Tele2 chief promises clarity on future after profit falls by a third

Tele2 president and CEO Mats Granryd has promised to "remove uncertainty" surrounding the Nordic operator's business in 2014, after net income fell by a third in 2013.

The Sweden-based operator's annual profit fell from 976 million krona (€110 million or $150.6 million) in 2012 to 655 million krona in 2013, as revenue dipped 3 per cent year-on-year. Figures for the fourth quarter offer little hope of a quick recovery, with profit down 22 per cent year-on-year at 169 million krona, and revenue falling 4 per cent.

Granryd said fourth quarter earnings were "stable and in line with our expectations", pointing to a 5 per cent annual increase in mobile service revenue during the quarter. However, declining sales of fixed broadband and telephony services weakened the benefits brought by higher mobile revenue during the year.

Looking ahead to 2014, Granryd said: "The Netherlands and Kazakhstan need to maintain their momentum within mobile. Tele2 Sweden will cement its position as the leader in mobile data services. The situation in Norway will be addressed in a way that maximises value for shareholders."

The CEO was referring to Tele2 Norway's failure to win an LTE licence and additional 3G spectrum during an auction in December.

Mobile revenues in Norway fell from 4.4 billion krona in 2012 to 3.8 billion krona in 2013. Granryd said the company's network in the country covers 75 per cent of the population, but failed to provide any update on its Norwegian strategy beyond reiterating its plan to continue providing services on its existing 900-MHz and 2100-MHz spectrum, while seeking opportunities to acquire any available 1800-MHz spectrum.

Growth in Tele2 Netherlands' mobile revenues in 2013 offset declines in fixed broadband and telephony sales, while in Kazakhstan - where the operator offers only mobile services – revenues grew from 957 million krona in 2012 to 1.3 billion krona in 2013.

Mobile revenues at Tele2's other European businesses were a mixed bag, with growth at its units in Croatia, Lithuania, and Germany, and declines in Latvia, Estonia, and Austria.

For more:
- see Tele2's results release
- see the full results

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