Swedish-Finnish telecom operator TeliaSonera pinned falling profits in the first quarter on lower-margin equipment sales. The company also blamed falling sales on "lower termination fees", which telecom operators charge each other for calls on their networks.
Net profit was down by 4 percent compared to the level a year earlier to 3.95 billion kronor ($600 million), slightly below the 4-billion-kronor expectations by analysts polled by Dow Jones Newswires.
"Our markets continue to be characterized by a changing customer behaviour and an evolving convergence trend," chief executive Johan Dennelind said in a statement.
While sales were down, profits from billing customers went up in the Nordic region by 3 percent, the company said.
"Solid demand for data services compensated for slower growth in voice and messaging," the company stated. "We see further positive effects from our data-centric price models, which are now introduced in all Nordic markets."
"We stay focused on upgrading our customers' internet experience through further investments in 4G and fiber," Dennelind added. "In Sweden, our 4G coverage has approached 90 percent of population and we remain committed to reach 99 percent by the end of this year."
As its European markets stagnated, TeliaSonera has expanded to several countries in Central Asia including Kazakhstan, Uzbekistan, Azerbaijan, and Georgia. To combat the downturn, the company said the region would be key to future successes.
"(We will) take Eurasia to the next level by monetizing on the data opportunity," Dennelind said.
Overall, TeliaSonera revenue for the period dropped by 2.4 percent to 23.97 billion kronor, slightly below analysts forecasts of 24.21 billion kronor. The group kept its outlook for 2014 unchanged.
"Net sales in local currencies, excluding acquisitions and disposals, are expected to be around the same level as in 2013," the company said. "Currency fluctuations may have a material impact on reported figures in Swedish krona."