efficiencies and cost cutting, and a shift in our sales mix towards broadband, IP and mobile,' said Lapthorne.
The shares were up 3¾p in morning trading to 133p. The stock has outperformed its UK telecoms sector rivals by about 10% since the start of 2005, and lagged European sector peers some 6% in the past 12 months.
