TV business ‘negatively impacts’ Telia as it moves towards TV4 Play launch

TV and media is continuing to “negatively impact” Nordic telco Telia’s performance, despite resilience in its telecom activities, according to CEO Allison Kirkby.

Reporting on Telia’s latest quarterly results, Kirkby said that “the current downturn in the advertising market is compounding the existing challenges in premium sports at a time of added cost from the ongoing business transformation” as the group seeks to restructure its media units and further cut costs.

Telia plans to launch its new TV4 Play streaming service in the next few weeks in the face o f headwinds including a 14% decline in advertising revenue.

Pay TV revenues fared better thanks to price increases, growing by 4%, but EBITDA fell by SEK7 million as a result of the advertising dip, previous content commitments and costs relating to the launch.

Telia is merging its C More pay TV services into linear broadcast operations TV4 in Sweden and MTV in Finland, with the launch of a new hybrid streaming and linear service and the shuttering of the C More brand.

The company is also scaling back its commitment to sports, with a focus on only “pursuing rights with certain clear profiles that support the TV4 and MTV local positions”.

While the telecom business is delivering results, the grim outlook in the immediate future for TV and media nevertheless means that Telia now expects cash flow in the lower half of the forecast SEK7-9 billion range for the full year.

TV revenue dropped by 5.4% year-on-year to SEK2.2 billion for the quarter, or by 7.4% on a like-for-like basis. Adjsuted EBITDa fell to negative SEK7 million from SEK345 million a year previously.

Telia did well in TV subscriptions in Sweden, with its total base rising by 5.9% year on year to just over one million, with 10,000 added in the quarter to June. TV subs in Finland also increased by 3% to 678,000, but declined slightly in Norway and significantly in Denmark, where it has signed an agreement to sell up to local player Norlys.

Overall, Telia posted revenues of SEK23.3 billion for the quarter, with EBITDA of SEK7.4 billion.