Ethernet services

COLT's Downer Day

Thursday was a down day for pan-European wholesale and business service provider Colt Technology Services Group Ltd .

It reported that annual revenues were down by more than 1 percent. Its market valuation fell by nearly 9 percent. And its Website was down too. (See COLT Reports 2006.)

The carrier, which faces tough competition across Europe from heavyweights such as BT Group plc (NYSE: BT; London: BTA) and Orange Business Services (formerly Equant), and additional competition in its core U.K. market from the likes of Cable and Wireless plc (NYSE: CWP) and Global Crossing (Nasdaq: GLBC), reported revenues of €1.8 billion ($2.36 billion) for 2006, down 1.1 percent compared with a year earlier.

Although the operator cut its annual pre-tax loss dramatically, to €18.8 million ($24.6 million) from €489.8 million ($641 million) a year earlier, and reported a profit in its fourth quarter, investors took flight, sending the share price down 15 pence, nearly 9 percent, to 162.5 pence on the London Stock Exchange , giving the carrier a market capitalization just shy of £1.1 billion ($2.1 billion).

New CEO Rakesh Bhasin said in a prepared statement that he is reviewing "all aspects of the business," and looking to "determine the best way forward for the Group in its next stage of development." (See COLT Names New CEO.)

He also noted that, as a result of the ongoing review and an ongoing decline in corporate voice revenues, predicting 2007 performance "is harder than normal."

But Bhasin noted on a conference call that he has no plans to get involved in Europe's telecom consolidation process, and that the new review wouldn't likely result in any major transformation of the carrier.

COLT is focusing hard on increasing its data and managed services sales to offset the decline in voice revenues, and has been overhauling its network and back office systems to offer Ethernet services to Europe's enterprises. (See Euro Giants Issue NGN RFPs and COLT Picks Comverse's OSS.)

The carrier's CTO Alireza Mahmoodshahi is a vocal supporter of Ethernet services, and has instigated the deployment of Ethernet-over-copper technology at COLT to attract mid-sized corporate users that need flexible high-speed access connections for their operations. (See Colt CTO: Let's Get Simple, COLT CTO Joins MEF Board, COLT Boosts Ethernet Speeds, and COLT Deploys Actelis.)

— Ray Le Maistre, International News Editor, Light Reading

materialgirl 12/5/2012 | 3:14:03 PM
re: COLT's Downer Day COLT plans to replace their voice revenue stream with Ethernet. Do they have the presence to scale? Are Ethernet bandwidth prices holding up enough for revenues to grow on expected unit demand growth? How are margins? Go Ethernet service margins gain leverage with bandwidth growth?
Gnut 12/5/2012 | 3:14:03 PM
re: COLT's Downer Day Have there already been some UK lay-offs?

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