Vodafone buys Cable and Wireless Worldwide

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.