Cable & Wireless Communications PLC (CWC.L) said it entered into a strategic alliance with Columbus Networks Ltd to develop its international wholesale capacity business.
Under the agreement, CWC and Columbus would form a joint venture or JV in the pan-America region which will provide international wholesale capacity to both companies, as well as to third party carriers.
The strategic alliance positions CWC to meet the data capacity demands of its retail operations in the future, as well as optimising its capital expenditure commitment to its undersea cable networks.
The JV would initially operate on an agency basis by providing joint sales and marketing services for each of CWC's and Columbus' international wholesale capacity services. Columbus has a 72.5 percent majority share in, and management control of, the joint venture and CWC has a 27.5 percent share with appropriate minority protections.
The alliance would be broadened within the next two years with Columbus and CWC contributing their sub-sea and related assets into the joint venture company. Until then, Columbus and CWC will retain complete ownership and control of their respective existing networks in the region.
Further the company said, once the applicable approval requirements and conditions have been met, the JV will then assume ownership and management control of the international wholesale capacity operations of CWC and Columbus and all new investments in infrastructure will be made, and owned by it.
For comments and feedback: editorial@rttnews.com