CWW CEO: “We need to be more confident”
Speaking at a press conference today for its interim management statement, Gavin Darby, CEO at Cable&Wireless Worldwide (CWW), said that there had been a lack of confidence in the business over the last year. “We need to more confident in terms of the way in which we price and sell our products,” he stressed.
Darby’s comments come in the wake of interest from Vodafone this week, which is eyeing CWW as a potential acquisition. He acknowledged when answering questions that it was “difficult to talk about hurdles and goals in the current climate.”
Darby, a former Vodafone chief executive, was appointed in November to replace John Pluthero, following a series of poor financial results. Darby’s previous working relationship with Vodafone could turn out to play a significant role in any acquisition plans.
In his interim statement Darby said that: “Under-investment has left the business with an inefficient cost base and insufficient capacity to participate in the high growth hosting market.” He also appeared to ask for more time from shareholders stating that the business was capable of delivering a better return for them, while acknowledging that some of the strategic challenges CWW faces will take time to address.
CWW set out plans in the interim statement to reduce the complexity of its business, build internal capability and reduce cost. Meeting demand for next-generation services was also highlighted, with the company planning to expand further into hosting and hosted services from its core network base.
CWW’s Indian business was described as a “jewel in its crown”, with a force of 850 support workers built up steadily since 2007. CWW’s role as one of the founders of the consortium for the EIG cable was also highlighted.
Darby said that one of the things that most surprised him when he joined the company was that it had not been investing in more data centre capacity. The recent announcement that CWW was expanding its data hosting capacity by 25% through a 15-year agreement with data centre operator, Infinity, appears to be the company’s solution to this problem.
Whether or not the interim plans will be able to take their course remains to be seen. Vodafone’s offer for CWW, estimated at £700 million, was thought to be on the lower end of the spectrum, with an higher potential offer of £900 million considered a possibility by some analysts. That CWW was worth £2.5 billion after its split from Cable and Wireless Communications in April 2010 emphasises how much it has declined since then.