C&W sells underwater cabling division

NEWS In the first of two big cabling deals announced today, Cable & Wireless said it has sold its Global Marine division to Global Crossing, based in Bermuda. The deal is worth £550m - including £100m in assumed debt. Global Crossing will get a fleet of 13 cable laying vessels and approximately 1,200 staff, most of whom will be retained. Existing customers include AT&T, BT and MCI WorldCom. Last year, the division made a profit of £20m on a turnover of £170m, but Global Crossing has its eye on a market which is set to expand rapidly as demand for high-bandwidth global networks increases. Meanwhile, Level 3 Communications - which is building its own high-speed fibreoptic network for business voice and data services - has signed a deal with Tyco Submarine Systems (TSSL) estimated to be worth between $600m and $800m. Tyco - which is arguably Global Crossing's main rival - will build a transatlantic terabit cable system for Level 3. It claims the network will have the capacity to transport the equivalent of the entire contents of the US Library of Congress in just 16 seconds. Jayne Stowell, Level 3 senior vice president for International Business Development, said: "This is critical for Level 3. We're building multi-terabit networks in the US and metropolitan areas in Europe and we can't allow them to be let down by a weak connection across the Atlantic." Level 3's first quarter results, out last week, showed a loss of $105m on consolidated revenues of $102m. The company spent $407m on network construction and other expenses and plans to invest a further $2bn this year haven't deterred investors, with a further $1.5bn sale of equity at the start of March. During Q1, Level 3 bought BusinessNet, an Internet service provider predominantly serving the City of London, for approximately $16m.