Profits fall for Brasil Telecom

6 May 2004

Fixed line telco Brasil Telecom has reported a net profit of BRL74 million (USD25 million) for the first quarter of 2004, down from BRL101 million at the same time last year. Gross revenue rose by 11.5% to BRL2.9 billion, although this failed to compensate for the rise in operating expenses which grew from BRL1 billion to BRL1.2 billion during the year. The operator increased its number of lines in service to 10.7 million by the end of March, up by 0.9% in a year, while it claimed 325,000 broadband subscriber lines at the same date, a 97% rise. It attributed the fall in profits to higher interconnection rates due to an increasing number of pre-paid mobile users, which use their handsets to receive more calls than they make, increasing the interconnection burden on fixed line telcos.