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TeliaSonera’s revenues drop 3.2%; 7% of workforce to be cut

18 Oct 2012

Consolidated net revenues at Swedish telecoms group TeliaSonera decreased by 3.2% year-on-year to SEK25.84 billion (USD3.92 billion) in the third quarter of 2012, while it also posted an 8.1% drop in EBITDA to SEK9.14 billion. Net profit attributable to shareholders of the parent company fell by 1.2% to SEK4.80 billion. During the three months ended 30 September the group’s total number of mobile, broadband, fixed line and pay-TV subscriptions grew by 4.0 million in the consolidated operations and by 1.4 million in the associated companies. The total number of subscriptions reached 180.0 million at the end of the period. TeliaSonera did not change its full-year outlook, but announced a new programme of cost-cutting prompted by weak service revenues in several of its mobile markets. During September in Sweden several new mobile packages were launched, with mobile VoIP calls now included in all but one package offered by TeliaSonera; this followed the scrapping of a proposed tariff model charging specifically for third-party VoIP service usage which the group piloted in Spain. The company added that in both Sweden and Norway, more than 40% of all its post-paid mobile subscriptions now also include a mobile data package.

Overshadowing the Q3 results announcement, TeliaSonera revealed a plan to cut 2,000 jobs, or 7% of its total workforce, over the next two years as part of a SEK2 billion (USD300 million) efficiency programme in response to its increasing costs and declining revenues. CEO Lars Nyberg offered the explanation: ‘Our cost base is today growing at a higher rate than our revenues and we have to reverse this trend,’ although he refused to speculate on the proportion of redundancies in Sweden and overseas. The Unionen Tele trade union – the telco’s largest union with 3,800 members – told the TT news agency that the job cut announcement was a complete surprise: ‘This has dropped like a bomb. No one was prepared for it,’ a spokesperson said.

Meanwhile, in an ongoing corruption probe into TeliaSonera’s 3G licence payments in Uzbekistan, the Stockholm District Court this week froze USD30 million in an account belonging to the group’s Uzbek partner company Takilant, while allegations of money laundering are investigated. Commenting on the matter, Nyberg stated that TeliaSonera’s own external legal review will present its findings ‘before the end of the year.’

Sweden, Telia Company, Telia Sweden

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