TeliaSonera’s revenues fall 6%, lowers expectations

19 Apr 2011

Net income at Sweden’s TeliaSonera group was flat year-on-year at SEK5.24 billion (USD839 million) in the first three months of 2011, as net sales fell by 6% to SEK24.73 billion. The mobile, broadband and fixed line group achieved a 1.6% increase in EBITDA, though, reaching SEK8.84 billion in January-March, and also raised CAPEX spending in the first quarter to SEK3.71 billion, up from SEK2.05 billion in the same period a year earlier. In Q1 2011 CAPEX included SEK937 million in licence and spectrum fees, of which SEK854 million was for 800MHz frequencies in Sweden. Capital expenditure for the rest of the year will be driven by investments in broadband and mobile capacity as well as in network expansion in its Eurasia division, the group said. During the quarter the number of subscriptions grew by 2.1 million in consolidated operations while subscriptions in associated companies decreased by 1.2 million. The total number of subscriptions was 158.0 million at end-March 2011. Group outlook for 2011 has been revised, with TeliaSonera lowering its expectations on growth in net sales: it is now expected to be around 3% in local currencies and excluding acquisitions.

TeliaSonera’s mobile operations in Sweden, Finland, Norway, Denmark, Lithuania, Latvia, Estonia and Spain reported net sales of SEK12.02 billion in the quarter ended 31 March 2011, down by 3% year-on-year, whilst divisional EBITDA rose 3% to SEK3.68 billion (excluding non-recurring items). The number of subscriptions in the division rose by 1.5 million from the end of the first quarter 2010 to 18.7 million (up by 300,000 quarter-on-quarter). Growth was strongest in Spain with an increase of 800,000 year-on-year to 2.5 million subscriptions. Finland and Sweden followed with increases of 300,000 in twelve months in both countries.

Broadband and fixed line operations in Sweden, Finland, Norway, Denmark, Lithuania, Latvia (49% owned) and Estonia plus international carrier operations recorded an 11% drop in net sales to SEK9.03 billion in 1Q11, down from SEK10.12 billion in the year-ago quarter. EBITDA excluding non-recurring items fell by 12% y-o-y to SEK3.09 billion. Broadband internet subscribers increased by 3% y-o-y to 2.42 million, whilst combined fixed voice and VoIP customers decreased by 6% to 5.02 million. The number of VoIP subscriptions reached more than 400,000 at end-1Q11 and the addition of 50,000 VoIP subscriptions in the first quarter compensated for approximately 50% of the total decline of PSTN subscriptions in the same period. Meanwhile, pay-TV subscribers in the Nordic and Baltic regions grew by 21% y-o-y to 994,000 at end-March 2011.

The Stockholm-based group’s Eurasia business area comprising mobile operations in Kazakhstan, Azerbaijan, Uzbekistan, Tajikistan, Georgia, Moldova and Nepal – also including interests in Russia’s MegaFon (44%) and Turkcell (38%) – posted net sales in 1Q11 of SEK3.86 billion, up 9% y-o-y, and a 13% jump in EBITDA excluding non-recurring items to SEK1.97 billion. Customers at consolidated Eurasia subsidiaries increased by 32% y-o-y to 30.29 million at end-1Q 2011, whilst total subscribers at associated companies was reported at just under 100 million, flat on the previous year. TeliaSonera added a statement that in Turkey, it has decided to take ‘a more explicit standpoint to protect our rights as a shareholder and to safeguard good corporate governance in Turkcell.’ Therefore, it has decided to take legal action against the Chairman of the Board of the cellco, as ‘he has denied us our legal rights as a minority shareholder.’ The Swedish firm says it is confident of reaching a solution with regards to ‘the complicated ownership situation in Turkcell’ during this year.

Sweden, Telia Company