Colt losses widen despite strong demand for high-speed data

Colt Telecom, Europe's biggest competitive local exchange carrier, yesterday unveiled third quarter results that displayed strong demand for high speed data services, although the company's losses widened to £33.4m from £21.9m a year ago.

Colt Telecom, Europe's biggest competitive local exchange carrier, yesterday unveiled third quarter results that displayed strong demand for high speed data services, although the company's losses widened to £33.4m from £21.9m a year ago.

Revenues grew 59 per cent to £167m from the year earlier period but only 10 per cent from the second quarter. Earnings before interest, taxation, depreciation and amortisation or EBITDA rose by half to £2.4m compared with forecasts of £2m. Colt also said it had cash on hand of £1.8bn.

Colt's chairman, Jim Curvey, said: "We are seeing very strong demand for higher bandwidth services from new customers and existing customers as they upgrade their data transmission requirements. Our entry into the hosting market is also stimulating additional bandwidth sales."

Colt stock led FTSE 100 decliners, closing down 126p, or 5.9 per cent, at 2005p. Although Colt isn't expected to turn a profit until about 2004, the group is valued at £14bn. Its shares hit 4073p at the peak of the boom in technology shares in March.

One factor hurting Colt stock is the planned departure of its chief executive, Paul Chisholm, in the first half of next year. The company has yet to find a replacement. Saeed Baradar, analyst with Bear Stearns, said: "It's a very solid set of numbers but nothing spectacular."

Colt builds high-bandwidth local networks in urban business areas. This allows high capacity lines to be plugged into office buildings, offering business customers specialised private network services for voice and data applications. Colt, which now has networks in 24 European cities, is several years ahead of rivals.

Meanwhile, it emerged yesterday that the Swiss government is set to allow Swisscom, which is 65.5 per cent state-owned, to sell a minority stake to Vodafone Group. The Swiss government cabinet may approve the deal as early as today.

A mooted 25 per cent stake in Swisscom's mobile arm is thought to be worth around 3.75bn euros (£2.25bn). It is unclear whether Vodafone would offer cash or shares or a combination of both should terms be agreed.