* Shares rise 3.4 percent
* Lifts EBITDA margin guidance
* Norway, Bangladesh among top markets (Adds CEO comment, analyst, shares)
By Balazs Koranyi
OSLO, July 23 Telecoms firm Telenor lifted its full-year outlook on Wednesday on a solid rise in lucrative data traffic across its sprawling business empire in Europe and Asia, sending its shares sharply higher.
Norway's Telenor said its margins would be above its earlier projection on a continued shift to data and a rebound in its Norwegian operations, offering a contrasting outlook after rivals TeliaSonera and Tele2 cut their guidance recently on stiff competition.
"We have very strong momentum in the Telenor group; Asia is still a very strong growth engine for us," Chief Executive Jon Fredrik Baksaas told Reuters. "If Thailand didn't struggle, it would have been a terrific quarter."
State-controlled Telenor, which has more than 175 million customers, has been among the most successful telecom firms in converting data traffic into revenues, earning returns on its heavy investment in network infrastructure.
Its stock is up more than 8 percent over the past three months, a top performer in the sector. With a rise of 3.4 percent on Wednesday, it was the best-performing share in the European telecoms index.
The firm's second-quarter adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) rose 8.5 percent to 9.62 billion crowns ($1.56 billion), just above expectations for 9.48 billion crowns in a Reuters poll of analysts.
It now sees its full-year EBITDA margin above last year's 34.5 percent after reporting a 35.5 percent rate for the first half of the year, lifting its guidance after earlier predicting a steady margin.
"It's a quite good report, organic growth is OK and in line with expectations. They deliver well in important markets with few exceptions," Daniel Johansson, an analyst at brokerage Fondsfinans, said. "It's very good they raised the EBITDA margin guidance. The consensus expected it but now it's confirmed."
The Norwegian government, which holds 54 percent in Telenor, earlier this year said it may cut its stake to 34 percent over time, selling down more than $7 billion worth of shares.
Baksaas said Telenor would continue to bank on data traffic, arguing that a shift in focus from voice to data in high-end markets such as the Nordics, and lower-income Asian countries, was paying off.
"Remember when you got your first mobile phone? It was a fundamental change. You felt different. Getting data access is an even bigger shift for the individual," Baksaas said.
Baksaas predicted a rebound in Thailand, one of Telenor's biggest markets, arguing that the political instability following a military coup, which depressed revenues in the second quarter, would pass.
"I believe it's temporary ... I think Thailand will be capable of bringing back democracy and bringing optimism and investment capacity back in," Baksaas said. "That country has that kind of ability."
In India, where the firm is rapidly gaining customers, Baksaas said the expansion could continue and 2014 was the last year the unit would make a loss on the EBITDA level.
Despite the guidance increase and the positive outlook, the stock's upside may be limited, analysts said, as Telenor trades at around 6.4-6.6 times on an enterprise value to expected 2014 EBITDA ratio, broadly in line with a 6.5 ratio for its peers.
($1 = 6.1872 Norwegian Kroner) (Additional reporting by Ole Petter Skonnord; Editing by Dale Hudson)