C&W to sell Japanese division

Network operator Cable & Wireless (C&W) has agreed to sell its Japanese business, Cable & Wireless IDC, to Softbank for £72.4m.

Network operator Cable & Wireless (C&W) has agreed to sell its Japanese business, Cable & Wireless IDC, to Softbank for £72.4m.

The deal, which will include the assumption by Softbank of C&W IDC debt worth £9.5m, is expected to be completed in the C&W's fourth quarter ending 31 March.

C&W will retain two international data nodes, allowing it to continue to provide customers with network service to and from Japan. C&W operations in other parts of Asia, including Hong Kong, China, Singapore, Macau and India, will be unaffected by the sale.

The sale of C&W IDC is part of C&W's continued retreat from its once-planned $3.5bn global IP (internet Protocol) network.

In 2000, the company said that in Japan alone, it would invest £960m over five years to build an optical fibre network.

However, the company's fortunes turned in 2001, which C&W blamed in part to decreased demand for its fibre optic networks.

C&W cut thousands of jobs and began selling some of its assets, including its stake in Hong Kong telecommunication operator Pacific Century CyberWorks (PCCW). It also launched a company restructuring plan which included dismantling its global data services division, C&W Global, and exiting from the US and continental Europe, except for multinational enterprise and service provider customers.

In January, as part of a court-supervised bankruptcy sale, C&W sold its US web hosting and IP services businesses, Cable and Wireless America (CWA), to Savvis Communications.

The deal was for $155m (£84m) in cash and the assumption by Savvis of liabilities of approximately $12.4m. C&W began its retreat from the US market in September 2002 when it sold its US retail voice and data business to Primus Telecommunications Group.

Laura Rohde writes for IDG News Service

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