Telenor Reports Continued Revenue Growth
Fornebu
7 minute read
The Telenor Group recorded an operating profit of NOK 1811 million for the first six months of 1999. This is an increase of NOK 42 million compared to the corresponding period in 1998. Turnover increased during the same period by over 15 per cent to NOK 15 851 million.
The increase in turnover of over NOK 2 billion during the first six months of 1999 compared to the same period in 1998 is to a great extent attributable to network-based services, including satellite and mobile telephony.
Subscriptions, Internet related traffic and traffic to the mobile networks in particular have contributed to an increase in turnover from domestic telephony. Turnover from long distance and international traffic declined as a result of price reductions and increased competition. The price changes for mobile and fixed network generated traffic have reduced the turnover for the first half of 1999 by approximately NOK 400 million compared to the first half of 1998, based on the 1999 volume. Additional price reductions were implemented on 1 July when one price for the entire country corresponding to the local rate, the Norway price, was introduced. The growth in traffic minutes generated in the fixed network after the first six months was 14 per cent compared to the same period last year. The growth in traffic minutes for all of 1998 was 16 per cent in comparison.
Profit before taxes was NOK 1194 million for the first half of the year. This is NOK 102 million less than the corresponding period in 1998. Net gains on the sale of assets in the first half of 1999 were NOK 340 million less than the corresponding period last year. The net effect of changes in the accounting principles and estimates have increased the profit before taxes by NOK 215 million so far this year.
Telenor had 1,527,000 GSM subscribers at the end of the first six months, which is a net increase of 267,000 subscribers, and 240,000 of these new subscribers were prepaid service subscribers. The number of Internet subscribers in the private market at the end of the first half of 1999 was 320,000, which is an increase of 60,000 subscribers since 1 January.
An increasing number of customers are converting to ISDN. The number of ordinary fixed network lines (PSTN) decreased during the first half of the year by 123,000, while the increase in the number of ISDN lines during the same period was 239,000. Almost 40 per cent of the traffic generated in the fixed network during the first half of 1999 was ISDN based.
Associated companies reported accounting losses of NOK 653 million in the first half of 1999, compared to losses of NOK 642 million for the same period last year. This reflects that Telenor is now involved in several major international operations that are in a start-up phase or an early stage of operation, the majority of which are linked to mobile operations. More mature operations, such as Cosmote (Greece), Pannon GSM (Hungary) and Esat Digifone (Ireland) are showing a positive development. The associated mobile companies now have a total of 2.2 million subscribers, which is an increase of 100 per cent since the beginning of the year.
The Telenor Group invested a total of NOK 6.7 billion in the first half of 1999, which is an increase of NOK 2.4 billion compared to the corresponding period last year. NOK 3.8 billion of this amount was invested in Norway and NOK 2.9 million was invested abroad. The international investments were primarily made in VimpelCom (Russia), Esat Digifone (Ireland) and Viag Interkom (Germany).
"Telenor is now well positioned for competition in both its home and the international market. Even though the margins are lower and the competition has increased, we have laid the foundation for continued traffic growth in Norway through introducing one rate zone for all of Norway. We are also anticipating continued customer growth in both the mobile and Internet markets, and we are satisfied that network based income has increased in spite of the increased competition and price reductions", says Chief Financial Officer Torstein Moland. "It is gratifying to note that our more mature international investments are now showing better results. This provides us with a solid foundation for continued international investments and greater confidence in a good long-term return on these investments", says Moland.
Subscriptions, Internet related traffic and traffic to the mobile networks in particular have contributed to an increase in turnover from domestic telephony. Turnover from long distance and international traffic declined as a result of price reductions and increased competition. The price changes for mobile and fixed network generated traffic have reduced the turnover for the first half of 1999 by approximately NOK 400 million compared to the first half of 1998, based on the 1999 volume. Additional price reductions were implemented on 1 July when one price for the entire country corresponding to the local rate, the Norway price, was introduced. The growth in traffic minutes generated in the fixed network after the first six months was 14 per cent compared to the same period last year. The growth in traffic minutes for all of 1998 was 16 per cent in comparison.
Profit before taxes was NOK 1194 million for the first half of the year. This is NOK 102 million less than the corresponding period in 1998. Net gains on the sale of assets in the first half of 1999 were NOK 340 million less than the corresponding period last year. The net effect of changes in the accounting principles and estimates have increased the profit before taxes by NOK 215 million so far this year.
Telenor had 1,527,000 GSM subscribers at the end of the first six months, which is a net increase of 267,000 subscribers, and 240,000 of these new subscribers were prepaid service subscribers. The number of Internet subscribers in the private market at the end of the first half of 1999 was 320,000, which is an increase of 60,000 subscribers since 1 January.
An increasing number of customers are converting to ISDN. The number of ordinary fixed network lines (PSTN) decreased during the first half of the year by 123,000, while the increase in the number of ISDN lines during the same period was 239,000. Almost 40 per cent of the traffic generated in the fixed network during the first half of 1999 was ISDN based.
Associated companies reported accounting losses of NOK 653 million in the first half of 1999, compared to losses of NOK 642 million for the same period last year. This reflects that Telenor is now involved in several major international operations that are in a start-up phase or an early stage of operation, the majority of which are linked to mobile operations. More mature operations, such as Cosmote (Greece), Pannon GSM (Hungary) and Esat Digifone (Ireland) are showing a positive development. The associated mobile companies now have a total of 2.2 million subscribers, which is an increase of 100 per cent since the beginning of the year.
The Telenor Group invested a total of NOK 6.7 billion in the first half of 1999, which is an increase of NOK 2.4 billion compared to the corresponding period last year. NOK 3.8 billion of this amount was invested in Norway and NOK 2.9 million was invested abroad. The international investments were primarily made in VimpelCom (Russia), Esat Digifone (Ireland) and Viag Interkom (Germany).
"Telenor is now well positioned for competition in both its home and the international market. Even though the margins are lower and the competition has increased, we have laid the foundation for continued traffic growth in Norway through introducing one rate zone for all of Norway. We are also anticipating continued customer growth in both the mobile and Internet markets, and we are satisfied that network based income has increased in spite of the increased competition and price reductions", says Chief Financial Officer Torstein Moland. "It is gratifying to note that our more mature international investments are now showing better results. This provides us with a solid foundation for continued international investments and greater confidence in a good long-term return on these investments", says Moland.