Morningstar | Telia Growth Now Recentered on Sweden and Finland
With the Finnish government selling down its stake in the company, TeliaSonera has changed its name to Telia. After lapses in judgment in its dealings in Uzbekistan, which led to the resignation of much of its senior leadership, Telia has a new management team, which decided to exit from Eurasia. With the divestitures mostly complete, Sweden now accounts for about 44% of Telia's revenue. Sweden has been one of the best-performing markets in Europe, but it witnessed a slowdown in the past couple of years. The small and midsize enterprise market, and the fixed-line telephone business have particularly struggled. We expect these operations to continue to hold back growth in the country as Tele2 has acquired TDC’s business operations and acquired Com Hem, the largest cable TV operator in the country. With these additional assets, Tele2 is now a fully converged operator.Telia is the incumbent telecom operator in Finland, though it is only the second-largest carrier in the country. It also has extensive assets in Norway and Denmark. It called off merging its Danish operation with Telenor's as a result of regulatory concerns. However, it has improved its positioning in Norway with the acquisitions of Get and TDC Norway, which now makes it a converged operator in the country. These other Nordic countries provide an additional 40% of revenue.The Baltic region's operations have been the bright spot recently, but these businesses slowed in 2018’s fourth quarter. With mobile penetration rates well above 100%, we think growth will be driven by increased data usage, rather than significant subscriber growth. The firm also owns a sizable position in Turkcell.Telia Company provides telecommunication services in the Nordic and Baltic countries, the markets of Eurasia, including Russia, Turkey and Spain. Co. has three business segments: Mobility Services, which comprises operations in Sweden, Finland, Norway, Denmark, Lithuania, Latvia, Estonia and Spain; Broadband Services, which comprises operations in Sweden, Finland, Denmark, Lithuania, Latvia (49.0%), Estonia and international carrier operations; and Eurasia, which comprises mobile operations in Kazakhstan, Azerbaijan, Uzbekistan, Tajikistan, Georgia, Moldova and Nepal. The business area also includes Co.'s shareholdings in OAO MegaFon, Russia and Turkcell Iletisim Hizmetleri A.S., Turkey.
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