Telenor lifts margin outlook as data usage grows
Source: View: 291 Date: 2014-07-24

Telenor on Monday raised its full-year guidance on the back of a strong performance in the second quarter, in which the demand for mobile data was made manifest, particularly in the telco’s home market.

The Norwegian incumbent posted a 4.1% on-year increase in revenues to 26.8 billion kroner (€3.2 billion) in the three months to the end of June, while EBITDA grew by 8.6% to NOK9.6 billion (€1.2 billion). Its EBITDA margin increased to 35.9% 34.4%.

"On the back of strong performance so far this year and our estimates for the remainder of 2014, we now expect an EBITDA margin above last year while our revenue outlook remains at low single digit organic growth," Telenor chief executive Jon Fredrik Baksaas said, in a statement.

After its Q1 results announcement, Telenor said it expected its full year EBITDA margin to be "stable" compared with 2013. Last year its EBITDA margin came in at 34.5%.

The company said its Norwegian operations performed well, driven by 4G rollout and the fact that mobile data usage almost doubled as a result, compared with the year-ago quarter. ARPU increased by 4% and underlying mobile revenues by 6%, Telenor said.

"While the results are strong, the high investments in modern infrastructure and changes in customer expectations demand continued efficiency improvements, as well as strong efforts for building capabilities for the future," Baksaas noted.

He added that Telenor had a strong quarter in Sweden, Malaysia, Pakistan, Bangladesh and India, but admitted that Denmark remains challenging.

"In Thailand, our ability to successfully migrate customers to the new 3G network and complete the transition to a licensing regime is key to delivering high quality services as well as improving profitability," Baksaas said, adding that fierce competition, lower interconnection rates and weaker macro-economic development hit its local unit DTAC’s sales in Q2.


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