Sonofon signs up more users, but competition drives revenues down

Danish mobile operator Sonofon reported just over 1.21 million subscribers at the end of June 2004, up from 1.05 million a year before, but said that tough competition and sharp price cuts have impacted hard on revenues and the company’s bottom line. In the three months to 30 June, Sonofon posted net revenue of DKK1.108 billion (USD180 million), up just 2% on last year, but EBITDA amounted to USD34 million and, more worryingly, earnings for the year-to-date were down 19% (USD75.6 million) on the first half of 2003, as the company cut costs to attract new customers. Commenting on the results Tage Reinert, CEO of Sonofon, said that ‘the mobile market in Denmark is in a period of change and the price war is putting pressure on earnings in the sector. It is a phase that a market with too many operators has necessarily to go through, and so is no surprise to Sonofon’.