The UK telecoms giant's woes were triggered last week when the company was forced to put £1.5bn in escrow as a result of a clause in a contract drawn up with Deutsche Telekom for C&W's sale of One2One. This followed a stockbroker downgrading of company bonds to junk status.
C&W recently announced a restructure which will cost nearly £1bn and see some 3,000 job losses. Its one strong card was its cash reserves of £2.2bn but, with the £1.5bn indemnity and restructuring charges, the company's future is now less certain.
Jan Dawson, a telecoms analyst at Ovum, said, "Customers should be looking for alternatives - not necessarily buying in huge quantities but seeing what is available. The biggest worry is continuity of service. If C&W goes out of business you need to be able to switch quickly. It might not come to it but it would be stupid not to."
Mike Mikkelsen, head of the Communications Management Association's risk and continuity special interest group, said the news reinforced his organisation's call for an "at-risk register" of telcos to be held by the regulator. "Many customers are at risk in terms of long-term service sustainability," he said.
A C&W spokesman said, "The directors re-affirm that, on the basis of current trading conditions, C&W has sufficient financial flexibility to implement its restructuring of C&W Global and to meet its debt obligations."