TeliaSonera to slash 2,900 jobs

Swedish-Finnish telecommunications operator TeliaSonera said Friday it would slash 2,900 jobs to improve efficiency as it reported a 5.2 percent rise in 2007 earnings that failed to please the market.

The announcement sent TeliaSonera’s share price plunging on the Stockholm stock exchange, shedding 7.08 percent to 52.50 kronor in early morning trade.

TeliaSonera said two-thirds of the job cuts would be in Sweden and the remainder in Finland. The company had 28,528 employees at the end of 2006.

The semi-public group said the cuts were part of a savings plan of four billion kronor ($614 million) to be completed by early 2009.

The savings were deemed necessary as the group shifts the focus of its product mix from fixed telephony to IP-based and mobile services, it said.

TeliaSonera reported a 5.2 percent increase in full-year net profit to 20.29 billion kronor, while sales climbed 5.8 percent to 96.34 billion kronor.

For the fourth quarter alone, net profit was up 14.8 percent to 5.2 billion kronor and sales rose 7.5 percent to 24.9 billion kronor.

Fourth quarter pre-tax profit of 5.76 billion kronor was below analyst forecasts for 6.06 billion.

Operating profit excluding exceptional items was also lower than expected, at 6.35 billion kronor. Analysts had anticipated 6.9 billion kronor.

Looking ahead, TeliaSonera said it expected its 2008 net profit to be “somewhat” higher than in 2007 and predicted sales and operating margin would remain stable.

At the end of 2007, the group had 115 million subscribers, compared to 96.2 million in 2006, it said.


‘Rotten’ business claims at Nordic TeliaSonera

Swedish-Finnish telecom operator TeliaSonera has been accused of “rotten” business dealings in Azerbaijan, following a separate bribery scandal in Uzbekistan.

'Rotten’ business claims at Nordic TeliaSonera
A TeliaSonera conference in Stockholm last year. Photo: TT

Folksam, which is one of the largest insurance companies in Sweden, has accused the firm of “systematic cheating”, after it emerged that TeliaSonera’s subsidiary in Azerbaijan had ties with the family of Ilham Aliyev, the Arab nation’s leader.

It has been claimed that the dictator’s daughters were shareholders of TeliaSonera's subsidiary Azertel, via a connected company based in Panama.

“It is distressing that in a large Swedish company…people thought that cheating would pay off in the long run,” Carina Lundberg Markow, one of Folksam’s managers told the TT news agency on Wednesday.

She criticized TeliaSonera for failing to act “in an honest and open way” when entering new markets.

“Instead, they choose to pay for success,” she added.

TeliaSonera is one of the biggest telecom operators in the Nordic and Baltic countries and also operates in several emerging markets in Eurasia including Russia and Turkey, as well as Spain. The Swedish state owns 37.3 percent of the company.

Swedish prosecutor Gunnar Stetler is already investigating claims of unethical business practices in Uzbekistan and told TT he had also been given new information concerning potential bribery in Azerbaijan.

The company has voluntarily cooperated with the investigation, handing over what Stetler describes as “extensive information” about “the terms and conditions in Eurasian countries”.

Stetler said he was unable to discuss how he had responded to the information. But calls are growing for TeliaSonera to release a public report about its business dealings.

“Now it is extremely important to create transparency,” said Lundberg Markow.

“This shows the importance of having a set of values when doing business in complex markets or countries,” she added.

TeliaSonera and Norwegian rival Telenor recently merged their operations in Denmark, while the telecoms giant last year purchased rival Tele2's Norwegian division for 5.1 kronor.