Tele2’s Q2 mobile revenues up 29%

2 Aug 2006

Swedish telecoms group Tele2 yesterday announced its consolidated results for the second quarter of 2006, posting a 12% year-on-year increase in revenues to SEK13.5 billion (USD1.87 billion) with mobile revenues rising 29% to SEK4.6 billion. Q2 EBITDA stood at SEK1.397 billion (down from SEK1.689 billion in Q2 ‘05), including integration costs at Versatel in the Netherlands of SEK57 million and a capital gain of SEK52 million from the sale of its Czech operations. Lars-Johan Jarnheimer, President and CEO of Tele2, commented: ‘In Q2 2006, Tele2’s period of transition continued. We maintained our focus on growth and the opportunities in mobile and broadband, where our operations are progressing well… Our mobile businesses had an excellent quarter, particularly in Sweden and Russia. Swedish mobile had an EBITDA margin of 44%, the third quarter in a row at that level. Russia also contributed a very strong overall mobile performance this quarter with customer numbers up 136% to 4.6 million, revenues up 156% to SEK568 million, and an EBITDA margin of 13%, compared to -18% a year ago. We further consolidated our strong position in Russia in early July with the acquisition of four more mobile operations in northwest Russia. Our MVNO in France had a strong quarter, reporting a total of 300,000 customers at the end June, and the mobile launch in Croatia continues to go well… We have made two significant broadband announcements. In June, we announced our intention to acquire E.ON Bredband in southern Sweden, giving us a firm foothold from which to accelerate our broadband push… In early July, we announced the creation of a broadband company, Plusnet, in Germany, [in partnership] with QSC… We anticipate launching a LLU broadband offer in Germany towards the end of this year… We also had a soft launch of a triple-play offer in France during the quarter… Our fixed line businesses continued to experience a high level of churn. We lost 701,000 of our 16 million fixed line customers during the quarter, with a significant proportion of those coming from France where we are experiencing intense competition from the incumbent, as well as a highly competitive broadband market. However, it must be recognised that the traditional European fixed telephony market is now in structural decline.’

Sweden, Tele2,

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