Company Reports

Tele2 is Sweden’s second-largest telecommunications player, both in the mobile and broadband markets. Although Sweden’s consumer market is relatively stable, we expect Telia, and not Tele2, to be the main target of any pressures coming from Telenor or HiG3. Telia is by far Sweden’s most expensive telecom provider, with prices 15% to 30% higher than peers in mobile and broadband, respectively. Tele2 executes moderate price increases every year, which customers seem to accept, but the pricing gap with Telia is still large. We therefore expect Tele2 to moderately increase prices in years to come.

Tele2 second-quarter results were weak, and although management reaffirmed its low- to mid-single-digit 2026 EBITDAaL growth outlook, the Sweden risks we flagged in our previous quarterly note have begun materializing.

Tele2 began 2026 on a strong note, delivering 10.7% year-on-year EBITDAaL growth in the first quarter. We believe management’s decision to maintain the conservative “low- to mid-single-digit EBITDAaL growth in 2026” guidance stems from the competitive Swedish mobile market.

Tele2 is Sweden’s second-largest telecommunications player, both in the mobile and broadband markets. Although Sweden’s consumer market is relatively stable, we expect Telia, and not Tele2, to be the main target of any pressures coming from Telenor or HiG3. Telia is by far Sweden’s most expensive telecom provider, with prices 15% to 30% higher than peers in mobile and broadband, respectively. Tele2 executes moderate price increases every year, which customers seem to accept, but the pricing gap with Telia is still large. We therefore expect Tele2 will moderately increases prices in years to come.

Tele2 ended 2025 strongly, with service revenue growing organically by 4% year over year to SEK 5.6 billion, while underlying EBITDAaL rose 13% supported by sharp cost controls. This lifted EBITDAaL margin to 39.2% for the full year, up from 35.9% a year ago.

The Morningstar Developed Markets Europe Communication Services Index has returned 23.7% year to date, thanks to renewed hopes for consolidation and modestly improving conditions in markets like Italy.

Tele2 delivered strong 11.4% EBITDAaL growth in the third quarter, underpinned by 2.4% service revenue growth year on year and the ongoing ambitious cost plan. With a successful 2025 almost complete, Tele2 investors will soon start looking into 2026.

Tele2 delivered an impressive second quarter, with 15% underlying EBITDAaL growth and raising its 2025 underlying EBITDAaL guidance to “slightly above 10% organic growth” from “mid- to high-single-digits growth” previously. Shares are up 7% in morning trading on July 17.

Tele2 is Sweden’s second-largest player in the mobile and broadband markets. Although Sweden’s consumer market is relatively stable, we expect Telia, and not Tele2, to be the main target of any pressures coming from Telenor or HiG3. Telia is by far Sweden’s most expensive telecom provider, with prices 15% to 30% higher than peers in mobile and broadband, respectively. Tele2 executes moderate price increases every year, which customers seem to accept, but the pricing gap with Telia is still large. We therefore expect Tele2 will maintain or slightly grow its subscriber numbers steadily, while it moderately increases prices.

We are updating our moat ratings for eight European telecom stocks. European telecom companies lack the scale and pricing of international peers. Network redundancies and little cross-border synergies are common, and the regulatory landscape is not supportive of competitive advantages.

Tele2 is Sweden’s second-largest player in the mobile and broadband markets. Although Sweden’s consumer market is relatively stable, we expect Telia, and not Tele2, to be the main target of any pressures coming from Telenor or HiG3. Telia is by far Sweden’s most expensive telecom provider, with prices 15% to 30% higher than peers in mobile and broadband, respectively. Tele2 executes moderate price increases every year, which customers seem to accept, but the pricing gap with Telia is still large. We therefore expect Tele2 will maintain or slightly grow its subscriber numbers steadily, while it moderately increases prices.

Tele2’s new management team began 2025 on a strong note, delivering 1.3% service revenue growth but 6.3% EBITDAaL growth in the first quarter thanks to cost-cutting efforts.

Narrow-moat Tele2's playbook is exactly what we like to see in a telecommunications company. In a challenged sector, costs are key. In addition to Tele2's streamlined cost structure and lean mentality for more than a decade, management has now launched an even more ambitious efficiency plan to reduce its workforce by 15% during 2025 or between 600 and 700 employees. This news comes after the CEO change on Nov. 14 when Jean Marc Harion took the helm. Harion is the former CEO of Play, an Iliad company, where a culture of disruption, agility, and low costs was established by Xavier Niel, the owner of Iliad, for more than two decades. Niel has held a 29% stake in Tele2 since February 2024. The market has received the news well with Tele2 shares jumping 5% intraday to SEK 121. We raise our fair value estimate to SEK 120 per share as we incorporate this into our model.

Tele2 is Sweden’s second-largest player in the mobile and broadband markets. Although Sweden’s consumer market is relatively stable, we expect Telia, and not Tele2, to be the main target of any pressures coming from Telenor or HiG3. Telia is by far Sweden’s most expensive telecom provider, with prices 15% to 30% higher than peers in mobile and broadband, respectively. Tele2 executes moderate price increases every year which customers seem to accept, but the pricing gap with Telia is still large. We therefore expect Tele2 will maintain or slightly grow its subscriber numbers steadily, while it moderately increases prices.

Tele2 is Sweden’s second-largest player in both the mobile and broadband markets. Although Sweden’s consumer market is relatively stable, we expect Telia, and not Tele2, to be the main target of any pressures coming from Telenor or HiG3. Telia is by far Sweden’s most expensive telecom provider, with prices 15% to 30% higher than peers in both mobile and broadband. Tele2 executes moderate price increases every year which customers seem to accept, but the pricing gap with Telia is still large. We therefore expect Tele2 will maintain or slightly grow its subscriber numbers steadily, while it moderately increases prices.

Narrow-moat Tele2 increased end-user service revenue by 3% year on year in the third quarter, slightly lower than the previous two quarters, but in line with its mid-single-digit growth guidance for 2024. EBITDA (after leases) grew 2% organically, with energy costs partly offsetting revenue growth as the firm did not receive the EUR 25 million electricity support from last year. Tele2’s midterm cost plan keeps progressing well, with SEK 225 million in run-rate cost savings this quarter compared with a target of SEK 600 million by the end of 2026. We are maintaining our SEK 100 per share fair value estimate, with shares looking fairly valued at this point.

Tele2 is Sweden’s second-largest player in both the mobile and broadband markets. Although Sweden’s consumer market is relatively stable, we expect Telia, and not Tele2, to be the main target of any pressures coming from Telenor or HiG3. Telia is by far Sweden’s most expensive telecom provider, with prices 15% to 30% higher than peers in both mobile and broadband. Tele2 executes moderate price increases every year which customers seem to accept, but the pricing gap with Telia is still large. We therefore expect Tele2 will maintain or slightly grow its subscriber numbers steadily, while it moderately increases prices.

Narrow-moat Tele2 delivered results in line with guidance during the second quarter, with 4% and 3% growth in service revenue and EBITDAaL, which came at SEK 5.5 billion and SEK 2.6 billion, respectively. The healthy performance is explained by Sweden, which saw service revenue growth of 4%. Mobile revenue is trending especially well, up 5% year over year due to higher average revenue per user, or ARPU. Despite raising its prices, Tele2 mobile plans remain cheaper than those of Telia, so Tele2 management has room to keep increasing prices at a moderate pace. Cost controls are also helping with EBITDAaL growth, with cost of goods sold declining by 2.5% while total revenue grew by 1.7% this quarter. We are maintaining our SEK 100 fair value estimate, with shares remaining fairly valued.

Tele2 aims to maintain its position as Sweden’s second-largest player in both the mobile and broadband markets. Although Sweden’s consumer market is relatively stable, we expect Telia, and not Tele2, to be the main target of any pressures coming from Telenor or HiG3. Telia is by far Sweden’s most expensive telecom provider, with prices 15% to 30% higher than peers in both mobile and broadband. Tele2 executes moderate price increases every year which customers seem to accept, but the pricing gap with Telia is still large. We therefore expect Tele2 will maintain or slightly grow its subscriber numbers steadily, while it moderately increases prices.

Narrow-moat Tele2 shares rose 6% after it reported first-quarter results as the firm beat company-compiled consensus estimates for EBITDA after leases and free cash flow. Sweden’s service revenue grew by 4% and EBITDAaL grew 2% organically as price increases in mobile and broadband kicked in while subscribers also grew. Even after price increases, Tele2's pricing plans remain significantly below those of Telia, so we expect Tele2 will continue to increase market share steadily while raising prices moderately. Tele2 has started 2024 on the right foot, with its revenue and EBITDAaL guidance looking within reach. We maintain our SEK 100 fair value estimate and shares remain fairly valued after a 12% rally since the beginning of 2024.