mmO2 revenues boom as landline telcos disappoint

Mobile operator mmO2 surprised the City by reporting booming customer figures and revenues, while alternative telcos Colt Telecom and Cable & Wireless revealed losses and falling sales figures in their quarterly results.

mmO2 signed up 600,000 new customers in the UK and Germany in the last three months and boosted annual revenue per user (APRU) to £279 in the UK. This is £25 higher than the comparable quarter of last year.

Confirming results predicted in a profit warning issued at the beginning of the month, Colt reported first quarter revenues of £301.2m, up 3 per cent from the same period in 2003. First quarter losses were £26.3m, compared to £27.3m last year. Colt shares dropped 34 per cent to 53p on the day of the profit warning. They now stand just over 40p.

Retiring Colt CEO Steve Atkin blamed the poor showing on increased competition from previously bankrupt companies which have managed to shed their debt. He said in a statement: "Part of what we are seeing is those international companies emerging from Chapter 11, such as MCI and Global Crossing, with very aggressive pricing."

Colt's new CEO Jean-Yves Charlier, who made his reputation by reviving BT Global, is charged with helping the company move into high revenue services and profit.

Francesco Caio, CEO of C&W, also spoke of fierce competition. In a statement, he said: "In the UK, where switched voice is still the largest component of our revenues, we continue to see pressure on pricing."

For its first quarter, C&W reported a 9 per cent fall in revenue from the previous quarter, to £798m. The company said that around 5 per cent of that decline was due to changing currency exchanges. C&W also reported significant drops in revenue in both its European and Caribbean operations.

C&W has cash holdings of £1.43bn.