ALONG with Vodafone, Tata Communications, a unit of India’s biggest business house, is considering a bid for Cable & Wireless Worldwide (CWW). The Indian press has referred to the British telecoms firm as a “giant”, a label that is fifteen years out of date. CWW is today is more of a joke, or a tragedy, a living rebuke to British capitalism, or maybe just a disgrace. Since the late 1990s it has made fortunes for its managers, paid a king’s ransom in bankers’ fees, and lost its owners almost everything. Its putative buyers should beware.
Until the mid-1990s Cable & Wireless was a contender, one of the industry’s biggest firms, with a portfolio of assets ranging from Hong Kong’s main operator to stakes in mobile firms in Japan, Britain, South Africa and France. But after drinking gallons of dot-com Kool Aid its bosses sold its good assets, sometimes for good prices, and reinvested in its worst businesses. These were a midsized British fixed line unit and a global network along which voice, data and internet traffic passed, which had its roots in the telegraph systems of the imperial age. (In 2010 the last international assets, profitable and mainly in the Caribbean, were hived off and became a separate company. The rump of C&W was renamed CWW.)