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Interview: David Shaw of Cable & Wireless’s Lime

01 March 2010

Just 18 months since Cable & Wireless rebranded and united its 13 Caribbean operations, the new Lime is to purchase new broadband technology

Read more: Lime Cable & Wireless Caribbean Panama Jamaica Digicel

C&W’s rebranded Lime to invest in new networks across Caribbean




David Shaw: following the rebrand, Lime has to upgrade
the network to make sure it’s fit for purpose

 


 
 

Chief executives in the telecoms industry are familiar with the challenges of being an incumbent suddenly faced with competition. The habits of years, as a monopoly or even as a government department, have to be overturned and staff have to learn commercial ways of doing business.

David Shaw, CEO of Lime in the Caribbean, has that challenge many times over, for his company is the effectively the incumbent in 13 varied Caribbean island countries and territories.

Most of his customers are in the respectably large independent country of Jamaica; but some are in tiny islands such as Anguilla, with 14,000 people, and Montserrat, with 5,000. Some work in the offshore financial institutions of the Cayman Islands, where the gross domestic product is $60,000 per person. Those in Montserrat are still recovering from the effects of the volcano that devastated the island 15 years ago.

“It’s a wonderfully diverse range, with all the developing country issues they face,” says Shaw, who took over as CEO in July 2009.

Lime’s an unfamiliar brand to most people. It was created by Cable & Wireless, the company that owns the 13 operations, in late 2008 as part of its strategy to relaunch and modernise the operations.

“We called the project One Caribbean, to symbolise our efforts to find a way of using the scale advantages that we have,” he explains. It’s meant a slimming down of the operations in some of the smaller islands. “We had 13 financial teams, 13 human resources departments, 13 engineering teams, 13 billing and customer care systems, and so on. We had a fabulous service on the islands but no scale benefit.”

Now, Lime has concentrated “eight or nine call centres into two or three”, with a shared service centre for finance and back office systems. Operations are now concentrated in two largest islands in terms of population, Jamaica and Barbados.

The change means Lime has lost 800-900 staff. “In some of the smaller markets that was difficult, but our cost base was out of kilter with our competitors’.” In every market “there are at least two mobile providers if not three”. Lime provides fixed services in 12 of the 13: in Antigua the fixed network is still a state monopoly.

“Digicel operates in all the markets we’re in,” he adds. “It’s a vibrant competitive scene.” Lime is the leading mobile operator in nine of the 13, though privately owned Digicel is bigger in the largest market, Jamaica. “My job is to try to knock them off their perch.”

And the name? Though it echoes many other fruit-related brands in IT and telecoms — especially Orange and Apple — Shaw says with a straight face that it stands for “landline, internet, mobile and entertainment”.

He’s come into the operation after a career in AT&T in the UK, Mercury Communications — once C&W’s UK telecoms brand — and Energis, the rival UK business that became part of C&W in a takeover in 2005. Many of the leading executives in C&W today came into the group through Energis.

And he spoke to Global Telecoms Business, in the office in London which had once been Mercury’s headquarters, C&W was undergoing the latest and most radical change: a demerger into two businesses. After March 2010 the company that owns Lime will be the independent Cable & Wireless Communications — see panel.

What does this series of changes — the creation of Lime and the splitting of C&W — mean for Shaw and his team? “Telecoms in the Caribbean is at the next stage of development,” he says. “Consumers are trending up to much more data-intensive services.”

That means Lime has “got to upgrade the network to make sure it’s fit for purpose”. At the moment “there are a lot of different technologies, a consequence of how the business has been run”, he says. “We intend to standardise on a common platform and architecture.”

The upgrade will start with the appointment of “one vendor” to renew the network, says Shaw. He’s looking for an equipment deal, without any form of managed services. He wants to keep his engineering staff “in the community”, he says. “Today we have every supplier’s kit in the ground. We intend a single supplier route” in preparation for “the explosion of data”.

The GSM mobile networks are still 2G except in Kingston, the capital of Jamaica, where there is some 3G. “We intend to roll out more 3G”, as well as wifi. “I want to make broadband ubiquitous for people.”

Which vendor? Though he says “we are in the final stages of choosing”, it seems clear that a vendor has been chosen and contract negotiations are nearing signature. He expects an announcement in April or May.

The demerger is “nothing but good news”, he adds. “This will give us a board that’s focused on our business, with the flexibility and freedom over the capital we’ve got.”

In the past, he suggests, the international side of C&W — which is becoming CWC — generated the cash, but “in any debate about capital more would go to the UK than international”. UK is, of course, a realistic term for what will be C&W Global, built on the former Energis business.

So, apart from renewing and expanding the fixed and mobile networks across the 13 territories, what else can we expect from Lime under the gaze of a dedicated board?

“We’ve got the opportunity to expand the business outside the existing geographical footprint,” says Shaw.

Lime is just in those places in the Caribbean with a UK heritage. “There will be opportunities in French, Dutch, American and Spanish” areas of the Caribbean, he notes. And beyond: C&W already owns an operation in Panama, and “there is a licence coming up in Costa Rica”, so he’s looking out from the islands towards Central and South America.

How? Mainly by buying out existing businesses, he suggests, “but that’s a conversation for another day”. CWC has “a leadership opportunity that we want to step up to”. Other companies in the area “look just like us” and they could “make a perfect fit”.

Of course, those other companies may also be looking at C&W and the two bite-sized chunks into which it’s handily divided itself. The UK operation, CWW, has an asset value — according to C&W — of £2.8 billion, which would be a good acquisition for a European operator looking to expand across the English Channel.

And CWC’s assets are valued, also by the C&W group, at $3.4 billion — an intriguing choice of currency. If Lime can gain scale advantages by merging 13 businesses into one, how much more advantage could one of the big American or European operators gain — a company such as Orange, Telefónica or América Móvil?

Will Lime still be part of Cable & Wireless in five years’ time? “Yes,” he says. “I’d like to see us lead the industry.” GTB



 


 

Lime’s 13 territories

Lime’s operations cover 13 territories in the English-speaking Caribbean: five overseas territories of the UK plus eight independent countries, including one republic and seven that share a monarch with the UK. The total population is 3.7 million, of whom 78% live in Jamaica

Anguilla: 91 sq km, 14,000 people, overseas territory of the UK

Antigua & Barbuda: 442 sq km, 85,000 people, independent state — parliamentary monarchy

Barbados: 430 sq km, 284,000 people, independent state — parliamentary monarchy

British Virgin Islands: 151 sq km, 24,000 people, overseas territory of the UK

Cayman Islands: 264 sq km, 49,000 people, overseas territory of the UK

Dominica: 751 sq km, 72,000 people, independent state — parliamentary republic

Grenada: 344 sq km, 90,000 people, independent state — parliamentary monarchy

Jamaica: 10,991 sq km, 2.8 million people, independent state — parliamentary monarchy

Montserrat: 102 sq km, 5,000 people, overseas territory of the UK

St Kitts & Nevis: 261 sq km, 40,000 people, independent state — parliamentary monarchy

St Lucia: 616 sq km, 160,000 people, independent state — parliamentary monarchy

St Vincent and the Grenadines: 389 sq km, 104,000 people, independent state — parliamentary monarchy

Turks & Caicos: 948 sq km, 22,000 people, overseas territory of the UK


 

New structure for Cable & Wireless

On March 26 2010 Cable & Wireless will split into two independent companies, both to be listed on the London Stock Exchange. Both will use “Cable & Wireless” in their name.

Cable & Wireless Worldwide focuses on enterprises. It operates globally, but its strongest market is in the UK — where the business is essentially that formed by Energis, which C&W bought in 2005 for £674 million, and Thus — formerly Scottish Telecom — which it bought in 2008 for £330 million. It serves large companies and governments and has a wholesale operation for carriers and telecommunications resellers.

The chairman will be John Pluthero, former head of Energis, and the CEO will be Jim Marsh. Tim Weller will be worldwide CFO from May 2010.

Assets worth £2.8 billion as at September 2009.

Cable & Wireless Communications operates a series of fixed — mainly incumbent — and mobile operations in small countries and territories around the world. It includes the 13 Caribbean businesses now united into Lime, but also C&W Panamá in central America, C&W Macau in southern China, Monaco Telecom in the independent country on the French Riviera and some scattered island operations. Note that Cable & Wireless Communications is a name used in the 1990s by C&W’s UK-based cable TV operation which included the residential side of C&W’s Mercury Communications. NTL bought that version of CWC for £8 billion in 1999 in a bidding war with Telewest, but then merged with Telewest and is now Virgin Media.

The chairman will be Richard Lapthorne, currently chairman of the demerged company; the CEO will be Tony Rice and the CFO will be Tim Pennington.

Assets worth $3.4 billion as at September 2009.




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