Tele2 on Tuesday reported a rise in revenue during the second quarter but continued sales and customers declines at its fixed operations and heavy spending in the Netherlands hit earnings.
In the three months to 30 June, the Sweden-based telco generated sales of 6.6 billion kronor (€705.8 million), up 4% from last year, thanks to a strong performance by its mobile business, which saw service revenue grow 7% to SEK3.3 billion.
Tele2’s net customers additions came in at 540,000 during Q2, as 563,000 mobile net adds were offset by a 13,000 net decline in fixed broadband customers, and a 10,000 net decline in fixed telephony customers.
The company, which has operations in nine countries, en ded the quarter with 14.3 million customers in total.
"The second quarter once again proved that the strategy to become a value champion is the right way forward," said Tele2 CEO Mats Granryd, in a statement. "Our customer net intake was strong and we experienced a breakthrough by having the lowest churn in many quarters."
However, EBITDA fell to SEK1.4 billion in the second quarter, from SEK1.5 billion a year ago, due to falling revenue at Tele2’s fixed business and investments in the company’s Netherlands arm.
Indeed, the operator launched a 4G mobile network in the Netherlands at the beginning of 2015 and has been investing heavily in strengthening the business and expanding the network. By the end of the second quarter, Tele2’s Dutch 4G network reached 80% outdoor population coverage.
"The surge in data growth coupled with our dependency on an MVNO relationship [with T-Mobile] will however continue to be a drag on EBITDA until full launch," Granryd admitted.
