S&P's Cable & Wireless ratings unaffected

Standard & Poor's said the ratings and outlook on Cable & Wireless plc (BB-/negative/B) were unchanged following the group's presentation of plans for further restructuring and refocusing of its U.K. business.

Cable & Wireless is replicating the broadly successful business model of Energis, the U.K. telecoms services company that it acquired in November: it has announced a withdrawal from the low-margin U.K. small-to-midsized business market and a new focus on large U.K. corporate customers, the agency said.

Given this streamlining of the customer and product base, employee numbers could be reduced by up to 3,000, resulting in additional headcount reduction and lease exit costs. The group also plans to continue investing in Bulldog, its early-stage, and largely residential, local-loop-access operation.

S&P said this further retrenchment underlines the external and internal challenges that the company faces, and the group's cash flow profile in the United Kingdom is likely to be more negative than previously anticipated, although material erosion of the gross cash position is not currently expected.

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