Brasil Telecom price hikes cause profits to double

12 May 2003

Telcoms holding company Brasil Telecom Participaçoes [NYSE: BRP] has more than doubled its first quarter profit year-on-year, thanks to a rise in call charges and expansion at its fixed line operator Brasil Telecom. The telco, which operates in the south and mid-west of the country, responded to the regulator’s decision to relax laws on call costs between fixed lines and mobiles by hiking its prices 24.2% in the year to 31 March 2003. This, coupled with a 8.4% year-on-year rise in the number of installed lines to 9.6 million, contributed to a 14.3% jump in its parent company’s quarterly revenues to BRL1.87 billion. The telco also identified strong sales growth at its data services division as a contributing factor. Brasil Telecom Participaçoes reported a net profit of BRL138.2 million for the quarter, up from BRL64.1 million in the corresponding period last year.