TDC revenues flat despite rising competition (Denmark)
TDC has formed concrete results as its total revenue grew by 0.3% to US$4.85 billion for the full year 2010, while EBITDA rose by 2.2% to US$2 billion. The Group’s operating free cash flow grew significantly by 15%.
According to Henrik Poulsen, TDC’s President and CEO, this represents good performance in a difficult market. Thanks to the Group’s strong brands, good products, skilled employees and highly developed technology platforms, they have succeeded in maintaining their position in a telecoms market where competition further intensified during the year.
TDC invested a total of US$640.18 million, of which the vast majority was spent on continued upgrading of the Danish fibre, cable and mobile infrastructure. Towards 2020, TDC plans to invest a total of US$4.57 billion in the Danish infrastructure.
For 2011, TDC expects to maintain its revenue in line with 2010, whereas EBITDA is expected to grow by approximately 2% compared with 2010.
Verizon expects 2010 CAPEX of $16.8bn-$17.2bn (USA)
www.WirelessFederation.com/news: Verizon Communication, the telecommunications giant has announced that its capital investment this year will be very similar to last year. A full-year CAPEX of $16.8 billion to $17.2 billion is also expected by the company which is roughly flat from 2009, besides expecting continued strong free cash flow this year.
Company’s strong wireless business will provide it with much of its cash flow while the joint venture of Verizon and Vodafone Group Plc, Verizon Wireless is also expected to contribute much of the cash flow growth.
Customer growth is also expected by Verizon in the fiscal first quarter. Verizon Wireless still has the opportunity to grow its more lucrative contract customers which is very much unlike other carriers focusing their attention on the prepaid business.
The price of the unlimited calling plans was reduced by Verizon Wireless by $30 to $70, earlier this year. According to Chief Financial Officer John Killian, the company will have a strong first quarter for wireless subscriber growth in the first quarter, and that prepaid wireless service will start to pick up.
Africa has great potential among all emerging markets: Bharti CEO
www.WirelessFederation.com/news: While explaining the rationale for buying Zain, Africa was described as a potential emerging market by Sunil Bharti Mittal, founder Chairman and Group CEO, Bharti Enterprises.
The need of globalisation for Bharti has also been explained by him as Indian operations were generating free cash flows. While defending his decision to enter into talks with the Kuwait telecom major, he made it clear that competitive intensity is low for Zain in most countries and the valuations offered are fair and reasonable.
According to Bharti officials, Africa had good growth opportunities among emerging markets, given its high population, lower mobile penetration and relatively less competition and the tariffs too, in Africa are more than 10 times India.
Sprint suffers a net loss of USD2.44 billion in 2009
www.WirelessFederation.com/news: A net loss of USD2.44 billion for the twelve months ended December 31, 2009 has been posted by Sprint Nextel, which is a 13% year-on-year improvement. A net loss of USD2.79 billion has also been suffered by the company and the revenues continued to fall, down 9% from USD35.64 billion in 2008 to USD32.26 billion a year later.
Operating income before interest, depreciation and amortization went down from USD7.66 billion to USD6.41 billion. The company also lost a total of 1.13 million wireless subscribers in 2009.
According to CEO Dan Hesse, Sprint’s performance built notable momentum during the second half of 2009 and the firm continues to closely manage costs, and in 2009 it generated the highest annual free cash flow since the merger.
The fourth quarter completion of the Virgin Mobile USA and iPCS acquisitions, as well as additional large investment in Clearwire, are hailed important for the future of the company.
Telstra lowers its stance on revenues
www.WirelessFederation.com/news: Due to difficult markets at home and in Hong Kong, Australian operator Telstra cut its sales outlook for 2010. The company attributed the flattish FY 2010 revenues to a difficult second half of its fiscal year
2009. Earlier, the company expected growth in the low single digits.
Strength of the Australian dollar, strong domestic competition driven by ULL growth, tough operating conditions in Hong Kong, very competitive mobile offers, and a growing number of mobile-only households were the major drivers behind the lower-than-expected growth.
Because of the similar reasons, the sales for the fiscal first half of 2010 will also be lower. For low single-digit growth in full-year EBITDA and EBIT, a stable EBITDA margin, capex at around 14 percent of sales and free cash flow of AUD 6 billion- Telstra’s guidance was unchanged.
Telstra cuts long-term earnings target
Telstra has cut its long-term earnings target after laying down its financial parameters for the next four years ahead of the $8 billion T3 sale.
Australia’s biggest telecommunications company also said its five-year transformation plan is running ahead of schedule, as it launched a $1 billion third generation (3G) broadband network.
But a year into the restructure, Telstra cut its long-term management objective for underlying earnings, saying it expected earnings before interest, tax, depreciation and amortisation (EBITDA) to grow by two to 2.5 per cent per annum up to 2009/10.
At a similar meeting last November it forecast EBITDA growth of three to four per cent from 2005 to 2010 and growth of two to three per cent from 2005 to 2008.
And Telstra’s annual EBITDA margin is now expected to be 46 to 48 per cent over the same timeframe, down from 50 to 52 per cent.
But its shares rose 10 cents to a two-month high of $3.83 as the company updated its forecast to reflect the impacts of regulatory and other issues through the year.
“Today’s investor day proved a hit, with confidence beginning to return as was evident in the support for the stock,” said IG Markets senior trader Harley Salt.
The share price boost for Telstra comes ahead of the federal government’s launch on Monday of the T3 prospectus, for the sale of up to $8 billion worth of its shares in the company.
Telstra said it had been forced to alter its targets due to higher cost growth, after it earlier this year scrapped plans for a high-speed fibre broadband network due to regulatory issues.
“Telstra’s transformation engine is humming on all cylinders, and the most critical ones are performing best of all,” said chief executive Sol Trujillo said at a day-long strategy briefing.
“We are on or ahead of budget and delivery schedule, and we’ve been busy winning in the market with new high-speed networks, new products that are simple and integrated, and improved customer service that is more reliable and convenient.”
Telstra’s other long term management objective was for annual revenue growth of two to 2.5 per cent on the back of increased revenues from third generation mobile services and IP telephony, which was expected to offset losses from adverse regulatory outcomes.
“New product revenue will be in excess of 30 per cent of sales revenue,” it said.
Telstra also expects costs to grow by two to three per cent per annum up to 2009/10.
The company also remains focused on a plan announced last year to cut its workforce by 12,000 jobs.
Capital expenditure to sales ratio of 10 to 12 per cent is expected by 2009/10, because of substantially reduced expenditure as the $11 billion transformation program progress.
Free cash flow is forecast at $6 billion to $7 billion.
Telstra also launched a NEXT G mobile broadband network, offering high-speed wireless mobile and internet access to 98 per cent of Australians.
Chief financial officer John Stanhope said the investment would give the company an advantage over its rivals.
“We are the only true national infrastructure provider because we have made the investment,” Mr Stanhope said.
“This gives us a tremendous advantage.
“We are seeing real momentum in business, our topline growth is strong and we expect to build on this.”
Telstra said that in the first two months of 2006/07 sales revenue was up 3.3 per cent.
But earnings before interest and tax (EBIT) for the period declined by 8.6 per cent.
The company reiterated its forecast for EBIT to decline by 17 to 20 per cent in the first half of this year, due to costs related to its transformation plan and other one-off impacts.
Telstra’s full year EBIT is expected to increase by two to four per cent and after second half EBIT expands by 37 to 40 per cent.
“Telstra is already turning the corner and we will record more impressive earnings growth as the one-off costs associated with new investment, redundancy and restructuring and accelerated depreciation begin to subside later in fiscal year 2007,” Mr Stanhope said.
Source- http://www.theage.com.au
