The Norwegian incumbent saw a decline in both its net profits and revenues in the first quarter of 2010. The better news was a strong performance from the mobile operations in its home market. But all of its Eastern European mobile operations were disappointing.
Telenor's net profit plummeted 36 per cent to NKr1.04 billion (US$172 million) in the first quarter, a greater fall than was expected by analysts. Revenues fell by 3 per cent to NKr23.95 billion. The silver lining was the performance of mobile operations in Norway where revenue grew by 9 per cent thanks to the contribution of mobile data services, increased handset sales and a growth in mobile subscriptions. The growth in data services was the main factor that contributed to a year-on-year increase in ARPU in Q1 2010, partly offset by declines in voice and messaging revenues, the company said.
But further east things were rougher. All three of Telenor's mobile operations in Central and Eastern Europe saw both profit and revenue decline. Its largest investment in Hungary, Pannon, reported a 26 per cent fall in operating profits and a 10 per cent fall in revenues. And the number of the customers at Pannon fell thanks to pre-paid churn. Even the fall in pre-paid customers could not halt a fall in ARPU, as well.
Striking a more positive note, the company maintained its previous whole-year outlook for revenues and raised it for Ebitda margins, thanks to improved performances in the Nordic region and its Asian investments. The company also reduced the capex to sales ratio for 2010 to 13-14 per cent from the previous 14-16 per cent.
For more on this story:
France Telecom feels the pinch: Both revenues and profits down
Telenor Q2 2009: Profit falls, but EBITDA improves
Mobile data growth is recession proof, claims Orange exec
Telenor sees Q4 profit increase 23%