CWW purchase will enable Vodafone to add fixed network for backhaul and cut M2M service costs

Camille Mendler Camille Mendler

Analysts agree that enterprises will benefit from the planned acquisition of Cable & Wireless Worldwide (CWW) by mobile network operator Vodafone Global Enterprise. Corporate customers could be among the winners if the operator’s M2M service delivery costs are cut as a result.

The Board-agreed deal (which is still subject to shareholder approval) values CWW at just over UK£1 billion (US$1.7 billion) and the offer of 38 pence per share represents a premium of over 90% compared to February levels. Years of changeable investment strategy and indifferent results at Cable & Wireless have led to steady share price decline, then separation from its UK-focused sibling Cable & Wireless Communications.

Now, however, CWW could be joining a strong and profitable parent with a growing enterprise offering, one that includes a leading position in the machine-to-machine (M2M) communications sector. (See also: M2M service providers: How they stack up in 2012 — new report, and Vodafone stays top of Machina Research’s M2M Leaderboard, AT&T misses second place through US technology choices.)

The benefits for Vodafone are clear: the operator would obtain a comprehensive fixed network in the UK and beyond, key to its objectives of becoming a ‘total telecommunications’ player and ramping up its enterprise business.

“If the £1 billion cash offer is successful, it will trigger a competitive shake-up that’s long been needed. Not least, it creates a communications service provider that’s increasingly capable of serving multinationals’ diverse ICT needs, but is also serious about small enterprises,” says Camille Mendler (pictured), principal analyst at Informa Telecoms & Media.

“Globally, Vodafone’s move also underscores the fact that consumer revenue growth is tapped out in many telecoms markets: The new frontier of monetisable opportunity is the enterprise,” she adds.

Mendler points out that Vodafone, which currently serves 560 multinational customers and 34 million small enterprises, gains a powerful foothold in the FTSE 100 listing and the UK government market via CWW if the deal goes through as expected. The MNO can also slash its UK and international wholesale service delivery costs with CWW’s fibre connectivity and global IP backbone.

However, Mendler says the biggest benefit is that this is ‘fresh meat’ for Vodafone’s enterprise mobility services, a business sector which, according to Informa surveys, is a leading ICT (information & communications technology) investment priority for large enterprises. Multinational enterprises want to mobilise their employees, but also their physical assets. And she is certain that Vodafone’s global M2M business – which manages more than 7 million M2M SIMs – will also gain from the C&WW deal.

Nor is Informa alone in this view, as M2M Now has found.

Adrian Drozd, a research manager and principal analyst, ICT Europe, at global consultancy Frost & Sullivan, says, “From a global perspective, the deal is particularly significant for Vodafone Global Enterprise (VGE). Adding CWW’s network presence (127 points of presence across 35 countries) and service offerings (integrated communication and data hosting) will allow VGE to compete on a more even footing with some of the leading fixed-line players such as Orange and Telefonica.”

“Although Vodafone’s mobile coverage and capabilities have allowed the company to develop a leading role in the managed communication arena, the addition of CWW’s fixed coverage and capabilities will doubtless open up new opportunities with clients seeking to fulfil their total telecoms and unified communications needs from a single provider. Furthermore, by leveraging CWW’s established network presence, Vodafone will be able reduce its reliance on third-party network providers, potentially delivering significant cost benefit,” adds Drozd.

Asked by M2M Now what impact the planned deal would have on the M2M sector, Drozd says, “Vodafone is already a leading player in M2M in Europe. In the M2M market, revenue opportunities extend far further than cellular connectivity. Vodafone already has a strong M2M platform and extensive partnerships with both technology providers and systems integrators – the CWW acquisition adds fixed connectivity coverage (including backhaul).

“The addition of CWW’s capabilities will allow Vodafone to catch up with what other leading telecoms operators are doing around smart opportunities – adding a comprehensive fixed network footprint offers will provide a strong foundation for further development in this regard. The benefits may be most strongly felt in the UK, but CWW’s global presence will also deliver wider geographic opportunities,” Drozd concludes.

RECENT ARTICLES

Semtech enhances global connectivity with NTN support in HL78 modules

Posted on: March 29, 2024

Semtech Corporation has announced the integration of non-terrestrial network (NTN) support into its HL series LPWA modules, specifically the HL7810 and HL7812. This significant advancement showcases a leap forward in enabling uninterrupted global connectivity even amidst the most challenging conditions.

Read more

Enhance EV charging performance with cellular connectivity

Posted on: March 28, 2024

Electric vehicles (EVs) are steadily growing their market share at the expense of internal combustion engine vehicles. The growth is fuelled by several factors. Perhaps most importantly, prices for EVs have started to drop as competition in the industry is intensifying. New players and models are emerging, prompting several established EV makers to lower their

Read more
FEATURED IoT STORIES

What is IoT? A Beginner’s Guide

Posted on: April 5, 2023

What is IoT? IoT, or the Internet of Things, refers to the connection of everyday objects, or “things,” to the internet, allowing them to collect, transmit, and share data. This interconnected network of devices transforms previously “dumb” objects, such as toasters or security cameras, into smart devices that can interact with each other and their

Read more

The IoT Adoption Boom – Everything You Need to Know

Posted on: September 28, 2022

In an age when we seem to go through technology boom after technology boom, it’s hard to imagine one sticking out. However, IoT adoption, or the Internet of Things adoption, is leading the charge to dominate the next decade’s discussion around business IT. Below, we’ll discuss the current boom, what’s driving it, where it’s going,

Read more

9 IoT applications that will change everything

Posted on: September 1, 2021

Whether you are a future-minded CEO, tech-driven CEO or IT leader, you’ve come across the term IoT before. It’s often used alongside superlatives regarding how it will revolutionize the way you work, play, and live. But is it just another buzzword, or is it the as-promised technological holy grail? The truth is that Internet of

Read more

Which IoT Platform 2021? IoT Now Enterprise Buyers’ Guide

Posted on: August 30, 2021

There are several different parts in a complete IoT solution, all of which must work together to get the result needed, write IoT Now Enterprise Buyers’ Guide – Which IoT Platform 2021? authors Robin Duke-Woolley, the CEO and Bill Ingle, a senior analyst, at Beecham Research. Figure 1 shows these parts and, although not all

Read more

CAT-M1 vs NB-IoT – examining the real differences

Posted on: June 21, 2021

As industry players look to provide the next generation of IoT connectivity, two different standards have emerged under release 13 of 3GPP – CAT-M1 and NB-IoT.

Read more

IoT and home automation: What does the future hold?

Posted on: June 10, 2020

Once a dream, home automation using iot is slowly but steadily becoming a part of daily lives around the world. In fact, it is believed that the global market for smart home automation will reach $40 billion by 2020.

Read more

5 challenges still facing the Internet of Things

Posted on: June 3, 2020

The Internet of Things (IoT) has quickly become a huge part of how people live, communicate and do business. All around the world, web-enabled devices are turning our world into a more switched-on place to live.

Read more