• United States

Cable & Wireless ditches U.S. customers

Jun 09, 20032 mins
Internet Service ProvidersNetworking

* Future of Cable & Wireless' 5,000 U.S. customers is in the balance

International carrier Cable & Wireless last week announced that it is exiting the U.S. market, despite the company’s repeated assertions to the contrary.

Last year, Cable & Wireless started restructuring its U.S. business first with the sale of its voice customers and then the sale of its data customers that only had domestic service needs.

The carrier was asked time and again if it was completely pulling out of the U.S. and it repeatedly said no, just that it was refining its focus on business users that had data needs in multiple countries.

But when a new executive team is brought in and several months pass, anything can happen.

Cable & Wireless’ new executive team essentially says it can’t make enough money off of its U.S. operations. Chairman Richard Lapthorne and CEO Francisco Caio took over earlier this year along with several new board member changes.

So where does this leave Cable & Wireless’ 5,000 U.S. business customers? Well, that’s not too clear at this point. The company says that “it’s business as usual” as it explores how to exit the U.S. market.

One option for Cable & Wireless is to sell its customer contracts and network in the U.S. This is one route that would motivate the carrier to maintain network performance and take the time to interact with customers to make sure they don’t flee before a pending sale.

But how many carriers are in a position to buy Cable & Wireless’ IP, Web hosting and content distribution network service customers and network? Level 3 is one company that comes to mind, but it just bought Genuity, so would it need Cable & Wireless’ assets too?

One thing is certain, if Level 3 is the acquirer, then user beware. After Level 3 acquired Genuity it ditched hundreds of customer contracts and then set out to renegotiate “more favorable terms.” Translation: higher prices for users.

Another option for Cable & Wireless is to take its U.S. operations into bankruptcy. When asked if this was an option, Caio said the carrier was looking at all options and would choose the option that costs the company the least amount of money. That sentiment cannot sit well with U.S. Cable & Wireless customers.