Telenor witnessed a 65 percent drop in net profits for Q1 on a y-o-y basis which the firm attributed mainly to stake issues with its Russian subsidiary Vimpelcom and decline in international call traffic.

Telenor''s Q1 net stood at 1.62 billion kroner ($248 million) compared to 4.57 billion kroner a year earlier while revenues rose to 27.1 billion kroner from 26.38 billion kroner.

"The business environment continues to be turbulent and we now experience some impact on the telecom sector, in particular influencing international traffic. However, the total traffic volumes are relatively stable," said Telenor's president and chief executive, Jon Fredrik Baksaas.

The dispute with the Russian subsidiary is related to a Russian court directing Telenor to pay $1.7 billion in damages to VimpelCom in connection with an earlier acquisition in Ukraine. The other party happens to be Aplha Group.