BT loses out to C&W in CGNU merger

Cable & Wireless has snatched a massive £350m contract from under the nose of arch-rival BT to provide network services for CGNU, the UK's largest insurance house.

Cable & Wireless announced today it has inked a memorandum of understanding to manage CGNU's entire telecoms infrastructure.

Dr Ian Butterworth, MD of central services for CGNU, said he chose Cable & Wireless because the telco provided the best fit for the kind of services the insurer wanted to be able to provide its customers with in the future.

He said: "With this IP-based infrastructure we will be able to develop the kind of services, such as fully web-enabled call centres, that our customers want to see. The network had to be IP, because we are increasingly mindful the distinction between voice and data is irrelevant."

The deal will see Cable & Wireless deliver and manage an entirely IP-based network for the firm's 200 UK sites for seven years. CGNU estimates the deal will be worth around £350m.

The impetus for updating the network was provided by the merging earlier this year of Norwich Union and CGU to form CGNU. Cable & Wireless provided telecoms for Norwich Union, while BT served CGU.

Both telcos were thoroughly scrutinised to see which one could best provide an ongoing telecoms infrastructure for the merged company.

Mark P. Grimshaw, general manager of the CGNU deal at Cable & Wireless, said: "We're absolutely delighted to win this contract - it's a real vindication as Norwich Union have been with us so long and we're delighted they're pleased to stay with us."

He added: "I guess we're particularly pleased to have won the contract from BT - because this says that after a very close inspection of the two companies, Cable & Wireless provides the better service."

A spokesman for BT said the telco was disappointed to have lost out.

He told silicon.com: "We operate in a competitive marketplace. It is the nature of a competitive market that you can't win every deal."

Cable & Wireless expects the deal to by finalised in November or December of this year.