Shares in British Telecommunications Plc remainined fairly static yesterday as the company turned in first quarter results slightly down on last time. And no significant movement is expected before August 2, the deadline set for the company to respond to pricing proposals by the UK Office of Telecommunications regulator. BT has yet to make up […]
Shares in British Telecommunications Plc remainined fairly static yesterday as the company turned in first quarter results slightly down on last time. And no significant movement is expected before August 2, the deadline set for the company to respond to pricing proposals by the UK Office of Telecommunications regulator. BT has yet to make up its mind if it is to accept Oftel’s proposals on post-1997 price caps for low-spending residential users and trading regulations. If it rejects the proposals the matter will be referred to the Monopolies & Mergers Commission for investigation. First quarter pre-tax profits slipped 0.6% to 869m British pounds on revenue that edged up 3,641m pounds, and the firm said its poor performance was attributable to higher lay-off charges, which rose 136% to 52m pounds. There was little change in actual staff numbers during the period. UK reductions were offset by those that joined the group through overseas acquisitions. In April it acquired Dutch computer services company Rijnhaave Groep NV (CI No 2,896) and in May sold part of its stake its Albacom Holdings joint venture with Banca Nazionale del Lavoro, to Siolvio Berlusconi’s Mediaset SpA (CI No 2,904). Mediaset paid 22m for its Albacom shareh olding. To strengthen its position in Italy and in order to cement the new relationship, BT and Banca Nazionale acquired a 2.4% stake in Mediaset for 71m pounds. The two acquisitions formed the major element of the total 162m pounds expended in th e quarter on the purchase of fixed asset investments and subsidiary undertakings, and the lion’s share of 55m pounds goodwill written off to reserves derived from the Rijnhaave acquisition. In the UK, cellular was the main contributor to the group’s profits. Revenue rose 24% to 235m pounds, which the company said reflected the 30% increase in the number of Cellnet Mobile Communications Ltd cellular connections over the year. Cellnet had 2.5m connections on its systems at June 30, a net rise of some 70,000 in the quarter. Inland call revenue inched up 2% and international calls fell by 4%. BT said competition adversely affected residential line numbers, which fell by 0.4%, or 32,000 lines in the quarter. The 19% increase in other sales and services revenue included contributions from the two recently acquired systems integration companies, French Europe Informatique and Rijnhaave, both now part of its Syntegra business. As its replacement program draws to an end, less is being spent on digital telephone exchanges, but BT said investment in Cellnet’s digital network and investment in computing capability continues at a high level. Its share of its associates’ profits, 38m pounds, was 7m pounds up on the previous period, aft er an increased contribution from MCI. During the quarter the firm cut gearing by 447m pounds to less than 4%.