Alternative Networks, a B2B provider of IT and telecoms, has reported a difficult first half, sending its share price down 10 per cent today by the close in London.
The company blamed roaming tariff reductions implemented by carriers – notably EE – for its 18 per cent drop in mobile profits. Mobile revenue dropped by seven per cent to £18.9m.
The European Union made changes to roaming charges in an attempt to reduce the costs for people and businesses.
Chief executive Mark Quartermaine told City A.M.:
EE have recently become very aggressive on tariffs. We've done deals with O2 and Vodafone and made adjustments to our own tariffs to stay competitive.
Mobile now makes up 27 per cent of Alternative Networks overall revenue.
The company posted adjusted pre-tax profits of £5.35m, down a whopping 36 per cent on the same period last year.
Revenue also declined, though at a more mellow four per cent to £69.3m. Adjusted earnings before interest, tax, depreciation and amortisation fell by 27 per cent to £7.5m.
The company managed to somewhat reassure investors however with an interim dividend of 6.2p per share, up from 5.5p.
Revenue in its Advanced Solutions division was broadly flat, after a contract was bumped back to the second half.
Advanced Solutions, which supplied cloud software and storage, is expected to become a bigger revenue driver for the company in the future.
"The cloud market is evolving. Its a hybrid world and it’s not the solution for everything but we think we're able to offer something for everyone," said Quartermaine.