TeliaSonera on April 21 reported first-quarter earnings that fell below analysts’ estimates in the face of intensified competition in its Nordic and Baltic markets.
Q1 adjusted earnings before interest, taxes, depreciation and amortization rose 2.3% to $980 million, or 32.8% of sales. Analysts had on average expected $1.02 billion.
“The start of the year has been somewhat slow, but we foresee a gradual improvement in the earnings trend,” TeliaSonera said in a statement.
Despite the disappointing earnings, Seeking Alpha this week described the company as “a solid telecommunications investment,” noting that TeliaSonera was weathering challenges “quite well.”
The Seeking Alpha author, who owns shares of the company that trades on the Stockholm exchange, cited a belief that the company’s Eurasian presence offers strong growth potential. One of the company’s strongest growth markets over the past several months was Nepal. It remains to be seen if sales will be impacted due to the devastating earthquake that took place there this week.
On April 10, RCR Wireless News reported that the proposed merger between TeliaSonera and Telenor in Denmark was being investigated by the European Commission amid concerns that a joint venture between the two carriers would result in higher prices and decreased innovation.
The merger was first announced in December, and if it goes through the two Nordic operators will each control 50% of the joint venture, and the combined company will command 40% of the Danish mobile market with 3.5 million subscribers and expected annual revenue of more than $1.5 billion.
Consolidation in the telecom sector has been receiving increased scrutiny by the EU of late.
A marriage between Sweden-based TeliaSonera and Norway-based Telenor would leave just two competitors in the Danish market: TDC and Hi3G, according to Margrethe Vestager, the EC’s new competition commissioner.
