Due to a continuing lack of customer demand for network capacity, London-based Cable and Wireless PLC (C&W) on Wednesday issued its third financial warning in six months. Its stock price closed the day down 7 per cent, its lowest level in over a decade.
C&W — one of the largest telecommunication carriers in Europe — said in a statement that it expects revenue to drop by 10 per cent in its fiscal year ending March 31. On Sept. 19, C&W warned of a 5 per cent drop in revenue. Full results for the year are due May 15, C&W said.
The company cited decreased demand for its fibre optic networks, in which it has made large investments to extend capacity and reach, as the primary reason for its expected drop in revenue. Furthermore, a “significant reduction in revenues from smaller business customers” due to C&W’s earlier business decision to “withdraw from lower margin business” has also had a negative effect on its bottom line, C&W said.
C&W expects its global capacity sales to be “no better” than