Cable & Wireless pulls plug on Bulldog |
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Published
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Fri, 09 Jun 2006 13:40
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LONDON - Cable & Wireless announced Thursday that it was pulling the plug on Bulldog, its loss-making consumer-oriented broadband business, in order to concentrate on wholesale division. This move puts around 150 jobs in jeopardy.
"I found out early on that the retail option wouldn't be the most favorable for us. Carphone Warehouse and Orange have launched new offers and Sky is launching broadband this summer," said C&W's UK chief executive John Pluthero. I am confident, however, that we will have the right number and scale of wholesale customers. And I am delighted that we have a network of this nature because it allows us to offer corporate services to our customers that are distinct from BT."
C& W had acquired Bulldog for £18 million in 2004. But Mr Pluthero said that the business had changed a lot since then. He even insisted that the £260 million spent on Bulldog would not go a waste. The move into the wholesale market could have come at just the right time for C&W since mobile phone operators O2 and Vodafone are planning to provide such services.
C&W also said that the existing 140,000 customers would continue to receive the service. "We believe that a wholesaling approach to the consumer and SME market is the best way to optimize our return from our unique local loop network capability," Pluthero said. Analysts said that this move by C&W was logical, "We believe the wholesale market is under-competed. Investors should welcome this news as this route offers more rapid revenue growth with less execution risk," said Dresdner Kleinwort Wasserstein analyst Sam Morton in a research note.
Shares in Cable & Wireless increased by 2.75 pence to 108.75 pence after this announcement.
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