Communications group, Cable and Wireless, has today announced that revenues for its first quarter trading declined 9% year-on-year to £798 million.
Chief Executive, Francesco Caio said this morning that the expected fall in revenue was principally due to tough UK conditions, coupled with the continued negative impact of exchange rate movements which hit its National Telcos operations. He added: “This was in line with our expectations for the first quarter given the difficult trading conditions we had anticipated going into this year and we expect to persist looking forward.”
Revenue in the UK for the three months to 30 June 2004 declined by 4% on the previous quarter to £406 million. This was due to increased competition in the enterprise market and increased pricing pressure. Carrier services once again accounted for a significant proportion of UK revenue. Caio said: “In the UK, where switched voice is still the largest component of our revenues, we continue to see pressure on pricing.”
Conditions in Europe remained tough for the group who saw revenues falling by 36% on the previous year. Japan and Asia also failed to impress with a mediocre increase of 10% on the previous quarter. This is still down 20% when compared to the same period last year.
Once again, Cable and Wireless felt the squeeze on increased pricing pressure, which took its toll on both domestic and global contracts.
The statement said that cost reduction initiatives which were introduced in 2003 are helping to compensate for the increased pricing competition faced. Further cost saving initiatives are set to be rolled out in the second half of the year which will further help to spur on overall cash performance at Cable and Wireless.
Caio said that its immediate priorities in the UK are to manage efficiently existing services whilst laying the foundations to participate in growth areas such as product development.
The group hopes to be able to capture further growth in the voice-over-internet-protocol (VOIP) and broadband markets over the next few years by launching a VOIP capability in July through Bulldog Communications, which was acquired in May.
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