VODAFONE will have to spend £500m on integrating Cable & Wireless Worldwide (CWW)’s infrastructure into its own network, the firm announced yesterday, as it counted the cost of the £1.3bn acquisition.
However, Vodafone said the benefits of the purchase were better than many analysts had expected, leading to cash generation of £150m-200m by 2016.
CWW was sold in July as Vodafone aims to bolster its network to cope with the growth in data usage and improve its business sales. CWW’s 12,400 miles of fibre cables around the UK will also relieve Vodafone’s dependence on renting lines from suppliers such as BT.
CWW’s newly-appointed chief executive Nick Jefferey said the first priority was to stabilise the telecoms firm and stem the declining revenues. “It just takes a long time for this ship to turn around, and it’s that we see taking 18 months to two years,” he said.
Jack Rich at Espirito Santo said the length of time for the deal’s benefits to accrue was “a disappointment”.
“March 2016 is more than three and a half years after the deal completed,” he said, adding that the delay was “a reflection of the poor state that the CWW business had descended into”.