Tele2 NL: preview to 13Q1 results (April 18)

Tele2's results are due April 18, before the markets open.

Looking back to the 12Q4 results:

• Relatively strong in mobile, weak in fixed broadband.
• Revenue still down, EBITDA weak as a result of losses in mobile.
• Tele2 has now finally entered the NGA world of FTTH and LTE.

Guidance for the mobile activities in NL:

• Revenue SEK 1,600-1,700m (EUR 185-200m) (2012: EUR 105m)
• EBITDA negative SEK 50-75m (EUR 6-9m)
• EBITDA break-even: 3 years after launches 4G-services
• Capex: SEK 2,000-2,500m (EUR 230-290m), of which SEK 1,400m (EUR 161m) for 4G licenses.

Market consensus (roughly):

• Revenue SEK 1,330m
• EBITDA SEK 340m
• Mobile subs 540k

Recent issues:

• Tele2 Russia was sold and perhaps Tele2 Croatia is next. This is good news from a capex point of view as resources may be shifted to NL. It may also leave room for acquisitions.
• Tele2 Business finally has a new director, Fedor Hoevenaars (formerly of BT and Verizon).
• Group management was reshuffled. Günther Vogelpoel (formerly Western-Europe) is now solely responsible for NL again.

Conclusion:

• The main point is Tele2 NL's LTE strategy:
• Timeline, pricing, targets, quad plays, fixed-line replacement services?
• Will there be network sharing (with T-Mobile NL)? Recently, the group stated it expected to see 'co-build' in NL.
• Is Tele2 NL essentially a mobile-only company, following the group's motto: "Tele2 - a European mobile operator - Mobile is our strategy".
• What about WiFi? And distribution (Tele2 NL doesn't operate a retail store chain of its own)?