Slimline Tele2 turns a profit in third quarter

22 Oct 2008

Swedish telecoms group Tele2, which has recently been shedding European subsidiaries at a rapid rate, has posted a net profit of SEK160 million (USD21 million) in the third quarter, compared to a net loss of SEK188 million in the corresponding period of 2007. The turnaround arrived on a 4% year-on-year pro forma rise in revenues to SEK9.89 billion in the three months ended 30 September 2008, driven by a net increase of 495,000 customers, as 682,000 new mobile users and 8,000 fixed broadband additions offset the loss of 195,000 fixed line subscribers. The group ended September with a total customer base of 23.967 million. 3Q 2008 EBITDA was SEK2.25 billion, up from SEK1.75 billion a year earlier, which the company attributed to a larger contribution from mobile services on its own networks (having sold off the majority of MVNO operations), and positive EBITDA from fixed broadband operations. Profitability was achieved despite a significant increase in CAPEX from SEK635 million in 3Q 2007 to SEK1.66 billion in June-September 2008, as it expanded its mobile presence into additional regions of Russia. Tele2’s new CEO Harri Koponen said the company will focus on mobile, mobile internet and corporate services; earlier this month its domestic unit unveiled a new entry-level pay-as-you-go mobile broadband package with a monthly charge ceiling, to encourage increased take-up of its 3.5G services.

Sweden, Tele2