Cable & Wireless, the global telecom group announced that it is considering de-merger of core business divisions. The company had promised its share holders that it would look into ways, in 2008-2009, to realise the value of its shares. DE-merger is being considered as a possible way to fulfil the promise.

The group had divided itself into two separate divisions. One division covered the operations in US, Europe and Asia, the other division managed international operations and businesses Macau, Panama and the Caribbean.

Tony Rice, company’s finance director, says that de-merger option is on top of its agenda, including options of selling off parts of business or returning capital to share holders by resorting to alignment of group.
The global telecom group’s revenues were down by 5.9% to £3.15bn, but the earnings showed a jump of 23% to £605m, much above the analysts’ expectations.

Its dividend is up 28% to 7.5p. The growth during the current year is expected to be between £702m and £725m. The four year turnaround plan includes improvement of efficiency, boosting of margins and cutting number of customers to 3,000 from 30,000 for high-quality contracts.

The group cut down work force by 9%, contributing to cost reduction of £4m. It renegotiated network contracts and managed reduction of 97% in rejection of customer orders. The company achieved phenomenal success by changing the way it worked.

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