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When the few outweigh the many

When the few outweigh the many

Growing from a UK-based company to a global business, Cable & Wireless (C&W) was faced with a critical decision in its marketing strategy--should it be concentrating on increasing their customer pool or is focusing on a few major ones the way to go?

C&W decided on the latter. "We've exited our consumer and SME businesses, and currently have fewer than 10,000 customers remaining. C&W ultimately seeks to focus on serving the top 3,000 biggest telecom users in the world including some of the largest Asian, US and European MNCs," said Patrick Razavet, C&W's director of transformation, Asia.

Razavet joined C&W in 2001, based in Singapore. He is responsible for transformation initiatives, and was involved in formulating the company's growth strategy.

Prior to joining C&W, he held positions in sales, business development, marketing and internal auditing at BT.

According to Razavet, C&W has based its transformation on the Pareto principle, as the targeted 3,000 users--or 10 percent of the company's original customer base--account for 90 percent of revenue. "It's also easier to communicate one-on-one with fewer customers to find out their needs."

Energis acquisition

The transformation process began in November 2005, when C&W acquired Energis--the UK's third largest fixed line telecommunications operator--at a cost of more than S$2 billion. C&W is still in the midst of this process, which is expected to continue over the next two to three years.

"C&W has invested some S$27 billion worldwide in infrastructure in the past seven to eight years," said Razavet. In the Asia Pacific (APAC), the company has spent an additional US$40 million to expand capacity and infrastructure over the last 12 months.

"APAC has become a major network hub thanks to the region's huge population and rising standard of living. With consequently more internet users, demand for services that facilitate downloading of information has shot up," he explained.

The company signed an agreement with China Telecom in July, allowing C&W to expand service capability for large corporate customers across 200 mainland Chinese cities. "China is very important to many of C&W's customers, especially those in the manufacturing industry," Razavet said.

Telekom Malaysia Berhad

In October, C&W extended its existing agreement with Telekom Malaysia Berhad, where both companies would set up a Network-to-Network Interconnect to leverage each other's MPLS networks for wider coverage.

During the same month, the company's dark fiber network in Singapore became fully operational, connecting major local cable landing stations with C&W's core transmission network. "This provides us the capacity to carry traffic across Singapore or those passing through from Asia to other regions very quickly," explained Razavet.

Razavet further justified the moves, "Many of our US and European customers tell us that their APAC businesses are outgrowing their domestic operations."

Additionally, several APAC countries like Singapore and Hong Kong have already established highly sophisticated network infrastructures that facilitate expansion. However, he noted that customers seeking to do business anywhere in the region do not shy away even from APAC countries with less mature infrastructures and technologies.

In response, C&W would consider expanding its network in countries where these customers wish to invest. The company has set up customer councils that bring clients together to provide feedback and suggestions. Suggested concepts may be tested for economic viability should rolling out occur. Following successful testing, C&W may make the concept a standard service, Razavet said.

Earthquake measures

Natural disasters are a business challenge. "To mitigate this risk, C&W ensures that every key location is connected to its network through three channels, allowing traffic to be re-routed should earth movements snap one cable." The company also offers some customers integrated networks for extra resilience.

However, Razavet acknowledges that the more serious the risk is to an organization, the higher the cost may be to minimize that risk. "As such, the organization needs to decide on the optimal point where further safety investments no longer reduce the risk further and become uneconomical."

On a tactical level, C&W has increased the use of automation, cutting down human handovers and errors. As a result, any cable damage may be more easily monitored. The company also seeks to reduce the number of billing systems and simplify them to better deliver services to customers.

To help beef up its Asian Pacific operations, C&W has appointed Nick Lambert as president Asia Pacific charged with providing strategic direction in the region. Lambert brings along much experience from his previous position as IBM's Asia-Pac vice president of Infrastructure Management Services.

"Rubber" CIOs

Razavet also commented that "CIOs get stretched like rubber men by various stakeholders in the organization." Business users may demand better IT services, while the CFO may require the CIO to cut the IT budget to meet financial objectives. Meanwhile, the CEO may want the CIO to integrate systems, technologies and networks with an acquired entity.

To deal with these challenges, Razavet said a CIO should be frequently updated on the latest technologies, and consider which ones are able to meet business goals. These goals may include using the technology to create a new product and gain marketing advantage, or bring down operational costs.

"However, even the rubber man breaks beyond a certain point. As such, C&W's approach is to rely on fewer partners who will work with the CIO, allowing the CIO to better ensure that business processes run smoothly," he admitted.

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