Great Titchfield Street, London -- Cable & Wireless (LSE: CW.) is a mucky company. Some might go further and call it clumsy. Compared with the clarity cable telecom network developer Colt (LSE: CTM) or mobile phone operator Orange (LSE: ORA) display, Cable & Wireless is a real hotch potch of businesses. This blend seems to be forever stirred up by directors, switching their strategies. This has confused investors in the past.
Rumours have swirled around about the future of the group, following the sale of various stakes earlier this year, such as its One2One mobile arm to Deutsche Telekom and the Cable and Wireless Communications consumer entity to NTL. Some suggested the group might be on the verge of selling off its substantial holding in Hong Kong Telecom. For a summary of recent developments and the current status readers could do no worse then check the recent Rulemaker assessment of the company on the US Motley Fool web site.
Today though, C&W has set out the new direction it intends to follow. The group wants to stamp its authoritative mark on the business-to-business Internet and e-commerce market, carrying much of the data traffic involved in such transactions across Europe. To this end it has announced the purchase of eight European Internet service providers, forking out £300m in all. In addition an extra £300m will also be invested in the group's current European Internet protocol network build programme (whatever that means).
The board's vision is that the group - already connecting more European cities by cable than any other telecom company - will be able to offer broadband access to over 200 business centres within two years. That's an ambitious programme and might make Colt quake. This upstart, currently worth three-quarters of C&W, is planning to do something remarkably similar. The whole European business Internet protocol market is envisaged to be worth £19b by the time C&W's plans are implemented, so there should be room for both companies to install capacity. Today C&W only makes £300m from this business.
With this change of direction the Hong Kong residential telecom business sits uneasily in its portfolio against the rest of the group's business contracts. The speculation about plans for this arm out on an Asian limb will continue to beset Cable & Wireless until it makes a definitive decision about this activity. Going forward C&W will be busy building up all these business telecom contracts. Luckily following the sale of One2One and CWC the group has an extremely healthy balance sheet, piled up with tons of resources to be able to do this effectively. The ugly duckling of the telecom sector is scrubbing up nicely.
A raft of retail trading statements came from a rag-tag of stores this morning, including House of Fraser(LSE: HOF), JJB Sports(LSE: JJB) and Great Universal Stores(LSE: GUS) amongst others. The latter in particular delivered surprisingly buoyant figures. A round-up summary will be given at lunchtime.
Elsewhere the most innovative retailing enabler of the 80s, British Airports Authority (LSE: BAA) has taken a stake in the most enterprising UK Internet retailer of the 90s, Lastminute.com, sending the former soaring. And finally another private company will be cheering today as Scottish Media(LSE: SSM) makes a bid for Chris Evans's Ginger Media, making the filthy-mouthed Northerner a millionaire 75 times over.
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