TeliaSonera targets fibre networks buys, LTE investment

TeliaSonera said it plans to invest further in LTE networks and will also look at buying fibre networks in its home markets in order to broaden its range of services and attract customers away from cheaper rivals such as Tele2.

In a statement on its second-quarter results, the operator said network quality and capacity are crucial to meet the rapid increase in demand for data services.

"Therefore we will further invest in 4G and mobile coverage, expand within fibre and selectively target acquisitions of existing fibre networks in our home markets," said acting CEO Per-Arne Blomquist, who will return to his position as CFO once newly appointed CEO Johan Dennelind joins on Sept. 1.

Blomquist added that the operator would "significantly expand" its LTE network in Sweden, targeting 92 per cent geographic coverage in the next two years and utilising existing 2G/3G infrastructure to ensure a cost-efficient rollout.

"Coverage is prioritised across the group and our Estonian operation extended its 4G network significantly in the quarter and has currently the best national 4G coverage in Europe," he said.

Blomquist further claimed that TeliaSonera is leading the way in the move away from minute-based voice pricing to new data-centric models. He noted that the shared data plans introduced in March have so far gained 180,000 subscribers across Scandinavia. Indeed, TeliaSonera's "Telia Mobil Dela" family plans were the first shared mobile data plans to be launched in Europe.

In the second quarter, the operator recorded a lower decline in profits than analysts had expected, largely due to cost reductions through restructuring efforts and growth at its Eurasian operations. Net income fell to €467 million ($612 million) from €561 million a year earlier.

"The report was actually better than expected, especially with TeliaSonera's Eurasian business and mobility services businesses topping our estimates," Mikko Ervasti, an analyst at Evli Bank Oyj in Helsinki, told Bloomberg. "The Eurasian business really is the growth engine for the company and helps diversify the carrier during slower economic times in Western Europe and the cost-cutting efforts in its mobile unit helped improve its profitability."

The company said organic revenue growth in Eurasia reached around 14 per cent, supported by increasing data consumption and subscription growth. It added that it reached a new milestone in Nepal by passing 10 million subscriptions.

For more:
- see this release
- see this Bloomberg article
- see this Reuters article

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