The final confirmation that Vodafone has bought Cable & Wireless Worldwide (C&WW) is something that may lead to a few heads being scratched. The acquisition that places a value of just over £1bn on Cable & Wireless Worldwide, means that Vodafone has just re-entered the fixed line market after divesting itself of its fixed line telephone and broadband customers in December 2011.
The obvious benefit to Vodafone from acquiring Cable & Wireless Worldwide, is that this buys them an extensive fibre backbone, just before the roll-out of 4G services, this puts Vodafone in a position where the cost of backhaul from mobile towers may be lower for it, and potentially it could make a profit from other mobile operators who are looking to buy more capacity to support the faster 4G services.
C&WW owns Thus, which run the Demon broadband service, and also C&WW acquired the Bulldog LLU network hardware which is used by Demon customers where it is available, and is also sold at the wholesale level, providing services to high profile names like Tesco, and the Virgin Media National ADSL service (sold in the 50% of the UK Virgin Media does not have its DOCSIS 3.0 network).
With Vodafone already talking of a reduction in headcount, we are pretty sure that the accounts will gone over with a fine toothcomb, and if the broadband division is not contributing significantly, we may see Thus up for sale, and perhaps the loss of another wholesale ADSL2+ provider.
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