However, despite its protests, the UK government has failed to act, and Freeserve has therefore decided to relocate to Madeira in a bid to pay less VAT – 13% rather than the UK’s 17.5%. It said it expects to save more than 6m euros ($6.5m) in costs during 2003 as a result.
During 2002, Freeserve’s losses continued to mount. The Hemel Hempstead, UK-based ISP reported a net loss of 92m euros ($99.7m), up from a net loss of 74m euros ($80.2m) the previous year.
Despite Freeserve’s loss for the year, its parent group Wanadoo has reported a profit, a year ahead of its forecasts. It is Europe’s first ISP to hit the net profit milestone, largely achieved through tax breaks and strong results at its telephone directory.
For the year to December 31, Wanadoo reported net income of 30m euros ($32.4m), compared with a net loss of 193m euros ($208.8m), on revenue up 33% at 2.07bn euros ($2.24bn), compared with 1.56bn euros ($1.69bn) in 2001. Looking forward, the company said it expects to achieve revenue growth of 25% to 30% in 2003, a strong rise in net income, and a tripling of consolidated EBITDA.
The Paris, France-based ISP, which is Europe’s second largest after T-Mobile, is 74% owned by France Telecom. During the past year, it increased its internet access subscriber base by 41% to 8.5 million, from 6 million at the end of December 2001.
Source: Computerwire
