The Investment Column: World Telecom heads overseas
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.A company called World Telecom may sound like some huge American operator, with millions of subscribers and billions of profits. In fact, it's an AIM-quoted tiddler which only joined the market in March and is valued at just pounds 57m. The group is just four years old, turned over a meagre pounds 4m last year, and has yet to make a profit.
However, the name says something about the scale of World Telecom's ambitions. It sells prepaid phonecards and telephone chargecards which offer hefty discounts to the rates charged by established operators like BT. Customers include Arthur Andersen and - amazingly - BT, which issues the cards to executives to cut telephone bills when they're travelling. World Telecom also produces cards for the likes of NatWest who stick their own names on the cards.
This may seem like a low-margin business. But, crucially, World Telecom also has the technology to handle the calls made with its cards. This allows it to route calls to the cheapest lines available - making a healthy mark-up - and offer extras like voicemail and comprehensive billing. Overseas markets beckon. Yesterday, World Telecom announced plans to invest pounds 1.1m on a similar service in Spain. Germany, Italy and France will follow shortly.
All this should mean explosive growth: house broker Collins Stewart forecasts sales of pounds 30m in 1998, with pre-tax profits of pounds 1m after a pounds 2.5m loss in 1997. The risk, though, is that World Telecom is squeezed as larger players muscle into its market. The group says it is nimbler than the opposition and able to stay ahead. But investors will have to see some hard numbers before pushing the shares - unchanged yesterday at 162.5p - any higher.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments