Embassy telecom deal to save taxpayer £90m

Cable & Wireless Worldwide yesterday claimed a deal to supply telecom services to more than 200 UK embassies, high commissions and consulates will save the UK taxpayer £90 million.

The contract, worth some 82m, will see the group provide phone, internet and video conferencing services to the Foreign & Commonwealth Office (FCO) in 160 countries for five-and-a-half years.

The new agreement will be welcomed at C&W Worldwide after it recently warned government spending cuts would impact its full-year growth.

The FCO previously used local service providers across the world so moving to a single network will help lower costs, C&W Worldwide said. The group added that FCO flight costs would reduce by 25 per cent through an increased use of video conferencing, as well as a reduction in carbon emissions.

The FCO said it expected ongoing operating costs to reduce by more than 50 per cent under the new contract, when compared to the service from incumbent Global Crossing.

Earlier this year, C&W Worldwide said it was forced to ramp up cost-cutting plans after public-sector spending slowed significantly in the wake of Chancellor George Osborne's emergency Budget in June.

The firm, which was spun off from the wider international business in March, has a heavy focus on the UK public sector, accounting for some 13 per cent of the group's revenues.