TeliaSonera hit by price pressures in Q1, plans to review Eurasian deals

Nordic operator TeliaSonera reported weaker profits in the first quarter of 2013 as a result of price pressures and falling revenue from voice services, with data revenue still failing to compensate for this decline.

The company said EBITDA fell to €996 million ($1.3 billion) from €1.04 billion a year earlier, and said it would focus on cutting costs in the coming months, Reuters reported. Sales were up by 4.5 per cent to €4.03 billion.

"We remain determined to bring total costs down by 2 billion crowns (€234 million) net over a two year period," interim CEO Per-Arne Blomquist said in a statement.

Telia's Eurasia unit, which also services clients in Tajikistan, Georgia, Moldova and Nepal, accounted for around 19 per cent of total sales in 2012. However, the operator has encountered heavy criticism for some of its activities in these markets, such as allowing authorities in Azerbaijan and Kazakhstan to access its networks to keep tabs on anti-government activists.

In addition, Swedish prosecutors have been carrying out a preliminary investigation since last year into the company's purchase of a 3G licence in Uzbekistan amid allegations of bribery, Reuters reported.

TeliaSonera said it has now appointed the law firm Norton Rose to carry out a review of its deals in Eurasian countries. "The aim of the review is to give TeliaSonera's new board of directors a clear picture of the company's transactions in Eurasia and to perform a risk assessment from a business ethical perspective," Telia said in a statement, according to Reuters.

Meanwhile Sweden's Tele2, which recently sold its Russian unit to a local bank for $3.5 billion (€2.67 billion), said it is on the lookout for acquisitions in Europe and Eurasia.

Reuters quoted Tele2 CEO Mats Granryd as saying that the operator is looking for acquisition targets in the two regions as well as for opportunities to establish new operations through buying mobile licences.

In news of other Nordic operators, Finnish Elisa also suffered from competitive pressures in the first quarter and reported a drop in its first-quarter EBITDA to €109 million ($142.6 million) from €121 million a year earlier, according to Reuters.

For more:
- see this Reuters article
- see this second Reuters article
- see this third Reuters article

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