Telenor shares slump on poor Thai figures
Norwegian phone giant Telenor has reported disappointing profits on the back of high costs and squeezed margins in its fast-growing Asian business, sending its shares down more than 6.4 percent by the end of trading on Wednesday.
The company’s underlying earnings (ebitda) for the last three months of the year rose four percent to 9.09 billion kroner ($1.20 billion), well below analysts’ average estimate of 9.72 billion kroner.
The company’s margins have been under pressure primarily due to high spending in Myanmar, where it is rolling out a new network, and a price war with competitors in Thailand.
Chief Executive Jon Fredrik Baksaas admitted in a statement that “intense competition” in Thailand had made 2014 “a challenging year” for its subsidiary dtac.
He was more upbeat about Myanmar, where he boasted that the company had signed up an impressive 3.4m subscribers in the three months since its serviced launched.
“In just one year, the people in main cities in Myanmar have leapfrogged from very limited connectivity to broadly available mobile services,” he said.
The company reported that it had now launched services in Yangon, Mandalay, and Nay Pyi Taw, the country’s three biggest cities, and was on the way to rolling out coverage across the country.