Cable & Wireless Communications Business Update; Cost Efficiencies and Growth Achieved.

LONDON--(BUSINESS WIRE)--Sept. 15, 1997--

Highlights

-- Successful integration in only 4 months

-- Range of new products launched

-- Over 100 million pounds in synergy savings in 1997/98

Pro forma operating statistics and revenues for three months ended June 30, 1997

-- Total revenue increased 13% to 551 million pounds (Q1 96/7 - 488 million)

-- Significant growth in usage of telephony services

-- Consumer telephony

- penetration increased to 22.6% (Q1 96/7 - 20.1%)

- direct lines increased by 45% to 772,209 (Q1 96/7 - 533,241)

-- Cable television

- penetration increased to 19.1% (Q1 96/7 - 18.1%)

- customers increased by 36% to 652,903 (Q1 96/7 479,242)

Graham Wallace, chief executive, said:

"We have made significant progress. In merging four companies we have created the UK's largest company delivering integrated communications services. This has been achieved whilst growing both revenues and the customer base.

"We will achieve over 100 million pounds in synergy savings this financial year compared with the standalone plans of the separate companies. The management team, which is 40% smaller than in the original companies, is now in place. We will continue to rationalise the business, and already anticipate on-going annual cost savings in excess of that 100 million pounds.

"The one-off costs of reorganisation are expected to total 200 million pounds, about half of which is the cost of transforming our systems and operations in order to deliver excellent customer service.

"We are restructuring our sales channels and investing in customer support. The 50 million pound advertising campaign being launched today will reach every consumer in the country. Our digital plans are well-developed and we are in discussion with a wide range of content providers to make sure we give our customers what they really value.

"Cable & Wireless Communications is ideally placed to exploit the converging telecommunications and television markets. The early take-up in the consumer market of our new combined telephony and television packages demonstrates the demand for integrated communications services."

Pro Forma Operating Statistics and Revenues for the Three Months Ended June 30, 1997

Cable & Wireless Communications today announced pro forma unaudited operating statistics and revenues for the three months ended June 30, 1997.

Summary of revenue

Total revenue increased by 13% to 551 million for the three month period to June 1997 compared with 488 million pounds for the same period in 1996. A competitive approach to pricing contributed to minutes of use increasing 30% to 6.1 billion with some impact on margins.

Consumer telephony

Consumer telephony lines increased by 45% to 772,209 with penetration rising to 22.6%. Churn fell to 18.9%.

Cable television

Total customers increased by 36% to 652,903 with penetration rising to 19.1%. Churn fell to 28.1%. -0-

                    Cable & Wireless Communications
        Pro Forma Revenues and Operating Statistics (Unaudited)

million pounds            3 months to   3 months to    3 months to
                           June 1996     Sept 1996      Dec. 1996

Telecommunications               457        460           489
Cable television                  31         33            38
Total revenue                    488        493           527

Operating Statistics
(Unaudited)
Three months ended
June 30, 1997

Homes passed (000s)            2,877      3,029         3,189
Homes released to
 operations (000s)             2,647      2,787         2,934

Penetration % -
 Consumer telephony             20.1%      20.8%         21.7%
 Cable television               18.1%      18.5%         19.5%

Churn %
 Consumer telephony             19.5%      21.0%         19.5%
 Cable television               29.4%      30.8%         29.3%

Consumer
 Telephony lines             533,241    578,365       635,807
 Cable television
  customers                  479,242    515,417       572,982

Average monthly revenue
 per consumer telephony
 line (pounds)                 22.03      20.24         18.42

Average monthly revenue
 per cable TV customer
 (pounds)                      21.98      22.21         22.93

Total minutes of telephone
 usage (million)               4,731      4,970         5,334




                              3 months to   3 months to
                              March 1997     June 1997

million pounds

Telecommunications               487           508
Cable television                  41            43
Total revenue                    528           551

Operating Statistics
(Unaudited)
Three months ended
June 30, 1997

Homes passed (000s)            3,438         3,630
Homes released to
 operations (000s)             3,239         3,418

Penetration % -
 Consumer telephony             21.6%         22.6%
 Cable television               19.1%         19.1%

Churn %
 Consumer telephony             19.2%         18.9%
 Cable television               28.4%         28.1%

Consumer
 Telephony lines             698,385       772,209
 Cable television
  customers                  618,638       652,903

Average monthly revenue
 per consumer telephony
 line (pounds)                 21.17         21.63

Average monthly revenue
 per cable TV customer
 (pounds)                      22.24         22.43

Total minutes of telephone
 usage (million)               5,792         6,147


Notes:

Pro forma numbers have been derived by combining the results of the
component companies, Bell Cablemedia, Mercury, NYNEX CableComms and
Videotron, as if Cable & Wireless Communications had been in
existence since April 1, 1996.

Homes Passed - A home is "Passed" when activated plant is available
at the individual home curtilage (boundary).  Homes in this
definition may require further action to determine whether
construction and installation is economically feasible.

Homes released to operations - A home is "Released to Operations"
when no additional works are required by the construction
department to ensure the home is serviceable.

Penetration -- The measurement of the take-up of telephony or cable
television services.  Penetration rate for telephony or cable
television services is (i) the number of lines or television
customers connected on a particular date, divided by (ii) the total
number of homes released to operations on that date, expressed as a
percentage.

Churn - The discontinuance of telephony or cable television services
to a customer either voluntarily or involuntarily, commonly measured
as a rate from period to period.  Cable and Wireless Communications
calculates 12 month rolling churn rate by dividing (i) the number of
its lines or customers that have been disconnected during the previous
twelve months by, (ii) the average number of lines or customers
during that period.

Average Monthly Revenue Per Telephony Line/Per Customer - Excludes
installation revenues and VAT and represents (i) the total consumer
telephony revenue or cable television revenue for the given period
divided by the number of months in such period, divided by (ii) the
average number of lines/customers in such period.
-0-

Pro Forma Income Statement for the Year Ended March 31, 1997
(Unaudited)

                                         Year ended
                                       March 31, 1997

                                      (million pounds)

Revenue (a)                               2,036
Outpayments and other cost of sales(b)     (848)
Operating expenses                         (609)

EBITDA                                      579

Depreciation and amortization              (397)

Operating profit                            182

Profits less losses on sale and
 termination of operations                   15
Losses on disposal of fixed assets           (7)
Net interest payable                        (110)

Profit on ordinary activities before
 taxation                                     80

Taxation                                       -

Profit on ordinary activities after
 taxation                                     80

Notes
(a) Excludes intercompany revenue of 31 million pounds i.e. revenue
received by Mercury from the cable companies.
(b) Excludes 80 million pounds of contribution arising from
settlement of interconnect rates between Mercury and BT relating to
prior periods.

Exceptional charges
To be included in the accounts for the period to Sept. 30, 1997

                                        million pounds
Staff related costs                           45
Branding & launch costs                       47
IT systems writedowns                         55
Property & other writedowns                   53
                                             200
-0-
Pro Forma Balance Sheet as at March 31, 1997
(Unaudited)
                                        million pounds

Fixed assets
 Tangible assets                           4,089
 Investments                                  10
                                           4,099

Current assets
 Stocks                                       11
 Debtors - due within one year               448
         - due after more than one year        6
 Cash at bank and in hand                    175
                                             640

Creditors
 Amounts falling due within one year      (1,329)

Net current liabilities                     (689)

Total assets less current liabilities      3,410

Creditors
 Amounts falling due after more than
  one year                                (1,455)

 Provisions for liabilities and charges     (260)

 Net assets and shareholders' equity        1,695

Notes:
1. The balance sheet incorporates an adjustment to reduce the net
assets of the acquired cable companies to fair value as follows:

                                   million pounds

Debt refinancing                        279
Asset writedowns                        185
IT systems and other writedowns          40
                                        504

2. Creditors, amounts falling due within one year and amounts falling
due after more than one year, include gross debt of 1,780 million
pounds.  Net debt is 1,605 million pounds, after deducting the
balance of cash at bank and in hand.

Subsequent to the year end short term debt has been refinanced by the
raising of a 2.9 billion bank facility.
-0-

Notes to Editors

Interim results for the period ending Sept. 30, 1997 will be issued
on Nov. 10, 1997.

Cable & Wireless Communications is the largest provider of integrated
telecommunications and television entertainment services in the
United Kingdom.  The company serves customers nationally with a broad
range of facilities-based network services including local, national
and international voice and data services, and in certain regions,
multichannel television and Internet services and, through resale,
mobile telecommunications services.  Cable & Wireless Communications
is one of the largest carriers of wholesale telecommunications
traffic in the United Kingdom and the thirteenth largest carrier of
international traffic in the world.

The following cautionary statement is included for safe harbour
purposes in connection with the Private Securities Litigation Reform
Act of 1995 legislation introduced in the United States of America.
Statements made in this press release that refer to Cable & Wireless
Communications' or management's "beliefs" or "expectations" for the
future, or "anticipated" results, or similar expressions, are forward
looking statements.  It is important to note that such forward
looking statements involve various risks and uncertainties which
could lead to actual results differing materially from those
projected in such statements.  Additional information concerning
factors that could cause actual results to differ is contained from
time to time in Cable & Wireless Communications' SEC filings
including, but not limited to, its prospectus dated March 21, 1997
included in the Registration Statement filed on Form F-4.  Copies of
these filings may be obtained by contacting Cable & Wireless
Communications or the SEC.

CONTACT: Cable & Wireless Communications

Nicholas Mearing-Smith, 0171 528 2108

Samantha Ashworth, 0171 528 2565

or

Media enquiries

Roy Payne, 0171 528 2528

or

Brunswick

Andrew Grant, 0171 404 5959