Telenor sees profits slide

Nordic operator Telenor on Tuesday reported that net profit for the first quarter fell to NOK1.62bn (€185m) in 2009, compared to NOK4.57bn in the same period in 2008.

Revenues meanwhile climbed to NOK27.1bn during the first three months of the year, from NOK26.29bn in the first quarter of 2008.

Speaking at the company’s results presentation, Jon Fredrik Baksaas, president and CEO of Telenor, said: “The business environment continues to be turbulent and we now experience some impact on the telecom sector, in particular influencing international traffic. However, the total traffic volumes are relatively stable. Among our markets, the Ukrainian economy is being the most affected by the financial crisis. In spite of negative revenue development, Kyivstar continues to deliver high margins and defend its strong revenue market share.”

Telenor’s other Ukrainian interest is not faring so well however. Last month, the confusing spat involving Telenor, Russian operator VimpelCom and Ukrainian Radio Systems (URS), saw Telenor served with a claim to pay $1.7bn to Farimex Products.

Farimex is a minority VimpelCom shareholder, which last year managed to have the Siberian appeals court in Omsk issue an arrest order for Telenor and Altimo’s (Alfa) shares in VimpelCom, amounting to almost 63 per cent of the company.

In the wake of the shares arrest, Telenor is being held liable for approximately $1.7bn in damages for allegedly delaying VimpelCom’s entry into the Ukrainian market via the acquisition of URS.