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Telenor ASA (TELNY)

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  • Sixty-Week Delay on Router Orders Shows Scale of Chip Crisis
    Bloomberg

    Sixty-Week Delay on Router Orders Shows Scale of Chip Crisis

    (Bloomberg) -- Broadband providers are seeing delays of more than a year when ordering internet routers, becoming yet another victim of chip shortages choking global supply chains and adding challenges for millions still working from home.Carriers have been quoted order times as long as 60 weeks, more than doubling previous waits, according to people familiar with the matter, who asked not to be named because the discussions are private.Running out of the right router would prevent a carrier from being able to add new subscribers to its network, risking lost sales in the ever-competitive broadband market. Their supply chains have become a headache because sharp coronavirus manufacturing shutdowns a year ago were exacerbated by a prolonged surge in demand for better home broadband equipment, said Karsten Gewecke, head of European regional business for Zyxel Communications Corp, a Taiwan-based router-maker.Since January, it’s asked customers to order products a year in advance, he said, because the lead time for components like chips from Broadcom Inc. doubled to a year or more since then. Zyxel is a major supplier of routers, with customers including Norway’s Telenor ASA and Britain’s Zen Internet.Adtran, a U.S. network equipment maker picking up market share from China’s Huawei Technologies Co. in Europe, has also warned customers of supply chain risks and lead-time extensions in recent months. It’s expanded its warehouse facilities in the U.K., more than doubling its inventory and logistics capacity to avoid problems, a spokesman said by email.No carrier has run out of routers completely yet, but the supply chain looks strained for the next six months, so it’s possible, according to Gewecke. “We have been very close several times,” he said in a video call. “It could still happen.”Even shipments already en route can’t escape global trade ructions: last week, Zyxel routers were on and behind the Evergreen ship which blocked the Suez Canal, according to Gewecke.Broadcom did not immediately respond to requests for comment. Some 90% of its 2021 supply has already been ordered, CEO Hock Tan said last month.Zyxel’s problems started more than a year ago when manufacturing in its Wuxi, China factory shut down for a month due to Covid-19. Since it reopened, supplies have been spotty and shipping costs have spiked as much as ten times their previous levels as exporters raced to catch up, even vying for space with outbound medical and personal protective equipment.Strong demand for networking products has helped Zyxel’s parent company Unizyx Holding Corp. Its shares have soared more than 181% in the last twelve months.Since Chinese factories restarted, chipsets have become a global bottleneck, choked by shortages of parts like silicon wafers as well as supply-demand mismatches. Components for other systems like memory and power management are also affected, Gewecke said.“It’s a snowball effect that we’re pushing in front of us, and the situation since then has just become worse and worse and worse,” said Gewecke. “When I talk to some of the chipset vendors, some of them tell me that they have something like overbooking of 300% of their capacity.”With semiconductor foundries struggling to allocate scarce capacity, less profitable work gets pushed to the back of the line. Routers command lower margins than smartphones and computers, and then within the world of routers, those destined for less affluent markets like eastern Europe use less sophisticated, lower-margin parts. In a similar vein, smaller telecom operators have been worst hit, while global enterprises have clinched supplies with their buying power.Some carriers have stockpiled to avoid shortfalls, and some were further insulated by ordering months’ worth of equipment ahead of potential Brexit trade disruptions.(Updates with Zyxel parent’s stock performance in 10th paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

  • Telenor and Axiata in advanced discussions to merge Malaysian operations
    GlobeNewswire

    Telenor and Axiata in advanced discussions to merge Malaysian operations

    (8 April 2021) Telenor Group and Axiata Group Berhad (“Axiata”) are in advanced discussions regarding a potential merger of its Malaysian mobile operations Digi and Celcom, in which the parties will have an equal ownership of 33.1 percent each. The new company will be a leading provider of telecommunication services in the country, with competence and scale to meet increasing expectations and demand from a digitally connected society. The parties aim to create a leading telecommunication service provider in Malaysia with the capabilities to drive research and innovation and facilitate a platform for accelerated digital growth in the local ecosystem. A progressive digital economy is important to Malaysia’s future economic resilience and competitiveness, and the merged company will be well positioned for delivering industry innovation, high-quality connectivity and a diversified value proposition to the customers. “The proposed merger represents an important milestone in Telenor Group’s strategy to strengthen its Asian presence and create value in the region. The new entity will have size and financial capabilities to support Malaysia’s digital aspirations and lead industry development in a connected society. We look forward to partner with Axiata to realize the potential of the new company”, says Jørgen C. Arentz Rostrup, Executive Vice President and Head of Telenor Asia. Both parties have agreed to nominate Dato’ Izzaddin Idris as Chair, Jørgen C. Arentz Rostrup as Deputy Chair, Idham Nawawi as CEO and Albern Murty as deputy CEO of the merged company which will be named Celcom Digi Berhad. As part of the transaction, Axiata will receive newly issued shares in Digi which represents 33.1% of the merged company. a transaction will realize synergies and provide value for shareholders in line with our strategy of developing value from core telco assets. Celcom Digi will continue to be listed on Bursa Malaysia and will be amongst the top stocks in terms of market capitalisation and contribute to the attractiveness of the local capital market. Telenor Group and Axiata will work towards finalizing agreements in relation to the proposed transaction within the second quarter of 2021 following due diligence. The transaction will be subject to approval by Digi Board and Celcom shareholder, receipt of regulatory approvals and other customary terms and conditions. The parties acknowledge that there is no certainty that these discussions will result in any agreement. Press contact: Tormod Sandstø, Director Media Relations, Telenor Group +47 90 94 32 15 | Tormod.Sandsto@telenor.com

  • Telenor gathers strength in IoT for the 5G era
    GlobeNewswire

    Telenor gathers strength in IoT for the 5G era

    (Fornebu/Stockholm, 25 March 2021) Businesses searching for world class Internet of Things solutions will find that Telenor’s new operating model brings the best capabilities and competence to every customer, today and in the future. Telenor Group today announces it is unifying its IoT offering across the Nordics and internationally. The Nordic IoT portfolio and the global Telenor Connexion portfolio will be gathered under the brand Telenor IoT. Effective immediately, Telenor IoT will be offered from all Telenor business channels in the Nordics, internationally by Telenor Connexion and through selected partners. As a part of introducing Telenor IoT, a new operating model is being launched to leverage on Telenor’s global competency, synchronise product development, accelerate the customer facing business and improve technical support. In doing so, Telenor is bringing together 200 full time IoT specialists, the largest team for any Nordic IoT service provider. Telenor will act as one united global IoT team with a uniform product portfolio and go-to-market strategy – bringing the best capabilities and competence to every customer. Commenting on the announcement, Mats Lundquist, CEO of Telenor Connexion and manager of Telenor IoT, says: “The new operating model reinforces our competitive edge and makes our product portfolio easier to buy for any customer searching for world class IoT operation and platform capabilities. We are also getting scale benefits on new technology investments.” The Telenor IoT offering will be supplied by Telenor IoT specialists located in 18 countries across Africa, the Americas, Asia-Pacific, and Europe. “The launch of Telenor IoT and unifying our IoT capabilities and competencies will make us better positioned to accelerate the digital future that will benefit customers, businesses, and society. The steps we are taking now is the culmination of several months of intense collaboration between colleagues in Telenor’s Nordic telco businesses, Telenor Connexion, and Telenor’s Nordic Hub,” says Jukka Leinonen, Nordic EVP and Chairman of the Telenor Connexion Board. With over 17 million connected devices active in more than 190 countries, Telenor is a recognised world leading provider of IoT connectivity services. In 2019, Telenor was positioned as a leader in Gartner’s Magic Quadrant for Managed IoT Connectivity Services, Worldwide. Today, Telenor ranks among the top 10 IoT operators globally, and in the top 3 in Europe by volume, and is the clear market leader in the Nordics. The company was one of the early pioneers in the IoT area and has long standing international customers such as Volvo, Scania, Verisure, and Hitachi. Media contacts: Cristoff Martin, CMO, Telenor Connexion | +4673 441 73 17 | cristoff.martin@telenorconnexion.com Stian Kristoffer Sande, Communication Manager, Telenor Group | +47 97 53 92 21 | stian-kristoffer.sande@telenor.com About Telenor Connexion Telenor Connexion is the specialised IoT company within the Telenor Group, one of the world’s major mobile operators. Building on more than 20 years of experience, Telenor Connexion provides global IoT connectivity and cloud services to enterprises with large fleets of connected devices as well as third-party service providers. With headquarters and tech centre located in Sweden, the company has regional sales representation in the UK, US, Germany, Italy, South Africa, Singapore, South Korea, China, Malaysia, and Japan. For more information, see www.telenorconnexion.com. About Telenor Group Telenor Group is a leading telecommunications company across the Nordics and Asia with 182 million customers and annual sales of around USD 14 billion (2020). We are committed to responsible business conduct and driven by the ambition of empowering societies. Connectivity has been Telenor's domain for more than 160 years, and our purpose is to connect our customers to what matters most. Telenor is listed at Oslo Stock Exchange under the ticker TEL. For more information, see www.telenor.com.