Swedish telecoms heavyweight TeliaSonera has reported that its consolidated net sales increased by 8.8% year-on-year to SEK26.041 billion (USD3.006 billion) in the first three months of 2015, while net sales in local currencies, excluding acquisitions and disposals, increased by 1.5%. Service revenues in local currencies, excluding acquisitions and disposals, decreased 1.1% in the same period. EBITDA, excluding non-recurring items, increased by 2.3% year-on-year to SEK8.540 billion although the EBITDA margin decreased to 32.8% from 34.9% one year earlier. Operating income decreased 12.6% to SEK5.496 billion in Q1, and quarterly net income attributable to owners of the parent company decreased 5.9% to SEK3.714 billion.
In Sweden, TeliaSonera’s mobile service revenue growth remained ‘healthy’ at 2% in the three months ended 31 March 2015, fuelled by solid demand for data in the consumer segment. Competitor activity intensified at the beginning of the year when more generous data bundles were introduced in the Swedish market, while the operator continued to expand 4G mobile and fibre networks. Demand for fibre services remained strong, and TeliaSonera remains on track to reach a 2015 target to increase the number of new fibre connections to single homes (i.e. not multiple-residence blocks) by 25%. Profitability slowed in Sweden in the quarter, mainly due to market investments and changed product mix, although the firm expects performance to improve during the course of the year.
In the M&A market, in February 2015 TeliaSonera finalised the acquisition of Tele2 Norway. Meanwhile, in March 2015, after nearly five years of deadlock between the main owners of Turkey’s Turkcell, TeliaSonera reached an agreement on dividend distribution for the years 2010-2014, subsequently approved by Turkcell general assembly meeting; TeliaSonera’s share amounts to approximately SEK4.5 billion after tax. The Swedish group called the resolution an important step in achieving ordinary corporate governance of Turkcell, adding that it will continue the dialogue with all relevant stakeholders. In Denmark, the regulatory approval process for TeliaSonera’s joint venture with Telenor continues ‘as expected’, and it anticipates closure ‘in the second half of 2015.’
TeliaSonera reiterated its full year outlook, anticipating EBITDA, on a local organic basis, to remain around the previous year’s level, while foreseeing CAPEX at around SEK17 billion, excluding licence and spectrum fees.