MAIDEN results from Cable & Wireless Communications (CWC), the cable television and telephony arm of Cable & Wireless, show a big rise in profits as a result of higher revenue and lower costs.
The group was created from the merger between Mercury, Nynex, Cablemedia and Videotron, and the rationale was to achieve the critical mass to invest in marketing, customer service and infrastructure.
Profits in the year to March more than doubled to #151m before exceptionals on revenue 12% up at #2283m. CWC shares hardened 5.5p to 449.5p.
The number of directly connected telecom lines jumped 36% to 952,000 and cable TV customers rose 26% to 780,000. CWC's network is about 70% complete and passes almost six million homes, with some 22% taking up the offer of cable services.
In January the first ''movies on demand'' service was launched on a pay-to-view basis. This enables customers to call up a film from their remote control. Take-up was three times greater than under the conventional method of making a separate phone call.
On the business side, Mercury achieved call volume growth of 12% as prices fell 17%. The introduction of number portability for small businesses will aid the marketing effort, removing the main barrier to competition.
Contracts for data networks were received from two large retailers. The constituent companies of CWC had not managed to win such contracts.
Cost savings in the first year came to #136m as integration was completed. This included reducing the number of service centres from 10 to three, which involved redundancies and retraining.
Chief executive Graham Wallace pointed out that to remain competitive in a market with continual downward pressure on prices, control of costs was crucial.
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