Delivering mission critical communications

2010/11 Annual report

Our business
at a glance

EBITDA growth
to £442M

FY 2009/10: £431m

Trading cash flow
to £116M

FY 2009/10: £71m

Free cash flow
to £61M

FY 2009/10: (£1m)

Strong performance in high margin product areas – 2010/11 Gross Margin and Percentage Margin

Gross margin (£m)

pie chart

Product set % margin

IP & Data 61%

Hosting & Apps 73%

Traditional Voice & Legacy 27%


Source: Ovum survey for Cable&Wireless Worldwide

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How will we grow and diversify the business?
How have we helped our clients?
How prepared is our network for the challenges ahead?
How our people are helping us drive success?
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We aim to be the first choice Communications integrator, delivering mission critical communications to large telecoms users.


  • By maintaining operational efficiencies
  • By driving cash flow growth
  • By supporting financial transparency
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  • By managing the decline in voice and legacy
  • By maximising opportunities from our strategic product set
  • By differentiation through communicating integration service proposition
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How does all of this help our clients?
Why have we been investing in cloud infrastructure?

Maintaining operational efficiencies

We continue to drive operating cost efficiencies across the business. However, given the anticipated nonrecurrence of some one-off benefits in 2010/11 and the cost inflation we are experiencing, combined with the operating expenditure investment we intend to make to exploit the cloud opportunities, we currently expect operating expenditure in 2011/12 to show a year-on-year increase in the order of £30 million.

Key features:

Driving cash flow growth

Given its importance to shareholder return, we remain particularly focused on cash flow growth and we expect trading cash flow in 2011/12 to be around £50 million higher than 2010/11. This is driven primarily by a year-on-year decrease in cash exceptional items and substantially reduced working capital outflow.

Key features:

Supporting financial transparency

We enhanced our financial disclosure in 2010/11 and continue to look for ways to simplify our business in order to allow investors to understand and compare our business more easily with peer group companies.

Key features:

Managing the decline in voice and legacy

The Telecoms industry grew out of the traditional need to carry voice from point to point. This has been in decline for a number of years as phone call volumes decline and although forecasting the precise year-on-year decline in absolute margins is difficult, we expect this to be in excess of 10% in the future. Traditional voice and legacy products also generate increasingly lower percentage margins. The world began to move to data carried over an Internet Protocol (IP) based network and we have sought to differentiate ourselves through our service and strategic product propositions as customers make this shift from voice to IP and data.

Key Features:

Maximising the opportunities from our strategic product set

We expect growth in strategic products to more than offset the decline in voice and legacy products. We continue to experience increased demand in bandwidth and migration from legacy voice to voice over IP. However, there is competitive pressure in the market for pure data connectivity and we are seeing price erosion on a number of contract re-signs. We continue to invest in our sales teams, reorganising our enterprise business to better address specific industry sectors, allowing us to become more aligned with our customers with products that meet their requirements.

Key Features:

Differentiation through communications integration service proposition

We continue to review developments in the markets in which the Company operates and to consider how the business can best position itself strategically. Customer appetite for integrated hosting solutions, i.e. cloud solutions, is a growing trend and we believe this represents a significant growth opportunity for Cable&Wireless Worldwide. Customers are demanding that their supplier can offer a full end-toend communications integration suite.

Key Features:

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49% of North American companies and 45% European companies report that pursuing a strategy of embracing cloud infrastructure services is a high or critical priority during the next 12 month.

Cloud service adoption is up 61% from April 2010 with 45% of MNCs already using cloud sourcing for at least some elements of key IT services.*

* Source: Ovum survey for Cable&Wireless Worldwide

How are we migrating our clients from legacy to cloud infrastructure?
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How prepared are we for demands for high-speed data access?

Case Study: Vertex

"Cable&Wireless Worldwide clearly demonstrated that it has the capability to take over a major component of Vertex's operations, and has the commercial flexibility and willingness to take on risk and invest in their relationship with Vertex."
Andrew Chamberlain, CTO, Vertex

Vertex is a leading global Customer Management Outsourcing business with clients in the private and public sectors.

Under a £40 million, five year private cloud contract, Cable&Wireless Worldwide is providing a fully-managed Infrastructure as a Service (IaaS) solution for Vertex to host its IT infrastructure, in the UK and India, in a private cloud within Cable&Wireless Worldwide's secure data centre environments. Vertex also has global access to all its information via Cable&Wireless Worldwide's high-speed nextgeneration network (NGN).

Vertex's IT infrastructure was previously a mixture of several platforms. Cable&Wireless Worldwide is helping Vertex to simplify their existing IT infrastructure, which will consolidate their expanding corporate and customer IT infrastructure, consisting of more than 1,600 operating systems and 600 physical servers, and will accommodate 200 terabytes (TBs) of storage space.

"This programme will dramatically transform our technological capability to continue delivering world-class service levels."
Andrew Chamberlain, CTO, Vertex

Case study: DFID

"Cable&Wireless Worldwide provides a fast, reliable and secure network that ensures we can focus on delivering aid more effectively into some of the poorest and most remote regions in the world. We are seeing substantial savings in our telecoms budget. This is good news for us and great news for the taxpayer."
Peter Sweeney, Head of Operations, Department for International Development (DFID)

DFID works to get rid of extreme poverty and manages Britain's aid to the world's poorest countries. It has offices in around 40 developing countries and provides aid to approximately 90 countries. In order to reduce its telecommunications budget and connect all its sites on one network, it turned to Cable&Wireless Worldwide.

Under a five and a half year, £10.3 million contract on its global telecoms framework, Cable&Wireless Worldwide provides fast and reliable connectivity to all of DFID's sites across the globe, allowing DFID users to seamlessly communicate with one another.

The advanced IP services, which include IP voice, ensure better value for money through the reuse of existing Cable&Wireless Worldwide shared services, enabling DFID to improve operational efficiencies and increase inter-departmental collaboration across the world.

Case study: Next

Cable&Wireless Worldwide continues to lead high street communications with a five year contract that connects 32 distribution sites and offices in the UK and Hong Kong for leading retailer, Next plc.

Cable&Wireless Worldwide's single, secure and high-speed nextgeneration network underpins all of Next's critical communications including taking orders and dispatching and receiving goods into warehouses. The advanced network provides Next with significantly more capacity to work with much higher volumes of goods than it was previously able to process.

The increased capacity and flexibility also enables more customers to place orders on Next's website; this will be particularly beneficial during peak trading periods. Next is well positioned to ensure its festive online shoppers enjoy the same high standards of service as they would instore.

Next comments: "We needed a highly resilient network which would support our current needs and allow for future growth and new technologies. Additionally, the Application Performance Management service gives us more control over our network traffic than ever before, helping us deliver even better service to our stores and online customers."

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Cable&Wireless Worldwide owns the UK's biggest fibre network dedicated to business users of telecommunications

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How do we work, recruit and develop colleagues?

Our network & global reach

Cable&Wireless Worldwide owns the UK's biggest fibre network dedicated to business users of telecommunications. Internationally, we have a cable network spanning more than 425,000km in length. It reaches across the Atlantic Ocean, through Europe and on to India, throughout Asia and beyond. In conjunction with satellites, we connect every continent and more than 150 countries, either directly or indirectly through our business partners.

Our Next Generation Network (NGN) spans the entire globe. It is specially designed to serve customers, who need a best-of-breed network solution, which is high speed and able to run the mission critical applications and services of large organisations.

Our IP-based Multi-Service Platform operates at the core of our NGN, offering a single environment on which voice and data applications can be converged to drive business efficiencies. It is uniquely designed with inbuilt resilience.

Our network is integral to meeting the increasing demands for high speed data access. High speed connection to mobile, tablet, video conferencing, etc. is only made possible by the networks and technologies that underpin those devices, and it is only cable that can deliver the speeds that are required.

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Our values

Our values determine everything we do at Cable&Wireless Worldwide. How we work, recruit and develop colleagues, help create the culture we need to deliver our promises to our customers.

Be the customer

Say it like it is


We deliver

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What do our results tell you?


We are all customers. We all know how we want to be treated and what it is that winds us up. Colleagues in our business are encouraged to look at everything through the eyes of the customer. We do this because we have an obsession for customer service. It also helps to drive innovation and insight on what more we can do to help our customers succeed.


We know we can get more from an open exchange of views than we can from meaningless platitudes. Above all though, we recognise the power of listening – to our customers, shareholders and colleagues.


We believe in partnerships and team working, ranging from cross-functional teams, working closely across varied geographies. We also partner with our customers and suppliers and constantly strive to live and breathe their business, because we know our success is tied in with theirs.


Customers want a telecoms partner that's reliable – that they can trust to deliver results, every time and all the time. Our colleagues are driven by this, that's why we measure and reward them on what and how they deliver.

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Download the 2010/11 annual report

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2010/11 Annual report

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