je.st
news
Colt warns for weaker EBITDA, to exit wholesale voice
2014-04-22 09:22:00| Telecompaper Headlines
(Telecompaper) European carrier Colt warned for weaker-than-expected EBITDA this year, due to product mix changes, customer churn and pricing pressure in bandwidth products. The company expects 2014 EBITDA (before restructuring charges) to be 5-10 percent lower than the current market consensus of EUR 325 million. In addition, Colt will book restructuring charges in the second half of around EUR 30 million for a planned exit of much of its wholesale voice business. The operator plans to end around 85 percent of its Carrier voice trading contracts over the next few months. The capacity of around 5 billion minutes per year freed up on its voice network will be dedicated to expanding the more profitable enterprise voice business. The decision will result in the loss of around EUR 175 million in annual revenue, around half of which will be felt in 2014 already. However, the exit of the wholesale business should lead to better profit margins over the next few years and have an "immaterial" impact on EBITDA this year, Colt said. For the first quarter, the operator reported revenues up 2.0 percent year-on-year to EUR 399.8 million, helped by forex effects and expansion in managed and colocation services. EBITDA was still down 8.0 percent to EUR 74.1 million, hurt by pressure on margins from regulatory price cuts and a shift from profitable bandwidth services to lower margin managed networking services. Colt said it expects the pressure on margins to continue through the year.
Tags: voice
exit
wholesale
weaker
Category:Telecommunications