The History of Cable & Wireless
As published in the SubTel
Forum Magazine
By Stewart Ash & Bill Burns
July 26, 2022
In the May Issue we explained how the Eastern Telegraph
Co (ETC) was formed and grew into the largest telecommunications company in
the world under John Pender and his youngest son, John Denison. Then how
competition with Marconi’s radio had forced a merger between the two
companies in 1929, and that it fell to John Pender’s grandson, John Cuthbert
Denison-Pender (1882-1949), to take the new combined company forward.
John Cuthbert joined The Eastern Telegraph Co in 1900, at
the age of eighteen. During the First World War, he served in France and
Belgium as a Captain and aide-de-camp to Major General William
Lambton (1863-1936). In 1917, he was captured and remained a prisoner of war
until after the 11 November 1918 armistice. On returning to London in late
November 1918, he re-joined the ETC. In January 1923, he was appointed Joint
Managing Director, replacing his father, a position he retained when he was
made Vice Chairman of the company in April 1925. On 1st March 1928, there
were three generations of Denison-Penders working for The Eastern Telegraph
Co when John Jocelyn (1907-65), John Cuthbert’s eldest son, aged twenty-one,
joined the London staff as an office junior in the Accounts Department. On
8th April 1929, John Cuthbert was appointed Governor and Joint Managing
Director of Cable & Wireless Ltd and Joint Managing Director of Imperial &
International Communications Ltd, alongside Admiral Henry William Grant
(1870-1949). In July 1930, John Jocelyn was appointed Assistant Secretary of
Imperial & International Communications Ltd.
The first task of the merged operating company was to
rationalise the organisation and reduce the annual overhead. The board
members were reduced from 22 to 14 and the workforce was reduced by 13%. On
1st January 1933, the Direct Spanish Telegraph Co, founded by John Pender in
1872 and until then owned by the Denison-Pender family, was acquired.
Further acquisitions and liquidations were to follow.
When the Eastern Telegraph Co was formed the headquarters
had been established at Palmerston Buildings in Bishopsgate, but as the
Company grew the HQ was moved to 66 Old Broad Street. The original building,
known as Winchester House, was pulled down in 1883 and rebuilt, and from
1885 it housed the Company HQ, along with the headquarters of the Telegraph
Construction & Maintenance Co (Telcon). In 1902, the ETC moved to its own
building, Electra House in Moorgate. Despite the need to reduce costs, the
Company built a new HQ on Victoria Embankment, while Electra House became
part of the Post Office. New Electra House was officially opened by John
Cuthbert’s wife, Irene née de la Rue (1886-1943), on 11th May 1933.
This reorganisation could not have come at a worse time,
as the global economy had been plunged into ‘The Great Depression,’ which
began in 1929 and lasted throughout most of the 1930s. During this period,
the directors of the Company were not free to make purely commercial based
decisions, and all major decisions had to be approved by a government
appointed ‘Imperial Communications Advisory Committee.’ Because of its
financial difficulties, in 1931 the Company put a proposal to the Advisory
Committee to raise rates across the board. Due to the cost implications for
Imperial communications, a government ‘Committee of Enquiry’ was set up to
consider this plan. At a meeting of the Court of Directors of Cable &
Wireless Ltd on 21st April that year, the directors were warned that the
Committee’s brief might include the Government taking over the Company. A
three-man committee was formed under the chairmanship of Wilfred Arthur
Greene KC (1883-1952) and its report was given to the Company’s directors on
21st November 1931. It supported the Company’s recommendation to increase
rates, and advised against nationalising the Company; however, it
recommended a number of organisational changes, in particular that they
should replace the existing Management Committee of Imperial & International
Communications with a single Chairman and that the Government should approve
that appointment. On 3rd May 1932, the Board of Directors nominated John
Cuthbert as Chairman for Government approval. His appointment was confirmed,
and one year later John Jocelyn was appointed as Deputy General Manager to
Edward Wilshaw (1879-1968), who had joined the Eastern Telegraph Co as an
apprentice in 1898.
One of the recommendations of the Greene Report was that
the name of the operating company should be changed. The Court of Directors
were opposed to this, but as the report was never published it did not
become public knowledge. However, responding to another of the Greene
report’s recommendations, the directors appointed its first publicity
manager, and it appears that he was able to convince the directors that a
change of name was a good idea. On 24th May 1934, this was put to the
shareholders and the names were changed. Imperial & International
Communications Co Ltd became Cable & Wireless Co Ltd, and Cable & Wireless
Ltd became Cable & Wireless (Holdings) Ltd.
By 1935, global communications were beginning to recover;
however, in March that year Adolf Hitler’s National Socialist Government
repudiated the disarmament clauses of the Versailles Treaty (28th June
1919), and in October Benito Mussolini’s Fascist Government invaded
Abyssinia. Submarine telegraph cables, which had appeared to be on the point
of being phased out, regained their importance and became ‘strategic’
assets. In this environment, the Advisory Committee’s role became more one
of master than watch dog. This did not sit well with the directors, and they
became divided into two camps, one led by John Cuthbert and the other by
Edward Wilshaw. Each camp had its own approach to the problem of the role of
the Advisory Committee. On 30th October 1935, a secret meeting was held with
the objective of a hostile take-over, the removal of the Denison-Pender camp
and the abolition of the Advisory Committee. This plan never came to
fruition, and it appears that John Cuthbert was never aware of it.
In his own way, John Cuthbert continued to challenge what
he saw as the interference of the Advisory Committee, but his attitude and
lifestyle did not sit well with the Conservative Government under Stanley
Baldwin (1867-1947). By Easter 1936, the Government was running out of
patience, and John Cuthbert was called to a meeting with Sir Norman Fenwick
Warren Fisher (1879-1948), permanent Secretary to the Treasury and Head of
the Home Civil Service. The meeting took place at the Treasury, where John
Cuthbert was told that the Government could no longer support him in the
position of Chairman of Cable &Wireless Ltd. The notes of this meeting
record the possibility that John Cuthbert might be granted a baronetcy, but
it was stressed that such an honour would not be linked to his agreeing to
step down. After much political manoeuvring and in-fighting, on 24th June
1936 John Cuthbert stood down as Chairman of Cable & Wireless Ltd but
remained on its Board of Directors; he also retained his positions as
Governor and Joint Managing Director of Cable & Wireless (Holdings) Ltd. He
was succeeded as Chairman by Edward Wilshaw (1879-1968) and John Jocelyn was
promoted to General Manager of Cable & Wireless Ltd, replacing Wilshaw.
On 12th July 1937, John Cuthbert Denison-Pender was
elevated to the peerage and created the first Baron Pender of Porthcurno,
the rank and title his grandfather had so craved. The coat of arms and motto
Persevero were confirmed by royal seal on 10th March 1938. The
conferring of this peerage appears to have been part of a package linked to
the agreement reached with the Government for John Cuthbert to step down
from the chairmanship of Cable & Wireless Ltd, and at the same time to
protect and advance John Jocelyn’s position within the company.
Edward Wilshaw was 56 when he became Chairman of Cable &
Wireless Ltd, one year beyond the Company’s normal retirement age, but he
had agreed to stay on to work closely with the Advisory Committee and bring
the Company out of recession. This was to prove a difficult task, as by 1936
the Company’s development of radio communications was far behind where it
should have been. This was blamed on the constraints and obligations set out
in the 1928 Treasury Agreement, requiring the Company to maintain all its
submarine cables for strategic purposes, while the Government retained the
monopoly on overseas radio telephony. British radio communications were well
behind those of Nazi Germany, where radio development had advanced much
quicker. In terms of Imperial communications, cables were secure from spying
but could be cut and diverted, whereas radio signals could be overheard, but
they could not be diverted and were not that easy to jam effectively.
At this time, the Colonial Governments were beginning to
go their own way in setting up state-owned radio systems, further reducing
Cable & Wireless’s revenues. A solution was needed, so on 1st March 1938,
the Government cancelled the twenty-five year Beam Radio Rental Contract,
due to run until 1953, and handed over all the assets to the Company, in
exchange for £2.6M shares in Cable & Wireless. For the first time, the
British Government now held an equity stake in Cable & Wireless.
Additionally, the operating licences granted to the Company by the Post
Office in 1928 were extended to 1963. All this was embodied in the Imperial
Telegraphs Act 1938, which came into force just in time for the ‘Munich
Crisis’ that year.
At the outbreak of World War Two, Cable & Wireless
operated in 146 locations around the world, and initially the British
Government was content to leave the management of Imperial Communications in
the hands of the Company. To demonstrate their support for Edward Wilshaw in
his role as Chairman, he was knighted KCMG in December 1939. It was
immediately recognised that the Company’s radio stations were vulnerable to
enemy bombing raids, a fact that reinforced the importance of maintaining
cable communications. However, it was not until the fall of France and the
success of Operation Dynamo (26th May – 4th June 1940) that work began on
‘The Tunnel’ at Porthcurno, a bombproof suite of offices, equipment rooms
and a generator room dug into the cliffs; it went into operation on 31st May
1941.
It is not intended to cover any further the second world
war exploits of Cable & Wireless in this article, but if readers are
interested in this part of the story, they should seek out The Thin Red
Lines by Charles Graves, published in 1949.
In 1943, Sir Edward Wilshaw approached John Charles
Walsham Reith (1889-1971) to become a director of Cable & Wireless Co Ltd.
Lord Reith had been Director General of the BBC until 1938 and in 1940 had
been appointed Minister of Information under Arthur Neville Chamberlain
(1869-1940), but he had been dismissed from his post in 1942. As was
required, Reith’s appointment was approved by the Government, and his first
task was to examine the working relationship between the Company’s directors
and the Advisory Committee. He concluded that too much power had been vested
in the Chairman of the Advisory Committee, Sir Campbell Stuart (1885-1972).
In April 1944, a new Commonwealth Communications Council
met in London, at which the formation of a government-owned public utility
corporation in the UK and the Dominions was mooted. One month later, on his
sixty-second birthday, John Cuthbert retired. His son John Jocelyn
Denison-Pender was appointed Joint Managing Director of Cable & Wireless Ltd
and a Director of Cable & Wireless (Holdings) Ltd, while Sir Edward Wilshaw
became its Governor and Managing Director. Negotiations with the overseas
Governments had reached an impasse, and so Lord Reith was asked to undertake
a mission to resolve the situation. He accepted the challenge, and in
January 1945, having resigned his directorship, he set out on a 45,000-mile
tour of the Dominions to develop a modified scheme that had majority
acceptance. The result of this trip was a White Paper called the ‘Canberra
Proposals.’ On 24 June, Wilshaw chaired what would be the last Cable &
Wireless Annual General Meeting, at which the shareholders agreed to sell
the entire Marconi’s Wireless Telegraph Co share capital to English Electric
for £3,750,000. From July to October, Reith’s recommendations were debated
by the British and Dominion Governments and on 1st November 1945, the Cable
& Wireless Act received royal assent. It was then announced in the House of
Commons, on 19th December, that Cable & Wireless Ltd would be taken into
public ownership on 1 January 1947.
Under the Act, the Court of Directors was reduced to
five, all chosen by the Government to serve under a new Chairman, Sir
Stanley Angwin (1883-1959). During the war years the relationship between
Wilshaw and Campbell Stuart had deteriorated significantly and Stuart had
finally had him removed, although Wilshaw remained Governor of Cable &
Wireless (Holdings). By that time, this company was little more than an
investment trust. All the Company’s assets and operations in the UK were
transferred to the Post Office, and the Post Office also took on the role of
negotiating concessions with Dominion Governments. However, during the first
half of the 20th century, the structure of the British Empire had
changed due to the increasing self-governance of its territories. This had
first been formally recognised as the ‘British Commonwealth of Nations’ in
the Balfour Declaration of 1926 and formalised through ‘The Statute of
Westminster’ in 1931. In 1949, the current Commonwealth of Nations was
established through the ‘London Declaration’, under which all 54 member
states are ‘free and equal’.
So, what was left of the pre-war Company? It still
managed the largest part of the Commonwealth overseas telegraph system, and
as such was the largest single entity engaged in international telegraphy in
the world. In the UK, it owned the Porthcurno cable station and the training
school, plus the short land routes to the eleven telegraph cables that
landed there. These connected to a global network of 155,000nm of submarine
cable. In addition, it operated a fleet of eight repair ships based in
various locations around the world. Based on this structure and these
assets, the Company was struggling to cover overheads, so a long-term plan
was needed.
Angwin had been with the Post Office since 1907 and was
well known at New Electra House. He had also accompanied Reith on his tour
of the Dominions; however, the Chairman’s role was only a part-time position
and many people thought that he had only been brought in to preside over the
Company’s demise. The real control of the Government-owned Company was
vested in the Managing Director, and this post was filled by John Innes, a
Post Office Engineer who specialised in telephony.
John Jocelyn was relegated to the role of Deputy Managing
Director but succeeded his father as the 2nd Baron on John
Cuthbert’s death on 4th December 1949. At the end of March, the following
year, John Innes retired and was succeeded by Major-General Leslie
Burtonshaw Nicolls (1895-1975) ex Royal Corp of Signals. This left the aging
Wilshaw (now effectively side-lined) and John Jocelyn as the only members of
senior management with experience of running the submarine cable business.
Wilshaw was then seventy-one, so much of the day-to-day work fell on the
shoulders of John Jocelyn. He retained this role as Deputy Managing Director
under four Government-appointed Chairmen of Cable & Wireless Ltd: Stanley
Angwin until 1951, then Leslie Nicholls until 1954, Sir Godfrey Ince
(1891-1960) until his death in December 1960, and Sir John Stuart Macpherson
(1898-1971) from 1962. In 1958, John Jocelyn became the sole Managing
Director of Cable & Wireless (Holdings) and the following year he became
Managing Director of the Globe Telegraph & Trust Co. That same year, his
portrait became the fourth of the Pender family portraits to be hung in the
“Directors’ Court Room” at New Electra House.
After his removal as head of the operating company,
Edward Wilshaw had become a peripheral figure. He had remained Governor of
Cable & Wireless (Holdings) and had insisted on retaining the Company’s flat
in Arundel House as his residence. However, in June 1964, on reaching his 85th
birthday, he finally retired, and John Jocelyn became Governor in his place.
He did not hold this position for long because he died at his London flat on
31st March 1965, aged just fifty-eight. His death was effectively the end of
the Denison-Pender family control of the Cable & Wireless group of companies
as, under Government ownership, his eldest son John Willoughby (1933-2016),
the 3rd Baron Pender of Porthcurnow, was not to rise to any of
the senior management positions that his forebears had attained.
Having completed his National Service at the beginning of
1954, John Willoughby joined a London firm of stockbrokers. After eighteen
months he was sent out to Canada for a year, and on his return, in the
summer of 1956, he joined the staff of C&W (Holdings), moving from one
department to another to gain experience of the business. He then went to
work for his father, and in 1960 he was appointed to the Board of Directors.
At the end of 1955, Cable & Wireless once again moved its
headquarters, leaving New Electra House for Mercury House in Theobalds Road,
London WC. As with Winchester House, two of the floors became the HQ of
Telcon, where the 1864 portrait of John Pender (see the May Issue) hung
until Telcon merged with BICC in 1959. It was then given to John Jocelyn by
Sir John Dean, the Chairman of Telcon. The investment trust, Cable &
Wireless (Holdings), and the Court Room remained at New Electra House, along
with the Post Office Overseas Telecommunications Executive.
During this period of the Company’s history, two major
technological advancements would change the shape of global
telecommunications. During the 1950s, the introduction of
polyethylene-insulated coaxial cables for submarine systems, together with
the development of extremely reliable thermionic valves (vacuum tubes),
enabled the first submarine telephone cable across the Atlantic. This was
called Transatlantic Telephone One (TAT-1) and went into service in 1956,
ninety years after the first successful Atlantic Telegraph. With the success
of TAT-1, Cable & Wireless began planning a global network of transoceanic
telephone cables, known collectively as the ‘Commonwealth Cables’. These
would introduce two British inventions that are now standard practice in the
submarine cable industry: lightweight cable and rigid bi-directional
repeaters. For more detailed information on the Commonwealth Cables, see
Back Reflection, Issue 76, May 2014. In parallel with the first Commonwealth
cable, CANTAT, an 80 x 3khz telephone channel cable, connecting the UK with
Canada, New Jersey – Bermuda, owned jointly by Cable & Wireless and AT&T,
went into service in 1962. Cable & Wireless had finally entered the world of
international voice communications and transoceanic telephony, via submarine
cables.
The second technical innovation was satellite
communications. The 1962 launch of communications satellites Telstar and
Relay was the start of real competition for long-distance radio and cable
telephony. Then, in 1963, the first successful geosynchronous communications
satellite, Syncom II, was launched. On 6th April 1965, the first commercial
communications satellite, INTELSAT 1 (Early Bird) was launched with a
capacity of 240 x 3khz voice channels or one television channel. Cable &
Wireless’s first involvement with this program was to provide its first
earth station on Ascension Island to support NASA in the US Apollo space
missions. Apart from the C&W ground station Ascension also hosted the US Air
Force, with its Apollo Range Instrumentation Aircraft (ARIA). These were
specially equipped Boeing 707s that flew from the Island’s base to track the
Apollo (and other) space craft.
Despite the fact that subsea cables offered a better
quality of service, with no perceivable delay or echo and infinitely better
security, satellites offered significantly more capacity and a cheaper
service. This put pressure on the subsea cable industry, and by the
mid-1970s satellite systems had become the dominant service for transoceanic
telephony.
By the end of the 1960s submarine telegraph cables had
become obsolete, and in 1971 the Porthcurno Cable Station was closed. The
Cable & Wireless College remained there until 1993 when it was moved to
Coventry. Around the same time, the museum in Mercury House, that had been
opened by John Willoughby in July 1979, was closed and the archive was moved
to Porthcurno. However, it was not until May 1998 that the Telegraph Museum
at Porthcurno opened its doors to the public and, since that time, it has
provided visitors with a unique insight into the history of the unsung
industry that is submarine telecommunications. PK Porthcurno, as the museum
is now called, has won multiple awards over the years, and is officially
recognised for the national and international significance of its historic
collections with “Designated Outstanding” status from Arts Council England.
By 1972, the largest part of Cable & Wireless’s
operations was in Hong Kong, where the international telecommunications
services provided 88% of the Company’s profits. Over the next few years many
of its early concessions around the world began to lapse, and by 1978, the
Company had moved into niche markets, electronic systems for hotels,
security systems, marine telex, and, under the largest contract in its
history, communications systems for the Saudi Arabian National Guard.
1979 marked the Silver Jubilee of Cable & Wireless, and
in May that year Margaret Hilda Thatcher (1925-2013) became Prime Minister.
This would lead to the re-privatisation of Cable & Wireless, in November
1981. Initially, the Government sold 49% of the Company’s shares, but by
1985 all the shares had passed into private hands, with the exception of a
‘Golden Share’ retained by the Government. Sir Eric Sharp (1916-1994) was
made the first Chairman and Chief Executive of Cable & Wireless plc, a role
he held until 1990. As part of the restructuring of the Company, New Electra
House was no longer required, and as a result, the four portraits from the
Court Room were moved to the Company archive in Mercury House.
With privatisation, there was less need for a hereditary
peer among the directors, and so Cable & Wireless plc and John Willoughby
parted company. It appears, that around this time, a decision was taken to
retain the 1889 portrait of the founding chairman, and the other three
portraits were given to John Willoughby. The 1889 portrait is currently on
display at PK Porthcurno, as part of ‘The Cable King Exhibition.
Though John Willoughby remained immensely proud of his
family’s contribution to the Company, then in his fifties, he focussed the
remainder of his working life on his stockbroker career in the City of
London, and his ‘Duty’ as a member of the House of Lords.
Under the new liberalisation of telecommunications in the
UK, Cable & Wireless launched a subsidiary, Mercury Communications Ltd, a
joint venture with Barclay’s Bank and British Petroleum, to compete with
British Telecom, mainly in the area of long distance and business
communications. In 1984, Cable & Wireless acquired Hong Kong Telephone, and
in a restructuring in 1988 this became Hong Kong Telecom. In 1986, the
submarine cable Telephone Era came to end, and the technology of choice for
submarine cables became fibre optics. This heralded a change in the
structure of international telecommunications. During most of the 20th
century, the vast majority of international operators were government-owned
entities, but in the 1980s many of them were privatised and, in submarine
cables. the concept of the “Carriers’ Carrier” was born. In 1988, the first
Atlantic fibre optic system, known as TAT-8, went into service between
England, France and the USA.
Mercury moved into the Private Branch Exchange (PBX)
market in 1990 as a result of Telephone Rentals being bought by Cable &
Wireless. This enabled the Smart Box to be connected to a large number of
TR's customers, so traffic was routed away from BT onto Mercury's network.
Sir Eric Sharp was a man of vision on a similar scale to
John Pender, and he saw an opportunity in the new liberalised
telecommunications environment, so he set out to build a private ‘global
digital highway,’ circling the world, based on fibre optic cables. This plan
resulted in two transoceanic systems, of which the first, PTAT-1, went from
England to the USA with spurs to Ireland and Bermuda and was completed in
1989. The second ran from Oregon in the USA to Japan with a spur to Alaska;
this system was called the North Pacific Cable (NPC) and went into service
in 1991 (see Back Reflection, Issue 85. November 2015. By the time these
cables were operational, Eric Sharp had been replaced by Lord David Young (b.1932)
as Executive Chairman, a position he held until his retirement in 1995.
During Young’s tenure, Cable & Wireless entered several new markets around
the world as a second-tier player. In 1993, in partnership with US West,
they launched Mercury One2One, providing mobile services in the UK. Then
there was Optus in Australia and Tele2 in Sweden, and several smaller
companies. Cable & Wireless was in danger of spreading its portfolio too
thinly, and competition everywhere was hitting the bottom line. These
problems led to infighting between CEO James H. Ross (b. 1940) and
Lord Young, which resulted in an extraordinary decision by the Board of
Directors to fire both of them. This was announced on 21st November 1995.
The Board took until May 1996 to appoint an American, Richard Brown (b.1945)
as the new Chairman, but this choice did not sit well with the City of
London, and he only lasted 18 months. In 1997, China took back control of
Hong Kong, which added to the Company’s difficult financial position, as it
was forced to sell its stake in Hong Kong Telecom to a Chinese company. By
then Cable & Wireless had taken a 53% stake in a new joint venture company,
Cable & Wireless Communications.
Mercury pulled out of the PABX market in 1996, when it
sold that part of the business to Siemens, creating Siemens Business
Communication Systems (SBCS), which later became Siemens Communications.
Mercury Communications was merged into Cable and Wireless
Communications in October 1996 and ceased operations in 1997.
Cable & Wireless plc survived as a single entity until
2010, when it was once again split into two companies, C&W Worldwide Ltd and
C&W Communications Ltd. C&W’s global submarine cable interests were vested
in C&W Worldwide and were sold to Vodafone in July 2012. Cable & Wireless
Communications was acquired by Liberty Global plc in 2016. These two
companies can trace their roots back to the Eastern Telegraph Co, founded by
John Pender 150 years ago, on 1st June 1872. Initially under John Pender,
and then by his descendants, it was built into the world’s largest
telecommunications company. However, it is our belief that very few people
working for the present two companies, or the industry as a whole, are aware
of this unique and complex history. We hope we have gone some way to
rectifying that in these two articles!
Acknowledgements
The authors would like to thank Charlie Foreman for his
personal recollections of life on Ascension during the Apollo Missions;
Harry Pender for permission to use the images of his family in this article
and in particular, the portraits of John Cuthbert Denison-Pender and John
Jocelyn Denison-Pender that are now on long-term loan at PK Porthcurno. The
images of the portraits of John Cuthbert Denison-Pender and John Jocelyn
Denison-Pender are provided courtesy of PK Porthcurno – Museum of Global
Telecommunications. The PK Porthcurno Online Collections are now available
at: https://pkoc.co.uk/
References
A Century of Service, Cable & Wireless Ltd 1868-1968, K C Baglehole;
Anchor Brendon Ltd Tiptree, Essex 1969
Girdle Round the Earth, Hugh Barty-King: William Heinemann London 1979
The Cable King, the life of John Pender, Stewart Ash, Amazon 2018
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