TC2's David Rohde on Telecom

About TC2
News and Analysis From the Enterprise User Viewpoint

Vodafone clears hurdle to pick up Cable & Wireless

By David Rohde Posted June 18, 2012

It took a while, but it looks like Cable & Wireless Worldwide is going to settle into the arms of Vodafone after all.

London investment firm Orbis, which owns 19% of C&W Worldwide and wanted a higher price than the £1 billion that Vodafone offered, said today it would drop its objection to the sale. It was a rather grudging change of heart – Orbis said that it knew it was in the minority, so holding out “would only serve to prolong the process.” But it clears the way for a strong majority vote in favor of the sale.

True, Vodafone is picking up a big brand name for a very moderate price, although C&W Worldwide’s recent bad financial results didn’t put it in a great position. Otherwise you’d expect to see a buyer bid up, since Vodafone is keen on expanding its wireline presence.

There’s also an accompanying tax issue – Vodafone can make good use of C&WW’s current losses while the merger integration takes place, as Ben Fox explained back in April. But for enterprises, the combination means the arrival of another enterprise networking player on the scene.

Of course a great deal has to happen for any carrier to be a credible bidder on global RFPs. It’s a big world out there, and so many carriers really do not provide the combination of facilities-based networks in some countries, very strong NNIs in other countries, and true customer service expertise (including cultural and language norms in growing markets) that’s required. But this is a key step for Vodafone, a brand name that’s likely to become more known now in North America than it has been in the past.

Tags: , ,

Leave a Reply

Your email address will not be published. Required fields are marked *

*