Telenor’s Balancing Act: Profits Rise as Customers Flee in Norway
Telenor is experiencing a complex situation in the Norwegian market. Recent financial reports reveal a surge in profits, fueled by shareholder returns and increased revenue per user, even as the company loses mobile subscribers. This dynamic highlights a strategic shift towards prioritizing profitability over sheer customer numbers.
Record Profits and Shareholder Rewards
Telenor’s stock price jumped over 7 percent following the release of its latest financial figures, nearing record levels after a period of underperformance. The company plans to distribute 28 billion NOK to shareholders through dividends and share buybacks. Further returns are possible, contingent on the absence of significant acquisitions within the Nordic region.
Price Hikes and Subscriber Churn
The positive financial results aren’t solely due to cost-cutting or market growth. Telenor has implemented a “more-for-more” pricing strategy, effectively increasing prices on mobile subscriptions. This has led to a loss of approximately 17,000 customers over the past three months. However, the company remains optimistic, citing a 5 percent increase in average revenue per user (ARPU) which offsets the decline in subscriber numbers.
Telenor has lost 56,000 mobile customers in Norway over the past year – a figure comparable to the population of cities like Tønsberg or Ålesund.
Norway’s Premium Pricing: A Wider Trend
The data reveals a significant price disparity between Norway and other Nordic countries. In Norway, the average revenue per mobile customer is 426 NOK per month, a 4.5 percent increase year-over-year. In contrast, Swedish customers pay 191 NOK, with a 1.9 percent increase, and Danish customers pay 125 NOK, with an 1.8 percent increase.
Whereas Sweden sees consistent customer growth, Norway is experiencing a steady outflow of subscribers. This suggests that Norwegian consumers are more price-sensitive or have more alternatives available.
Consumer Concerns and Market Dynamics
Thomas Iversen, a consumer affairs specialist at Forbrukerrådet (The Consumer Council), expressed concern over Telenor’s approach. He noted that customers are demonstrating their dissatisfaction with price increases by switching providers, but Telenor is prioritizing short-term profits over customer retention. Iversen emphasized the importance of active consumer engagement and regularly reviewing mobile contracts.
The Norwegian mobile market offers a wide range of subscription options, with varying data allowances and included services. Consumers are advised to prioritize sufficient data and the lowest possible price.
Telenor’s Defense: Value and Investment
Birgitte Engebretsen, CEO of Telenor Norway, argues that comparing prices directly with other Nordic countries is misleading. She claims that Norwegian customers receive more value for their money due to included services like fraud call alerts (Nummervarsel) and access to Norway’s most robust mobile network. She also points to the high cost of building and maintaining network infrastructure in Norway.
Telenor acknowledges the competitive pressure in the Norwegian market and intends to continue highlighting the added value of its services to both existing and potential customers.
Frequently Asked Questions
- Why are mobile prices higher in Norway? Norway has higher infrastructure costs and includes additional services like fraud protection in its mobile plans.
- Is Telenor losing customers? Yes, Telenor has lost 56,000 mobile customers in Norway over the past year.
- What is Telenor doing with its profits? Telenor is returning 28 billion NOK to shareholders through dividends and share buybacks.
- How can I save money on my mobile plan? Regularly review your contract, compare offers from different providers, and prioritize your data needs.
Explore more mobile plans: https://mobiltelefoni.no/mobilabonnement
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