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Foreign exchange woes deepen Call-Net loss

Call-Net Enterprises Inc., owner of the Sprint Canada phone business, lost $29.9-million in the first quarter as revenue remained flat compared with last year and a foreign exchange loss outweighed operational improvements.

A year earlier, Call-Net had a profit of $7.6 million or 32 cents a share, largely reflecting a $36.2-million foreign exchange gain.

The loss in the 2004 first quarter amounted to 84 cents a share as Call-Net reported an $8.1-million foreign exchange loss.

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Call-Net's first-quarter operating loss fell to $10.3-million from $15.7-million in the same period of 2003.

The Toronto-based company generated $202.5-million in revenue in the three months ended March 31, compared with $202.2-million in the first quarter of 2003.

Consumer services revenue improved by 10 per cent compared with the same quarter in 2003, as increases in local and wireless service revenue more than offset decreases in dial-up Internet and long distance.

Business revenue grew by 5 per cent compared with the first quarter of last year, with improvement in every product category including local, long distance, and data, including Internet protocol technology (IP).

However, the gains in consumer and business revenues were offset by a decline in wholesale revenue from selling network capacity to other carriers. Wholesale carrier revenue for the first quarter was $47.9-million, a $10-million decline from the first quarter of the previous year.

"During the first quarter, we added 34,000 net local equivalent lines, more than 25,000 were for consumers. Our total local service line count now stands at over 300,000," said Bill Linton, Call-Net's president and chief executive officer.

"Our wireless customer base grew by close to 6,000, with 15 per cent of new home phone service customers now opting to add a second wireless line."

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