TeliaSonera said that it expects its earnings trend to “improve somewhat in the second half of the year”, but warned of increased risks related to its Eurasia business.

The guidance came as the company reported Q2 net income attributable to shareholders was SEK3.26 billion ($349.89 million), down 8.1 per cent from SEK3.55 billion, on sales of SEK27.12 billion, up 8.5 per cent from SEK24.99 billion.

Free cash flow benefited from a SEK4.72 billion dividend from Turkcell.

The company noted that service revenue in local currencies, excluding acquisitions and disposals, decreased by 1.3 per cent.

Johan Dennelind, CEO of the company, said: “In the second quarter, organic service revenue and EBITDA remained slightly under pressure, while reported numbers were supported by the acquisition of Tele2 in Norway and currency effects.”

“TeliaSonera is on a journey of change to become a new generation telecoms company and we will achieve this by enhancing our core operations and explore opportunities in adjacent areas. In order to succeed, we need to drive innovation across the group to improve customer experience and deliver new relevant services,” he observed.

In Sweden, pressure on profitability eased, with mobile, broadband and TV operations all delivering growth off the back of higher ARPU and positive net customer intake – although fixed telephony continued to decline.

The integration of Tele2 Norway was said to be “progressing at full steam”, with “synergy execution running ahead of plan”. It has raised its synergy target from SEK800 million to SEK1 billion, of which SEK700 million is expected to be achieved this year.

But for its Eurasia business, the quarter was “challenging in several aspects”. In late April, Nepal was hit by a devastating earthquake, and TeliaSonera said that via Ncell it has “made major long-term commitments to support the rebuild of Nepal”.

And in Kazakhstan, price competition remains fierce, impacting service revenue growth and profitability.

The company maintained its guidance that full year EBITDA on a local organic basis, and excluding synergies in Norway, will be at “around last year’s level”.