Core sales at telecoms equipment maker Marconi have fallen again as the company battled against what it described as "extremely challenging" trading conditions.

Marconi reported sales for the July to September period of �482m, down 6% on the previous quarter and down 40% on the same period last year.

It also said that its debt restructuring was on track to be completed by the end of January.

The operating loss sustained at core units fell by 20%, excluding one-off items, thanks to cost cutting measures.

The firm shed 2,000 jobs over the quarter under long term plans to reduce the size of its workforce.

By the end of September, Marconi employed 19,000 in total, and plans to reduce this figure to 15,000 next year.

Net debt at the firm had been cut to �2.85bn by the end of the quarter, compared with �3.02bn at the end of June.

Sales outlook

Marconi said that sales had remained "relatively resilient" over the quarter, but the over picture was mixed.

"In some markets we are seeing stabilisation and in other markets further deterioration," said chief executive Mike Parton.

The UK was one market showing signs of stabilising.

BT accounted for nearly 19% of Marconi's sales between July and September, and BT's new push to promote broadband in the UK should help trigger equipment sales in the long-run, Marconi said.

It added that the Italian market had remained "relatively stable" because Italian telecoms firms were not weighed down with debt from the 3G auctions.

But elsewhere in Europe, telecoms firms are desperately trying to cut debt, and are not spending on new equipment.

Marconi said that sales also remain under pressure in the US.

Debt deal

In August, Marconi agreed a refinancing deal to save the company from collapse.

Its debts had spiralled to �4bn after it overspent in the tech boom.

The deal cut its debt levels drastically, but effectively passed control of the firm to its creditors - the banks and bondholders - through a debt-for-equity swap.

Ordinary shareholders will be left with just 0.5% of Marconi when the deal is completed.

Earlier this month, Marconi shareholders expressed their anger over the deal at the company's annual general meeting.

Marconi shares closed 0.05p lower at 1.92p in London on Tuesday.