Interim accounting figures show that Telenor recorded a pre-tax profit of NOK 3,314 million in 1999. This is NOK 406 million more than in 1998 and the highest profit in the groups history. The profit is mainly the result of significant growth in traffic and gains from sales. Operating income increased by 15.8 per cent.
Telenors operating profits for 1999 amounted to NOK 4,002 million, an increase of NOK 205 million compared with 1998. Operating revenue for 1999 was NOK 33,468 million which is 15.8 per cent or NOK 4,558 million more than the previous year.
“The merger and break-up from Telia greatly influenced the groups operations last year,” says Tormod Hermansen, CEO at Telenor. “We also noticed a strong growth in competition on the domestic market and implemented considerable price cuts in response. Nevertheless, Telenor has achieved its highest profits ever. With a starting point like this, I am in no doubt that we will succeed in our future operations, both at home and internationally.”
Operating income from subsidiaries abroad increased by 50 per cent and amounted to a total of NOK 3,050 million. The mobile phone companies Pannon GSM (Hungary) and Cosmote (Greece) generated profits for the first time. Taken as a whole, in 1999 associated companies made a net loss of NOK 1,239 million. This is NOK 142 million more than in the previous year and reflects the fact that many of the companies are still in the early stages of operation. Value assessments carried out by banking institutions show a considerable increase in value of the associated companies in 1999, as is borne out by the agreement with BT (British Telecom) concerning ESAT in Ireland.
The groups sales profits increased by NOK 657 million to NOK 1,116 million in 1999. Of the net profit, NOK 683 million was from the sale of the directory operations in Sweden, NOK 509 million from the sale of shares in Elkjøp and NOK 132 million from net realised profits in the Venture engagements. Losses on disposals reduced profits by NOK 302 million, mainly related to Clarion Inc. in USA.
Telenor experienced strong growth in the number of internet customers in Norway in 1999 and by the end of the year the number had grown to 400,000. The FriSurf offer at the end of the year yielded a new internet customer every two minutes. The number of traffic minutes generated by internet use rose by 63 per cent in 1999.
The number of mobile phone subscriptions in Norway rose to two million in 1999 and for the first time exceeded the number of normal telephone subscriptions (PSTN). Through associated companies abroad, Telenor had 4.3 million mobile phone subscribers at the end of the year, an increase of 3.1 million on the previous year. Telenors GSM operations in Norway had a market share of 70 per cent at the end of the year.
There was also a strong growth in the number of ISDN subscriptions. Last year, the number of ISDN lines increased by 471,000 whilst the number of normal telephone subscriptions (PSTN) fell by 260,000.
Competition on the domestic market increased considerably in 1999. The proportion of traffic minutes in the fixed network routed through other carriers was around 13 per cent at the end of 1999, compared with just over 3 per cent at the end of 1998. Nevertheless, traffic routed through Telenors fixed network increased by 20 per cent, compared with growth of 16 per cent in 1998.
Total investments in 1999 amounted to over NOK 13 billion, of which more than six billion was invested abroad. The largest investments abroad were in DiGi Telenor in Malaysia, ESAT Digifone in Ireland and Viag Interkom in Germany.
“We expect continued strong growth both on the domestic and international telecoms and IT markets,” adds Mr Hermansen. “The industry is going through considerable restructuring and we expect competition to continue to increase on the domestic market owing to new players both in the fixed and mobile phone markets. Telenor will continue to make significant investments abroad. We hope to be able to implement the plans for a public listing of the group in the course of this year.”
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