Colt confirms plans to exit carrier voice market

23 Apr 2014

Colt Group, the London-based, pan-European telecoms service provider, has announced that it is withdrawing from the carrier voice market. In publishing its financial results for the three months ended 31 March 2014 Colt revealed that it is currently completing a strategic review of its performance by lines of business with ‘a focus on operational and financial improvement’. In line with this the group has confirmed it will move forward with the reorganisation of its business into four lines, those being: network services, IT services, data centre services and voice services. With plans for each of the units said to have been formalised, Colt has claimed the underlying plans will ‘facilitate the prioritisation of investments and opportunities that are of the greatest strategic and commercial value to [the] Group with a goal to improve revenue growth, margin and cash flow in 2015 and beyond’.

As part of the reorganisation process, Colt has announced a planned reduction in its carrier voice business, revealing that it will withdraw from around 85% of its carrier voice trading contracts over the next few months. It was noted that, while the move will liberate approximately five billion minutes per annum of voice network capacity to pursue more profitable enterprise voice business, it will result in the loss of approximately EUR175 million (USD242 million) of annualised revenue.

In terms of the company’s financial performance in the first three months of 2014, Colt generated a total turnover of EUR399.8 million, representing a year-on-year increase of 2.0%, while on a constant currency basis revenues were up by 1.2%, with contributions from all four lines of business. Group earnings before interest, tax, depreciation and amortisation (EBITDA) stood at EUR74.1 million, meanwhile, down by EUR6.4 million (8.0%) from the same period a year earlier.

United Kingdom