GICS Sector : Communication Services
Tele2 AB (publ), a telecom operator, provides fixed and mobile connectivity and entertainment services in Sweden, Lithuania, Latvia, and Estonia.The company offers mobile telephony and data, fixed broadband, fixed telephony, switch and contact center, cloud services, IT services, network services, workplace, video and collaboration, and security services.It also provides data network services, including dark fiber, dedicated wavelength, ethernet and IP VPN, and internet services; and unified communications comprising service provider, mobile virtual network operator, and carrier SIP-interconnect services.
Tele2 reported a robust Q2 2025 performance, with organic end-user service revenue growing 2% year-over-year, driven by strong contributions from the Baltics and Sweden Business segments. Underlying EBITDAaL surged 15%, benefiting from cost-cutting measures and workforce reductions, while equity free cash flow reached SEK 1.6 billion, up SEK 450 million year-on-year. The company also raised its full-year guidance, now expecting underlying EBITDAaL growth to exceed 10% organically, up from its previous mid- to high single-digit growth forecast. CEO Jean-Marc Harion emphasized that the accelerated cost-cutting measures were part of the original transformation plan, with no new ambitions beyond the initial workforce reduction target of 600-700 positions.
Publication Date: Jul -17
In Sweden, Consumer end-user service revenue declined 1%, primarily due to the discontinuation of Boxer terrestrial TV, but excluding this impact, growth was 1%. Mobile Postpaid added 10,000 RGUs, and fixed broadband ASPU grew 2%, supported by the successful launch of new flexible TV and streaming offerings. Sweden Business delivered a 4% revenue increase, fueled by IoT and Large segment growth. The Baltics outperformed expectations, with a 7% revenue increase and 20% underlying EBITDAaL growth, supported by price adjustments and cost discipline. Cash conversion improved to 77% over the last 12 months, reflecting higher margins and disciplined spending.
Tele2’s focus on cost governance and restructuring yielded significant benefits, with restructuring costs of SEK 83 million and a decrease in net financial items due to lower interest rates. Economic net debt declined to SEK 24.7 billion, leveraging strong cash generation. The company’s financial policy remains unchanged, with no near-term revisions expected during the transformation year. As Peter Landgren noted, “The cost-cutting measures were an acceleration of existing plans, not new initiatives, with further efficiencies expected in specific areas.”
Tele2 currently trades at a P/E ratio of 26.03 and an EV/EBITDA of 12.36, reflecting market confidence in its transformation progress. The stock’s dividend yield of 4.52% and free cash flow yield of 6.45% highlight its attractive income characteristics. While the company faces headwinds such as competition in Swedish open fiber areas and regulatory challenges, its focus on agility, data-driven product launches, and 5G investments positions it well for long-term growth. Management’s ability to deliver ahead of schedule on its transformation goals underscores its execution capabilities, though macroeconomic uncertainties and reinvestments in growth areas could moderate H2 performance.
Tech, Media & Telecom Roundup: Market Talk
Oct -21
Tech, Media & Telecom Roundup: Market Talk
Oct -21
Tech, Media & Telecom Roundup: Market Talk
Sep -30
Tele2 (OM:TEL2 B): Evaluating Valuation After Recent Share Price Momentum
Sep -11
Is There Still Opportunity in Tele2 After Strong 48% Gain and 5G Expansion in 2025?
Sep -09
Are Utilities Stocks Lagging Deutsche Telekom (DTEGY) This Year?
Aug -07
Is Telenor (TELNY) Outperforming Other Utilities Stocks This Year?
Jul -18
Tele2 Shares Jump After Earnings Guidance Raise
Jul -17
Tele2 AB's 1.2% growth in End-user Services is driven by increasing mobile data consumption, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digital transformation, improved customer experience, and cost savings initiatives have contributed to this growth.
Tele2 AB's equipment segment growth of 0.8 is driven by increasing demand for 5G network infrastructure, expansion into new markets, and strategic partnerships. Additionally, the company's focus on cost savings and operational efficiency has enabled it to invest in growth initiatives, further boosting segment performance.
Tele2 AB's 1.1% growth is driven by increasing mobile data consumption, 4G network expansion, and cost savings from operational efficiencies. Additionally, the company's focus on digitalization, IoT, and 5G investments are expected to contribute to future growth. Furthermore, the operator's strong market position in Sweden and the Baltics provides a solid foundation for continued growth.
Tele2 AB provides mobile services including voice, data, and SMS to individuals and businesses across Sweden, Estonia, Latvia, and Lithuania.
Tele2 offers fixed broadband services, providing high-speed internet access to homes and businesses.
Tele2 provides TV services, offering a range of channels, on-demand content, and streaming capabilities.
Tele2 offers IoT solutions, enabling businesses to connect and manage devices, and collect and analyze data.
Tele2 provides cloud services, including infrastructure, platform, and software as a service, to businesses.
Tele2 offers security services, including threat detection, incident response, and security consulting.
Tele2 AB (publ) operates in a highly competitive industry, but the threat of substitutes is mitigated by the high switching costs for customers and the lack of viable alternatives.
Tele2 AB (publ) has a large customer base, but the bargaining power of customers is high due to the availability of alternative service providers and the ease of switching.
Tele2 AB (publ) has a diversified supplier base, and the bargaining power of suppliers is low due to the availability of alternative suppliers and the company's significant purchasing power.
The threat of new entrants is moderate due to the high barriers to entry in the telecommunications industry, including the need for significant capital investment and regulatory approvals.
The telecommunications industry is highly competitive, with multiple players competing for market share, leading to a high intensity of rivalry.
| Value | |
|---|---|
| Debt Weight | 55.72% |
| Debt Cost | 4.10% |
| Equity Weight | 44.28% |
| Equity Cost | 5.03% |
| WACC | 4.51% |
| Leverage | 125.84% |
Value: 4.8
Growth: 3.3
Quality: 5.7
Yield: 8.8
Momentum: 9.0
Volatility: 10.0
1-Year Total Return ->
Value: 9.3
Growth: 3.4
Quality: 5.2
Yield: 9.4
Momentum: 7.5
Volatility: 6.3
1-Year Total Return ->
Value: 8.1
Growth: 4.7
Quality: 6.5
Yield: 6.9
Momentum: 6.5
Volatility: 8.3
1-Year Total Return ->
Value: 4.1
Growth: 4.1
Quality: 5.9
Yield: 7.5
Momentum: 7.0
Volatility: 10.0
1-Year Total Return ->
Value: 6.6
Growth: 3.2
Quality: 7.5
Yield: 9.4
Momentum: 4.0
Volatility: 7.0
1-Year Total Return ->
Value: 3.0
Growth: 3.2
Quality: 5.8
Yield: 8.8
Momentum: 9.5
Volatility: 3.0
1-Year Total Return ->