Tele2 marks progress on fixed-mobile convergence plan

Tele2 made solid progress in the first quarter towards realising its vision of fixed-mobile convergence following its merger with cable operator Com Hem, according to CEO Anders Nilsson.

Anders Nilsson

Nilsson said that initiatives such as selling mobile services to Com Hem customers following the launch of Com Hem mobile and selling fixed services to Tele2’s mobile base would “take some time” before they delivered service revenue growth, but added that the company’s “cost transformation is on track”.

Nilsson said that Tele2 would “move from being a cost-cutting play, operating in two stagnant markets, mobile and fixed, to become an efficient challenger in a growing three-player FMC-market with focus on customer satisfaction”.

Tele2 said that the integration with Com Hem delivered synergies of about SEK50 million in Q1, and annualised run-rate cost synergies of SEK300 million.

Com Hem mobile, offering fixed and mobile services on the same invoice for the first time in Sweden, was launched in the quarter. Tele2 said that the number of fixed-mobile convergent customers increased to 45,000, with initial data indicating a positive effect on customer loyalty.

The company added 12,000 net new fixed broadband customers, in line with Q118, while the Com Hem TV subscriber base grew by 3,000, compared with a slight decline last year. The Q1 performance was boosted by new group agreement subscribers.

The Boxer digital-terrestrial base declined by 11,000 due to pricing changes and customers switching to fibre. TV revenue fell by 6% thanks to the decline in Boxer’s base.

Mobile postpaid customers were up 5,000, but prepaid customers fell by 25,000. Both figures were significant improvements on the prior year.

Tele2 had 2.927 million mobile customers, 839,000 fied broadband customers and 1.049 million TV customers – including DTT – at the end of March.

The company posted revenues of SEK7.2 billion, down 1% on a like-for-like basis. EBITDA was SEK2.397 billion.