Price hikes on the agenda
Today, we hosted Bredband2's CEO Daniel Krook at ABGSC's Investor Days. Mr Krook reiterated the optimistic outlook of an improved EBIT margin throughout 2023, reaching ~7.5% in Q4'23 (vs. 6.5% in Q1) on the back of raised prices and further cost synergies. Since the acquisition of A3 in H2'20, Bredband2 has driven its operations through three phases: 1) consolidate the different brands into the Bredband2 brand, 2) increase marketing activities (which pressured its margins in Q2'22-Q4'22), and 3) now hike prices to enhance margins. The latter is also a result of increased network prices - particularly from the largest private actors; Telia and GlobalConnect - which means that Bredband2 is now looking to defend its margins (similar to recent comments from key peer/competitor Bahnhof). Mr Krook highlights the current inflationary environment as a driver for the increased network prices, and expects a slowdown in the growth of these rates in 2024.
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