Cable & Wireless Communications plc (CWC, Financial)(0.8%) (CWC LN – $0.84/55.57 p – London Stock Exchange) is a full service communications provider operating in the Caribbean and Panama. In March 2015 CWC completed the acquisition of Columbus International in a major in-region consolidation transaction. The shareholders of Columbus, including John Malone of Liberty, now hold a 20% interest in CWC and have appointed three non-executive directors to the company board. Among the benefits that should accrue to CWC are an improved Caribbean network infrastructure, rapid deployment of convergence products, increased distribution, an expanded geographic footprint, and enhanced B2B and B2C capabilities. Annualized cost savings of $85 million are expected to be achieved by fiscal 2017/18. Remedies to gain approval for the Columbus acquisition were confined to the pending sale of CWC’s minority stake in Trinidad and disposal of certain fiber optic assets in Barbados. Over the longer term, we view it as likely that CWC will act to further consolidate its position in the region with assets including Liberty’s Latin America and Caribbean group as a logical target. Operationally, CWC benefits from the duopoly market structure in the majority of its territories. An exception is Panama where we expect to see in-market consolidation amongst the existing four mobile operators, subject to the legal framework being amended.
From GAMCO's Global Telecommunications Fund third quarter 2015 shareholder commentary.
