Telenor profit probably gained on Ukraine, Thailand

Competition

Telenor ASA, Norway's largest phone company, will probably say third-quarter profit rose because of higher demand in countries such as Ukraine, Serbia and Thailand.

Net income may have climbed to 2.71 billion Norwegian krone ($410 million), or 1.61 krone a share, from 2.20 billion krone, or 1.31 krone, a year earlier, the median estimate of 16 analysts surveyed by SME for TDN Finans showed. Sales may have gained 32%, helped by acquisitions, according to the survey. Telenor, based in Fornebu, has expanded through acquisitions in nations such as Hungary, Ukraine and Bangladesh to fuel growth as demand for traditional phone services shrinks and competition hurts prices at home. The strategy has helped Telenor grow faster than Swedish competitor TeliaSonera AB. A 4% decline in the Norwegian krone against the dollar in the past year may have spurred revenue, analysts at UBS said. “We expect strong results from international operations to offset slower growth in the domestic business,” analysts including Nick Lyall at UBS wrote in a note. The broker has a “neutral” rating on Telenor's share. The company has close to 100 million mobile customers in more than a dozen countries. It won an auction to buy Serbian mobile-phone operator Mobi 63 in July, gaining more than 2 million wireless users in a country where about seven out of 10 have a handset.

By comparison, the Nordic region is saturated. Earnings may also get a boost as clients opt for pricier services allowing faster Internet for both wireless and fixed connections. Finland's Elisa Oyj on October 20 reported higher third-quarter profit and beat analyst expectations. Shares of Telenor have gained 39% this year, giving the company a market value of 157 billion krone. That compares with a 22% increase for Stockholm-based TeliaSonera and 24% gain for Helsinki-based Elisa. TeliaSonera reports on October 31 and a smaller Swedish rival Tele2 AB the following day. Nineteen analysts that have published research on Telenor in the past year recommend buying the company's shares, while four advise selling them, according to Bloomberg data. Eight have a “hold” rating. The company has beat analysts' estimates twice in the past four quarters. (Bloomberg)

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