mm02 writes off value of 3G investments

By Alun Williams

Posted on 21 May 2003 at 18:03

What was Gordon Brown's gain has been mm02's loss according to its latest preliminary financial results for the year. The Exchequer, of course was the recipient of revenue from the 3G licence bidding process.

The UK telco has now bitten the bullet on the devaluation of its 3G investments and written them down to the tune of £9.7bn. This was enough to push the company £10.2bn into the red, but mm02 bosses insisted the underlying performance of the company was strong.

For the year to 31 March 2003, the company has reported a 14 per cent growth in total revenue to £4,874m with an 18 per cent growth in service revenue to £4,327 million, and an increase of 11 per cent in its customer base, up to 19.4 million.

'In these year-end results, the size of the exceptional charges we have taken has masked the strong underlying performance delivered in our first full year as an independent company,' said David Varney, Chairman of mmO2. 'However this impairment enables us to go forward with a balance sheet that reflects realistic assumptions about the potential of our business to grow, and to deliver attractive returns for shareholders.'

In the course of the year mmO2 offloaded its Dutch business - report - and Varney referred to this in his outlook. 'Looking ahead, following the disposal of our sub-scale business in the Netherlands, we will build on the momentum created since the demerger in our continuing operations. We will maintain our focus on delivering growth, and improving the operational and financial performance of all our businesses without, as we have stated previously, ruling out any other potential opportunities to deliver enhanced shareholder value.