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25th July 2005:
Cable and Wireless
Cable and
Wireless AGM, Chairman’s remarks confirm talks with Energis
In
their recent AGM announcement, Cable & Wireless have confirmed via
Chairmans comments that they are approaching the stakeholders of Energis
concerning a possible acquisition, that a transaction is not yet certain and
that a further announcement can be expected.
Announcement: Cable and
Wireless plc Chairman’s remarks – Annual General Meeting
2005
“As I wrote in the Annual Report 2004/5 was a very encouraging
year for Cable & Wireless because of the sheer quality of achievement from
our management team. Delivering on the promises made in June 2003, management
completed our exit from the US and Japanese markets, re-focusing the Group on
markets where we have a relevant presence. Driven by our customer focus, we
also improved operations and tightened cost control while progressing
opportunities to invest in growth services such as IP, broadband and local loop
unbundling.
“We have been encouraged by the objectives and
direction of the Ofcom Strategic Review and by its achievement in winning a
commitment from BT to accept and adhere to clear, legally enforceable
obligations. The review to date reinforces the strategic direction Cable &
Wireless has chosen in both local loop unbundling (“LLU”) and the
build out of a Next Generation Network. In deciding to accept undertakings in
lieu of an Enterprise Act referral Ofcom has demonstrated the shortcomings of
previous voluntary agreements. To ensure a sustainable competitive future for
this industry, it is now vital that the undertakings accepted by Ofcom fully
deliver conditions in which there can be sufficient incentive for deep
infrastructure investment and in which sustainable competition and innovation
can be secured. We are reviewing the proposed undertakings in detail against
these objectives.
“Our strategy across all our businesses is to
pursue profitable revenue streams and cash generative margins, while continuing
to reduce operating costs and control capital expenditure. The overall revenue
number is secondary to these considerations.
“Market conditions
remained challenging in the UK. Our National Telcos are performing
satisfactorily. At a Group level, trading for the first quarter of 2005/6 was
in line with our expectations and management maintains its Group outlook for
the year to 31 March 2006.
“In the UK, as customer demand for
migration to IP services continues to grow, so the downward pressure on our
legacy revenue intensifies. Carrier Services continues to account for almost
half of UK revenue. As anticipated, the outpayments and network cost savings,
identified in our initial UK network and operations review, are doing no more
than offsetting the impact of ongoing pricing pressure on legacy
margins.
“In line with our timetable, we expect to see the cost
savings derived from the reorganisation of the UK business, Corporate Centre
and European operation flowing through in the second half of the
year.
“In broadband, over the last few weeks, Bulldog has begun to
improve customer provisioning. We are encouraged by comments and feedback from
customers who are experiencing its 8meg broadband and telephone
services.
“However, in the area of provisioning in particular, the
level of service remains inconsistent as we work with BT - after their
relatively recent introduction of automated procedures – to enhance the
quality and accuracy with which telephone lines are transferred to the Bulldog
network. Announcement
This, together with the interest in our new
services, has resulted in higher than expected call volumes to Bulldog customer
support. We have recruited and trained further customer support staff, in line
with our plans, and introduced automated tracking systems to reduce call
volumes. We expect to see material improvements over the summer. We will
provide further detail on LLU operational metrics at our interim results in
November.
“We continue to develop our mobile and broadband services
across the National Telcos, while at the same time reviewing our cost base. In
the Caribbean we are rolling out shared service platforms to provide
standardised billing, procurement and supply chain management, as well as
centralised regulatory and other support functions across the region. We
continue to explore opportunities to extend these initiatives to other National
Telcos.
“At the beginning of September, we will provide both our
restated results for the full year 2004/5 on an IFRS basis and a summary of the
effect of IFRS on the Group outlook comments provided in our preliminary
results 2004/5. We will announce our interim results to 30 September 2005 on 8
November 2005.
“We remain active in the area of corporate
development and we are approaching the stakeholders of Energis concerning a
possible acquisition. We cannot be certain that a transaction will result and a
further announcement will be made in due
course.”
Notes
It is possible that this announcement
could or may contain forward-looking statements that are based on current
expectations or beliefs, as well as assumptions about future events. These
forward-looking statements can be identified by the fact that they do not
relate only to historical or current facts. Forward-looking statements often
use words such as anticipate, target, expect, estimate, intend, plan, goal,
believe, will, may, should, would, could or other words of similar meaning.
Undue reliance should not be placed on any such statements because, by their
very nature, they are subject to known and unknown risks and uncertainties and
can be affected by other factors that could cause actual results, and Cable and
Wireless plc’s plans and objectives, to differ materially from those
expressed or implied in the forward looking statements.
Certain
important factors that may cause actual results to differ materially from those
contained in such forward looking statements include (but are not limited to):
business risks such as technological changes or network failures; unforeseen
changes in regulation and government policy; risks specific to the
telecommunications industry such as the adverse affects of competition and
price pressures; and legal risks.
Cable and Wireless plc undertakes no
obligation to revise or update any forward looking statement contained within
this announcement, regardless of whether those statements are affected as a
result of new information, future events or otherwise.
Cable and Wireless
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