Project Telecom dives on warning

Shares in Project Telecom plunged 40 per cent yesterday after warning this year's profits would be at a similar level to last year's after business customers reigned in spending and mobile phone operators cut costs.

Project Telecom provides mobile and fixed-line telecoms services to the business market although more than 90 per cent of its profits come from reselling mobile services, mainly Vodafone's.

Blaming "increasingly difficult trading conditions", the company warned it had seen slower-than-expected growth during the first three months of the year.

It now reckons profits for 2003 from continuing operations will be "broadly in line" with last year's £10.2m. Analysts slashed their forecasts by about 34 per cent to that level. The shares slumped 27.5p to 42p.

Tough competition in the business market from mobile phone operators such as T-Mobile and Orange has meant Project Telecom's customer base has grown more slowly than expected while customers are also spending less, meaning that average revenue per use has fallen.

In addition, the company has been hurt by cuts in the connection commissions it gets from the operators. The mobile phone companies have cut the bonuses they pay resellers in an effort to recoup some of the income they will lose from recent telecoms regulation. Worse still, Project Telecom said it thought the mobile phone operators might look to implement further reductions in commissions later in the year.

One analyst who did not want to be named said: "The operators are basically cutting costs and Project is coming off much worse than everyone had thought. Meanwhile corporate spending is also much weaker."

Project Telecom also said yesterday that the fixed-line telecoms market remained tough thanks to a "significant supply and demand imbalance". It added: "Since the beginning of the year, the economic environment has become increasingly challenging for businesses in general and the telecommunications industry in particular."

Separately, Colt Telecom also warned yesterday that there were no signs of improvement in the market for telecoms provision to corporate customers.

Nevertheless, Colt produced first-quarter results that beat most forecasts. Sales were in line with expectations at £271.7m but an underlying, or Ebitda, profit of £34m exceeded forecasts.

Start your day with The Independent, sign up for daily news emails
Sport
wimbledonScot will face Ivo Karlovic next
Sport
football
News
Hillary Clinton comments on viral Humans of New York photo of gay teenager
Arts and Entertainment
The gang rape scene in the Royal Opera’s production of Gioachino Rossini’s Guillaume Tell has caused huge controversy
music
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test