Transformed C&W brings together internet heritage
Phil Male: infrastructure as a service and software as a
service are the way telecoms networks will evolve
Within a couple of days, the old Cable & Wireless will be no more. The company, with origins dating back to the 19th century, will have been split into two, Cable & Wireless Worldwide and Cable & Wireless Communications — independent entities, though both with the historic name left confusingly as part of their new identities.
A few weeks ago we interviewed David Shaw, who runs the Caribbean operations of one of those two entities, Cable & Wireless Communications. Shaw is CEO of a collection of fixed and mobile networks with the common brand Lime, and with aspirations to grow within central America.
And the other part of the company, which was due to be split off on March 26? There’s something déjà vu about Cable & Wireless Worldwide, which focuses on enterprise markets. 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.
Déjà vu because the chairman is John Pluthero, the former head of Energis; and there are other senior Energis executives at the top of the business.
Phil Male, the chief strategy officer of CWW, is one of the exceptions, but if he’s not from Energis he’s assuredly not a vintage Cable & Wireless hand either. “I ran Thus for 10 years as chief operating officer,” he says. He came into the company via Demon Internet, one of the UK’s very first internet service providers, founded in 1992 and bought by Scottish Telecom in 1998.
So, at first sight, CWW is essentially a combination of Energis and Thus, with the addition of some worldwide enterprise-based assets and the global infrastructure from the C&W portfolio — leaving the worldwide local retail operations in the hands of CWC.
The company has been in a state of almost continuous change for years. The integration of Energis — sorry, C&W — and Thus following the 2008 takeover is barely complete. “There are a few months to go,” Male told Global Telecoms Business in mid-February 2010. “The Thus IP network is moving over to the C&W strategic platform.” But “integration is a well trodden path for us”, he adds: the group built up the experience and acquired the methodologies during the C&W/Energis integration.
And now, free of the historic responsibility to run incumbent and mobile networks across the world — they are all in CWC — CWW is ready to face its market challenges.
“We are in 153 countries,” says Male. The company has interests in 69 cable systems connecting Asia, North America, Europe and Africa.
But it’s more than just a communications network, he says. Telecommunications service providers are part of enterprises’ integral business processes, he says: “It’s more than just a jack socket. There’s a high level of systems and service integration.”
Male knows the important of that from his own career experience, perhaps more than many others in this industry.
He began business life as a software engineer. “I messed around with Unix kernels for a hobby. I still do,” he says. He worked on systems producing information for betting shops, and from there went into the Press Association, a agency that produces news as well as sports results and TV listings for UK newspapers, magazines and other outlets.
The PA was one of the pioneers in internet delivery of its services, and Demon was the acknowledged creator of a consumer and business market in dial-up internet services in the UK. So Male was there at the start of IP services and still watches, and participates in, the rapid transformation of the industry.
Pluthero is another internet pioneer: in the 1990s he set up and led Freeserve, a hugely successful rival to Demon, until 2002 — a few months after Orange bought it — and went off to join Energis.
One of the biggest changes in the past few years is that the local area network inside the building has merged into the wide area network outside the building, notes Male. “A couple of years ago we passed a huge milestone, when we started getting LAN speeds on access networks out of the building.”
That means that “people today don’t think of the geography of their networks”, he smiles. “You get the same speed on the cable inside the building as you do out of the building.”
Through all the changes, CWW has retained Demon and Thus as brands. “Thus resells C&W products to the small and medium business sector,” says Male. It has no independent network. And there is a substantial wholesale business: the Tesco supermarket chain’s broadband is carried on CWW’s network, for example.
Male returns to his theme of the central position that telecoms operators now have in their enterprise customers’ business. “As technology improves the net becomes more feature-rich,” he says. “This is where scale and the skill-set come into play. Telecoms operators work from a position of economic advisor.”
There is a “trust perspective” at work, he adds. When the network fails, “it’s not just the phones that stop, particularly in the target markets that we’re going for”, says Male. “It is their business that is affected, and we have to be very aware of the impact when things happen.” Today people “come to the office with their laptop and expect it to work”.
We’re talking cloud services here, of course. “We see infrastructure as a service and software as a service as the way telecoms networks will evolve. Telecoms operators are in the best place to offer that.”
Cloud services have been emerging for some years: voicemail systems in the network have largely replaced plug-in answering machines. “It’s a naturally evolutionary path.”
And this has changed the way CWW and others in the industry sell their services to enterprises and other customers. Male briefly recalls the days when, as an IT director, he signed order forms for infrastructure and then waited for the technicians from the phone company to turn up in their van to carry out the installation.
“Today we are innately involved in the work, the design, the technology and the processors.” It’s a continuous process. “What people are looking for is the total service experience.”
But CWW “is not a systems integrator”, he warns. “We are very good at the communications stuff.” The company’s skill-set is building the network, not in installing a new accounting system. “That’s why we use the phrase ‘communications integration’.”
If anything, CWW is more of an internet-based services company than ever. “Our heritage comes from the internet,” says Male, pointing to both Demon, which he helped to found, and Freeserve, which Pluthero helped set up. “You’d expect us to be good at that.”
But there is another common factor running through the company: Energis and Thus were both set up as offshoots of electricity companies, and CWW retains strong connections with utilities and is using those roots to explore the potential of smart grids.
“We also have strong a retail product offering,” notes Male: perhaps that’s roots again, as back in the 1990s Pluthero persuaded the Dixons consumer electronics chain to back the Freeserve idea. One of Energis’s first major contracts outside the electricity industry was for the BBC, distributing programmes, and Male points out that CWW is still strong in the media, with a number of TV, radio and publishing groups among its large customers.
“We’re particularly strong in banking on a worldwide stage,” says Male: CWW’s ancestors have been in Asia “for 100 years”, he notes, and that market is still important to the company.
Most of CWW’s business is UK-based, with 54% of its revenue coming from UK-based enterprises and about 15% from mid-market customers. The rest is global enterprises and wholesale services for carriers, says Male.
But it has managed services in 29 countries in Europe, “quite an extensive footprint”, he notes, and provides services for Europe-wide companies such as Ryanair, covering 180 airports in 26 countries.
Following the split from CWC, “we are now in a fit state”, says Male: clearly not casting aspersions on the condition of what is now CWC but, like Lime’s Shaw in the January-February issue, hinting at the difficulty two very dissimilar businesses had in existing alongside each other.
“We can go from strength to strength,” he says. “We’re showing investors how strong our transformation has been.” GTB