Norway’s Telenor has written down the value of its Danish business by NOK2.1bn (US$245.07m) following its failed attempt to establish a joint venture in the country with TeliaSonera. The Oslo-based telco has now initiated a turnaround process for Telenor Denmark.
Norway’s Telenor (OSL:TEL) has written down the value of its Danish business by NOK2.1bn (US$245.07m) following its failed attempt to establish a joint venture in the country with TeliaSonera (OMX:TLSN) amid European Commission opposition.
“Based on estimated value in use, an impairment loss of NOK2.1bn was recognised in the fourth quarter of 2015 relating to tangible and intangible assets in Telenor Denmark,” the Oslo-based telco said in a statement on its Q4 2015 results, noting that the outlook for the telecoms sector in Denmark remains “challenging”.
The impairment charge saw Telenor record a net loss for the quarter of NOK1.39bn (US$162.2m), compared with NOK1.41bn (US$164.54m) a year earlier.
In mid-January, TeliaSonera said it would write down the value of its Danish operations by SKr1.9bn (US$222.25m) following the failure of the JV.
The Nordic telcos scrapped plans for the Danish JV in mid-September after failing to agree antitrust remedies with the commission. The transaction was the first to be reviewed by new competition commissioner Margrethe Vestager, with the decision a significant departure from the more liberal approach taken by her predecessor Joaquín Almunia.
Vestager was quoted at the time saying the commission’s analysis had shown that the proposed JV created significant competition concerns requiring an equally significant remedy, namely the creation of a fourth mobile network operator. The establishment of a beefed-up MVNO was deemed insufficient.
Telenor and TeliaSonera had contended that their Danish subsidiaries needed to merge in order to increase network investment. Following the EC’s decision, they have said they will continue to assess strategic options in the Danish market.
In its statement today, Telenor said a turnaround process is being initiated following the abandonment of the JV plans.
Telenor Denmark’s total revenue for the fourth quarter was down 3% in local currency terms to NOK1.43bn (US$166.83m) , mainly as a result of lower mobile ARPU as well as 10% decline in fixed-line revenues. Mobile subscription and traffic revenues fell 3%. The unit’s number of mobile subscribers decreased by 7,000 during the quarter, totalling 1.9977 million at end of 2015.
The Telenor Group posted revenue of NOK33.49bn (US$3.91bn) for the quarter, up from NOK30.44bn (US$3.55bn) in Q4 2014. EBITDA was up to NOK10.86bn (US$1.27bn) from NOK9.32bn (US$1.09bn) the previous year.
