Cable & Wireless is planning to ditch the UK's retail broad-band market in yet another reversal of previous strategy - but its shares rose yesterday on hopes that plans to sell wholesale internet access stand a chance of success.
The company, which has a large operation in Birmingham, said existing home and small business customers would continue to be supported, but it would cease marketing and advertising, with the expected loss of 150 London-based jobs.
C&W will instead offer its lines to major broadband service providers, with discussions going on with a number of potential customers.
The company, which acquired Bulldog for £18 million in May 2004, will look to pass on the benefits of its work freeing up connections from 411 telephone exchanges, known as local loop unbundling. It hopes to have 800 exchanges unbundled by the end of September.
Yesterday's move is in line with the group's wider telecoms strategy to reduce its number of UK customers from 30,000 to 3,000 larger corporations and public institutions.
John Pluthero, group managing director in the UK, said: "We believe that the whole-saling approach to the consumer and SME market is the best way to optimise our return from our local loop network capability."
Analysts said the move would spare Bulldog the costs of acquiring retail customers in an increasingly cut-throat broadband market and boost its chances of raising revenues.
"We believe that the wholesale market is currently undercompeted," said Dresdner Kleinwort Wasserstein analyst Sam Morton.
Bulldog has received hundreds of millions of pounds in investments as the group embarked on an ambitious plan to install equipment in 800 BT telephone exchanges.
Mr Pluthero said the company had been looking at the best way to maximise the return on its investment and now believed a wholesaling approach was "the best way to optimise our return".
Mr Morton added: "Bull-dog's capability to offer full unbundling and advanced services - like IP-TV - should make its wholesale offering attractive to other players; mobile operators, cable operators and retailers, looking to enter the space."
C&W hoped to expand its struggling UK business but investors and analysts turned sceptical, and Bulldog struggled in a market where competition only promises to get tougher.
