Telecom operator Telenor is targeting Opex (operations expenditure) reductions of NOK 1 billion in 2017.
Telenor is targeting to create a leaner telecom company with the aim of improving cost efficiency. The company, as part of its strategy to become leaner organization, has sold its India business to Bharti Airtel.
Telenor is in the process of selling its equity stake in Veon, a leading telecom operator with presence in Russia and other European telecom markets.
Telenor exited from online classified advertisement business and enhanced its equity stake in emerging Asian telecom markets.
Telenor net loss
Telenor has posted net loss of NOK 167 million in Q2 2017 against net income of NOK 1,111 million in Q2 2016.
Telenor achieved Opex reductions of NOK 0.6 billion (–5 percent) with EBITDA of NOK 12.7 billion (+13 percent) in the second quarter of 2017.
Telenor achieved second quarter revenues of NOK 31.5 billion (+2 percent) with free cash flow of NOK 9.9 billion.
Telenor reduced the number of FTEs by 1,100 in Q2 2017 from Q4 2016. Telenor achieved Opex reductions in 11 out of 12 telecom markets. Telenor achieved all-time high EBITDA and EBITDA margin with EBITDA margin expansion in all business units.
Telenor Norway has reduced workforce of 300 FTEs in Q4 2016 and Q1 2017 in order to lower personnel cost.
This apart, Telenor Norway has also improved sales and marketing efficiency, driven by handset installment program and business segment.
The global telecom operator reduced use of temporary workers at customer care, due to digitization and lower incoming volumes.
It will continue efficiency improvements within operations and maintenance in areas such as fault handling, service delivery, among others.
Telenor Capex
Telenor said its Capex (capital expenditure) excluding spectrum licences was NOK 4.4 billion, resulting in a Capex to sales ratio of 14 percent in Q2.
The above chart reveals the Capex distribution of Telenor in its key mobile markets. 4G and fibre broadband is the focus area for Telenor Norway.
Telenor revealed its investment distribution towards: Norway (27 percent), Thailand (23 percent), Malaysia (10 percent), Sweden (10 percent), Bangladesh (8 percent), Pakistan (7 percent) and others 8 percent.
Telenor, revising the financial performance, said it has increased the EBITDA margin guidance to 38-39 percent, from previously announced around 37 percent. “We expect an organic revenue growth in the range of 1-2 percent and capex to sales ratio excluding spectrum licences of 15-16 percent,” said Sigve Brekke, president and CEO of Telenor Group.
“We deliver a strong set of results for the second quarter with improved revenue growth, double-digit EBITDA uplift and strong cash flow generation. Both the EBITDA and the EBITDA margin are all-time high this quarter. We were able to reduce our costs by NOK 0.6 billion and we saw margin expansion in all our business units,” Sigve Brekke said.
Grameenphone, Telenor’s business in Bangladesh, has achieved 15 percent revenue growth — with growth from both voice and data; 24 percent growth in active data users (+1.8 m) and 22 percent growth in normalised EBITDA.
Telenor Pakistan achieved 8 percent revenue growth, added 0.7 million subscribers, 8 percent growth in subscriber base, 48 percent EBITDA margin and 1 percent organic growth in EBITDA
Telenor Myanmar achieved revenue growth of 8 percent, 10 percent subscription and traffic revenue growth, 48 percent EBITDA margin and 13 percent organic growth in EBITDA, launched 4G services launched in 29 townships.
Baburajan K