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C&W upbeat about prospects

International carrier touts upcoming broadband plans, network investment.

LOS ANGELES--Despite ongoing problems related to the purchase of MCI Worldcom's Internet backbone, Cable & Wireless executives insist their American plans are about to bear fruit.

The company will spend nearly $700 million to build a high-speed network in the United States, in order to win a chunk of the domestic communications market and connect it to its sprawling international layout. In an interview here, C&W executives also hinted at plans to enter the broadband access market, with particular interest in digital subscriber line, or DSL, technology.

Acknowledging that Cable & Wireless USA remains embroiled in an ugly lawsuit over the Internet network it purchased from giant MCI Worldcom, executives nevertheless insisted that a targeted marketing campaign along with an updated fiber-optic network, due to be completed in 2001, are the answers to ongoing criticism of C&W's domestic efforts.

"We're not a passive player, we're going to be here for a long time," said Dennis Matteucci, chief executive officer for C&W USA, at the Spring Internet World '99 trade show.

C&W aspires to compete in a climate that has seen a slew of new communications carriers spend billions of dollars to create high-speed fiber-optic networks they can use to either offer advanced sets of network services to businesses and consumers or sell capacity to other carriers who need it.

C&W's strategy doesn't seem to be much different. But company executives believe their international network will separate them from the pack. "Nobody's got the reach we do, they just don't," said Matteucci. "There's a tremendous opportunity here."

Executives also hinted at upcoming moves to address the so-called last mile to the home, either through DSL, cable, or wireless technology. "Will we do something in that area? Yes," Matteucci said.

The company may be hoping to ride the wave of interest in high-speed connections to the home as a means to raise its domestic profile. "We are looking at those technologies very closely," Matteucci said.

Separately, the company has complained in court filings that MCI has not lived up to its end of the bargain, and says it is losing customers in the process. "Cable and Wireless's reputation for high-quality customer service has been injured and opportunities to sell other products to Cable and Wireless's customers have been lost," according to a recent court filing.

While analysts have been critical of C&W in the aftermath of its MCI purchase and subsequent litigation, many do not count the firm out, given its large international footprint.

"Competitors should recognize that C&W has a tremendous presence in the U.S. through its acquisition of MCI's network, regardless of whether or not the company has successfully capitalized on the acquisition," said market watcher Current Analysis."

It is the company's facilities that remain attractive and give the firm a potential competitive weapon in the United States, according to analysts. And C&W knows it. "All we have to do is connect it up," observed Jeff Young, chief engineer for C&W's Internet services division.

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