IBM and Cable & Wireless are thrashing out a deal over IBM's Global Network, a source close to C&W told PC Week.
C&W believes it should be given a "good deal" on the #2 billion global infrastructure following the #1.8 billion outsourcing contract it awarded IBM to manage all its IT (PC Week 2 June 1998). But Simon Weedon, telecoms analyst at Deutsche Bank, pointed out that there are a lot of bidders after the Global Network, including BT, AT&T and NTT in Japan. He said: "IBM would be hammering out special deals with all of them if this were the case." Weedon could only deduce that Cable & Wireless must be, "slightly misguided to believe it is in a stronger bargaining position than BT or AT&T."
Dataquest analyst Bhawani Shankar said: "Cable & Wireless has a chequered history in terms of international network services - most recently seen through its alliance with Telecom Italia, which has fallen apart. However its relationship with IBM has always been good. It has been a reseller of IBM network services for years. The Global Network is an excellent opportunity for C&W to gain a foothold in the international market and they are sure to be after it."
Robin Duke-Woolley, analyst at telecoms consultancy Schema said: "The real win here is the customers on that network, including IBM itself.
It also fits in well with the Internet business Cable & Wireless won from MCI as it means more distribution for their own services."
The IBM Global Network, which grew out of IBM's internal phone system for its different outposts, is now one of the world's most widespread networks, transmitting corporate data for about 30,000 customer facilities across 50 countries.
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