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British megacarrier Cable & Wireless has been expanding its Internet Protocol portfolio and getting out of circuit-switched networks since its 1998 acquisition of MCI Communications backbone from WorldCom. The company has been mentioned recently as a potential buyer of Exodus Communications. Cable & Wireless CEO Graham Wallace spoke with Senior Writer Max Smetannikov last week.
Are you indeed planning to buy Exodus?
We do review acquisitions all the time, and at the moment we have investor bankers coming to us with great opportunities. However, we have a very tough criteria. Just because weve got a huge amount of cash and a strong balance sheet doesnt mean we have to spend it. We cant afford again to go into a messed-up business thats got incompatible networks . . . and sort out the mess.
Are you referring to MCI?
Yes.
Where is the bulk of your revenue coming from?
The bulk of our revenue will continue to be voice for the next 12 months. But I suspect that the fastest-growing segment of our revenues would be Web hosting.
Do you view data centers as new central offices?
We see voice simply as another application. Its a real killer application. But it will replace fixed lines termination and origination. What you have to do is to make sure voice is an application over an IP network. Data is increasingly what the traffic is about in volume terms. I do believe in the power of ultimately delivering voice and data over the same network all the way to the desktop.
Are you relying only on your network for services?
Increasingly, service providers like us will use different sources for their bandwidth. I think bandwidth trading is an interesting development. We are very interested in that and talking to other players. The days of bilateral arrangements are long gone.