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Embattled Wallace to leave C&W
LONDON, England -- Ailing telecom operator Cable & Wireless said on Tuesday Chief Executive Graham Wallace would leave the company. Wallace had been under pressure to resign after he gambled billions of pounds on acquisitions by C&W Global, the corporate telecoms and Internet hosting arm of the group. But the forecast growth in Internet traffic was zapped by the dot-com crash, ailing economies and over capacity in the industry. C&W (CW), whose share price plunged 87 percent last year, said Wallace would remain in charge of the group's day-to-day operations until his successor was chosen. The company's stock rose 7.3 percent to 66.5 pence in early London trading on Tuesday after the announcement aimed at restoring confidence in the 131-year-old company. At 66.5 pence a share, the company is worth about £1.47 billion ($2.5 billion) -- a far cry from the £37 billion it was valued at the height of the dot-com boom in March 2000. Wallace has been CEO since 1999. Wallace's exit comes within two weeks of the appointment of Richard Lapthorne as the company's chairman. Telecoms analysts welcomed Wallace's exit, saying the company needed to set out a clear strategy to nurse its battered credibility back to health. "The market's view is that Wallace needed to go in order for the group's management to regain credibility,'' analyst Rod Hall, of investment bank Dresdner Kleinwort Wasserstein, told Reuters. Nomura telecoms analyst Mark James said C&W now needed to decide the fate of C&W Global. "They need to set out a clear strategy as to how they are going to either move C&W Global to become a profitable, cash generative business or close the business down,'' James told Reuters. "It does not need to be a telecoms expert, just someone who can spot a loss-maker from 100 paces,'' he added.
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