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LONDON (Reuters) - Cable & Wireless (CW.L: Quote. Research) plans to ditch the UK's retail broadband market in yet another reversal of previous strategy. but its shares rose on hopes its plans to sell wholesale Internet access held chance of success.
Britain's second biggest fixed-line network operator after BT Group (BT.L: Quote. Research) said on Thursday the move would result in the loss of about 150 jobs at its loss-making Bulldog broadband unit. mainly in sales and marketing.
C&W said its Bulldog Internet unit would. offer a wholesale product to other providers and was in discussions with several potential customers for the product.
Shares in the company jumped over 3 percent. Analysts said the move would spare Bulldog the costs of acquiring retail customers in an increasingly cut-throat broadband market and boost its chances of raising revenues.
"We believe that the wholesale market is currently undercompeted ... Investors should welcome this news as this route offers more rapid revenue growth with less execution risk." said Dresdner Kleinwort Wasserstein analyst Sam Morton.
Bulldog. has received hundreds of millions of pounds in investments as the group embarked on an ambitious plan to install equipment in 800 BT Group Plc telephone exchanges via a process called local loop unbundling.
C&W's UK head John Pluthero said the company had been looking at the best way to maximise the return on its investment and now believes a wholesaling approach was "the best way to optimise our return".
"Bulldog's capability to offer full unbundling and advanced services (like IP-TV) should make its wholesale offering attractive to other players (mobile operators. cable operators and retailers) looking to enter the space." said DrKW's Morton.
Wholesale
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