UPDATE 1-Emerging market telco Millicom's CEO to leave firm

Tue Jul 31, 2012 4:51am EDT

* Grahne to be replaced by Hans-Holger Albrecht as CEO

* Analysts say decision unexpected

* Shares in Millicom dip

STOCKHOLM, July 31 (Reuters) - Millicom said on Tuesday Mikael Grahne would step down later this year after just over three years as chief executive, a move which surprised analysts and pushed down shares in the emerging market-focused telecom group.

Millicom, which operates in Latin America and Africa said Grahne would leave in October and be replaced by Hans-Holger Albrecht, currently CEO of Modern Times Group MTG AB and a member of Millicom's board since 2010.

Millicom gave no reason for Grahne's departure, saying only that he had notified the board of his intention to step down.

Grahne, who has been with the company for 11 years, is seen by analysts as having been a key driving force behind Millicom's rapid expansion over the last decade.

During the period, the group has seen core profit (EBITDA)rise to $2.1 billion 2011 from $226 million in 2001. Customers have grown to over 43 million from 3.4 million.

"The future will tell whether Hans-Holger Albrecht is going to be a good CEO," said Sven Skold, analyst at Swedbank.

"That Mikael Grahne is stepping down and leaving the company I think is a negative."

Shares in Millicom were down 1.7 percent at 611.50 crowns at 0824 GMT against a 0.2 percent rise in the blue-chip Stockholm index.

A second analyst said that he was surprised by the move.

"Hans-Holger has been on Millicom's board for two years and has worked in similar industries, but he doesn't have any operational experience in the telecoms branch," the analyst, who declined to be named, said.

Grahne became CEO in March 2009. He joined Millicom in February 2002 as Chief Operating Officer.

During his tenure as CEO the company sharpened its focus on Latin America - its biggest market - and Africa, divesting operations in Asia.

The company has shifted toward selling higher-value services to customers from focusing on growth in subscriber numbers and cut costs by selling off infrastructure such as transmission towers.

In the second quarter this year, Millicom posted core profit (EBITDA) of $513 million on sales of $1.2 billion and trimmed its margin forecast for the full year as it invests in value-added services.