Tele2 Russia EBITDA up 2% in Q3
STOCKHOLM. Oct 18 (Interfax) - The Russian branch of Scandinavia's Tele2, Tele2 Russia, increased EBITDA (earnings before interest, taxes, depreciation, and amortization) to SEK 1.24 billion ($186 million) in the third quarter of this year, a 2% year-on-year increase from SEK 1.21 billion ($182 million), Tele2 reported.
The EBITDA margin was down two percentage points at 38% (40% in Q3 last year.
Tele2 Russia's Q3 sales revenues (not counting exchange rate variance) amounted to SEK 3.26 billion ($489 million), 14% more than for the same three months last year (SEK 2.86 billion).
Tele2 Russia increased its subscriber base by 710,000 users to 22.3 in Q3 (20.4 million at end-Q3 2011). Subscriber loss over the quarter was stable, Tele2 materials say.
Monthly ARPU (average revenue per user) for Tele2 Russia was 234 rubles in Q3 versus 225 rubles a year earlier. Average usage was 257 minutes per month (240 minutes).
Tele2 says that it was disappointed by the decision of Russian regulators to delay the introduction of technological neutrality, but is ready to provide support to the State Radio Frequency Commission in studying this issue.
That commission intended to make a decision October 2 relative to applying the principle of technological neutrality (the possibility for a frequency-spectrum holder to independently select technology), and planned to announce nine frequency auctions in the 1,800 megahertz range without specifying technology - but consideration was put off until later.
In the spring of this year, Tele2 tested LTE (long-term evolution) technology in the 1,800 MHz range of frequencies permitted by regulators for GSM. The State Radio Frequency Commission gave thumbs-up to the results of the testing, saying that 4G communications would not cause disturbance to voice services. Recently, market players, particularly representatives of major operators, disputed the results of the testing, saying that much more research needed to be done.
Tele2 Russia currently holds licensing to provide GSM mobile communications services in 43 regions that are home to 62 million people.
The Tele2 holding ended the third quarter of this year with net profits down about 23% at SEK 980 million (SEK 1.26 billion in Q3 last year). EBITDA rose to SEK 3 billion from SEK 2.99 billion and sales revenues increased 5% to SEK 10.9 billion (from SEK 10.4 billion).
About 80% of the holding's combined revenues come from mobile communications services. Tele2 CEO Mats Granryd, who is cited in a company press release, said this corresponds to market structure, on which demand for data-transfer services in the mobile segment is growing three times faster than fixed-line services.
Granryd noted that the Russian mobile communications market is still growing. Tele2 now plans to concentrate its efforts on the adoption of a more weighted approach to increasing the subscriber base and increasing profitability, he said.
As to the Swedish market, Granryd said that there has been substantially higher demand for 4G services. The company figures that a significant number of devices that support LTE will appear in the fourth quarter.