It has been a turbulent 12 months for Cable & Wireless, resulting in some major changes at the telecoms company.
With the acquisition of rival Energis in October 2005, the company has had its hands full integrating the two businesses. Ultimately, the merger is expected to produce capital expenditure savings of about £3 million through the reduction of complexity in its IT systems.
But it also means a major shake-up to the company’s UK business and the way it is run. Since the deal was signed, Cable & Wireless has stated that it plans to strip down its customer base from approximately 30,000 to 3,000 large corporate customers and public institutions. According to C&W, 89 per cent of its customers create just four per cent of its revenues. By concentrating on fewer, larger customers, the company hopes to reduce costs and improve customer service for its select customer group rather than service low-value customers. As part of this cost reduction, the company expects that UK headcount (Cable & Wireless UK and Energis) will fall from more than 5,500 to between 2,500 and 3,500 over the next four to five years.
“We have already made significant progress on integration in the relatively short amount of time we have had,” says John Pluthero, UK chairman. “We know what we want to do and, from our track record at Energis, have proved we can do it. Customers are crying out for a better experience from their telecommunications supplier and we intend to give them that.”