TeliaSonera AB reported profit that missed analysts’ estimates as Sweden’s biggest phone carrier faces intensified competition in its Nordic and Baltic markets.
First-quarter adjusted earnings before interest, taxes, depreciation and amortization rose 2.3 percent to 8.54 billion kronor ($980 million), or 32.8 percent of sales, the government-controlled operator said in a statement Tuesday. Analysts predicted 8.61 billion kronor on average.
TeliaSonera is investing in northern European operations amid mounting domestic competition from Telenor ASA, 3 Scandinavia and Tele2 AB, Sweden’s second-largest mobile carrier, which has started offering more data usage in its plans to lure customers. TeliaSonera bought Tele2’s Norwegian business in March.
“The start of the year has been somewhat slow, but we foresee a gradual improvement in the earnings trend,” the carrier said in a statement.
Shares of TeliaSonera slipped 0.5 percent to 51.05 kronor at 9:11 a.m. in Stockholm, giving the carrier a market value of 221 billion kronor.
The company still expects this year’s adjusted Ebitda to be about the same as 2014’s 35.2 billion kronor.
Sales rose 8.8 percent to 26 billion kronor, compared with the estimated 25.4 billion kronor. Service revenue in Sweden, its largest market, slipped 1.1 percent, while the margin there fell to 36.1 percent from 41.3 percent, partly because of marketing investments. TeliaSonera lost 53,000 mobile subscriptions in Sweden during the quarter, the carrier said.
Service revenue in local currency from its Eurasia business, which includes countries such as Kazakhstan, Azerbaijan and Uzbekistan, rose 1.4 percent and the margin for that region narrowed to 52 percent from 54.7 percent a year earlier on increased competition and lower fees earned from connecting calls from other mobile networks.
In Turkey, TeliaSonera owns a stake in Turkcell Iletisim Hizmetleri AS, the country’s largest mobile operator. As part of a March agreement among shareholders, the Swedish carrier will get 4.5 billion kronor in dividends after several years without payouts, averting the prospect of a forced distribution by Turkey’s regulator.