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TELIASONERA

Beleaguered TeliaSonera announces profit tumble

TeliaSonera announced on Thursday that its profit took a blow in 2013, a year in which the Swedish-Finnish telecom operator faced a corruption probe, bad growth, and changing customer behaviour.

Beleaguered TeliaSonera announces profit tumble
TeliaSonera's new CEO Johan Dennelind. Photo: TT

The group's annual net profit fell by 25 percent to 14.97 billion kronor (1.69 billion euros, $2.3 billion), while revenue dropped by three percent to 26.5 billion kronor.

Johan Dennelind, TeliaSonera's chief executive since last September, said in a statement that 2013 was "an eventful and challenging year" for the company and the telecoms industry.Dennelind said that one of his main tasks had been to define a new country-based operating model to be implemented in April this year "to reduce overall complexity within the group, enhance customer focus and clarify general accountability".

Last November, TeliaSonera dismissed four top executives for possible links to an alleged corruption case during the group's expansion in Uzbekistan.

In 2014, the company expects net sales in local currencies, excluding acquisitions and disposals, to stay at similar levels of last year. In the fourth quarter, net profit fell by 68 percent to 2.19 billion kronor, while revenue decreased by two percent to 26.5 billion kronor.

In October 2012, TeliaSonera announced a cost-cutting programme including 2,000 lay-offs intended to save up to two billion kronor by the end of 2014.

"The accumulated savings amounted to approximately one billion kronor at the end of 2013," the company said in the statement.

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TELIASONERA

‘Rotten’ business claims at Nordic TeliaSonera

Swedish-Finnish telecom operator TeliaSonera has been accused of “rotten” business dealings in Azerbaijan, following a separate bribery scandal in Uzbekistan.

'Rotten’ business claims at Nordic TeliaSonera
A TeliaSonera conference in Stockholm last year. Photo: TT

Folksam, which is one of the largest insurance companies in Sweden, has accused the firm of “systematic cheating”, after it emerged that TeliaSonera’s subsidiary in Azerbaijan had ties with the family of Ilham Aliyev, the Arab nation’s leader.

It has been claimed that the dictator’s daughters were shareholders of TeliaSonera's subsidiary Azertel, via a connected company based in Panama.

“It is distressing that in a large Swedish company…people thought that cheating would pay off in the long run,” Carina Lundberg Markow, one of Folksam’s managers told the TT news agency on Wednesday.

She criticized TeliaSonera for failing to act “in an honest and open way” when entering new markets.

“Instead, they choose to pay for success,” she added.

TeliaSonera is one of the biggest telecom operators in the Nordic and Baltic countries and also operates in several emerging markets in Eurasia including Russia and Turkey, as well as Spain. The Swedish state owns 37.3 percent of the company.

Swedish prosecutor Gunnar Stetler is already investigating claims of unethical business practices in Uzbekistan and told TT he had also been given new information concerning potential bribery in Azerbaijan.

The company has voluntarily cooperated with the investigation, handing over what Stetler describes as “extensive information” about “the terms and conditions in Eurasian countries”.

Stetler said he was unable to discuss how he had responded to the information. But calls are growing for TeliaSonera to release a public report about its business dealings.

“Now it is extremely important to create transparency,” said Lundberg Markow.

“This shows the importance of having a set of values when doing business in complex markets or countries,” she added.

TeliaSonera and Norwegian rival Telenor recently merged their operations in Denmark, while the telecoms giant last year purchased rival Tele2's Norwegian division for 5.1 kronor.