Dolphin expects the rate of ESMR subscriber additions to increase with the commercial launch of the new handsets and offerings and accordingly maintains its net subscriber additions target of 100,000 for the year.
and France and I am confident our performance in the second half of the year will demonstrate increased market penetration of our ESMR services in these primary countries, particularly in the U.
Dolphin has set a target for ESMR subscriber growth in the United Kingdom in 2001 of 100,000 subscriber additions to reach 150,000 by year-end.
In France, Dolphin introduced pilot commercial ESMR services in the regions of Nord/Pas-de-Calais and Rhone-Alpes in the fourth quarter of 2000, and in the regions of Provence/Cote d'Azur and Paris in the first quarter of 2001.
During the first quarter of 2001, Dolphin announced actions to reduce costs and concentrate its efforts and financial resources on its United Kingdom operations and the four regions of France in which it offers ESMR services.
As a result of the changes in its business plan, Dolphin has provided for impairment in the value of certain long-lived assets in countries where ESMR services will be curtailed or delayed.
In Germany, Dolphin intends to switch on its ESMR network at the end of June 2001, as scheduled in the four main economic regions of Berlin, Frankfurt, Hamburg and Rhein-Ruhr.
Service revenues have been negatively affected by the anticipated decline in the SMR customer base, which was not totally offset by the increase of ESMR subscribers.
The increase in revenues reflects the increase in gross additions as a result of ESMR promotional activities in the United Kingdom.
The negative margin on services for the first quarters of 2001 and 2000, is mainly attributable to the launch of ESMR services in the United Kingdom and France, and a declining SMR subscriber base.
Increased selling and marketing activities in the United Kingdom for ESMR services and regional selling and marketing activities in France for the launch of commercial ESMR services are the main contributors for the increase.
The launch of commercial ESMR services in the United Kingdom and in France as well as continued ESMR network build-out efforts contributed to the increased operating losses.