C&WW acquisition to add new dimension

Tony Poulos
17 May 2012

In what would appear as a dramatic change in telecom "tradition", Vodafone has acquired Cable & Wireless Worldwide (CWW) lock, stock and barrel. It's a change because it marks the beginning of an era where traditional fixed-line operators, nearly all with a monopolistic heritage as national carriers, may no longer be the dominant players they always were.

Their attempts to stave off the inevitable decline in revenues from traditional voice services has had them building their own mobile networks, investing heavily into triple- and quad-play services and even trying IPTV against some pretty stiff cable and satellite competition.

These investments have returned mixed results. The multi-play, IPTV and value-added services routes have generally been disappointing. Those that established mobile networks now find offspring "ruling the roost" brought about by the public's "connected everywhere all the time" mentality. Their most powerful niche appears to have become as a backbone provider for mobile operations and enterprise customers, and it is this that is now making them an attractive target for would be suitors.

More than mobile access

The Vodafone/CWW deal was certainly driven by Vodafone's insatiable appetite for backhaul connectivity in the UK and also because of its growing enterprise customer base that is demanding far more than just mobile access. Enterprises with international operations want services provided to all their sites worldwide and all under one contract.

Vodafone has been doing its best to provide these global services by negotiating multiple back-to-back service agreements with other network operators where they didn't have a presence. However, guaranteeing SLAs and making this business profitable was always going to be a challenge.

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