Telia sold another business as part of its strategy to exit Eurasian markets, as it reduced its expectations of the fine related to its operations in Uzbekistan.
The company sold its 60 per cent stake in the company which controls Tajikistan operator Tcell to the Aga Khan Fund for Economic Development (AKFED), with the stake valued at $27.7 million. Telia was forced to sign a new sale agreement, after delays in securing regulatory approval saw an original September 2016 deal expire earlier this month.
Telia noted the sale means all tax liabilities now belong to Tcell and its shareholder – the operator was also embroiled in a tax dispute – and it worked with consultants to conduct due diligence and background checks on the new owner.
With regard to an investigation into Telia’s business in Uzbekistan by US, Dutch and Swedish authorities, Telia said it now expects the likely settlement to be around $1 billion, rather than its previous forecast of $1.45 billion.
The statements were made in line with Telia’s quarterly results announcement for Q1 2017.
For its core operations, in Sweden the company noted pressure from the decline of its legacy business and a short-term cost uplift related to customer support, IT and rebranding activities. It made price adjustments and portfolio modifications across mobile, fibre broadband and TV, and unveiled new convergence offerings.
In Finland, the mobile pricing regime was more stable, although this was coupled with pressure on fixed line – particularly fixed broadband. This market also saw increased costs during the quarter.
Telia’s Norway unit continued to show impressive performance despite intense competition. Its acquisition of Phonero was both approved and completed in April, strengthening its enterprise proposition.
Subsidiaries in Finland and Lithuania adopted the Telia brand during Q1, which means all of the company’s wholly-owned subsidiaries now use the moniker.
Profit in Q1 increased 85.4 per cent year-on-year to SEK6.98 billion ($796.1 million), while revenue of SEK19.25 billion was down 5.6 per cent. Telia’s bottom line was bolstered by the reduced Uzbek provision and forex gains.