The Channel logo

News

By | Paul Kunert 25th February 2016 15:04

Alternative Networks issues profit warning on soggy mobile bottom

Caps on roaming charges - great for consumers, bad for suppliers

London-listed tech and comms provider Alternative Networks has issued a profit warning on the back of sliding roaming charges.

The company said it was “too early” to quantify the impact on results for fiscal ’16 but the board reckons current estimates for aggregate revenues in the half-year ending March are “broadly” in line with the prior year.

Acquired businesses, Intercept IT and Control Circle, were bedding down in the group and progress made, but Alternative revealed:

“This has recently been offset by significant ongoing pressures in our mobile business particularly on roaming revenue and profitability arising from a combination of increased network competition and regulatory headwinds carriers currently face.”

As of June last year, the EU agreed to impose a minimal cap on mobile phone roaming charges for calls, texts and data set at €0.05 per minute for voice, €0.02 for text messages and €0.05 per MB of data.

“Mobile revenue and profitability reductions are being driven by significantly reduced roaming revenues as a result of the new global tariffs launched by the carriers,” Alternative added.

This was felt across the UK business where Alternative was “particularly impacted due to its comparatively larger roaming base”, but also in the EU where it generated a “large proportion” of mobile profits.

The company said it has matched competitive tariffs to hold onto punters and it will invest in the mobile unit to lure new customers on board and give existing ones a reason to stick with it

The upshot of this is that gross profit in percentage terms is expected to be “low double digits below the level” achieved in the previous year.

At the half-way point of fiscal ’15, Alternative reported revenues of £74m, up 17 per cent year-on-year, and gross profit of £30.9m.

comment icon Read 2 comments on this article or post a comment alert Send corrections

Opinion

Baby looks taken aback/shocked/affronted. Photo by Shutterstock

Kat Hall

Plans for 2 million FTTP connections in next four years 'not enough'
Microsoft CEO Satya Nadella
Stranded_ships

Chris Mellor

Thousands of layoffs announced as spinning rust enters its death spiral

Features

STRASBOURG, JUNE 29, 2016: The seat of the European Parliament. by Marco Aprile for shutterstock. EDITORIAL USE ONLY
Plan b, image via Shutterstock
EU workers, new markets: post-Brexit pressure on May & Co
Tough question, pic via Shutterstock
Honest mistake with your licensing? Audit police look at it on a 'case by case basis'