Ovum comments: Vodafone to buy CWW?

(PresseBox) (Cologne, Germany, ) Vodafone has issued a response to press speculation surrounding its evaluation of a potential offer for Cable&Wireless Worldwide (CWW). David Molony, principal analyst at Ovum believes this is not a UK telecoms story but very much a global telecoms story. In reaction, David has the following comment:

"The appointment of Gavin Darby from Vodafone as the new chief executive at Cable&Wireless Worldwide (CWW) last year should have been a clue, but it still took everybody by surprise, as the market reaction shows.

"A merger would give Vodafone significant global network for fixed services to complement or even integrate with its mobile operations worldwide, and give it a significant position in global enterprise services. Second, it fits with an Asia-Pacific growth strategy for Vodafone - CWW has the highest penetration of the business fixed services market in Asia-Pacific of the European and US-owned telecoms service providers.

"However, becoming a fully-integrated telco will make life complicated for Vodafone too. It has some major contracts with global MNCs that get their fixed services from other telcos like BT. Those customers who want more collaboration on fixed-mobile services will wonder where Vodafone's ownership of CWW leaves them."

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