TeliaSonera sales slump as market shifts to data

Swedish-Finnish telecom operator TeliaSonera on Friday reported a first quarter decline in sales and profit amid strong competition and a drop in revenue from texting and traditional voice traffic.

TeliaSonera sales slump as market shifts to data

“Our industry continues to go through a period of change where traditional business models are being challenged by new customer behaviour,” chief executive Per-Arne Blomquist said in a statement.

Net profit fell 0.3 percent to 4.108 billion kronor (€482 million or $631 million) in the January to March period as revenue slumped 4.5 percent to 24.545 billion kronor.

Analysts polled by Dow Jones Newswires had expected profit to come in at 4.23 billion kronor on revenue of 25.15 billion.

Sales in mobility services, which includes mobile voice and data traffic, fell 5.1 percent while broadband services, including traditional landlines, declined 8.3 percent.

But Eurasia — comprising Russia, Turkey, six republics of the former Soviet Union and Nepal — was a bright spot, posting a 5.4 percent revenue gain.

The region “is crucial for the development of our business,” Blomquist told Swedish news agency TT.

TeliaSonera said it would manage costs “in a prudent way”, as it continued to implement cost cutting measures announced in the second half of last year that will see the group shed 2,000 employees, or seven percent of its workforce.

Full-year guidance was unchanged, with revenue forecast to be flat on the year.

Blomquist replaced Lars Nyberg at the helm in February after an external review ordered by the company directed “serious criticism” at shortcomings in the company’s Uzbekistan investment.

A corruption probe by the Swedish prosecution authority into the Uzbek deal was launched in September last year and is still ongoing.

On Thursday, TeliaSonera said it had commissioned a report from the law firm Norton Rose into all of its transactions in Eurasia. The findings will be submitted to the company at the end of this year.

Blomquist told TT the quarter had been “turbulent” but that the events “so far haven’t affected our business.”

Shares in TeliaSonera were down 1.91 percent in midday trading on the Stockholm bourse, where the main measure was 0.43 percent higher.

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EU Commissioner ‘to ban roaming fees by 2017’

European Digital Economy Commissioner Günther Oettinger said on Monday that he wants to abolish roaming fees for mobile phone users within the EU by 2017.

EU Commissioner 'to ban roaming fees by 2017'
No more worrying about how much texting from the beach costs? Photo: DPA

“From the second quarter of 2017, roaming fees in the EU will probably fall away,” the former minister-president of Baden-Württemberg told journalists in Bonn.

“The European Commission, the governments of the 28 member states and the European Parliament (EP) will probably agree on it very soon.”

Oettinger's announcement comes just over a month after the European Commission dropped plans to abolish roaming charges from 2016 after objections from telecoms companies in smaller member states.

But a new compromise had to be reached after consumers' organizations and the EP protested vociferously.

“If the end of roaming comes in 2017, companies have a year longer compared with the old plans to conform to the new rules,” Oettinger said.

“And consumers will see yet more that they profit from the single market in telecoms. Roaming fees have already sunk a great deal.”

Wave of mergers expected

Oettinger believes that the EU must consolidate its telecoms market – pointing to the 280 telecoms companies across Europe compared with four in the US.

“To become more competitive and consolidate their networks, many more companies will merge in the coming years.

“That should lead to the European telecoms industry playing a bigger role on the global stage. But competition has to be assured.”

The Commissioner hopes to arrange the European telecoms market such that, for example, people could use a self-driving car – “an important market for Germany's car manufacturers” – to travel seamlessly from one country to another.