Telenor revenue shows poor performance in Q2

Telenor CEO Sigve Brekke
Telenor revenue growth shows poor performance in the second quarter of 2016 with revenue growing at 0.6 percent to NOK 32,477 millions, while net profit dropping to NOK 1,111 million from NOK 3,456 million.

Telenor said its Q2 revenues were impacted by low device sales.

“We have taken several initiatives to further strengthen our data position across our footprint, and we see encouraging signs of data monetization in several of our markets. Digitizing our core business, combined with efficiency measures, will be key to drive value creation going forward,” said Telenor Group CEO Sigve Brekke.

Telenor said organic mobile subscription and traffic revenues increased by 4 percent in the second quarter.

The telecom operator added 3.4 million mobile subscribers during the second quarter, taking the total mobile customer base to 211 million.

Telenor also said the global telecom network operator will not participate in the spectrum auction in India in 2016. Spectrum auction is expected to take place in September. Vodafone is in talks with Telenor to buy its Indian telecom business.

Telenor Capex

Telenor has slashed its Capex to sale ratio to 16.2 percent in Q2 2016 from 21.4 percent in Q2 2015. The Capex of Telenor fell to NOK 5.252 billion in Q2 2016 from NOK 5.546 billion in Q1 2016.

The telecom operator is also not expanding its Capex (capital expenditure) in India in a big way. Telenor has regional presence in the Indian telecom market.
Telenor Capex in Q2 2016

“We have decided not to participate in the upcoming spectrum auction, as we believe the proposed spectrum prices do not give an acceptable level of return. We will continue our efforts to meet customer demands and grow the business based on the current spectrum holding. As we evaluate our options in India, we will be disciplined on Capex,” said Telenor Group CEO Sigve Brekke.

The number of new high-speed broadband connections is showing encouraging trends, both in Sweden and Norway in the second quarter of 2016. Telenor is investing significantly in fixed and mobile networks in in Norway. Telenor will spend more than NOK 4 billion in 2016 towards Capex.

Telenor has secured additional spectrum in Pakistan. Telenor completed a 3G network expansion in Bangladesh, facilitating continued growth in data consumption.

In Myanmar, Telenor is making investments to secure service quality to 17 million customers and pave the way for further expansion and growth.

Telenor expects an organic revenue growth in the range of 1 percent to 2 percent and an improved EBITDA margin of around 35 percent.

Telenor has lowered the Capex to sales ratio, excluding licences, to around 17 percent in 2016.

Baburajan K
editor@telecomlead.com

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