TeliaSonera earnings hit by strong krona

Swedish-Finnish telecoms firm TeliaSonera's reported earnings on Wednesday below analyst expectations on the back of a strong Swedish currency and problems in its Turkish operations.

TeliaSonera earnings hit by strong krona

The Swedish-Finnish firm nevertheless maintained its outlook for the year.

For the April to June period, TeliaSonera’s net profit was 3.38 billion kronor ($524 million) against 4.26 billion kronor expected by analysts polled by Dow Jones Newswires.

Sales fell 4.0 percent, to 25.89 billion kronor, the company said in its earnings report.

The company was penalised by the strong Swedish krona, with sales going up with the exchange rate effects excluded.

TeliaSonera’s earnings were also dragged down by the poor performance of its Turkish branch Turkcell, whose profits fell 99 percent.

The company however said it was maintaining its forecast of a 3.0 percent

raise of its sales, excluding exchange rate effects, noting this could be affected by the krona’s fluctuation.

TeliaSonera has about 159.4 million direct and indirect clients at the en of June, and is a globe leader thanks to its stakes in Turkcell and Russia’s Megafon.

Similarly to its Nordic competitors Telenor of Norway and Sweden’s Tele2, it has centered its development strategy on the Baltic countries, Russia, Turkey and the former Soviet republics.

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‘Rotten’ business claims at Nordic TeliaSonera

Swedish-Finnish telecom operator TeliaSonera has been accused of “rotten” business dealings in Azerbaijan, following a separate bribery scandal in Uzbekistan.

'Rotten’ business claims at Nordic TeliaSonera
A TeliaSonera conference in Stockholm last year. Photo: TT

Folksam, which is one of the largest insurance companies in Sweden, has accused the firm of “systematic cheating”, after it emerged that TeliaSonera’s subsidiary in Azerbaijan had ties with the family of Ilham Aliyev, the Arab nation’s leader.

It has been claimed that the dictator’s daughters were shareholders of TeliaSonera's subsidiary Azertel, via a connected company based in Panama.

“It is distressing that in a large Swedish company…people thought that cheating would pay off in the long run,” Carina Lundberg Markow, one of Folksam’s managers told the TT news agency on Wednesday.

She criticized TeliaSonera for failing to act “in an honest and open way” when entering new markets.

“Instead, they choose to pay for success,” she added.

TeliaSonera is one of the biggest telecom operators in the Nordic and Baltic countries and also operates in several emerging markets in Eurasia including Russia and Turkey, as well as Spain. The Swedish state owns 37.3 percent of the company.

Swedish prosecutor Gunnar Stetler is already investigating claims of unethical business practices in Uzbekistan and told TT he had also been given new information concerning potential bribery in Azerbaijan.

The company has voluntarily cooperated with the investigation, handing over what Stetler describes as “extensive information” about “the terms and conditions in Eurasian countries”.

Stetler said he was unable to discuss how he had responded to the information. But calls are growing for TeliaSonera to release a public report about its business dealings.

“Now it is extremely important to create transparency,” said Lundberg Markow.

“This shows the importance of having a set of values when doing business in complex markets or countries,” she added.

TeliaSonera and Norwegian rival Telenor recently merged their operations in Denmark, while the telecoms giant last year purchased rival Tele2's Norwegian division for 5.1 kronor.