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Tele2 cuts outlook as mobile growth proves more difficult

2013-10-22 08:56:00| Telecompaper Headlines

(Telecompaper) Tele2 has cut its long-term outlook, citing an acceleration in market trends towards unlimited pricing and IP data services in the past six months. The company said these trends are positive in the long term, but will lead to higher costs and increased price pressure in the near term, leading to a downgrade in its targets for the period to 2015. The operator now targets revenue of SEK 32.5-33.5 billion in 2015, versus an earlier goal of at least SEK 35.6 billion, and cut the EBITDA forecast to SEK 6.7-7.3 billion from at least SEK 8.3 billion previously. As a result of the sale of Tele2 Russia and reduced guidance, the dividend for this year will fall to SEK 4.40 from SEK 7.10 in 2012. Tele2 said it will maintain its 'challenger' strategy and focus on the growth markets of Sweden, the Netherlands, Norway and Kazakhstan. In the third quarter, Tele2 showed solid customer growth in the Swedish and Dutch mobile markets, but Kazakhstan moved to negative growth on a change in dealer commissions to improve profitability. Total revenues in Q3 were down 2 percent from a year earlier to SEK 7.529 billion, hurt by the slowdown in mobile, increased competition in fixed broadband and a continued loss of fixed telephony subscribers. EBITDA fell 14 percent to SEK 1.523 billion. The net result was a loss of SEK 194 million versus a profit of SEK 283 million a year ago, due to an increase in tax and an impairment charge of SEK 454 million on the Croatian operations. Capex increased to SEK 954 million on mobile network expansion in key markets, and cash flow was less than a third the year-earlier amount, at SEK 495 million.

Tags: mobile difficult growth outlook

Category:Telecommunications

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