The president and CEO of Tele2 blamed additional costs associated with the transition from traditional voice to a more data centric emerging business model for falling profits in Q1.
Mats Granryd said the first three months of the year were “as challenging as expected”.
“Many of the structural trends foreseen in our industry are now materializing,” he added.
The Sweden-based operator unveiled a 29 percent fall in net profit to €98 million.
Q1 sales increased nine percent to €1.9 billion driven by growth in Kazakstan and Norway in particular.
The company added more than 300,000 customers in Kazakstan, where revenues jumped 450 percent.
In Norway, sales were boosted by the acquisition of Network Norway, the company established to roll out the country’s third mobile network.
In Sweden, Tele2’s largest market, growth was flat.
Nevertheless, Granryd predicts that the “natural evolution” of moving from voice to data is likely “to improve the operational performance of mobile operators over the medium term”.
He added: “Tele2 is embracing change and introducing full data service bundles, while competitors still resist.”