Cable & Wireless customers should update contingency plans

Cable & Wireless customers should look closely at the likely outcome of changes at the telco and draw up plans for moving to an...

Cable & Wireless customers should look closely at the likely outcome of changes at the telco and draw up plans for moving to an alternative provider, analysts have warned.

C&W recently announced a sweeping restructure that will include a complete withdrawal from the US market and a reduction of UK staff by 1,500.

With C&W going from being an £8bn business with 20% operating margins to a £4bn loss-making business, it has abandoned its strategy of being a global telecoms and networks provider.

This will mean that UK businesses with US operations or those with global accounts will have to look at how C&W account teams will service their business as the changes are implemented at the telco.

Julian Hewett, an analyst with Ovum, said, "Customers need to determine the level of support going forward. With C&W pulling back from local support outside the UK and Japan, it is a case of finding out what is going to happen at ground level.

"It may be that support will be very good, with new teams being more motivated by owning the local business, but customers need to look at the details and should consider the long-term options of alternative providers or second suppliers to step in if things get rough.

"A UK company with operations abroad will now have to deal with a local account management team who may not be as aware of their needs as the global team was. Really, though, it depends on people. There are some good people at C&W and if they go that should sound alarm bells."

A Gartner first take following the announcement advised C&W customers in the US to, "Immediately update contingency plans and negotiate with other providers. They will have many options since numerous competitors will be eager for the business."

Because of the new national market focus, Gartner said, "Global enterprises should be wary of including C&W on their tender lists for communications services."

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