News
Sweden-based telco reports strong customer growth at domestic, Dutch, Kazakh operations.
Tele2 on Thursday announced it swung to a second-quarter net loss due to its ongoing push into the Netherlands.
However, the Sweden-based telco maintained its full-year guidance, insisting that its overarching challenger strategy is on the right track.
"Our Value Champion strategy, combined with a relentless focus on offering the best wireless technologies with a challenger cost structure, will lead us to sustainable value creation for our customers, employees and our shareholders," said Tele2 CEO Allison Kirkby, in a statement.
Tele2 generated revenue of 6.67 billion kronor (€702.97 million) in the three months to 30 June, up slightly from SEK6.61 billion in the same quarter a year ago. The performance was driven by growth at its Dutch, Kazakh and Croatian operations, which offset declines in Sweden, Germany and Austria.
The company added 165,000 subscribers during the second quarter, giving it a total of 16.38 million, as solid mobile net additions made up for the ongoing decline in fixed telephony customers.
Mobile net additions in Tele2’s home market came in at 14,000. Croatia also did well, netting 23,000 new mobile customers. Kazakhstan and the Netherlands were the standout performers though, netting 104,000 and 57,000 mobile customers respectively.
Tele2 Netherlands has been investing heavily in its LTE-Advanced network this year. The network launched in January and by the end of June had reached 97% outdoor population coverage and 81% indoor population coverage. The operator has also been competing aggressively on mobile data prices via its ‘Drown Yourself in Data’ campaign.
While this strategy has been successful at attracting customers, it has weighed on Tele2’s financial performance.
Tele2 Netherlands swung to negative EBITDA of SEK116 million in the second quarter, compared to positive EBITDA of SEK146 million a year earlier.
That weighed on group EBITDA, which fell to SEK1.09 billion from SEK1.39 billion. That, coupled with SEK191 million worth of one-off charges, saw Tele2 swing to a Q2 group net loss of SEK60 million, compared to year-earlier profit of SEK309 million.
Nonetheless, Tele2 reiterated its full-year guidance of revenue between SEK26 billion and SEK27 billion, and EBITDA of SEK4.6 billion-SEK5 billion.
