COLT stumbles despite cutting costs and gaining subscribers

21 Jul 2004

Pan-European telecoms service provider COLT Telecom said its net losses for the three months to 30 June narrowed to GBP26.27 million (USD48.7 million) from GBP27.25 million for the corresponding period of 2003, after it cut costs and signed up more customers. The UK-based operator reported a 1% rise in pre-tax profits to GBP38.3 million on the back of an 8% rise in sales to GBP301 million, but said that slower than anticipated demand for data services and poor sales of higher margin voice products had combined to make the quarter a disappointment. COLT chairman Barry Bateman said that since publishing its 1Q results on 21 April the company had faced ‘continuous pricing pressure within the industry’ and that much of its growth in Q2 had come from lower margin products. On 1 July COLT issued a shock profits warning that it expected to miss analysts’ estimates for earnings in 2004 as a result of ‘difficult’ trading conditions, leading to a 25% slump in the company’s share price.

United Kingdom