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London (pte056/21.04.2005/17:15) - British telecom company Cable & Wireless is thinking about extending its Bulldog broadband service to more than half of the UK population, presenting a significant challenge to BT in the race to attract Internet users. As the Media Guardian http://www.mediaguardian.co.uk reports, the company, which returned to the residential market a year ago through the acquisition of Bulldog, yesterday announced plans to spend 190 million pounds in the next three years upgrading its UK network. While the new network will allow C&W to offer corporate customers an improved range of communication services using Internet technology, it will also serve as the basis for a reinvigorated consumer offering through Bulldog. As a result, Bulldog is understood to be aiming to recruit many more engineers and will reveal numbers when it reports its annual results in May.
C&W, which was led to the brink of collapse four years ago by an ill-timed expansion into the Internet sector, hopes to save an extra 50 million pounds this year through its new network. Meanwhile, BT is spending 9 billion pounds on an upgrade that will take four years. It is expected to announce the hardware partners that will supply its new kit within the next few weeks. However, Francesco Caio, C&W's chief executive, who took over the ailing business in April 2003, denied that his plans for a new network are a knee-jerk reaction to BT's move. "This is not just an investment in boxes in the ground...this is an opportunity for us to take a mid-term view of the market," he said. He also warned that competition in the corporate communications market is as tough now as it was in the dotcom boom. "In general terms, we don't see any major variation to price trends," he added.
C&W has become increasingly interested in the consumer market. There are more than 7 million broadband Internet users in Britain, but most ISPs are forced to base their broadband access on wholesale products sold by BT, meaning they are unable to offer differentiated services. Bulldog, which C&W bought for 18.6 million pounds last May, is involved in local loop unbundling which allows the crucial copper phone line that connects homes and businesses with BT's local telephone exchanges. Taking control of that line allows Bulldog to design its own services. Bulldog had aimed to place its kit in 400 BT exchanges by December this year, covering 30 per cent of the UK population. According to Caio, it had reached 320 by last week and the company "are reviewing opportunities and options to expand their coverage beyond the 30 per cent". The company is understood to be planning to roll out its service to more than 50 per cent of the population, which would make it the largest national competitor to BT, on a par with cable companies Telewest and NTL.
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