Telenor has appointed Sigve Brekke as its new CEO to replace long-serving industry veteran Jon Fredrik Baksaas, who retires in August after 13 year at the helm of the Norway-based operator.
Brekke, the current head of Telenor's Asian operations, will be tasked with boosting the company's data business and creating a strategy for its investment in VimpelCom. He first joined Telenor in 1999 and has held several executive positions in the company since then.
As head of the group's Asian business, Brekke has bolstered the region's subscribers to more than 100 million during his tenure, covering half a dozen countries from Pakistan to Malaysia. The value creation from Asia has been significant for Telenor and the region now represents more than 40 per cent of the total enterprise value of Telenor Group.
Baksaas will continue as advisor to the board of directors until the end of 2016 and will serve as chairman of the GSMA, the global industry organisation for mobile operators.
On Brekke's work in Asia, Reuters reported Tore Toenseth, an analyst at Sparebank 1 Markets, as saying: "He has done very well in the Asian operations with a big exception for the entry into India and the way it was handled."
Brekke will receive a base salary of NOK5.9 million (€705,000/$791,000), which Reuters noted is low for such a strong company with a market capitalisation of $37 billion (€32.9 billion), but complicit with Norway's tradition of modest wages for state-controlled companies.
Brekke served as the Norwegian Deputy Minister (State Secretary) of Defence from 1993 to 1996. He holds a Master of Public Administration from the John F. Kennedy School of Government at Harvard University, where he also served as an Associate Research Fellow.
Last week, Telenor's Baksaas raised the company's full-year earnings forecasts after the operator generated record high revenues in the opening quarter of 2015.
Baksaas said the company now expects full-year organic revenue growth of between 5 per cent and 7 per cent compared to its previous prediction of mid single-digit growth, and an EBITDA margin of between 34 per cent and 36 per cent compared to a range of between 33 per cent and 35 per cent previously.
Management's confidence was boosted after the company generated record high revenues of NOK30.2 billion in the recent quarter compared to NOK25.3 billion in Q1 2014. Baksaas said Telenor's performance in the first quarter represents a "promising start to the year."
Meanwhile, the Norwegian mobile market is also changing: in February this year, Sweden-based TeliaSonera was given permission by the Norwegian Competition Authority (NCA) to implement its expansion plans for Norway, acquiring the Norwegian operations of Tele2.
Furthermore, Telenor and TeliaSonera said in April that they were confident a planned merger of their respective Danish mobile network operations would be approved during 2015 after the European Commission (EC) opened an in-depth investigation into the proposed deal. The planned 50:50 joint venture in Denmark will be confirmed or denied by the EC on Sept. 2.
For more:
- See this Reuters article
- See this Telenor press release
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