Telia reveals Capex growth though 5G yet to become priority

Telia Company has revealed that the telecom operator has marginally increased its Capex to SEK 2.992 billion in Q1 2021 from SEK 2.943 billion in Q1 2020.
Telia CEO Allison KirkbyTelia’s Capex spending was SEK 556 million (-10.8 percent) in Sweden, SEK 344 million (+26.6 percent) in Finland, SEK 586 million (+27.8 percent) in Norway, SEK 43 million (-53.8 percent) in Denmark, SEK 64 million (-22.6 percent) in Lithuania and SEK 52 million (-38.7 percent) in Estonia during the first quarter of 2021.

Telia, while announcing its financial result, said customer perception is improving on the back of 5G and new TV packages. Telia does not reveal its specific achievements in 5G business. Telia is going slow on its 5G expansion going by the Capex.

Telia has secured 5G spectrum at attractive investment levels in both Sweden and Denmark. Telia is well positioned to accelerate the 5G network roll-out to implement its “Connect Everyone” strategic priority. Telia is now actively modernizing all mobile networks and as a result strengthening leading 5G positions in Sweden, Norway and Estonia while catching up in Finland.

Telia noted that 5G enabled handset uptake is increasing. The 5G smartphone penetration in Sweden now represents up to 55 percent of new handsets sold – providing momentum ahead of wider service launches across the footprint.

“With network roll-out as well as 5G enabled handset migration underway, 5G monetization opportunities across segments will accrue in the second half of the year,” Telia CEO Allison Kirkby said.

Cash CAPEX, excluding Telia Carrier and fees for licenses and spectrum, is expected to be in the range of SEK 14.5-15.5 billion during 2021.

“Transform to Digital”, Telia’s effort targeting product portfolio as well as IT infrastructure simplification and process automation, is also progressing to plan. Legacy migration and organizational streamlining have yielded network cost reductions in Sweden.

Overall, Telia achieved an operational expense reduction of 3 percent in the quarter and with slightly more than 400 FTE/FTC reductions implemented by March 31, Telia is well on track to deliver a 1,000 FTE/FTC reduction by the end of this year.

Telia’s net sales declined 2.7 percent to SEK 21,814 million. Service revenues decreased 4.9 percent to SEK 18,747 million.

Lower roaming revenues due to COVID-19 is estimated to have impacted service revenues negatively by around SEK 250 million.

Operating income decreased to SEK 1,821 million.