Cable and Wireless has all but put down their Bulldog in announcing they will be adopting a revised strategy in relation to the consumer and small business element of its local loop capability. It seems a catalogue comprising of poor service and Ofcom investigation and losing £50m has done it for the C&W broadband company. Cable & Wireless themselves are still smarting from losing their position in the FTSE100 earlier this week.
From 1 July 2006, Bulldog will offer only a wholesale product to major broadband service providers. This means that Bulldog will cease any further proactive sales, marketing or advertising activities to acquire new residential and small business customers. Existing customers will be retained and C&W say will be provided with ongoing customer care and launch of new innovative services.
As a result of the move to wholesaling, Bulldog will reduce headcount by approximately 150, mainly from the areas of sales and marketing as part of a strategic U-turn that will see it stop looking for customers for Bulldog, despite having spent millions on a high-profile advertising campaign, which saw the actor Terence Stamp tell consumers that “the gate is open” for high-speed internet access.
The local loop rollout plan is unchanged with a target of 800 fully unbundled exchanges by 30 September 2006, (411 unbundled at 31 March 2006). It is intended that, by the end of this calendar year (2006), Cable & Wireless will use this local loop capability for corporate customer access, in addition to the wholesale offer provided.
Cable & Wireless expects limited benefits from the move to wholesale during 2006/07 as Bulldog completes the local loop roll out and invests in wholesaling capability. Specific guidance will be provided at the interim results on 8 November 2006.
John Pluthero, Group Managing Director, UK said: “As the market leader in full local loop unbundling, we have been looking at the best way to maximise the return on our investment. We believe that a wholesaling approach to the consumer and SME market is the best way to optimise our return from our unique local loop network capability.”