It was not a propitious start to the year for the rebranded and ‘re-missioned’ telco-cum-infrastructure ‘Deliverer’, Colt (see Colt to stand and deliver!). Headline revenues at half-time (to 30th June) declined even faster than at the FY, down nearly 4% yoy to €766m. Operating margins lost nearly a point yoy, to 3.4%.
Most of the ‘problem’ was, of course, in Colt’s voice services, where revenues fell by 11% to €279m. But more worryingly, growth slowed considerably in Colt’s increasingly strategic Managed Services activities, where revenues only grew by 4% (to €87m) compared to nearly 11% growth last FY. CEO Rakesh Bhasin alluded to “challenging market conditions” and “delay(s) in buying decisions”.
About 40% of Colt’s total revenues, and almost two-thirds of its managed services revenues, derive from its new Enterprise Services division (CES), headed up by ex-Computacenter UK MD, Simon Walsh (see Colt’s cloud challenge). CES revenues declined by 1% to €302m, as ‘legacy’ data products revenues continued their downhill march. However, managed services revenues only grew by 3%, i.e. even slower than in the rest of Colt’s business.
The market to which Colt is now directing much of its efforts – infrastructure managed services – has plenty of opportunity, but also plenty of competition. Bhasin, Walsh and the rest of the top team will have to get the new organisation settled in very quickly if the more established competitors in the market – and of course the new ‘cloud’ upstarts – don’t strangle it at birth!