Further, Ziggo showed how rapid growth negatively impacts margins because it requires investments in all directions. Nothing unusual about that. Tele2, bleeding subscribers, now boasts rising margins at Tele2 NL. (How about TheStreet including European statements for their weekly '5 Dumbest Things on Wall Street'?).
Other noteworthy aspects of Tele2's 11Q3 report for Tele2 NL:
- Guidance, both long-term and short-term, was unchanged. No surprise here, since the capital markets day was just a month ago. One of the LT targets: 'The capability to reach a top 2 position in terms of customer market share, in an individual country or region'. This remains a vexing point.
- The core markets (Sweden, Norway, Russia, Kazakhstan, Croatia) each have their own individual public targets, but not Tele2 NL.
- The contribution of Tele2 NL to group sales dropped to 14.0% (from 14.8% a quarter ago).
- Sales growth sans currencies was a reported +7.2% due to the BBned takeover. We calculate +8.6%, down from +12.1%, +10.8% and +11.4% during the previous three quarters. (The lower growth rate could be the result of the unreported divestment of some voice related business.) From 11Q4, the BBned effect will vanish from the growth figures. Revenue growth will most likely be flattish.
- Mobile: subs -5k qoq (mostly prepaid). This is unremarkable in light of the recent performance. MTA redux leads to lower costs. EBITDA margin up 1.5 points qoq to 18.4%.
- Broadband: subs -16k qoq, much worse than during the previous quarters. ARPU was up. Triple play net additions were again higher than double play net additions. EBITDA margin up 2.9 points qoq at 34.6%.
- Fixed telephony: subs -15k qoq. Unremarkable. EBITDA margin up almost 2 points qoq at 27.9%.
- Total RGUs were down to 1.005 million (early 2007 there were 1.5m). Next quarter, it will go under the 1m milestone.