UPDATE 2-Nordic carriers Telia and Elisa hit by price pressures

Fri Apr 19, 2013 2:56am EDT

* Telia Q1 EBITDA ex items 8.5 bln SEK vs f'cast 8.6 bln

* Sees flat sales in local currencies, to focus on cost cuts

* Elisa Q1 EBITDA falls to 109 mln euros vs 121 mln

* Sees FY EBITDA ex items flat or slightly lower than 2012 (Recasts to include Finnish operator Elisa)

By Simon Johnson and Ritsuko Ando

STOCKHOLM/HELSINKI, April 19 (Reuters) - Nordic telecom operators TeliaSonera and Elisa reported weaker first-quarter profits, as competition intensified in Europe's mobile and internet services industry.

Both Telia and Elisa, like other European peers, have been squeezed by price pressures, falling voice call revenues and a failure to turn surging data traffic into profit growth.

Sweden-based Telia said it would focus on cutting costs after quarterly earnings before interest, tax, depreciation and amortisation (EBITDA), excluding one-offs, fell to 8.5 billion Swedish crowns ($1.3 billion) from last year's 8.9 billion, missing the average forecast of 8.6 billion in a Reuters poll.

Finnish operator Elisa lowered its outlook for the year after first-quarter profit fell more than expected, citing weaker corporate technology spending and tougher competition in mobile and Internet subscriptions.

The company's quarterly "churn" rate, which measures cancellations, rose to 20.0 percent from 19.3 percent in the previous quarter.

Telia's sales fell 4.5 percent to 24.5 billion, also shy of an expected 25.2 billion. Its revenue has been under pressure in recent years despite an expansion into markets such as Kazakhstan, Nepal and Azerbaijan, due to weakness in the Nordic region and the Baltics.

The company repeated its outlook for flat sales in local currencies and said cost cuts would help to slightly improve margins this year.

"We have continued to put significant emphasis on implementing the efficiency measures initiated at the end of last year," Chief Executive Per-Arne Blomquist said in a statement.

"We remain determined to bring total costs down by 2 billion crowns net over a two year period."

At Elisa, slower economic growth and lower employment rates have meant few businesses are adding fixed-line services, even though Elisa has been trying to make up for that decline with services such as online conferencing.

Its first-quarter EBITDA fell to 109 million euros ($142.6 million) from 121 million a year earlier, below the average forecast of 116 million in a Reuters poll.

The company said it expects full-year EBITDA, excluding items, to be at the same level or slightly lower than in 2012, having previously forecast the figure to be flat. ($1 = 6.5180 Swedish crowns) ($1 = 0.7644 euros) (Editing by Miral Fahmy and David Holmes)

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