C&W buys Energis
Here's yet another example of the growing consolidation of the European and world telephone markets. British-based Cable & Wireless announced it will acquire rival Energis for around $1.1 billion, solidifying its already strong base in the UK. C & W beat out a bid by Scottish telecom company Thus Group PLC, another owner of a major British fiber optic network.
C&W has, up until now, specialized in providing telecom and data service s to businesses. It supplies services over 300 cities in some 80 countries, and is particularly strong in the UK, in Europe, in the Caribbean, and Japan, rivaling Sprint, MCI, and AT&T in serving major multinational clients.
Energis also supplies UK businesses with voice and data transmission services, owning a mOE fiber-optic transmission grid throughout Britain. It also has joint operations in Ireland.
C&W is already the UK's second largest telecom company, second only to British Telecom (BT). In fact, C&W has been positioning itself to go head-to-head with BT, as a Financial Times article (" C&W chief says 'it's all about people", 8/17/05) discusses. Last year, C&W acquired Bulldog, a broadband provider, a move that put C&W back into the residential services market. The company has also been providing its own "last mile" services to customers, avoiding the need to go through BT's monopoly hold on UK land lines to reach customer sites. Finally, it recently announced a plan to create its own IP 9Internet Protocol) network, a more efficient way of delivering voice and data.
As the article points out that the merger comes just in time:
Both operators, like many rivals, were just about to start to upgrade their networks from existing switching technology to new Internet Protocol technology. So now not only can the combination of the two businesses cut out Energis' planned capital expenditure in that area but it also means both sets of customers will be migrated onto the new network when it comes ready, a step that many are already asking their telecom suppliers to take.
