Telenor leans on India to sustain Q4 earnings

Michael Carroll
09 Feb 2011

India led the way for Norway-based Telenor in Q4, as tough competition in Nordic and European markets caused the carrier to miss analyst’s forecasts for profit during the quarter.

The telco’s profit remained flat year-on-year at 2.1 billion kroner ($24.9 million) during the quarter, with revenue growth of 8% to 24.9 billion kroner mostly driven by a strong performance at its Uninor division in India.

Chief Jon Fredrik Baksaas stated the firm’s focus on establishing Uninor as an “ultra low cost operator,” was working well, with four million subscribers added in the “very competitive market,” during the quarter.

That performance boosted overall Asia Pacific revenue 13% year-on-year, mitigating results from Nordic and Central and Eastern European markets, which Baksaas described as “satisfactory.”

He noted the tough competitive environment in the latter two markets means the carrier would have to adopt an “innovative” approach to the regions, which includes further cost cutting.

While Q4 revenue was slightly higher than analyst’s forecasts, profit was lower than the 2.56 billion kroner predicted by analysts polled by Bloomberg.

Full year figures made for better reading, though, with profit up 5 billion Kroner at 14.3 billion Kroner and revenue growing by almost the same amount to 94.8 billion Kroner.

Baksaas referred briefly to Telenor’s continuing fight with VimpelCom over the Russian carrier’s acquisition of Wind Telecom, but made no mention of its move yesterday to force VimpelCom to issue pre-emptive shares that would help Telenor prevent its stake being diluted by the deal.

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