Telenor hailed second quarter earnings as validation for a strategy commenced in 2017 to offload non-core assets, with overall earnings up despite some stagnation in its domestic businesses.
In a statement CEO Sigve Brekke (pictured) noted declines in subscription and traffic revenue on an organic basis were offset by strength in the operator’s underlying earnings, with efficiency and modernisation programmes aiding “positive revenue development”.
Figures for the quarter “show that the momentum set at the start of the year continues” he explained, highlighting mobile ARPU growth in Norway, along with improving revenue growth from Thailand and Myanmar operations.
The operator continued preparations to launch 5G services in its domestic market (Norway) “through pilots and network upgrades” while generating “good traction on fibre rollout and copper infrastructure replacement”.
Brekke later told Reuters Telenor aims to launch commercial 5G services in Norway in 2020. Telenor’s boss also said it expects to decide on its supplier of 5G technology for the country in the fourth quarter: the decision will be dependent on any government regulation banning current 4G supplier Huawei from its 5G network.
Meanwhile Brekke reiterated a goal to complete an acquisition of Finnish operator DNA in August, noting the European Commission had given its blessing. The operator also continues to work on a “potential combination with Axiata”, which it aims to complete in the current quarter.
Telenor issued its figures a day after warning of a one-time hit relating to problems uncovered by its Bangladesh business Grameenphone. This resulted in a 1 per cent year-on-year decline in group EBITDA on an organic basis, though Brekke noted the underlying margin remained strong at around 40 per cent.
Group-level earnings moved in the right direction during the quarter, with net income attributable to shareholders of NOK3.1 billion ($362 million) up from NOK2.6 billion in Q218, on revenue of NOK28 billion compared with NOK27.5 billion.
But this masked annual declines in revenue and operating profit at its Norway and Sweden businesses, and while its Danish unit recorded strong profit growth as a strategy to simplify operations bore fruit, revenue was also down here.
The operator registered growth in both metrics in Thailand and Bangladesh; declines in Pakistan and Myanmar; and a mixed bag in Malaysia with revenue down but profit stable.Subscribe to our daily newsletter Back