DB-TMT-Conference-Slides-Jim-Marsh

DEUTSCHE BANK EUROPEAN TMT CONFERENCE

JIM MARSH, CHIEF EXECUTIVE OFFICER10 SEP 2010

1

CABLE&WIRELESS WORLDWIDEGENERATING CASH

2

(400)

(300)

(200)

(100)

0

100

200

300

400

500

£m

EBITDA

GROSS MARGIN %

EBITDA MARGIN %

0%

10%

20%

30%

40%

50%

%

TRADINGCASH FLOW

2006/07 2007/08 2008/09 2009/10

GROSS MARGINFROM THE RIGHT AREAS

2009/10

3

CUSTOMER GROUP PRODUCTS

56%

16%

28%

IP & DATA

HOSTING & APPLICATIONS

TRADITIONAL VOICE & LEGACY

41%

16%11%

10%

22%

UK ENTERPRISE

UK PUBLIC SECTOR

UK CARRIER

UK MID MARKET

GLOBAL

£1,075MGM: 47%

4

UK ENTERPRISE

IT BUDGETS GROWING 2.5% - GARTNER

£4.3BN MARKET AND 19% SHARE

MANAGED SERVICE >50%

VIDEO CONFERENCING GROWTH

FIXED MOBILE CONVERGENCE

MARKET MOVING IN OUR FAVOUR

UK ENTERPRISEOUR PRIMARY MARKET

41%

16%11%

10%

22%

UK ENTERPRISE

UK PUBLIC SECTOR

UK CARRIER

UK MID MARKET

GLOBAL

HOSTING / NETWORK INTEGRATION

2009/10

£446MGM: 53%

5

PUBLIC SECTORREAL CHOICE FOR GOVERNMENT

£2.4BN MARKET AND 12% SHARE

REAL DESIRE FOR COMPETITION

SPECIFIC PRODUCTS FOR GOVERNMENT

SHORT TERM PAIN, MEDIUM TERM OPPORTUNITY

UK PUBLIC SECTORBUILDING ON ENTERPRISE SUCCESS

41%

16%

11%

10%

22%

UK ENTERPRISE

UK PUBLIC SECTOR

UK CARRIER

UK MID MARKET

GLOBAL

2009/10

£168MGM: 59%

CARRIER LEVERAGES NETWORK ASSET MID MARKET, ACCESS TO NEW MARKETS

6

MID MARKETCOMMITTED TO THE UK MID MARKET

DATA RICH PRODUCT MIX

HIGH MARGIN

BACKED BY UK NETWORK

BTBUSINESS

THUS51%

UK CARRIERSSCALE AND STRENGTH

BANDWIDTH DEMANDS INCREASING

NEW BROADBAND ENTRANTS

>800 LLU FOOTPRINT

GREATER SHARE OF BACKHAUL MARKET

41%

16%11%

10%

22%

UK ENTERPRISE

UK PUBLIC SECTOR

UK CARRIER

UK MID MARKET

GLOBAL2009/10

£111M, GM: 32%

2009/10£118M, GM: 49%

GLOBALCONNECTING CONTINENTS

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GLOBALCONNECTING CONTINENTS

DEMAND UP 60%

ECONOMIC GROWTHASIA

DEVELOPING GROWTHAFRICA

69 GLOBAL CABLE SYSTEMS

153 COUNTRIES

DOUBLE RESILIENCEON KEY ROUTES

C.£61B MARKET,

<1% MARKET SHARE

41%

16%11%

10%

22%

UK ENTERPRISE

UK PUBLIC SECTOR

UK CARRIER

UK MID MARKET

GLOBAL

2 NEW CABLE SYSTEMS(EIG, WACS)

2009/10

£229MGM: 42%

MSP ASSETS IN 26 COUNTRIES

ETHERNET IN EU AND ASIA

APOLLO – CAPACITY UPGRADE

TELECOMS INDUSTRY TRENDS

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INCREASINGCRITICALITY

BANDWIDTHDEMAND

GLOBALISATIONCLOUD

1. INCREASING CRITICALITY

9

DELIVER

AP

PR

OA

CH

BUILD TRUST MISSION CRITICAL SERVICE

CONFIRM TRUST

DEEPEN RELATIONSHIP

EXPAND PRESENCE

CORE VOICE ADD SOME DATA LINKS

FULL VOICE & DATA ESTATE

WIN

S

RELATIONSHIP SALES

FMC MANAGED HOSTINGBROADBAND

HOSTED APPLICATIONS

YEAR 1

A LARGE UK PLC

2. BANDWIDTH DEMAND

10

200X INCREASE IN LAST 10 YRS

SOURCE: CISCO

1 PB=10^15 BYTES

GSM

GPRS

3G

4G

ISDN-BRI

ADSL2+VDSL

FTTH

ADSL

1

10

100

1,000

10,000

100,000

1,000,000

1985 1990 1995 2000 2005 2010 2015

Ban

dw

idth

(K

bps)

pea

k us

er r

ates

Fixed Access

Mobile Access

Glo

bal

Ban

dwid

th D

eman

d pe

r m

onth

((P

B)

FIXED CONSISTENTLY FASTER THAN MOBILE

-

10,000

20,000

30,000

40,000

50,000

60,000

1995 2000 2005 2010

2 ½ G

3. CLOUD

Co-Location

OUR FOCUS

HIGHER VALUE

Managed Hosting

Virtualisation

11

7 810

12

15

19

24

31

37

0

5

10

15

20

25

30

35

40

2007 2008 2009 2010 2011 2012 2013 2014 2015

$ B

Traditional Hosting Cloud Hosting

Clo

udSOURCE: OC&C

Infrastructure (IAAS)

Platform(PAAS)

Apps(SAAS)

Global Hosting Market2007-2015F

Cab

le &

Wir

eles

s W

orld

wid

e O

ffer

4. GLOBALISATION

12

MARKETS ARE BECOMING

INCREASINGLY GLOBAL

..ENTERPRISES HAVE NEED

TO SECURELY JOIN THEIR

OPERATIONS ACROSS

CONTINENTS

TELECOMS HAS MOVED FROM AN INHIBITOR TO AN ENABLER

ENTERPRISES LEVERAGING

GLOBAL FOOTPRINTS..

153 COUNTRIES69 CABLE SYSTEMS

CWW POSITION FOR THESE TRENDS

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INCREASING CRITICALITY

BANDWIDTHDEMAND

VIRTUALISATION

GLOBALISATION

More than 50% of margin from Managed Services

>70% of margin from strategic product set

74* of FTSE100 served

UK's largest fibre network dedicated to business

Moving UK core to 100GB optical capability

Building on broadband footprint to deliver Ethernet

> 205,000 sq ft of data centre space in UK

> 70% of hosting revenue from Managed

Launched Cloud early adopters programme

Increasingly serving UK MNCs globally

69 sub sea cable systems, c.500,000 KM Global Network

Asia core region outside UK, Africa coming on stream

Investing in global network, 2 new cables on stream in next 6 months

* As of March 2010

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