Dutch and Kazakh plays weigh on Tele2 in Q4 - Mobile World Live

Dutch and Kazakh plays weigh on Tele2 in Q4

28 JAN 2016

Self-styled disruptor Tele2 said 2015 provided “further evidence” of its challenger spirit in mobile, but recent investments in the Netherlands and conditions in Kazakhstan weighed on profit.

As part of the operator’s well publicised ambitions in the Netherlands, it has been ramping up its network and marketing investments, and launched a nationwide 4G offering in the country in November.

In the same month, Tele2 announced a joint venture with Altel, a Kazakhtelecom subsidiary, in a move that will reduce the market to three players.

The quarter however proved difficult for the company, with net profit in Q4 falling from SEK494 million ($60 million) a year earlier to SEK45 million.

Revenue remained almost flat, increasing by 1 per cent, to SEK6.94 billion, from SEK6.88 billion in the same quarter last year.

Group EBITDA also dropped by 5 per cent, from SEK1.4 billion to SEK1.3 billion, which the company claimed was anticipated, “as a result of our accelerated launch in the Netherlands and devaluation in Kazakhstan”, commented Allison Kirkby, CEO at the company.

“The fourth quarter marked the end of a very eventful year, and further evidence of our challenger spirit in our pursuit to be the champion of customer value in mobile connectivity,” she said.

“We launched our nationwide 4G only network, the world’s first, in the Netherlands, as well as completed the agreement to combine our mobile business with Kazakhtelecom.”

Kirkby added the company will continue to invest in the Netherlands throughout 2016, “as we further establish ourselves as the preeminent challenger”, and said it expects to close its merger in Kazakhstan this quarter.

Data monetisation journey
Positives from the quarter saw the company continue with mobile end user service revenue growth, increasing by 2 per cent to SEK3.3 billion from SEK3.2 billion in the quarter year prior.

It also talked up its commitment to driving data monetisation, with the strategy bearing fruits in its Baltic operations.

“Demand for data services surged, coupled with our competitive pricing and higher smartphone sales favourably impacting revenue and driving mobile end user service revenue by 8 per cent in Lithuania and 10 per cent in Estonia.”

Leadership changes
In a separate statement, Kirkby also announced key leadership changes, as the company “embarks on the next stage of our data monetisation journey”, said Kirkby.

The company named Lars Nordmark, current CFO at security firm Securitas Direct, as EVP and CFO, effective from April this year.

Samuel Skott will now head up the company’s Swedish operations, while Malin Holmberg, current EP central Europe and CEO of Tele2 Croatia, is set to take over as chief of the company’s ambitious Dutch operation.

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Kavit Majithia

Kavit joined Mobile World Live in May 2015 as Content Editor. He started his journalism career at the Press Association before joining Euromoney’s graduate scheme in April 2010. Read More >>

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