PREVIEW-Merger talk adds spice to Nordic telecom Q1 season

* Earnings for main Nordic telecom operators

* Millicom on April 22, Tele2 on April 23, TeliaSonera on April 25 and Telenor on April 30

* Earnings seen mixed, with speculation of a France Telecom/TeliaSonera deal overshadowing results

By Adam Cox

STOCKHOLM, April 18 (Reuters) - Nordic telecom operators, with their wide range of business exposures, have tended in recent quarters to offer a very mixed earnings picture.

First-quarter results, which kick off next week, promise to be no different -- but this time the picture is even more complicated due to merger speculation following France Telecom's (FTE.PA) declaration of interest in TeliaSonera (TLSN.ST).

TeliaSonera wraps up a busy week on Friday that starts with emerging markets specialist Millicom (MICC.O) on Tuesday, April 22, followed by Swedish operator Tele2 (TEL2b.ST) on Wednesday. Norway's Telenor does not report until the end of the month.

The market expects broadly similar earnings before interest, tax, depreciation and amortisation (EBITDA) excluding items for TeliaSonera to last year's 7.58 billion Swedish crowns ($1.28 billion) and a gain from the fourth quarter.

Analysts said the initial focus will be on Swedish fixed-line and mobile operations, which dominate its business.

They do not expect the company to address the merger question directly in their results statement, but analysts will have a chance to question TeliaSonera executives about their thoughts during a meeting afterwards.

France Telecom's confirmation this week that it was interested and had held exploratory talks has given TeliaSonera shares a 16 percent boost, making up a good chunk of the ground lost since a dismal fourth-quarter report.

"The fourth-quarter numbers were exceptionally bad. We are expecting an improvement on very, very poor numbers," said Lena Osterberg, analyst at SEB Enskilda. But she noted there was huge uncertainty in the market about TeliaSonera's numbers as the company has twice reorganised its business in recent quarters.

Osterberg said that in Euro-Asian operations, the market would be looking to see how far average revenue per user levels (ARPUs) were falling, especially in Kazakhstan, and whether there would be more of a decline in the Baltics as their economies started to be hit. Anders Berg, analyst at Evli, said TeliaSonera still gets a handsome share of earnings from associate companies such as MegaFon and Turkcell.

"The trend of developments there is still expected to remain positive and that of course is important for the view of the company," he said.

As far as the key Swedish business was concerned, Berg said: "There has been a 7 to 8 percent decline in traditional fixed and we expect that to continue. But at the same time, they have shown extremely good progress in the broadband space."

GUIDANCE AND MARGINS

Tele2 is expected to post a 10 percent gain in EBITDA to 3.66 billion crowns. But Osterberg said: "This time it's not so much the numbers, it's the full-year guidance."

Another issue, she said, is mobile margins: "We would expect even if the margins are okay-ish this quarter, they may guide down for the rest of the year."

Unlike the rest of the sector, Millicom is not dependent on Nordic trends but rather subscriber numbers in emerging markets, particularly central America and Africa.

"Our view is of course the key thing, you want to see that subscriber growth continues to keep up and that the ARPU decline is moderate and that you don't see an acceleration in that," Berg of Evli said.

Meanwhile Telenor, which reported a bigger-than-forecast drop in fourth-quarter core earnings, has forecast 6 percent revenue growth in 2008, down from about 15 percent in 2007.

Media reports in Norway have suggested Telenor may be interested in merging its 51 percent stake in data services firm EDB Business Partner (EDBASA.OL) with Nordic rival IT services group TietoEnator (TIE1V.HE).