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Mobistar Sees Tougher Roaming Impact as Profit Misses Estimates

April 26 (Bloomberg) -- Mobistar SA, Belgium’s second-biggest mobile-phone company, reported profit that missed analyst estimates as payroll costs and network depreciation rose and forecast a larger impact from roaming regulation.

First-quarter net income fell 28 percent to 38.2 million euros ($50.5 million) from 53.1 million euros a year earlier, the Brussels-based company said today in a statement. Analysts projected profit of 46.6 million euros, the median of six estimates compiled by Bloomberg. Service revenue, which excludes handset sales, fell 3.1 percent to 358.4 million euros.

An additional cut in the rate Mobistar charges other operators to handle calls on its network and the introduction by Belgacom SA of free fixed-to-mobile calls after 5 p.m. reduced voice revenue, while costs rose due to salary indexation and hiring. Mobistar also said it suffered from customer defections in the prepaid segment and suspended commercial efforts to win clients for its TV offer. Regulation will erase 32 million euros from earnings this year, 10 million euros more than initially estimated.

“The most recent roaming regulation issued by the European Commission is somewhat more aggressive than Mobistar mentioned during its full-year results presentation,” Nico Melsens, an analyst at KBC Securities NV in Brussels, wrote in a preview note this week. “Regulatory factors, competitive pressure and investments once again squeeze the numbers.”

Mobistar shares fell as much as 2.26 euros, or 6.7 percent, to 31.75 euros. The stock traded at 32.21 euros, or 5.3 percent lower, at 9:11 a.m. local time.

Mobistar, which is controlled by France Telecom SA, maintained its guidance, forecasting a drop in full-year revenue of as much as 2 percent and net income of 170 million euros to 195 million euros.

To contact the reporter on this story: John Martens in Brussels at jmartens1@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net

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