German fixed network operator Versatel reported revenues of EUR 725 million in 2010, 1 percent less than in 2009 and above Versatel's forecast of EUR 710 million. The adjusted EBITDA decreased by 8 percent to EUR 171 million in 2010, and the free cash flow dropped from EUR 46 million in 2009 to EUR 40.5 million in 2010. The decline in revenue is mainly due to difficult conditions in the residential DSL market where the operator is focusing on retaining customers due to fierce competition. This development prompted an adjustment to assumptions on future performance in the residential business. This led to recognition of a EUR 69 million impairment charge. This charge and a EUR 23 million increase in one-off expenses with regards to Versatel's restructuring program lead to a net loss of EUR 122 million for 2010, compared with EUR 42 million in 2009. The net debt amounted to EUR 350 million, EUR 82 million less than at the end of 2009, due to the sale of the group's cable companies and the positive free cash flow. The business revenues grew by 1.8 percent year-on-year to EUR 208.5 million, driven by marketing of IP VPN services, and the residential revenues dropped by 13.3 percent to EUR 2791.1 million due to a 9.9 percent decrease in DSL customers to 615,000 on 31 December 2010. The wholesale revenues grew by 14.1 percent to EUR 237.2 million, with wholesale voice revenue up by EUR 33 million to EUR 159 million.
