Cable & Wireless was being ground through the rumour mill on Friday morning, with abundant speculation that France Telecom was in the picture to buy out the carrier.

Earlier in the week, the carrier had posted a profit of £134m for the six months to the end of September, compared to an income of £58m a year earlier.

Evidently the company’s cost cutting strategy is working, although revenues for the same period fell slightly from £1.7bn a year ago to £1.56bn. Restructuring costs of £11m were recognised during the period as part of the Europe, Asia and US turnaround programme.

There was also a turnaround in management with Harris Jones stepping down as chief executive of International and as a director of Cable and Wireless, with John Pluthero to become executive chairman of International with immediate effect, while continuing his similar role for Europe, Asia & US.

Neither company was commenting on the acquisition rumours but France Telecom was in a frivolous mood.

The French carrier emerged as the preferred bidder for the acquisition of a 51 per cent stake in the incumbent Kenyan operator, Telkom Kenya, for a consideration of $390m (Eur270m).

Telkom Kenya serves over 280 000 fixed line customers and is also expected to pick up a new mobile licence. Mobile penetration in Kenya is currently lower than 30 per cent, offering high growth potential.

France Telecom has teamed up with Alcazar Capital, which subscribed to a 15 per cent stake in the consortium.