Telia sees digital ad growth but SVOD numbers hit by competition

Nordic telco Telia saw strong growth in digital advertising from its TV business in the first quarter but was hit by a decline in Swedish SVOD subscribers.

The company’s extensive TV and Media unit saw ad revenue grow by 11%. Digital advertising grew by 26% and delivering one third of the overall growth, despite what CEO Alison Kirkby described as good momentum in linear.

However SVOD numbers dropped by 30,000 during the quarter to 741,000 subscribers. The company said this was driven by a decline in non-sports subscriptions in Sweden, where competition is intense.

Pay TV revenue was flat in the quarter as growth in sports in Sweden, spurred by the Champions League, was offset by declines in other segments, in particular OTT competition in movies and series. Kirkby said that stronger content and “finetuned commercial propositions” are planned for the coming quarters to counter the competition.

Higher premium sports content costs resulted in a lower EBITDA contribution for TV and Media, with a decline of SEK311 million in Q1.

The company said that an increase in content costs would gradually fade during the year, and its 2022 guidance for the group of low single digit growth in both service revenue and EBITDA is unchanged.

Telia had 1.015 million TV customers in Sweden at the end of March, up 8.6% year-on-year. TV subscriptions increased by 18,000 in the quarter.

In Finland, the group had 658,000 TV customers, up 12,000 despite a decline in fixed broadband. In Norway the group had 477,000 TV subscribers, up 1.9%. TV numbers were mostly flat or declined slightly in other markets.