Smallcap UK telecoms face tough days ahead, broker Finncap says in a note to clients, as customers rein in spending or opt for short term contracts, and competition grows fierce.
Finncap does not like telecoms which have hit growth hurdles, struggled with management upheavals, or been too slow in showing shareholders returns on their investments.
The broker recommends a "sell" for both Redstone and Colt, with the first facing a "barren patch" in revenue and the second hit by the cost of maintaining its network.
Colt shares are down 0.3 percent.
Companies which are able to combine dependable cash flow with a focus on shareholder returns -- Alternative Networks, Maintel, and Spiritel are the standouts -- garner "buy" ratings from the broker.