Liberty Global this week agreed to acquire Cable & Wireless Communications (CWC) in a cash and stock transaction worth approximately US$8.2 billion.
The move not only makes note-taking with the pictured pen all the more poignant, it also bolsters the U.S.-based cable group’s position in Latin America and the Caribbean, a market that has been the sole focus of CWC since 2013.
It is also a watershed moment, since the deal could well mark the end of the road for one the oldest companies and oldest brands in the global telecoms industry.
Telco hacks have grown weary of hearing the phrase, "it’s early days", in relation to new technologies and services – usually during the course of a conference – but back when C&W was a lad it really was early days for the whole industry.
Therefore we thought it wholly appropriate to look at some of the important twists and turns in Cable & Wireless’ long history.
Known as Cable & Wireless since the 1930s, the company’s origins can be traced back to the 1850s and the first days of the global telecoms industry. Back then, early subsea telegraph systems were being deployed, Alexander Graham Bell was a child, and Marconi hadn’t even been born.
Scotsman John Pender, who made his fortune as a cotton merchant based out of Manchester, took it upon himself to build a global cable empire stretching from the U.K. to Australia via Africa, and Southeast Asia. These organisations were amalgamated in 1872 to form the Eastern Telegraph Company, which according to Cable & Wireless itself, was the largest operating company in the world at the time.
Just like telcos today, the Eastern Telegraph Company invested heavily in expanding network coverage, reaching 150,000 kilometres of undersea cables by 1900.
In 1929, the Eastern Telegraph Company merged with the Marconi Wireless Telegraph Company to form Imperial and International Communications, which was renamed Cable & Wireless in 1934. During this period, the company significantly expanded its presence in the Caribbean.
In 1947, the Labour government under Clement Atlee nationalised Cable & Wireless, turning it into the international arm of the U.K.’s mon opoly telecom operator, the General Post Office (GPO).
It continued to operate as a global telco provider, branching out into satellite services. In 1980, Cable & Wireless became the first company to be privatised by Margaret Thatcher’s Conservative government. Two years later, the government issued a national telco licence to Cable & Wireless’ newly-launched subsidiary Mercury Communications, becoming the first competitor to take on incumbent BT.
In 1997, Mercury, which had introduced Mercury One2One, the world’s first 1800-MHz GSM network, was sold to a consortium of three cable companies and renamed Cable & Wireless Communications. One2One was sold to T-Mobile in 1999.
Cable & Wireless’ first decade-and-a-bit of the 21st Century was marked by numerous acquisitions and divestments. It snapped up dot-com bubble victim Exodus Communications in 2001, merging it with its U.S. arm Digital Island and renaming the whole thing Cable & Wireless America. Cable & Wireless America hit the skids in 2003, filing for Chapter 11 in December of that year. It was snapped up by hosting provider Savvis in 2004.
Other acquisitions included Guernsey Telecoms in 2002, which was later sold to Bahrain’s Batelco in late 2012. It also bought defunct telco Energis in 2005, and altnet Thus in 2008.
In 2010, Cable & Wireless split in twain. Cable & Wireless Communications (CWC) would own the company’s international footprint of telco operators, while Cable & Wireless Worldwide (CWW) would continue to sell voice and data services to large enterprises, governments and carriers.
CWW was acquired by Vodafone in 2012, forming the basis of Vodafone Global Enterprise, Vodafone Carrier Services, and its recently-launched U.K. home broadband service.
CWC opted to concentrate on Latin America and the Caribbean, selling off its various operations in Macau, and its Monaco and Islands division, which consisted of its businesses in the Maldives, the Channel Islands, the Isle of Man, the Seychelles, the South Atlantic and Diego Garcia, as well as a 25% stake in Compagnie Monagesque de Communications, through which it owned a controlling stake in Monaco Telecom.
The Caribbean-focused strategy led to last year’s $1.85 billion acquisition of Barbados-based fixed-line telco Columbus, which was completed in April this year.
That deal left Liberty Global chairman John Malone – also a major shareholder in Columbus – with a 13% stake in CWC.
…Which brings us nicely back round to this week’s news. Liberty Global still has to jump through the customary regulator-and-shareholder-approval hoops, of course. However, unless major antitrust issues arise, or there is some kind of concerted effort by shareholders to block the deal – neither of which seems likely – the sun will soon set on Cable & Wireless.
