In June, C&W announced it was pulling out of the residential broadband market when it said it would stop actively selling broadband connections to small business and residential customers, at a cost of around 150 jobs. Instead, C&W said Bulldog would concentrate on providing wholesale services to other internet service providers and retail services to large corporate customers.
Prior to that, back in February, UK managing director John Pluthero said that Bulldog would remain part of the UK group, quashing then rumors of a sell-off. At that time he said he was really happy with Bulldog’s performance, which had grown its customer base to 118,000 (by the end of March this year), although it faced a probe by the UK regulator Ofcom following hundreds of complaints from customers, which meant that Bulldog’s heavy investment in local loop unbundling took a back seat for a few months.
But now it seems C&W management’s commitment to the consumer unit has ebbed away as the competitive consumer broadband market in the UK has witnessed the introduction of broadband packages from the likes of the Carphone Warehouse Plc and Orange SA, as well as competitive offerings from BT Group Plc and NTL Corp. With UK satellite broadcaster British Sky Broadcasting Group Plc set to launch its own broadband service in the next few months, Pluthero has obviously decided the market is simply too crowded and too competitive.
In line with our UK business strategy of serving the UK’s largest users of telecoms here and internationally with IP-based services – and with our recent announcement to wholesale our local loop capability to other carriers – we are now looking for a provider to buy our Bulldog retail customer base, C&W said. There are a number of compelling reasons for this move; chiefly that it allows us to simplify our relationship with our wholesale customers – by making clear that we will not compete with them – and to simplify our operations. In addition, these customers are of more strategic value to providers focusing on a retail play.
C&W said it expects the sale process to take a couple of months.
It was in June 2004 when C&W spent 18.6m pound ($34.1m) acquiring Bulldog Communication Ltd, a start-up ISP that offered DSL broadband connections and had its own equipment installed at 38 BT exchanges.
Since then C&W has invested 175m pounds ($323m) into the ISP, both upgrading the network and marketing the service with the gate is open television and newspaper adverts. The London, UK-based carrier had unbundled 411 telephone exchanges at the end of March, and is on target to have 800 fully unbundled exchanges by September this year.
Shares in the carrier fell 1.52% to 113.25 pence ($2.09) on the London Stock Exchange following the news.
