Telia has revealed its 5G network coverage, revenue, Opex and Capex for the third quarter of 2022.
Telecom operator Telia has slashed its outlook for 2022 and 2023 due to high electricity costs that eroded its quarterly profit.

Electricity prices have hit record levels in Europe after Russia’s invasion of Ukraine and a fall in nuclear power production in several countries.

“We saw a tripling of energy prices in the quarter on average, and we have got 70 percent hedge, but still got such volatility going on,” Telia CEO Allison Kirkby said.

Telia said the energy cost increase for full year 2022 is estimated to be around 900 million Swedish crowns ($80 million), which is 600 million crowns higher than expected three months ago.

Telia, which operates in the Nordic and Baltic countries, has hedged expects electricity costs to go up by 600 million crowns from 2.2 billion in 2022.

Despite higher energy costs, quarterly core earnings were in line with market expectations as Telia’s business grew in all its markets for the first time in a decade.

Third-quarter adjusted EBITDA rose to 8.07 billion Swedish crowns from 7.74 billion a year ago.

The electricity bill is eating into Telia’s plan of taking out 2 billion crowns in costs by end of 2023. In the latest quarter, the company saved 100 million crowns in costs.

Telia has raised prices for its telecom, broadband and TV services and would look at additional hikes next year.

The company expects full-year comparable core earnings to be similar to last year, down from its earlier estimate of growing by low single digit.

2023 outlook

Telia’s service revenues are estimated to grow by low single digit (unchanged) in 2023. Capex, excluding fees for licenses and spectrum, is estimated to return to around 15 percent of sales by 2023 (unchanged).

Telia’s Capex, excluding fees for licenses and spectrum, is estimated to be in the range of SEK 14.0-15.0 billion (unchanged) for 2022.

Telia accelerated the roll-out of 5G network. Telia said it now reaches 63 percent of the Nordic and Baltic population, up from 49 percent in June.

In Lithuania, Telia switched on 700MHz and 3.6GHz bands after acquiring them, making Telia’s 5G services accessible to 80 percent of the Lithuanian population.

In the Nordics, Telia Norway and Telia Sweden remain market leaders with 78 percent and 40 percent population coverage, respectively.