Alternative network provider TeleMasters' shares slumped 7.69% yesterday, after the company reported a R1 million loss in the three months to December.
The company, which is in the process of being delisted, is converting its traditional cellular least-cost routing (LCR) business to an independently-licensed network provider.
Yesterday, it reported a slump in revenue from R86.2 million in the three months to December 2010, to R55.93 million. It reversed its previous profitable position and reported a net loss of R1 million, compared with profit of R3.38 million a year ago.
The news sent its shares down 7.69%, to close at 120c yesterday, losing 10c on the previous day's close.
No more LCR
TeleMasters says in a statement to shareholders that the quarter reflects its expectations that 2012 will be a “transitional” year as its LCR turnover dropped 35% as it lost two large clients when tenders came to an end. “Expectations are that no more LCR tenders will be issued in future.”
service up”.
TeleMasters is rolling out its licensed telecoms services and has signed up 260 clients. “The challenge is to exceed the loss of revenue with the conversion of 600 long-standing current clients and the acquisition of new clients to the company's Digital Direct service,” it says.
TeleMasters is behind its schedule, but hopes the next quarter will show an improvement, says Pretorius. The company has earmarked R1.6 million in capital acquisition to upgrade the interconnect facilities to be independent of third-party vendors and improve quality of service.
Pretorius says the company is also experiencing long sales cycles. “There is a bit of blood on the floor this quarter.”
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