The History of Cable & Wireless

As published in the July Issue of 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 1 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 8 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 1 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 11 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 21 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 21 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 3 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 24 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 (28 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 30 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 24 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 12 July 1937, John Cuthbert Denison-Pender was elevated to the peerage and created the first Baron Pender of Porthcurnow, the rank and title his grandfather had so craved. The coat of arms and motto Persevero were confirmed by royal seal on 10 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 1 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 (26 May – 4 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 31 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 1 November 1945, the Cable & Wireless Act received royal assent. It was then announced in the House of Commons, on 19 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 4 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 31 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 6 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.

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 21 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, whichadded 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

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 1 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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