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Telenor reports strong second quarter

26 Jul 2004

Norwegian operator Telenor has reported a 16.1% rise in second quarter revenues thanks to sustained growth at a number of its overseas mobile subsidiaries. The telco said turnover reached NOK15.26 billion (USD2.21 billion) in the three months to the end of June 2004, up from NOK13.1 billion in the same period of 2003. Operating profit increased by 59% to NOK2.74 billion, whilst pre-tax profits rose by NOK172 million to NOK 2.66 billion, although the second quarter of 2003 included a gain of NOK1.5 billion on the disposal of 9% of the shares in Greek operator Cosmoté. Turnover from the group’s mobile operations climbed 41.7% to NOK8.2 billion, of which NOK2.635 billion was generated by its domestic service provider Telenor Mobil, up from NOK2.48 billion. In the second quarter of 2004 Telenor Mobil added 73,000 new customers to take its total to 2.45 million, which it claims gave it a 56% share of the Norwegian mobile market.

Telenor expects the contribution from its international operations to continue growing throughout 2004, helping to offset falling returns at its Danish mobile arm, Sonofon, which was fully consolidated into Telenor’s portfolio in February 2004. Sonofon reported revenues of NOK1.24 billion for the three months to the end of June 2004, down from NOK1.91 billion in the corresponding period of 2003. In contrast, Telenor’s operations in Ukraine and Bangladesh both enjoyed strong growth; Kyivstar recorded revenues of NOK996 million, up from NOK580 million, whilst GrameenPhone in Bangladesh saw turnover rising by 52% to NOK535 million. Telenor’s wholly and partly-owned companies had 38.9 million subscribers between them at the end of June, a rise of 4.7 million over three months.

Like many other former incumbent operators, Telenor has seen its domestic fixed line activities decline in recent years. In the second quarter of 2004 revenues from the sector fell by 5.5% to NOK4.87 billion. In contrast, demand for broadband internet subscriptions has continued to rise. Telenor said it had 429,000 ADSL customers at the end of June 2004, a figure it expects to rise to 600,000 by year-end. Telenor’s capital expenditure in the second quarter of 2004 reached NOK 4.01 billion, compared to NOK 1.31 billion in the 2Q 2003, and included an outlay of NOK1.8 billion for a new mobile licence in Pakistan.

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