Amid Financial Pressure, Telenor Says Workforce Reduction is Inevitable

With negative revenue growth in at least 6 out of 14 markets where Telenor Group operates, the CFO has finally said that workforce reduction in inevitable.

Jorgen Rostrup, Chief Financial Officer at Telenor Group, while responding to a question during investor conference last week, said that in order to control operating expenditures down the line, workforce reduction can’t be avoided.

With revenues shrinking in majority of markets, the Group is reportedly working on opex-cut during next couple of years.

“Sales, marketing and personnel costs make up almost half of Telenor’s cost base, and need to come down”, said the CFO.

The Group, as a whole, is struggling to define its digital strategy — that it earlier hoped would be enough to deal with declining revenue — mainly due to increased competition from digital content providers.

The real challenge kicked in when the investments made by Telenor Group in digital content didn’t offer any ROI due to behavioral differences of Telenor customers in developing countries.

While Telenor wants to compete with the likes of Netflix  and Spotify — as it acquired few companies in these verticals in the last two years — consumers in developing markets don’t tend to pay for such services due to loose regulations and availability of free alternatives.

Telenor Pakistan, for instance, introduced a paid music streaming service for its customers in Pakistan but — as you would have guessed — the service didn’t do well due to a fact that consumers here tend to gravitate towards the countless free alternatives available to them.

With declining revenues from conventional (voice and SMS) services, and free content available to consumers, telecom operators are feeling the heat.

A question sent to Telenor Pakistan about the magnitude of impact on local operations went unanswered.

With overall (YoY) organic growth of Telenor Group at just 1%, the pressure is going to be felt here in Pakistan as well.

We don’t yet know the time and number of reduction that Telenor Pakistan will undergo, but it is very clear that this is something that’s bound to happen, sooner or later.

Tech reporter with over 10 years of experience, founder of ProPakistani.PK

  • Farhan

    Sab ko nikaal do! Waisay bhi they have one of the worst customer support team!

  • Maybe if hey close down all the so called Service centers and offer 10GB data in 500 Rs. per month. Their revenue will increase rapidly…

  • Zafar Abbas Rizvi

    Time to sell Telenor Pakistan to Zong.

    • G Nahi
      Dhong waiting for Ufone :

      telenor Nahi Bikay Ga

      • Zafar Abbas Rizvi

        Ufone is merging in PTCL and Govt property. Not easy to sale. Forget these dreams

        • i use telenor :
          this is not my dream to buy Ufone Merge with Zong :
          But telenor Nahi Bikay Ga

          • Zafar Abbas Rizvi

            Bik to koi b nahin raha. But Telenor ya Zong ka bik jana possible hai Ufone ka nahin. Sarkari cheez ko privitise karna bohat mushkal hai. Abhi b Ufone k 74% shares Govt k pass hi hyn. Es liye Ufone ka bikna possible nahin lagta.
            Han yeh ho sakta hai k etisalat apne 26% share kisi ko bech de. Magar woh b Ufone ko kisi aur company myn merge nahin kar sakay ga.

  • Abu Zaid

    Stop spending so much money on Stupid and Expensive Advertisements.

  • Salim

    Propakistani strikes again with biased and negative blog against one company. paid blogging site with no professionalism.

    • Umar Awan

      Plz explain how biased reporting ? Are these facts wrong ?

      • Salim

        Biased because this is happening across all telecoms and other industries due to top line not growing, highlighting and criticising one but keeping closed eye on another is biased. Mobilink laid off more than 1000 employees and their lay off benefits were worst than telenor but reporting was such that it solutions need a neutral or favourable blog as oppose to any news against telenor which is reported here is always showing negative aspect. Money talks mam, whoever pays high gets due reward :) I am yet to read any blog which is other than copy and paste from other sites or based on half cooked insider leaks, hearsay. No blog has any independent analysis showing maturity, professionalism and expertise.

        • aamir7

          I have a story of Telenor better lay-off packages, which is currently sitting with compliance in Oslo.

          • Salim

            I am sure you have, knowing your obvious dislike for one and love for other, btw there are multiple similar stories about your beloved operator and other operators, why go after only one? I am sure you have “insiders” now in all such places who provide you with copy/paste content and images of internal correspondence and communication, Using undue influence due to traffic on your site is by no means fair or professional. Use this site for industry wide analysis, new trends and technologies instead of using it for negative publicity of those you don’t like due to obvious reasons. This site has lost credibility drastically in past few months because of the way it’s being managed now, like a tabloid, purely for sensationalism and propaganda.
            It’s my sincere advice to use this for productive purpose as i would hate to see people loosing faith in propakistani. A name i am sure you built after years of efforts and hard work.

            • Anonymous

              Very well said Salim. ProPakistani is mostly full of biased crap.