Telenor’s Strategy: Higher Prices, Fewer Customers and a Focus on Value
Telenor is navigating a complex landscape in the Norwegian telecom market. Recent financial reports reveal a strategy of increasing revenue per user, even as the total number of mobile subscribers declines. This approach, coupled with a significant return of capital to shareholders, signals a shift in priorities for the company.
Price Hikes and Customer Churn
Despite raising prices on mobile subscriptions through a “more-for-more” strategy, Telenor reported a loss of approximately 17,000 mobile customers in the last three months. However, the company remains optimistic, citing a 5% increase in average revenue per user (ARPU) which offset the decline in subscriber numbers, resulting in a 2.9% increase in revenue from mobile services.
Telenor has lost 56,000 mobile customers in Norway over the past year – a number equivalent to the population of cities like Tønsberg or Ålesund.
Norway: A Premium Market
The data highlights a significant price disparity between Norway and other Nordic countries. Norwegian mobile customers pay an average of 426 NOK per month, a substantial increase of 4.5%, compared to 191 NOK in Sweden and 125 NOK in Denmark, which saw increases of 1.9% and 1.8% respectively. This difference is contributing to customer churn, as evidenced by the steady growth of subscribers in Sweden while Norway experiences losses.
Shareholder Returns and Future Investments
Telenor is set to return 28 billion NOK to shareholders through dividends and share buybacks. The company has indicated that further returns are possible, contingent on the absence of significant acquisitions in the Nordic region.
Consumer Response and Expert Opinion
The Forbrukerrådet (Norwegian Consumer Council) expressed concern over Telenor’s strategy, noting that the price increases have prompted customers to switch providers. Fagsjef Thomas Iversen criticized the company for not responding more effectively to customer feedback and maintaining high prices despite the outflow of subscribers.
The Norwegian market offers a wide range of mobile subscription options, emphasizing the importance of comparing plans and understanding included services, particularly data allowances. Consumers are advised to review their contracts annually and whenever price increases are announced.
Telenor’s Defense: Value and Network Quality
Telenor defends its pricing strategy by arguing that Norwegian customers receive greater value for their money, citing included services like Nummervarsel (scam call alerts) and the robustness of its mobile network, consistently ranked among the best in the world. The company also points to the high cost of building and maintaining network infrastructure in Norway as a justification for higher prices.
FAQ
Q: Why is Telenor losing customers despite increased revenue?
A: Telenor is increasing prices, leading some customers to switch to cheaper providers. However, the revenue generated from remaining customers is increasing, offsetting the losses from subscriber churn.
Q: How does Norway’s mobile pricing compare to other Nordic countries?
A: Mobile subscriptions in Norway are significantly more expensive than in Sweden and Denmark.
Q: What is Telenor doing for its shareholders?
A: Telenor is returning 28 billion NOK to shareholders through dividends and share buybacks.
Q: What should consumers do to ensure they are getting the best deal on their mobile plan?
A: Consumers should regularly review their contracts, compare prices from different providers, and be aware of included services.
Did you know? Norway consistently ranks among the countries with the most expensive mobile data plans in Europe.
Pro Tip: Utilize price comparison websites to quickly assess the best mobile subscription options available in Norway.
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