July 19, 2022
Telenor reported a net loss of 1.1 billion Norwegian krone (US$110.4 million) in Q2 2022, after an impairment charge on its Pakistan operation and currency losses brought about a NOK3.3 billion ($332 million) drop in net income from the previous year.
The Norwegian operator said it paid an impairment for Telenor Pakistan of NOK2.5 billion ($251 million), which it attributed to a "deteriorating macro-economic situation" as well as an "adverse ruling" of the country's Supreme Court about the renewal of spectrum licenses.
Telenor explained that its 900 MHz and 1800 MHz spectrum license expired in May 2019, and the renewal fee was set at NOK4.4 billion ($443 million) by the Pakistan Telecommunication Authority (PTA) for 15 years. Telenor Pakistan took issue with the terms, mainly the price, which it believes should have been NOK2.9 billion ($292 million). The operator signed the license "under protest" and filed an appeal, but has so far been unsuccessful.
Figure 1: Telenor CEO Sigve Brekke said the group expects low single-digit growth in organic service revenues for 2022 as a whole.
(Source: Orjan Ellingvag/Alamy Stock Photo)
The operator also incurred higher currency losses of NOK2.3 billion ($231 million), mainly due to the appreciation of the US dollar against the Norwegian krone.
However, Telenor was able to increase reported EBITDA by 1.2% to NOK12.5 billion ($1.3 billion) in Q2 2022, while organic EBITDA rose 0.3%. Total reported Q2 revenue was NOK28.0 billion ($2.8 billion), an increase of NOK0.9 billion ($100 million) from the same period last year. Service revenues increased by 1.5% on an organic basis in the quarter.
In the first six months as a whole, net income actually increased by NOK7.2 billion ($725 million) to NOK5.5 billion ($554 million) as a result of gains made from the sale of fixed non-core assets in Sweden and a reversal of tax expenses for its former operation in India. Worth noting here is that net income in 2021 was also hit by the NOK6.5 billion ($654 million) impairment for Telenor Myanmar, which has since been sold.
Capex amounted to NOK11.7 billion ($1.2 billion) in the first six months of the year, driven by 5G rollout in the Nordics, fiber investments in Norway and network investments in Thailand.
In terms of network developments in its domestic market, Telenor said its 5G network in Norway now covers 50% of the population. The operator is also decommissioning its copper network, with 42,000 retail phone and internet subscribers remaining to be migrated to new platforms such as fiber by the end of 2022.
Looking ahead to the rest of the year, Telenor president and CEO Sigve Brekke said he expects that the group will see low single-digit growth in organic service revenues for 2022 as a whole, while organic EBITDA will remain at the same level of 2021. Telenor had previously predicted that organic EBITDA would be broadly in line with the 2021 level or slightly higher.
Want to know more? Sign up to get our dedicated newsletters direct to your inbox.
Telenor also noted that the planned merger between Celcom and Digi in Malaysia is expected to be completed this year after regulatory approval was received in the recent quarter.
— Anne Morris, contributing editor, special to Light Reading
Read more about:Europe
About the Author(s)
You May Also Like
5G Network Automation and AI at Global Megaevents: A Telco AI-at-scale case study with Ooredoo and EricssonOct 10, 2023
5G Transport & Networking Strategies Digital Symposium.Oct 26, 2023
Improve Service Efficiency in the Call Center and Field with Slack AutomationOct 13, 2023
Open RAN Evolution Digital Symposium Day 1Jul 26, 2023