Telecom Lead: European mobile giant Telenor will increase capital spending (Capex) for 2013 after finalizing Uninor’s license agreement in India.
On 14 November 2012, Telewings, a company controlled by Telenor, secured GSM spectrum licenses for INR 40 billion (approx. NOK 4.4 billion) in 6 of the former 13 circles in which Uninor had mobile operation.
Uninor is currently considering bid for Mumbai circle and looking for significant reduction in basic spectrum charge.
Telenor CEO Jon Fredrik Baksaas says the mobile service provider, which has around 150 million customers in Europe and Asia, sees the opportunity to accelerate investments to capture market positions and expects Capex/sales in the range of 12-14 percent up from 12 percent in 2012
In 2012, Telenor has invested NOK 21511 million towards Capex against NOK 11907 million 2011.
Telenor’s Capex in India increased to NOK 4526 million in 2012 from NOK 972 million in 2011. This is significant as the Supreme Court order on February 2, 2012 did not affect Uninor’s Capex plans and growth plans in India.
In Pakistan, one of the Asian countries where Telenor has presence, attracted Capex of NOK 749 million in 2012 as compared with NOK 532 million in 2011.
Uninor in India will follow Capex-light operating model from 100 percent tower sharing – no own towers.
Capex for telecom infrastructure of Uninor will be primarily related to radio network equipment. It will re-allocate equipment from scaled-down circles. Uninor’s long term Capex/sales will be around 5 percent.
In Q4 2012, Uninor’s revenues for seven active circles increased 3 percent from previous quarter. A decline in active subscriptions was leveraged by better quality of the customer base, resulting in an INR 3 increase in ARPU to INR 95.
Uninor’s total EBITDA loss for the fourth quarter was NOK 327 million. EBITDA was affected negatively by NOK 54 million due to reclassification of capital expenditure to operational expenditure.
Uninor revenues have increased 23 percent to NOK 3716 million in 2012 from NOK 3019 million in 2011. Revenues are marginally lower from Q4 2011 to Q4 2012 due to operations in fewer circles.
Uninor EBITDA losses have decreased from NOK 3414 million in 2011 to NOK 1981 million in 2012. Uninor operating losses have decreased from NOK 8514 million in 2011 to NOK 6283 million in 2012. Operating losses are down significantly from NOK 4978 million in Q4 2011 to NOK 444 million in Q4 2012.
For the full year 2012, Telenor’s organic revenue growth was 5 percent, EBITDA margin improved notably from last year and operating cash flow exceeded NOK 20 billion. During the year, Telenor invested heavily to improve user experience and prepare for increased efficiency and continued growth.
Telenor expects organic revenue growth of 3 to 5 percent this year after last year’s 5 percent, and it sees its earnings before interest, taxes, depreciation and amortization (EBITDA) margin widening to 34 percent from 32 percent.
Anand B
editor@telecomlead.com
