Telia lowers Uzbek fine expectations, finally sells Tcell, as it reports Q1 numbers

Telia

Telia has said it hopes to pay less than anticipated for alleged corruption in Uzbekistan, as it finally sold off its opco in Tajikistan.

The Sweden-based operator made the two announcements as it revealed improved sales but falling profits in the first three months of the year.

The company said a $1.45 billion settlement made with American and Dutch authorities last September may now be reduced to $1 billion.

Telia stands accused of a number of historical wrongdoings, including claims that investments in the acquisition of spectrum licences involved corruption and money laundering.

The operator’s General Counsel, Jonas Bengtsson, said discussions between the parties had been “constructive” but admitted there was no guarantee the fine would be reduced.

“The discussions are still ongoing and we can therefore not comment any further at this point in time,” he said.

Meanwhile, Telia has sold its holding in Tajiki opco Tcell to the Aga Khan Fund for Economic Development just weeks after it said the deal was off.

The two parties agreed a $39 million deal last September, but Telia wrote off the value of the company earlier this month after Tajik regulators broke off contact.

However, Telia has had to settle for less than it had hoped after agreeing a $27.7 million deal for its 60 percent stake.

“By divesting Tcell we have now taken a second step in our strategy to leave region Eurasia and we maintain the ambition to complete our exit in 2017,” said Johan Dennelind (pictured), President and CEO, Telia Company.

The announcements came as Telia reported that net revenues decreased 5.6 percent year-on-year to SEK19.25 billion in Q1, although they rose three percent when measured on a like-for-like basis in local currencies.

Underlying sales were also up 2.6 percent in Sweden, thanks to enterprises buying more fixed and mobile equipment.

Revenues were also up in Denmark, Estonia, Finland, Lithuania and Norway.

[Read more: Swedish operators investigated over preventing new market entrants]

However, group EBITDA fell 1.1 percent to SEK6.15 billion, which Dennelind put down in part to “elevated” but “short-term” costs around customer support, IT and rebranding in Sweden and Finland.

Net income from continuing operations fell 12.3 percent to SEK2.5 billion as operating income tumbled 10.8 percent.

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