LONDON (AP) _ British Telecommunications PLC’s earnings dropped 23 percent in the third quarter and the company announced plans to eliminate 3,000 jobs, or 10 percent of its managerial work force. Its stock price tumbled.
Britain’s biggest phone company blamed reduced charges for telephone calls, lower margins in wholesale business with other operators, the cost of developing new services and new investments in Japan, Canada and the United States for the profit drop reported Wednesday.
British Telecom shares closed down 18 percent in London trading.
It earned 453 million pounds, or $729 million, in the three months ended Dec. 31, down from 592 million pounds a year earlier.
Revenue rose to 5.6 billion pounds, or $9 billion, from 4.7 billion pounds in the same period of 1998.
For the first nine months, BT’s earnings fell to 1.6 billion pounds, or $2.6 billion, from 2.4 billion pounds a year earlier.
Nine-month revenue rose to 15.9 billion pounds, or $25.6 billion, from 13.3 billion pounds a year earlier.
Excluding a gain of 1.1 billion pounds, or $1.77 billion, on the sale of BT’s interest in MCI Communications Corp. in the previous year, pretax profits edged down to 2.36 billion pounds, or $3.8 billion, for the first nine months from 2.40 billion pounds a year earlier.
The company said its plan to reduce the number of its managers would be accomplished within 9 months at a cost of 350 billion pounds.
``Growth prospects in the U.K. and internationally remain good but we face increasing competition as the globalization of our industry continues,″ said BT’s chairman, Sir Iain Vallance.
``In this quarter, competitive pressures have adversely affected operating margins in the U.K. fixed voice telephony market. The results also reflect the costs of meeting increased customer demand and of growing new areas of business.″