Telenor profit suffers sharp drop despite subs growth

Michael Carroll
22 Jul 2011
00:00

Telenor’s post-tax profit more than halved year-on-year during 2Q11, despite strong gains in Asia Pacific subscribers and higher revenues from data services.

The Norway-headquartered carrier generated post-tax profit of 4.4 billion Norwegian kroner ($814.4 million) during the quarter, some 5 billion kroner less than in the same period in 2010. The fall comes despite an increase in revenue, which hit 24.3 billion kroner this year compared to 23.5 billion in 2Q10.

Much of the revenue rise is due to subscriber additions totaling 8 million during the quarter, president and chief Jon Fredrik Baksaas said. He notes the bulk of the additions came from operations in Asia Pacific, but that new service offerings in Nordic markets also played a part in growing the total customer base.

“Half way into 2011, we have captured growth opportunities and delivered another quarter with 7 percent organic revenue growth combined with steady customer growth and healthy margins,” Baksaas states, adding. “I am especially pleased to see the mobile subscriber base growing again in Norway and that the growth in data revenues continues to compensate for price pressure on voice.”

Executives claim the apparent slump in profits is misleading, as 2010 figures included a one-off 6.5 billion kroner gain from the transfer of Kyivstar shares to VimpelCom, MSNBC reports.

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