Telenor Q2 profit plunges

Norway's Telenor will slash equipment spending after posting a 61% drop in net income.

The carrier said that revenue was being affected by a significant downturn in inbound and outbound international traffic, due to slow down in international business travel and tourism.

Telenor stood by its 2009 guidance for an ebitda margin of around 34% but slightly revised its organic growth goal.

“Telenor expects organic revenues in line with 2008, however on the negative side,” the carrier said.

Telenor, which operates in 13 countries in Europe and Asia, cut its capex target to 13%- 15% of revenues from the original 15%-17%.

“The trends from the first quarter of 2009 continued into this quarter, with a challenging business environment also affecting the telecom sector,” CEO Jon Fredrik Baksaas said.

The carrier posted a €154 million net profit for the three months to June with the result hit by impairment losses on goodwill in Telenor Serbia. Sales were up 3.3%  to €2.75 billion.

One of Telenor’s fastest-growing markets Pakistan, may be part of a consolidation play following reports that it may be in talks with China Mobile to dispose its Pakistani unit with 20 million subscribers.

Meanwhile Huawei has signed a deal to supply 1.2 million HSPA modems in the coming 12 months for Telenor and its affiliates in Europe, CIS and Asia.