UK Cable and Wireless has sights on Cuba telecom market
Posted: 28 February 2010 11:07 AM   [ Ignore ]
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From Times Online

The international arm of Cable & Wireless is close to securing a foothold in Cuba, the first step of an expansion plan as it prepares for life after its UK arm has been de-merged next month.

Backed by a $1 billion (£655m) war chest, chief executive Tony Rice is looking at opportunities in Central and Latin America to capitalize on the Cable & Wireless Communications hub in Panama.

However, he has also promised to shake up the portfolio of small operators that date to when the group was the telecoms carrier for the British Empire.

Cable & Wireless will run an undersea internet cable from Jamaica into Cuba. The deal puts it in a strong position to pick up the stake in Etecsa, Cuba’s state-controlled mobile phone operator, that Telecom Italia is expected to sell shortly.

“The starting point is the cable landing but the greater prize is working with the government to develop its telecoms market,” said Rice, who is also preparing for mobile phone spectrum auctions in Costa Rica.

He wants to tackle Cable & Wireless’ portfolio of part-owned associates, in Trinidad, Afghanistan and the South Pacific. In the Maldives, it recently took control of the telecoms carrier from the government. “I want to move those businesses to majority control so we can run them better or divest them,” Rice said.

Cable & Wireless has greater financial freedom after hiving off Worldwide. “Cable & Wireless has suffered as the corporate cash machine but now effectively the kids are leaving home,” said Rice.

C&W shareholders approved the split last week and the de-merger is due to be completed by March 26.

END

Obviously the Cable & Wireless management knows very little about doing business in Cuba. If they think that Cuba is like Jamaica, Trinidad, Panama etc, they are in for a big wake up call.

Here’s how business works in Cuba. You kiss Cuban government ass for about year then sign a contract that is clearly in their favor then you might get rights to operate a business in Cuba. Of course you have to invest in everything AND hire Cuban labor at international wages. THEN you open for business for a couple years… keep investing in the business of course. THEN the Cuban government shuts you down for some reason, keeps all the infrastructure and intellectual property then does not renew visas for any employees.

Good luck Cable & Wireless. You WILL loose money in Cuba just like every other business ever started there. Of course the management will probably just consider this to be a long term “investment” so they will be on the ground when the US Embargo is lifted. Maybe next year. Right?

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