News
A summary of all the essential financial news in the telecoms world this week
Three UK publishes half year results
In the company’s half-year results, Three saw revenue increase by 4% to £1.23bn due to an increase in the active customer base.
Net customer service revenue went up 8% to £816 million, up from £754 million last year.
Profit margins increased by 9%, which Three put down to the development of new business areas, such as the success of its SIM-only brand SMARTY and 5G Home Broadband.
Operating expenses increased by 19%, largely because of inflationary pressures. These increased costs have exceeded margin growth, says Three, so EBITDA decreased by19% to £163 million.
“We have successfully grown the business in the first half of the financial year and I’m proud that we have added to the customer base and delivered an increase in margin,” said Robert Finnegan, CEO of Three UK and Ireland.
“While the ongoing rollout of 5G is a success, we have been clear that we are now at an inflection point. As strong connectivity continues to be critical to how we live and work, we’re planning for the future. Our EBITDA continues to be below our capital expenditure, which is unsustainable going forward.”
Telecom Italia sees profit rise
In its second quarter, Telecom Italia (TIM) has reported a 5.5% rise in profits, and a 0.6% rise in domestic revenue for the first time in five years, which reached to €2.9 billion The rise was mainly attributed to the company’s strong performance in the Brazilian market, recording an increase in service revenue of 9.5% to €1.1 billion.
Ruthless pricing competition in the Italian market has seen the operator’s earnings erode over the last ten years, ultimately leaving TIM burdened with debt over €26.1 billion. In an effort to combat this, TIM is currently seeking to spin off and sell its landline grid, with current bids standing at around €20 billion.
“The delayering plan for the sale of NetCo is progressing as planned after the decision made by TIM’s Board of Directors last June 22 to start exclusive negotiations with KKR, necessary activities to receive a conclusive binding offer by September 30 are ongoing,” said the company in a statement.
BT’s price rises boost revenue
BT Group has reported adjusted revenue of £5.16 billion for its fiscal first quarter, up 4% from £4.97 billion a year earlier.
The Consumer division saw adjusted revenue rise 3% to £2.42 billion in Q1 and business revenue was up 3% to £2.03 billion. Openreach revenue rose 8% to £1.53 billion, and its adjusted EBITDA increased by 12% to £965 million.
“We’ve made a strong start to the year, in what remains a very competitive market, with improved customer satisfaction, pro forma revenue growth in all of our business units and pro forma group EBITDA up by 5%,” said CEO Phillip Jansen
Along with many other providers, BT increased its prices by 14.4% earlier this year.
Bharti Airtel releases quarterly results
Indian Telco Bharti Airtel has released its financial results for the April–June quarter, seeing a 14.1% year-on-year revenue increase to Rs374.4 billion ($4.5 billion)
After accounting for the loss of $156 million, primarily due to currency devaluation in Nigeria, the net income for the quarter was $195 million, up 0.3% on last year.
Airtel’s customer base reached 528.97 million at the end of the quarter, up from 495.19 million a year earlier.
“We have delivered yet another quarter of strong and competitive growth across all our businesses. Our consolidated revenue grew sequentially by 4.0 percent, and EBITDA margin expanded to 52.7%, underscoring the simplicity and execution of our strategy,” said Managing Director Gopal Vittal.
“Our focus on winning quality customers and driving premiumization has helped us add 5.6 million new 4G customers and the highest ever postpaid customers in any one quarter.”
Qualcomm earnings take a tumble
Citing reduced consumer spending due to slow economic growth, US chip producer Qualcomm has seen a steep decline in both revenue and profits. Sales amounted to $8.45 billion in the three months to June, a decrease of 23% on last year.
Projections for the current quarter are equally unfavourable. Sales are expected to be $8.1–9 billion, down from $11.4 billion last year.
After the release of the report, Qualcommm’s share price dropped by over 9.5%.
“While we are in the process of developing our plans, we currently expect these actions to consist largely of workforce reductions, and in connection with any such actions we would expect to incur significant additional restructuring charge,” the company noted.
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Also in the news:
Comcast talks building a self-healing network at Connected America
1&1 foregoes Telefónica for Vodafone in 5G roaming deal
Is the UK losing the 5G rollout race?