The Norway-based Telenor Group has reported positive second quarter results including continued growth in its mobile phone outreach in Myanmar, a country in the throws of a communication revolution after decades of military regime rule.
Telenor and Ooredoo are the two main players competing in the largely virgin Myanmar market, helping everyone from farmers, to students, to businessmen connect up through mobile phone coverage.
The Telenor Group reported its second quarter revenues were NOK 32.5 billion (approx. US$3.8 billion). Organic mobile subscription and traffic revenues were up by 4%, while total revenues were impacted by lower handset sales. EBITDA (before other income and other expenses) was NOK 11.5 billion and the EBITDA margin improved by more than one percentage point to 35.5%. EBITDA less capex (excl. licences) was NOK 6.3 billion. 3.4 million mobile subscribers were added during the quarter, taking the total mobile customer base to 211 million.
In Norway, Denmark and Sweden, the group removed roaming barriers by introducing new mobile offerings enabling our customers to use their voice and data packages while travelling within the EU. While this is impacting on roaming revenues and costs in the short term, the group sees a solid uptake on new tariffs. The number of new high-speed broadband connections is also showing encouraging trends, both in Sweden and Norway this quarter. To maintain their position in Norway, they will continue investing significantly in fixed and mobile networks, and expect to spend more than NOK 4 billion also in 2016.
In Bangladesh, Pakistan and India the strong revenue growth continued during the quarter. Telenor secured additional spectrum in Pakistan and completed a major 3G network expansion in Bangladesh, facilitating continued growth in data consumption. While market conditions remain challenging in Thailand and Malaysia, the group says they have succeeded in the contract segment. Both dtac and Digi reported strong contract revenue growth and improving EBITDA margins this quarter.
In Myanmar, investments remain high to secure service quality to 17 million customers and pave the way for further expansion and growth. The strong EBITDA has already brought cash flow into positive terrain, according to the report.
A statement said the group recognizes the significant operational and financial improvement delivered by their Indian operation. They have however, after thorough consideration, decided not to participate in the upcoming spectrum auction, as they believe the proposed spectrum prices do not give an acceptable level of return.
Based on the performance in the first half of 2016 and the outlook for the second half, Telenor has revised the financial guidance for 2016. The group expects an organic revenue growth in the range of 1% to 2% and an improved EBITDA margin of around 35%. The expectation for the capex to sales ratio, excluding licences, is lowered to around 17%.