Bulldog, Cable & Wireless's unbundled broadband provider, is said to be poised to pull out of the residential broadband market.
According to sources within the company, C&W will announce early Thursday morning that with immediate effect Bulldog will focus purely on the wholesale market. The rapid success enjoyed by Carphone Warehouse, with its hugely popular 'free' broadband offer, is understood to have forced C&W into the decision, with sources pointing out that Carphone Warehouse signed up a third of a million customers in three months, more than double Bulldog's total of 118,000 after two years.
A spokeswoman for C&W declined to comment for this story, but the company admitted last month that Bulldog faced growing pressure in the residential broadband market.
"Competition in consumer broadband is tough and is likely to increase as the rapid take-up of broadband slows," said C&W on 25 May, when it released its full-year financial results. "Providers will increasingly compete with each other to win existing ... customers (and) pricing pressure is likely to remain a feature of the market," it added.
In the 12 months to March 2006, Bulldog made a loss of over £100m on a turnover of £33m, which sources say C&W is most unwilling to continue to finance.
Bulldog was one of the first companies to use local-loop unbundling to install its equipment in BT's local exchanges and offer its own services. However, it has suffered serious customer service problems, with some users forced to wait weeks to get their broadband or phone service. This led to an Ofcom investigation last year.
It's not clear what will happen to Bulldog's existing customers. Withdrawing from the residential broadband market will also represent a major u-turn for Bulldog, which recently began an expensive advertising campaign.
Talkback
What is wrong with this company???? Is this a snap decision or did no one think to tell the marketing department - considering how heavily Bulldog has been advertised on TV/Newspaper/Internet you have to wonder if there is any strategy in place.
I was literally asked yesterday if I wanted to jion Buldog residential broadband by one of a host of sales staff in our local high street! What a way to put off potential customers for C & W's other products!
Luckily, I was advising people to not touch Bulldog since they started. I also asked OFCOM to look into the licences given to C&W. C&W have an apalling record in the UK. Remember "Mercury"? That made major losses before being renamed 1-2-1 which also made big losses. What about C&W TV and landlines? They did exactly the same and now we have Bulldog. C&W treat the UK as they would a US market. High pressure sales, mass marketing costing many millions and then they cease trading and the customer always loses out. As US companies have proven, for many years, that they can't trade honestly and fairly, nor understand the UK consumer, we should have a total ban on US Corporations trading here, especially the likes of C&W who wouldn't cable an estae in Deptford because many refugees / asylum seekers / unemployed residents live there.
This is the best news ever.
I wish the company would go bust for all the stress and for supplying me with an inadequate service for over a year!
Had a bad experience with this company and never again.