UPDATED 12.30PM BST: Nordic and Asian operator Telenor used its first quarter results announcement to highlight its focus on bringing mobile internet services to the 80 per cent of its customer base still only using basic voice and data services.
“Mobile data represents the next growth curve for Telenor,” said CEO Jon Fredrik Baksaas (pictured above). “We are persistently working to increase the number of active internet subscribers across all our markets. Out of our total customer base of 172 million subscribers, some 20 per cent are currently active internet users, representing a large growth potential.”
Baksaas described overall quarterly performance as “solid” and “encouraging.” Revenue was up 7.3 per cent across the group to NOK 26.5 billion ($4.48 billion) and net income increased 2 per cent to NOK 3.68 billion from NOK 3.6 billion a year earlier.
Telenor had a one-time gain related to the sale of its video-distribution business Conax to Switzerland’s Kudelski for about NOK 1.4 billion. And the carrier had a one-time cost of about NOK 2 billion related to affiliate VimpelCom’s settlement of a dispute in Algeria.
Growth was fuelled by a customer surge in Asian markets like India, Pakistan and Bangladesh. Meanwhile its mature markets like Norway and Sweden kept up steam relative to other European countries. Thailand was its only market to experience a slowdown in revenue growth.
Telenor’s mobile subscriber base grew by 6 million in the three-month period, the company’s best customer surge in two years.
Baksaas highlighted recent success in securing new spectrum in India and Pakistan, while its Bangladesh operation “significantly improved its 3G coverage during the first three months of the year.” Telenor’s Indian business reported an organic revenue growth of 44 per cent in the quarter (and 2.5 million new customers), while the CEO made a point of showcasing its new internet strategy in India, “focusing on affordable and service-based internet offers.”
Baksaas said the company’s Myanmar network remains on track to launch in the second half of this year and reach breakeven within three years.
Baksaas concluded: “Our efficiency agenda is progressing, while we continue to work on bringing affordable internet to all and connecting the unconnected. However, we need to see continued improvement in all our markets, in particular a pick-up in revenues in Thailand and improved returns on the significant investments in Norway.”
The operator maintained its financial outlook for the year, excluding Myanmar, of low single-digit organic revenue growth, a stable EBITDA margin (compared with the 34.5 percent reported for 2013) and a capex-to-sales ratio of around 16 per cent.
In separate news, Telenor announced today that its Pakistan unit will be headed by new CEO Michael Patrick Foley from July 1. Foley is currently Chief Commercial Officer of the Canadian State Lottery, Atlantic Lottery Corporation, and will replace Lars Christian Iuel.
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