Tele2 grows sales 10%, EBITDA drops 3%; LTE gains 70,000 users

19 Jul 2012

Swedish telecoms groups Tele2 has posted consolidated revenues for the second quarter of 2012 of SEK11.064 billion (USD1.591 billion), up by 10% from SEK10.078 billion in the same quarter of last year, as a result of sustained growth in mobile services and an additional boost from the newly purchased and integrated operations and assets of Network Norway. However, EBITDA was negatively affected by significant increases in marketing spending, and dropped by 3% year-on-year to SEK2.715 billion in the three months ended 30 June 2012, while operating profit (EBIT) fell by 18% to SEK1.427 billion and net profit slumped by 23% to SEK849 million.

Mobile revenue in Sweden grew by 6% to SEK2.516 billion, as customer demand for smartphones and data services increased further during the quarter, although as a result of increased marketing spend, Swedish fixed/mobile EBITDA fell 22% year-on-year to SEK766 million. Tele2 Sweden’s 4G LTE mobile broadband network, launched in December 2010, yielded 70,000 subscribers by the end of June 2012.

In Q2 2012 Tele2 Russia added 693,000 mobile customers, compared to the 720,000 signed up in the corresponding period of 2011, leading to a total customer base of 21.6 million (up from 19.7 million a year earlier), and driving quarterly revenues up by 14.5% year-on-year to SEK3.277 billion. Russian EBITDA amounted to SEK1.199 billion in April-June 2012, up from SEK1.115 billion twelve months previously. Regarding Tele2’s prospects for launching 4G in Russia, it noted that the official report of the Radio Research and Development Institute (NIIR) submitted to the State Commission for Radio Frequency (GKRCh) in May expressed strong support for the application of technology neutrality on spectrum use; GKRCh has confirmed that it will make a ruling on technology neutrality by year-end 2012.

During the quarter under review, Tele2 Kazakhstan completed its national commercial rollout, resulting in a mobile customer intake of 759,000 in three months (compared to 355,000 in Q2 2011). The unit’s subscriber total amounted to 2.46 million at end-June 2012, up from 663,000 at mid-2011.

Tele2’s group mobile subscriber total rose to 33.461 million at the end of June, up by 4.589 million in a year, offsetting reductions in fixed line and fixed broadband bases, to take the total number of subscribers at the group to 36.27 million, up by 3.98 million in a year.

Kazakhstan, Sweden, Russia, Tele2, Tele2 Sweden, Tele2 (Russia), Tele2 Kazakhstan,

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