British Telecommunications Plc’s shares dipped in pre-market trading yesterday before stablising, as it announced its third quarter results. But this was probably a hangover from earlier nervousness regarding the intentions of the UK Office of Telecommunication regulator than the 5.4% drop in pre-tax profits to ú660m. On Wednesday, Oftel’s director Don Cruickshank had proposed amendments to British Telecom’s licence over the separation of its accounts, and sought to make the company’s accounts more open (CI No 2,599). There are more interesting things than the results right now, analysts Keith Sykes at Credit Lyoinnais Laing told Reuters. Chairman Sir Ian Vallance expressed his concern at British Telecom facing an increasingly unpredictable regulatory climate in the UK in his statement. Turnover edged up 1.1% to ú3,466m. The increase in sales of mobile communications products and services offset the lower revenues from telephone calls. Inland call revenues fell by ú184m, largely due to the abolition of the peak rate in March 1994 and the uniform long-distance rates introduced in September. International call turnover was also down, by 2.4%, but again growth was offset by price reductions. British Telecom’s headcount has fallen by 11,200 in the nine months, and now stands at 144,800. Redundancies this year will be in the thousands, but probably not more than 10,000, said finance director Robert Brace. In his statement, Sir Iain said that charges from the voluntary redundancy scheme were likely to exceed the ú750m previously projected for 1994 as more than the expected 15,000 are likely to leave. Brace added that British Telecom hopes the 1995 scheme will be the last of its kind – we still expect to have headcount reductions from time to time, but we can’t keep going down at the rate of 15,000 to 20,000 a year. After adjusting for the redundancy costs for the quarter of ú217m, and the effects of disposed group undertakings, earnings per share actually rose 3.1% in the quarter and the nine months, Sir Iain pointed out. Separately, British Telecom and Northern Telecom Ltd announced an extension to their distribution deal for five years after the current contract expires in December. The Canadian company anticipates that this will result in sales of over ú400m over the period.
