CWW integration to cost £500 million
Vodafone Group has said that the integration of Cable&Wireless Worldwide (CWW) will cost approximately £500 million over the next four years, but believes that the payback from the acquisition will be higher than expected.
CWW was acquired for a total of £1.31 billion in July, doubling Vodafone’s British enterprise business and increasing its UK and international network footprint.
The British carrier said that it expected cash flow synergies of £150 to £200 million a year by March 2016, equating to a free cash flow contribution of £250 to £300 million pounds that year.
Nick Jeffery, who has been appointed CEO of CWW having served as head of Vodafone’s global enterprise division previously, said that the acquisition’s revenues would continue to be negative until 2014.
Among CWW’s assets are a 20,000km UK fibre network which Vodafone is expected to utilise to connect its mobile base stations. This will reduce the operator’s dependence on BT for capacity and will prove important in the roll-out of LTE.
CWW also boasts an extensive 425,000km international network which Vodafone will use to handle some of its own international traffic.
Vodafone said that the company will continue to use the CWW brand until the group’s reputation improved enough to bring it under the Vodafone name.