Vodafone Group expects to spend GBP500 million on CWW over next four years

28 Sep 2012

UK mobile giant Vodafone Group has reportedly suggested that it will cost approximately GBP500 million (USD807 million) over the next four years to integrate recent acquisition Cable & Wireless Worldwide (CWW), according to Reuters. Vodafone however has claimed that CWW will offer bigger benefits than have been suggested by some analysts, with the company revealing that it expects the business to deliver cash flow synergies of between GBP150 million and GBP200 million a year by March 2016, resulting in an operating free cash flow contribution for the group in that year of GBP250-GBP300 million.

Vodafone meanwhile has said that its first priority is to stabilise its new acquisition, and approximately 60% of the funds earmarked for the integration of CWW is expected to be spent in the first 18 months. CWW’s new CEO Nick Jeffrey, who previously ran Vodafone Group’s global enterprise division, has said turnover at the fixed line operator is likely to continue a downward trend until 2014. ‘It just takes a long time for this ship to turn around, and it’s that we see taking 18 months to two years,’ the executive was cited as saying.

As previously reported by CommsUpdate, in April 2012 Vodafone Group reached an agreement to purchase CWW for approximately GBP1.044 billion in cash, and the former is expected to use CWW’s fibre network to bolster bandwidth for customers’ increasing demand for data services on its mobile network.

United Kingdom, Cable & Wireless Worldwide, Vodafone Group