Smart Telecom losses €4.4m

SHARES in Smart Telecom fell 3% yesterday after it said pre-tax losses for the first half of the year had doubled to €4.4 million.

Turnover soared over 60% to €9m as the company added more than 5,000 new residential customers every month, but administrative expenses that rose from €3.5m to €6.7m hurt the bottom line.

The company, which is headed by former stockbroker Oisín Fanning, said the results were solid and in line with expectations. It pointed to a listing on London’s Alternative Investment Market, which took place last month and raised €15m, and strong gross margins as reasons to be confident for the future.

Smart’s residential customer base has increased from 3,000 at the start of the year to 50,000, despite what it called “extremely aggressive” activity by rival Eircom to win back customers that Smart had persuaded to sign up. The company said it had been “very successful” in selling wholesale line rental.

This facility eliminates the need to receive separate bills from Smart and Eircom, for calls and line rental respectively, and makes it easier for customers to switch their telecom services provider. Smart also said this was important in removing a billing relationship between Eircom and Smart’s own customers.

The payphone division, which operates 3,000 standalone payphones benefited from a new payphone access charge that places a levy on operators of freephone 1800 services and generates a fresh source of revenue.