|Number of customers (in thousand)||4,742||4,744||0%|
|Net sales, external||12,398||11,881||4%|
1) excluding one-off items
In 2011, Tele2 Sweden continued to focus on three areas: growth in the postpaid and mobile broadband segments, improved quality, and market share expansion in the business segment.
The continued uptake of smartphones in the postpaid segment (mobile phones with text and data capacity that handle voice and data and are able to download different applications) further boosted mobile data revenues and equipment sales. At the end of 2011, the smartphone penetration within the postpaid residential segment exceeded 50 percent. The iPhone is the most sold smartphone but 2011 also saw the entry of more low-end smartphones taking market shares primarily in the prepaid segment. As a result, nine out of the top ten phones sold were smartphones, the majority of them sold together with a data subscription. This development is not expected to stop as the entry and popularity of cheaper low-end smartphones is gaining momentum.
To capitalize on the mobility trend among customers in Sweden, Tele2 continued the roll-out of its 4G network. At the end of the year, Tele2 Sweden had successfully rolled out 4G in 71 municipalities covering 4,055,000 residents in the country. The roll-out progress is according to plan, with the aim to cover 99 percent of the population by 2012. Faster mobile connections allow customers to do everything they are used to doing via the fixed ADSL connection but through the 4G network. During 2011, Tele2 launched a 4G Wi-Fi home router which offers a good substitute for fixed connections. At end of the year, Tele2 was carrying 25,000 4G customers in its network.
Despite increased competition, Tele2 Sweden managed to demonstrate strong results through quality-enhancing activities combined with cost containment efforts. The ongoing upgrade of Tele2’s network and IT systems has started to show results. Productivity was improved by Tele2’s cost effective networks.
As to the business segment, Tele2 Sweden completed the integration of Spring Mobil. The one-phone solution will further strengthen Tele2’s product portfolio and position within the SME segment. The continued focus on integrated services led to the acquisition of a number of customers for whom the product Communication as a service is particularly important. The customer base continued to grow, as the domestic economy strengthened.
The total mobile broadband customer base amounted to 387,000 (361,000) in 2011. The total mobile net intake amounted to 117,000 (212,000) in 2011. Net sales for mobile services grew by 10 percent to SEK 9,321 (8,474) million. EBITDA contribution for mobile was SEK 2,842 (2,803) million in 2011, affected by an increased amount of subscriptions sold with monthly instalments. Tele2 Sweden continued to grow market shares within the prepaid segment and further strengthened its position as the market leader in this segment. The mobile operations in Sweden reported an ARPU of SEK 179 (184). ARPU for mobile broadband increased during the year to SEK 134 (130). MoU per customer, excluding mobile broadband, grew to 246 (242) in 2011.
Tele2 Sweden’s EBITDA includes invoiced costs from the joint ventures SUNAB and Net4Mobiliy of SEK -658 (-491) million in 2011.
Tele2’s broadband services also showed profitability in 2011. During the coming year, Tele2 expects demand for high-speed access to increase. Tele2 will meet the accelerating demand for data capacity by further developing its LAN business, and by complementing its fixed broadband services with a high-speed mobile broadband network (4G). Fixed telephony showed profitability and positive cash flow during 2011. Mobile and fixed services are converging, a trend that Tele2 capitalizes on by offering the latest product Home telephony via the mobile network. This product enables the customer to keep the home phone, but over the mobile network, making it a simple and cost efficient solution for all parties.
The postpaid strategy of investing in high ARPU customers will continue into 2012. A stagnating market with fierce price competition and decreasing termination rates might put pressure on margins. Tele2 expects to deliver revenue growth through postpaid sales that generate higher ARPU. Tele2 Sweden will attract customers by responding to the increasingly price-conscious market as the undisputable price leader.
Growth in new areas will also contribute to increasing sales, e.g. mobile broadband, mobile advertising and mobile payments. Tele2 Sweden expects an increased growth in data as customers go mobile. Voice over IP is still on very low levels, but Tele2 Sweden will monitor the development going forward to be able to meet customer demand when the time is right.
In addition, profitability will be enhanced through cost savings from operating joint-venture networks, the efficient use of distribution channels, stronger focus on online activities, and increased levels of self-service.
Furthermore, Tele2 Sweden will continue to roll-out the combined 2G and 4G-network through the joint venture Net4Mobility as cost efficiency is a necessity to be a price leader.