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TeliaSonera cuts jobs despite profits boost

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TeliaSonera cuts jobs despite profits boost
08:20 CET+01:00
Nordic telecoms giant TeliaSonera announced layoffs within its fixed broadband operations, despite posting a 13 percent rise in net profits for 2010.

TeliaSonera, born out of the 2002 merger between Swedish Telia and Finnish

Sonera, posted a net profit last year of 21.26 billion kronor ($3.31 billion), up from 18.85 billion in 2009, despite a two-percent drop in sales to 106.58 billion kronor.

The dwindling sales were especially due to the increasingly strong krona, and the company said that without the negative exchange rate impact, its sales were up 3.5 percent in 2010.

TeliaSonera also saw its subscription numbers swell by seven percent last year to 156.5 million, 55.3 million of them in the consolidates operations and 101.2 million in associated companies.

In the fourth quarter, TeliaSonera posted an eight-percent-hike in net profits to 5.31 billion kronor on sales down three percent at 26.77 billion.

Disregarding the negative impact of the exchange rate however, the company's

fourth quarter sales were up 4.2 percent in the quarter.

The results slightly missed the expectations of analysts polled by Dow Jones Newswires, who had predicted a quarterly net profit of 5.33 billion kronor and a two-percent drop in sales.

Nonetheless, the figures allowed the company to raise its annual dividend to 2.75 kronor per share from 2.25 kronor in 2009.

Following Thursday's earnings, TeliaSonera saw its stock price jump 2.82 percent to 54.60 kronor a share in mid-morning trading on a Stockholm stock exchange down 0.09 percent.

For 2011, the Swedish-Finnish company forecast "somewhat" higher sales, boosted by strong growth in Spain, Eastern Europe and central Asia, while mobile Internet traffic volumes are expected to grow eight fold over three years as the use of smartphones and tablet devices continues to balloon.

"The demand for smart phones is growing at an exceptional rate. In 2010, seven out of 10 new mobile phones sold in our Swedish stores were smart phones," TeliaSonera chief executive Lars Nyberg said in the earnings statement.

The hike in mobile data services has however had an impact on TeliaSonera's traditional broadband offerings, and the company said it planned to cut 800 of

5,000 jobs in that division due to "synergies."

The 800 job cuts -- 640 in Sweden and 160 in Finland -- will meanwhile be balanced out by an expected 200 new jobs created elsewhere, the company said.

Like its largest Nordic competitors, Norwegian Telenor and Swedish Tele2, TeliaSonera has in recent years set its sights on expanding towards the East,

increasing its presence in the Baltic countries, Turkey, Russia and other former Soviet states.

TeliaSonera, which shares the rank as leading Nordic operator with Telenor, reported that its Spanish mobile operator Yoigo met its goals and reported positive results in the fourth quarter.

"Yoigo is well positioned to compete in Spain and has achieved a market share of four percent. In order to maximize shareholder value, we will now continue to develop the business and the next milestone is to record positive cash flow at the end of 2011," Nyberg said.

TeliaSonera, holds 44 percent of Russia's second largest operator Megafon and 38 percent of Turkish leader Turkcell, which it aims to merge with Russian group Alfa's holdings in the two companies. The deal has however been blocked for the time being by a Russian court.

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