CEO Word, Q1 2014


The first quarter 2014 showed good progress as several markets made operational improvements.
The growth profile within mobile services was maintained in the quarter, with a solid 3 percent mobile end-user service revenue growth. Marketing efforts in the Netherlands and Sweden resulted
in higher operational expenditures which, as foreseen, led to lower EBITDA contribution. I believe that these efforts will yield improved results in the coming quarters.

"Our focus for 2014 is clear. The Netherlands and Kazakhstan is building a mobile business for the future, contributing strongly to overall growth. Sweden stands as the role model when it comes to creating a profitable and data centric business model."

Our Swedish operations continued to demonstrate good end user service revenue growth during the quarter. The demand for 4G enabled smartphones was stronger than ever. And with better equipped customers, the data traffic trend maintained its trajectory. To drive demand even further, we proactively offered streaming services to our customers, such as HBO Nordic. Our efforts to create Sweden’s best 4G network received recognition in the quarter, when our infrastructure was rated best in class by OpenSignal.

Our Dutch consumer fixed broadband started to show improvement, and lower customer churn proves that our measures are working. We now have a clear view on how to develop this business going forward and our expectation is to see further improvements in the quarters to come. The mobile business is maintaining its momentum, taking market share through an innovative pricing and packaging strategy. Competition has increased, in accordance with our forecast, but we continue to lead when it comes to the data centric pricing model. The network roll-out achieved important technical milestones in the quarter and we will enable off-loading for our customer, so that they can start enjoying our 4G capabilities.

Our Norwegian operation performed well, with robust customer intake. We initiated an evaluation of the Norwegian businesses to explore various strategic options and ensure the best outcome for our shareholders. As this process is ongoing, our plan for the business remain unchanged and we will continue our commercial efforts, being the mobile challenger of the Norwegian market.

Tele2 Kazakhstan’s efforts to improve its customer management yielded solid results in the quarter and we once again started to add customers to our operations. The network roll-out maintained its fast pace and our technical team added 89 sites in the quarter. As a result, we should be able to match the competition’s technical and geographic capabilities by the end of the year.

Tele2 Lithuania had to face a price war during the quarter and did a splendid job fending off the competition. The successful outcome is largely the result of our strong corporate culture – knowing what to do and how to do it in a cost efficient way. In the case of Lithuania, the outcome was an improved market position fuelled by customer acquisition and increased revenue market share.

Our focus for 2014 is clear. The Netherlands and Kazakhstan are building a mobile business for the future, contributing strongly to overall growth. Sweden stands as the role model when it comes to creating a profitable and data centric business model. The strategic review of our Norwegian business will continue with the aim to find a solution that will maximize value for our shareholders.

 

 

Mats Granryd
President and CEO