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4G pioneer TeliaSonera climbs a mountain in 2010

3 Feb 2011

Stockholm-based mobile, broadband and fixed line group TeliaSonera has reported that net revenues in the fourth quarter of 2010 decreased by 2.8% year-on-year to SEK26.77 billion (USD4.17 billion), although in local currencies the total sales figure increased by 4.2%. EBITDA, excluding non-recurring items, was virtually flat year-on-year at SEK9.02 billion in the three months ended 31 December 2010, whilst the EBITDA margin increased to 33.7% from 32.8% a year earlier. The company said EBITDA increased by 5.2% y-o-y in local currencies and excluding acquisitions. Operating income, excluding non-recurring items, for the three-month period rose 5.5% y-o-y to SEK7.99 billion, and 4Q10 net income attributable to owners of the parent company grew 8.3% to SEK5.31 billion. During the October-December period the total number of mobile, fixed, internet and pay-TV subscriptions grew by 2.6 million in consolidated group operations while subscriptions at associated companies decreased by 2.2 million. The total number of subscriptions reached 156.5 million at end-December 2010.

For the full year TeliaSonera’s net revenues decreased by 2.4% to SEK106.58 billion, down from SEK109.16 billion in 2009, whilst in local currencies and excluding acquisitions net sales increased 3.5%. Net income attributable to owners of the parent company increased by 12.7% in 2010, reaching SEK21.26 million.

Lars Nyberg, TeliaSonera’s president and CEO, gave a summary of trends in 2010, in which he said the group strengthened its technology leadership with the launches of commercial 4G Long Term Evolution (LTE) services in Finland, Denmark and Estonia. 4G networks launched in December 2009 in Sweden and Norway were expanded throughout 2010, whilst in October, Ncell in Nepal launched mobile data services in the world’s highest location, when it introduced 3G services on Mount Everest. Nyberg said TeliaSonera sees major potential for mobile data in the Eurasian countries in the coming years, helped by it securing a 3G licence in Kazakhstan in December 2010. Meanwhile, in Uzbekistan it invested heavily to increase mobile voice and data capacity by expanding 3G infrastructure. The CEO also announced that Spanish mobile operator Yoigo reached the EBITDA breakeven target in the fourth quarter of 2010, four years after launch.

For TeliaSonera’s Mobility and Broadband Services divisions, a common operating model was put in place to better serve customers whilst taking advantage of cost and scale advantages. In the Eurasia division, all operations except UCell in Uzbekistan were rebranded as part of group integration. During the year the group upped its stake in UCell as well as Ncell in Nepal, in line with a strategy of increasing ownership in core holdings. It also divested non-core asset Telia Stofa in Denmark.

On the domestic front, in 2010 seven out of ten new mobile phones sold in Swedish ‘Telia’ stores were smartphones. Taking into account a continued strong demand for mobile broadband and the launch of tablet devices, TeliaSonera is expecting an eight-fold growth in data traffic on its network in the next three years. In Broadband Services, the demand for on-demand services, such as films, is gaining momentum and the company rented out more than two million films in 2010 through its video-on-demand service in Sweden.

As part of an efficiency drive, in 2011 the group aims to reduce its workforce by some 800 employees whereof 640 in Sweden and 165 in Finland. At the same time, it aims to hire 200 new employees in the year. The group expects ‘organic’ revenue growth in local currencies will be somewhat higher than in 2010, up to around 4% compared to 3.5%. It says this will mainly be driven by mobile data in the Nordic region, increased market share in Spain and higher mobile penetration in Eurasia.

Sweden, Telia Company, Telia Sweden

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