Jacqueline Holding

Cable & Wireless, which has seen revenue on its fixed-line business slipped significantly in the past few years, will this year focus more of its resources towards developing its Internet and broadband data businesses - areas that have already begun to show strong growth prospect.

The company's president, Jacqueline Holding told investors on Wednesday that C&W was aiming at providing broadband access to around 50,000 households by March 2006.
Currently, C&WJ has some 8,000 broadband customers.

"Broadband is the way of the future and once you have tried it you will never want to return to dial-up," Holding told investors at Mayberry Investment's monthly investors forum, held at Knutsford Court Hotel in Kingston.

"Recent surveys point to 94,000 homes having computers," she said. "It is our intention to offer broad-band to 50,000 homes by the end of the fiscal year 2005/2006."

In making this shift, C&W hopes to develop rapidly a new market in light of the recent slippage in its land- based customers. Last year alone, fixed-line revenues declined by $1.6 billion, while the actual number of fixed lines fell by 10 per cent.

The revenue reduction was in part attributed to some residential customers substituting pre-paid mobile phones for fixed lines.

Nevertheless, fixed line services still contributed the largest share of C&W revenues and profits. In 2005 for example, fixed line pre-tax profit amounted to $3.5 billion, 10 times the $348 million attributed to mobile services, and a multiple of the $181 million for carrier services - the latter largely representing earnings from data services such as broadband.

Holding also told the investors that Cable and Wireless would pay $1 billion in dividends to shareholders this year representing just under half of the company's net profit in 2004/05, but the lowest dividend payout in at least five years.

According to Holding, this year's payment would be subject to shareholder approval at the company's annual general meeting, to be held on August 11, 2005.

Holding said that this year's dividend payment came against the background of the turnaround in C&W's performance from 2004, when the company incurred major losses due to impairment that was brought unto the profit and loss account.

That year, she said, represented a transitional period - "an accelerated transformation effort in 2004", which she said enabled C&W to redirect focus towards driving growth in profits and expanding into a wider range of services.

During the last four years, the company incurred major transformation costs, as reflected in the $11 billion fixed asset impairment brought to book in 2004, leading to net loss of $5.3 billion.

For 2005, the company did not incur any impairment, and netted $2.3 billion.

C&W dividend highlight
Dividend net profit
2004 $1.07-b-$5.38-b (impaired) $2b (without )
2003 $2.15-b $1.83-b
2002 $2.15-b $3.23-b
2001 $1.84-b $3.9-b

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