Marianne Moe - Head of IR Sigve Brekke - CEO Morten Karlsen Sorby - Acting CFO

Peter Nielsen - ABG Stefan Gauffin - Nordea Bank Roman Arbuzov - UBS Ulrich Rathe - Jefferies Andrew Lee - Goldman Sachs Maurice Patrick - Barclays Terence Tsui - Morgan Stanley Nick Lyall - Societe Generale Sunil Patel - BASML

Good morning, and welcome to Telenor's Third Quarter Result Presentation. My name is Marianne and we will be guiding you through today's presentation.

Our CEO, Sigve Brekke and acting CFO, Morten Karlsen Sorby will present the results today. There will be a Q&A as usual here from the audience first and then from our conference call participants.

There will also be the opportunity from media present to speak to Sigve and Morten after the presentation. Sigve?

Well, good morning to all of you, and also those of you that are following us on the video streaming. Overall, I will say, we had a strong quarter.

2% revenue growth despite that tough competition still remains in Southern Asian markets and also affect all the lower roaming in the Nordics. I am especially happy for the data monetization that we now see start yielding some results in the Asian markets.

On the EBITDA level, we have an all-time high EBITDA of NOK12.5 billion, that’s a 5% increase year-on-year, and we have done with 38% taken, this also up 1% point compared with third quarter in 2015. When the year started, I said that efficiency and the cost is going to be one of the main focuses.

I think, I communicated than that we are going to initiate long-term structural initiatives. Those, you have not come through yet in terms of numbers, but what you see here is the cost focus that we have had throughout the first three quarters of the year.

As you also know, we made a decision of exiting VimpelCom in September 2015, and in this quarter, we took the first step in that direction. I have two slides on Norway and knowing that Norway is our main market.

There is like home [ph] that we introduced in May I think it was, I look forward to say, it had been a success. We have had a data increase of 300% as a result of that.

And the Norwegian team has been able now to upsell around 500,000 customers into packages which include then free roaming in the EU area and that 500,000 is about one-third of the overall postpaid base. I think that based in Norway is to increase that number closer to around 700,000 and this packages most of the customers are coming in on price points around 349,000 and 399,000.

And if you compare that with the average ARPU, you will see that it is quite significant ARPU increase, when you move into this packages and even though that this has given us a negative effect in the third quarter, we see that this will be a driver for the ARPU growth in the months to come. The domestic ARPU, as you see on this graph has increased NOK10 a year-by-year, whereby the negative effect like home [ph] is minus NOK13.

So, when you then take this going forward, I see a room here for increasing the ARPU in the monthly quarter to come. We have also now a good growth on the high speed fixed side mostly from fibre and we have increased 10,000 new customers on the - in fibre in this quarter and 13% growth.

Overall, there is a decline of 1% of the total revenues. This is coming from the sixth telephony continued to follow the same declining trend as you have seen before and also wholesale.

And of course, the main element here, it's the fixed like home [ph]. We have done NOK133 million this quarter from that.

But despite that we have a better trend on revenues than we have seen before and the minus 1% in active better than what we have seen in previous quarters. What I think I really want to credit a Norwegian team is that despite challenges on the top-line, they have been able to keep a stable EBITDA margin of 45% and the cost control in Norway is quite impressive.

Year-by-Year, there is a 6% reduction in OpEx and this lower OpEx come from personnel reductions, reduction in personnel costs, lower sales or marketing cost with moving some of the distribution from external channel into internal channel and with that, lower commission. And also, [indiscernible] introduction of a new handset or device program [ph].

In addition to that, Norway is also working with the structural initiatives on the IP transformation, on the network efficiency, but also on trying to engage customer digital and with that reduce costs on the customer engagement. Sweden, solid subscriber growth in Sweden, plus 35,000 customers, consumer and business customers and it also said that Sweden has had a positive sales mix now with including new tariffs that also have the European roaming, free roaming included.

More or less [indiscernible] growth of minus 1% that's coming from the roaming effect also in Sweden and also on continuous price pressure on the business segment. On the fixed side, we are now turning into profitability in Sweden.

After many quarters with the minus fixed revenue development we now have 1.4% revenue growth and this despite the legacy product continue to go down. This come from their investments, we are making fibre and also from price adjustments we have done on the DSL.

We are at 13,000 new high speed broadband customers. Most of them on fibre, and in total, we have now 650,000 high speed broadband customers in Sweden, whereby 511,000 is on high speed.

As we have said before, we are continuing to ramp up our SDU connection rollout and that will also be a prioritized focus in the year to come. Pakistan and Bangladesh, Telenor Pakistan and Grameenphone is really the growth stars of this quarter.

On the revenue side, Grameenphone, growing 14% and Pakistan, growing 11%. But even more impressive is to take this down to the EBITDA level with a 57% margin in Grameenphone and 44% margin in Pakistan.

This comes from now data monetization. They're on 60% of the handset in these two markets that are internet enabled.

However, most of them are still on feature phones and there is only 20% to 25% smartphones, and what we see it's that this smartphone penetration is really also driving the data uptake. So, it's a long way to go here.

A little bit more specific on the two companies, Grameenphone Bangladesh added 1 million new data users in the quarter. And if you compare that as a percentage of our total customer base, it's 42% of our customers are now active data users and that's up from 27% a year ago.

So again, it's a long way to go. We have now a rolled out 3G network and is covering around 90% of the population in Bangladesh with data network.

And quite successfully, they are also introducing new type of digital or internet based services, like health [ph] to use an example, which now have more than 1 million customers on health initiative that the company has launched. In Pakistan, subscriber growth of 15%, added 600,000 new data users in the third quarter and again taking that up from 33% of that is customer base a year ago to now 36% using data.

So again, a long way to go to bring more people on their data platform and internet platform. In the quarter, they continue to expand on 3G rollout and they've also launched now 4G in the three big cities, that's based on the 850 spectrums that we have acquired in the second quarter.

And again, focusing on data services, including also financial services. Thailand and Malaysia competition remains being very top industry markets especially on the prepaid segment.

Both companies, both DTAC and DIGI has chosen not to participate in the most aggressive price promotions of price aggressions on the prepaid segment and not on the subsidies of handsets for that prepaid segment either, and the reason for that is this segment has a very, very high share. Instead both companies have now started to build a strategic position on postpaid.

We will now see that's starting to yield some results. In Thailand, postpaid customer gives you about three times ARPU of a prepaid customer and when you migrate a prepaid customer into postpaid you get a 20% uplift and 44% now of the total revenues and for DTAC is coming from postpaid.

Same in Malaysia, prepaid customer yields - postpaid customer yields two times, the ARPU of a postpaid customer, of a prepaid customer and postpaid is now becoming a bigger and bigger proportion of the total revenue, 31% now in Malaysia. And the strategic position both companies now are trying to build is to build all the postpaid distribution and the service points, strengthen the service offering on postpaid and continue to build the data networks.

In DTAC, we did 3.600 new base stations on 4G in the quarter and in Malaysia we now have 78% for the coverage [ph] and are probably the leading operator in Malaysia on for the coverage. On top of that, both companies are trying to engage with the customers digitally and knowing that big digital segment we have in both countries.

Both companies are also now focusing on profitability and I am quite satisfied with also the margin development in especially Thailand, but also that Malaysia despite competition keeps it relatively high EBITDA margin. Myanmar, we see tough competition and I have seen that for the last three quarters.

We see aggressive promotions on net traffic and we also see that on data pricing. However, the third quarter is also affected by the rainy season and also the third quarter last year and rainy season means more fibre cuts means more power outages, the network is down and we see now going into fourth quarter, we will see a growth q-on-q.

Let's go ahead on Myanmar focus is to build a market leading position, reduce all we containing to add subscribers, added 900,000 new subscribers in this quarter, bringing the subscriber market share up to roughly 38% or 18 million subscribers. We are continuing to build out the distribution have now passed 100,000 total sales.

And not least, we're continuing to build a leading position on network. Have added another 700 sites this quarter and increased the population coverage from 65% to 82%.

We have also launched 4G in Myanmar. We have 4G in our 108 sites in Naypyidaw, the capital, and we are eagerly waiting for more spectrum, 1800 spectrum to come out to the market, so that we can increase our 4G position.

On top of that very focusing also on building the branded market and measured by NPS or Net Promoter Score, we are already a clear number one in the market and this is important for us to build that leading market position. On the profitability side, 43% stable EBITDA margin and if you bring it further down, you also see that we continue to be positive on free cash flow.

This is the third quarter in a row that we have positive free cash flow development in the company. And we see that despite now adding almost 1 million customers in the quarter, we have scalable customer going forward.

India, good operations in the quarter despite a very rough competition. The launch of Jio has affected the whole market, including ourselves.

But despite that, the company has grown 10% in revenue, added 9% on subscribers and EBITDA margin of also 9%. And it has reached breakeven on cash flow.

However, spectrum remains a challenge and as you know, we have decided not to participate in the October spectrum auction and the challenge remain. We do not have spectrum for a long-term solution and that's why we say as the headline on this slide.

We continue to have our options. As you have seen in the third quarter report, we have reassessed the value of our Indian business and we have because of that taken a decision to impair with the NOK4.1 billion.

VimpelCom, as I said, the strategic decision was made last year to exit our shareholding in VimpelCom. And that exit we started there to execute in the third quarter.

We sold 164 million shares through our public offer and that reduced our shareholding from 33% to 23.7% and the net proceeds of that were NOK4.6 billion. We also issued a three years’ bond of US$1 billion, which will then be exchangeable into VimpelCom shares.

We will not comment on further steps or next steps or saying that the intention to fully active VimpelCom remains. Before heading over to Morten, I want to give you a little bit, what should I call it, appetite of what we are going to talk about when we meet in February for the Capital Markets Day.

And that's about our main focus and priorities going forward. And the first one to the left is to monetize data demand.

We see a massive data demand across all our business units. It's up now year-on-year about 70% and as a result of that we are continuing to invest in the data networks.

To capitalize on that in the Nordics, we do that with the upsell to the packages, which includes more data as we have seen that successfully had done in Norway and we are also doing in Sweden. And we continue to rollout fibre.

In Malaysia and Thailand, it's the pre to postpaid migration as I told you about and also to take positions within digital services or internet based services, whereby in the more emerging Asia, Pakistan, Bangladesh, India and Myanmar it's to continue to build all the data networks and continue to push for smartphone penetration in this market, then including basic data services. And what you now see coming through in this quarter from Bangladesh and from Pakistan we hope and will continue in the coming quarters, that we can demonstrate monetization.

The next one is on efficiency and even though we have an all-time high EBITDA this quarter, I am not satisfied, there is more to be done here. And we have initiated now some structural transformative projects especially within the IT domain facing our IT solution on most underwrite close solutions [ph] in the network domain within increasing their efficiency and not taking advantage out of customer journeys and also digitalizing distribution.

And you will see that is both giving us a better engagement in the customers, but it's also bringing down the cost quite significantly. The third one is on the customer journeys.

Our aim is to be number one in the NPS score in all markets. Our aim is also to build analytic competencies within the companies to more efficiently do contextual marketing.

And again, take advantage of digitalization of the customer journey. And lastly, take position on relevant digital verticals.

And as you know, we are focusing on building up financial services in our emerging markets. We are focusing on the inbound [ph] classified position we had.

We have a position now on digital marketing through the acquisition we did with Tapad and IOT. But this is what we are going to go through more in-depth when we invite you to the Capital Markets Day in February, here are the phone number.

And the agenda will be then to presents our future strategic priorities and also our financial and capital allocation priorities. It is also need to show you more in detail, what all structural initiatives the content of that that I talked about improved efficiency.

We will show you more about what you mean by digitalizing our core business and also the selective bets we take on digital verticals and not least, we will bring in some key business units to show you how this is done in practice in the businesses. And with that, Morten I invite you on the stage.

Thank you, Sigve. Before I go into the details of the third quarter, let me quickly summarize the highlights.

The third quarter is described by continued revenue growth and good cost control supported by seasonality, and this result in an all-time high EBITDA and improved margin, despite competitive pressure in some of our key markets. The organic growth was 2% in the quarter, same as the organic growth in subscription traffic [ph] revenues.

We delivered a record high EBITDA over NOK12.5 billion, which is 5% higher than last year, and this is both on an organic basis, and as well as on a reported basis. We have some significant one-time items this quarter related to VimpelCom and India, which Sigve mentioned and I will come back later in my presentation to the accounting FX and the details India comes with that [ph].

Adjusted for these items, the net income to equity holders of Telenor also of the third quarter is NOK4.7 billion. Free cash flow is very strong at NOK9.1 billion, we share NOK4.6 billion is explained by the proceeds of the sales in VimpelCom.

Let me move into the more details of the quarter starting with the revenues. Reported revenues for the quarter was NOK32.8 billion, which is an increase of 3% compared to the third quarter last year.

We see a less currency FX compared to recent quarters and this quarter. Of the NOK1 billion revenue increased in a reported revenue, currency explains approximately NOK300 million.

The total organic growth was 1.8% and year-to-date, we are at 1.3% in that respect. Looking at the revenue breakdown, we see that the growth is driven by a subscription and traffic revenue growth primarily from our Asian emerging businesses, which is Bangladesh, Pakistan, Myanmar and India.

Offsetting some of the growth is still a decline in the outbound rooming revenues in over European operations and this accounts for close to 200 million on revenue level and the continued decline in the fixed legacy revenue in Telenor Norway. The increase in other revenues is primarily explained in the growth in the Global Wholesale Division of Telenor.

Few words on the OpEx development. As usual, OpEx is seasonally somewhat lower in the third quarter than in the other quarters.

Still I am very pleased to see that reported OpEx is almost flat and that OpEx to say decreased by 1% point compared to the third quarter last year. And despite OpEx increases from Myanmar and new business.

Feed [ph] development is driven by efficiency initiatives in several operations, of which the most notable cost reductions are seen in Norway and in Thailand. The improved growth profit and controlled OpEx translate, as I said in terms of all-time high EBITDA of NOK12.5 billion and that's solid 38% EBITDA margin.

The EBITDA growth is 5% this quarter both on the reported and organic basis. Looking at the sources of the improved EBITDA by market, we see that all our Asian operations are reporting improved EBITDA this quarter.

And again, I would like to highlight a very encouraging trend in Bangladesh. There are significant one-time effect.

The significant non-cash item related to VimpelCom impacts of reported net income both this quarter and in the third quarter last year. In Q3 last year, our decision to exit VimpelCom triggered a change in valuation method from the equity method to the market value, which resulted in an impairment of NOK5.1 billion in the third quarter last year.

The negative one-time effects related to VimpelCom this quarter amounts to NOK5.2 billion and it's impacted by the disposal of 164 million VimpelCom shares and the issuance of an exchangeable bond with the potential settlement in VimpelCom shares. As a consequence of the disposal of parts of the shareholder in VimpelCom, a proportionate share of currency FX earlier recognized in other comprehensive income.

These losses were reclassified from OCI to the profit and loss. This has a negative effect of NOK3.2 billion, as we have earlier announced this quarter in the profit and loss.

But there is no impact on the total equity of the Telenor Group. In addition, the difference between the market value of US$388 per share at the beginning of the quarter and the transaction price of 350 and market value on the remaining shares at the end of the quarter triggers a net impairment loss of NOK2 billion this quarter.

There are also some smaller effect on tax and net promotional items, which are netting each other out. The one-time effects related to VimpelCom have as I said no cash impact.

In the cash flow statement, the net cash contribution from the sale of VimpelCom shares is positive with the NOK4.6 billion. When it comes to India based on recent observation, India market is fair value of our license have been assessed resulting in the impairment loss of NOK4 billion.

And in addition, immediate impairment of Q3 CapEx amounted to NOK100 million. Taking the total impairment to NOK4.1 billion.

After this impairment, we have a recoverable amount of NOK300 million in our books related to the license and spectrum in India. In total, one-time effect relating to VimpelCom in India amounts to NOK9.5 billion this quarter.

If we then move into the adjusted net income and the translation into that, with the previous items relating VimpelCom and India already explained on my previous slide. The rest of the income statement is pretty straight forward this quarter.

While the reported net income is negative by NOK4.8 billion, the adjusted net income is NOK4.7 billion plus, which is an improvement of around NOK1.1 billion compared to the same quarter last year. And just underlying, the underlying improvement is driven primarily by the growth in EBITDA.

Few comments on our investments. CapEx for the group was NOK5.2 billion in the third quarter, of which NOK200 million was related to spectrum and license acquisition in mainly in Montenegro.

The CapEx to sales ratio for the group was 15% in the quarter and is at 16% year-to-date. The key reasons for the decline compared to last year lower investments in Bangladesh, Thailand and Myanmar.

In Norway, which accounts for approximately 25% of the group's total CapEx, we have increased of our investments compared to the third quarter last year, driven by the strong rollout of 4G and fibre. Although the CapEx to sales ratio has trended downwards in the recent quarters, we have historically had a higher CapEx level in the fourth quarter and this is also reflected in the outlook for the full year.

If we take a look into the cash flow development, we can note the following; On the net cash flow from operating activities this quarter, we have a cash net inflow of NOK10.5 billion at the reported EBITDA of NOK12.5 billion is partly offset by income taxes of NOK1.1 billion and net interest paid of NOK300 million. The net cash flow from investing activities is positive with NOK760 million this quarter and of course this is impacted by the net proceeds from the sale of VimpelCom shares of 4.6 billion and which more than offset the CapEx paid of 4.1 billion.

In addition to the cash flows from operating and investing activities shown on this slide, we have a payout of 1.1 billion in dividends to non-controlling interest in DTAC, DIGI and Grameenphone. And around NOK1.3 billion in supply chain financing and payments for license obligation.

In total, this gives us free cash flow to equity holders of Telenor over 9.1 billion this quarter, which again is a strong result. We continue to have a solid financial position as you can see from this slide.

Our net debt, excluding license commissions decreased by NOK11 billion during the quarter, taking the net debt to EBITDA ratio down from 1.3 to 1.1. In addition to the strong EBITDA, the reduction in net debt was driven by the net proceeds from the sale of the VimpelCom shares.

Currency FX are reducing net debt by 2.1 billion this quarter and consist our translation effect on debt in foreign subsidiaries that’s minus 900 million, currency gain on debt in currency and foreign currency, which is minus NOK1.9 billion, partly offset by currency losses on the placement and cash. The rest of the net debt reconciliation, which you can see on the slide is fairly straightforward and without significant deviations from previous periods.

In addition to the net debt shown on this slide, we have a license commitments of NOK4.8 billion, which is a slightly decrease from the previous quarter. The license commitments include commitments in India of NOK2.4 billion, NOK2.2 billion in Pakistan and NOK300 million in Myanmar.

Moving then towards the end of the presentation. Dividends in line with the proposed communicated statement in February this year.

The Board of Directors has declared a final dividend for 2015 of NOK3.50 per share. This dividend comes in addition to the dividend of NOK4 declared by the AGM in May and takes the total dividend for 2015 to NOK7.50 per share, and that's an increase of 2.7% compared to the 2014.

The total dividend for 2015 is in line with our ambitions to deliver a year-over-year growth in dividend and the expected payment date for the final dividend is November 10th with record date set at October 31st. Then moving to the outlook and financial guidance.

We have decided to keep the outlook unchanged after the first quarter. And that means that we are looking into our guidance for the full year which is the same guidance as we gave after the second quarter, which is 1% to 2% organic revenue growth.

EBITDA margin are around 35% and CapEx to say excluding licenses at around 17%. We've done EBITDA margin of 36.3 year-to-date and CapEx to sales ratio of 16.1% so far this year and only one quarter remaining.

I understand that some of you might see our outlook as somewhat conservative. Although, we see scope for a full year EBITDA margin above 35%.

The maintained guidance reflects the usual uncertainty regarding handset sales in the fourth quarter and in particular, there is uncertainty regarding both demand and supply of the iPhone 7. We have relaunched iPhone 7 in Norway and Sweden in September and there were still people on the waiting list and we have just launched sales of iPhone 7 in Malaysia and Thailand.

So, that gives some uncertainty. On the CapEx side, we continue to see results of our efforts to increase CapEx efficiency with lower equipment prices leveraging from our scale towards the vendors from strong demand management both within IT and network as well as from more efficient spectrum management.

At the same time, we know that CapEx tend to peak towards the end of the year and this has made us keep up the CapEx to sales guidance for this year. All-in-all, a strong quarter with a record high EBITDA.

I will now conclude this presentation and invite Sigve back for Q&A. Thank you.

Thank you as usual.

First on your capital structures. Now you've improved your net debt ratio significantly to about half of your previously guided [ph] cap.

Have you done any considerations with regards to any potential one-time payout to shareholders and or how this may be impact future ordinary dividend growth? And secondly, in light of the ongoing discussions now in the EU with regards to the wholesale price caps, can you shed some light on the development in your wholesale prices as you are now including EU roaming in more and more of your price plans?

Thank you.

On your first comment, we don’t have a history of special dividends in Telenor, I think we have stated that the proceeds from VimpelCom in this transaction will be used for general corporate purposes, including paying dividends in next month and we have a former dividend policy, which is delivering growth year-over-year. The Board will discuss the dividends for 2016 in the regular practice later this year and announced at the fourth quarter.

When it comes to the second question, on roaming, I would say unfortunately on that part regulation is not following the market, so we actually now achieved lower prices for terminating roaming in Europe than the officially stated prices and of course it's very important for us to be able to reduce the cost of roaming as we have introduced much more favorable roaming principles to our customers. So far what we have experienced is that the market price, which we can achieve negotiating with operators are lower than the regulated prices.

Thank you, Morten. Any further question there from the middle, please.

Hi, good morning. Just quickly, in terms of India could you explain to us why you continue to evaluate options there and I think you mentioned earlier this year that you would make a strategic conclusion after the spectrum auction, which has not happened.

If anything, could you enlighten us in terms of how you’re thinking, what needs to come into play to stay in India at this level? And secondly, if you look on like-for-like basis Norway ARPU this quarter if we eliminate the roam like home effect and just look at the increased ARPU effects from the news take up of subscriptions plans, what would that effect be in poster terms and is that the same effect we can expect year-on-year for Q4?

Thank you.

Yeah, I can answer the first one. We as I said many times, we will only look at options, which sees value creation.

We are not in India for any strategic reasons. We are there to create value for our shareholders.

And all options we’ll be seeing in the light of that. The auction has just concluded just some few weeks ago, so I cannot comment on what types of options we are looking at or what type of options or alternative that may emerge.

The only thing I can say that we would, our spectrum position is not sustainable, we have said that several times. Despite that, that we are able to grow in the current market, but it’s - we need to find the long-term solution, but I don’t want to go more into what those solutions maybe.

On the ARPU question, as I said, I am very satisfied that Norway have been able to increase their ARPU with NOK10 and then the roaming effect is NOK13 so that’s why you see that this is slight decline. You also need to take into account here that Norway have implemented a news program on handsets and when you previously headed the subsidized handsets and we had binding for 12-months you pay NOK4, if I recall remember right per month for that binding - a kind of binding fees, so you also need to take that into account when you look at the NOK10 increase.

So, if you take all these into account, you will actually see that there is flattish ARPU development in Norway, which is really, really impressive knowing that the roaming effect is minus NOK13. We now see that most of the new customers or not the new customers, but the customers that we are migrating into the new packages are coming in on price points of NOK349 and NOK399 I think you can calculate yourself what that could mean going forward in terms of ARPU increase.

And of course, we estimate here that the customers are not so rational that every month go down again after their summer month are over. I think they will now keep the new price points, which will give a very healthy ARPU development going forward.

Thank you, Sigve. Any further questions from the audience?

No, then we'll open up for the Q&A on the conference call please?

Thank you very much. I'd like to stay with Norway please and the new handset model that’s what model as you've discussed.

You discussed the impact on ARPU, how about the cost side. You talked a bit about the impact on EBITDA from the new model.

And maybe - in the third quarter, but if you would give us any light on this please. And secondly, could you just discuss and talk a bit about what is driving the strong uptake in demand you're seeing for ISB [ph] both in Norway and also in Sweden where you're doing very well please.

Thank you.

You can take this one and then I can take your second question was about what is driving the demand for fibre. Was that the question?

Yeah.

No, I think the what is driving the demand is that wholesale both in Norway and Sweden. I think that fibre is for the future.

And that's also why we now have increased our fibre rollout. And you will see now that we have got the kind of rollout machine really to work and that's why we have a very, very healthy growth on the broadband and specialty fibre in this quarter.

And I think when this rollout machine now is continuing in the coming quarter, our aim is now to take market share on the fibre rollout in Norway In Sweden is the same, the business model in Sweden is a little bit different, because the households are paying upfront some of the investments. So, and that's why we have said in Sweden that we really want to be aggressive on the single unique - loss and to connect them to fibre.

So, I think the demand is there and I think our ability to deliver on demand is also there. It has taken a little bit time to get that rollout instrumental work as we planned for.

But now, I will say that there is full force both in Norway and Sweden.

And on your first question which was on the new handset program in Norway is swap [ph] program. Just to clarify it's a 24-month device installment program with some additional attributes like glass insurance and trading options.

And it was introduced in June and what's different is that it's available through overall distribution channels, including through the web channels. So, we are distributing this through overall channels.

And I think that is giving more benefits and is also driving core [ph] commissions and subsidies for the traditional third-party distribution.

And if I may add, it's also very customer friendly, because you are not now into at one-month contracts. And you are free to upgrade your phone.

And because of that we see that the churn for this customer are coming down. And so, I think both from a churn perspective, this is a very good program.

Thank you both. Sorry we have to follow in order to get - so, I am moving onto the next one please.

Thank you.

Yes, couple of questions. We can start in Norway, first of all the CapEx spend in Norway is 10% above the level seen last year, if you look at year-to-date.

Can you provide some split-on CapEx between fibre build and 4G rollout, and what can we expect for CapEx spend in Norway for the years to come and when are you done with 4G rollout? And then on India, can you say what has changed with regards to the value in India.

Is this a reflection of a lower value when or if you sell or higher contractual obligations, which may not be able to be passed onto a new owner? Thank you.

I think India, I don't want to comment more than what me and Morten already had said. It's a reassessment of the value for our business in India and of course that reassessment is also taken into account what market developments that we have seen lately.

So, other than that, I don't want to go into details. On the first question, we are now having full speed on the 4G roll out in Norway.

And as we have said before, the aim here is that within next year, we will have 4G on all our 2G base stations, 7,500 base stations if I recalled it right. And we will then be significant better on 4G than our competitors are.

So, that’s why we had on the mobile side still quite high investments of 4G, but of course when we then have finished this rollout that part which will come down and then we have also now as I said, focusing on addressing I will say, the market share loss we have had on fibre development over the last few years and we are therefore very happy now and that what we see all the development of last quarter. I don’t know if you can comment.

The split is approximately 50-50 in the third quarter. So, I think that gives some answer and just underline, we anticipate to be ready with the 4G rollouts by the end of next year.

Okay. Thank you, Sigve and Morten, the next caller please.

Hello. Thank you taking the questions.

Two please. One is on group CapEx.

The group CapEx has been developing favorably i.e. coming down throughout the year, you were saying that it may come up again in 4Q and for good reason, but as we look to the medium term given that CapEx in terms it has been coming down, do you still see yourself as investing quite heavily currently and therefore would you see scope for potentially for the CapEx reduction in the medium-term, so that would be very helpful.

And then secondly just in Myanmar, you’ve mentioned both seasonality and competition affecting the performance this quarter. Could you perhaps just give us a little bit more color on that, what do you think it was more seasonality given that you expect the return to sequential growth already from Q4 and perhaps part of that also give us an update in terms of the fourth change.

Thank you.

I can take Myanmar and then you can take CapEx. On the Myanmar, yes we expect to growth to increase in the fourth quarter and seasonality in the third quarter is more or less as expected, because the rainy season in Myanmar is really rainy season.

The country is basically under water, so there are a lot of technical or some network or issues and fibre problems in that quarter. So, that’s as we expected and we already see now and going to fourth quarter that we will see a better growth in the fourth quarter.

On the competition side, we see quite aggressive now on net pricing, as I mentioned, and we also see one aggressive data pricing. However, we see that we stay competitive and of course, we added almost NOK1 million new subscribers in the third quarter itself and that is going to yield some revenues going forward.

And also, the network pressure we have now with more than 80% of their contributing coverage [ph]. You will not see the same fantastic growth figures in Myanmar as we have seen the last few quarters and I think I have said that every quarter that soon or later this also will be leveling itself also a little bit, but I will not say that the growth in over in this country, it's not much sure yet.

So, fourth quarter I hope we will see some better growth coming back.

Thank you. Morten anything?

On the CapEx, I think I will just reflect on the development this year. We started the year on CapEx guiding with a guiding of 17% to 19%.

We are guided around 17% after the second quarter, so we will definitely see a trend in that, but for the mid-term guiding I'll leave that for the capital market to give - Capital Markets Day to give them more flavor.

But just give a little bit credit to the finance department and to Morten. I think we are getting better and better in what we call the dynamic capital allocation or capital allocation, which means that the group finance sitting very tight - tightly integrated in discussions with the BUs on how do we make sure that we get return on the CapEx and I think that model is now really paying off certainly, we are able to control the investments very much align to where the growth is coming.

Just one more point on Myanmar also, I think the price reductions that we saw came actually in the second quarter, not in the third quarter, I haven’t seen any further price reductions in the third quarter itself. So, hopefully this is also the competitive pressure on pricing is also starting to level up a little bit.

Thank you, both. We’ll move on to the next question please.

Yeah, thank you, everyone. I have only one question really.

In the past, you sort of have quite probably put on each, in each presentation a chart showing your mobile service revenue - organic mobile service revenue growth for the group. And obviously, this has been just 2%.

I understand there is a roaming impact, I calculate this around less than 1 percentage point. So, organically MSR is now sort of down to maybe 3%, which would still be at the very bottom end and if not the lowest in 10 quarters.

So, the question really is, is the asset portfolio that you currently have to work with in Telenor is that sufficient to produce a reacceleration of growth. I think in the past you've talked about growth being in the DNA of Telenor, so do you have the right asset portfolio with increased investments growth can come back.

Or is there really something more structurally needed beyond India obviously. And in this context, can I also sort of just sneak in one element to that question, on the asset portfolio.

There have been some marginal press reports in Asia about foreign ownership issues sort of boiling up again. Is this anything serious in either Malaysia or Thailand at this point or do you think there is something sort of coming up again.

Thank you.

On the second question, I haven't seen this issue being more visible now than it has been in the past. In Malaysia, as you know, we are 49% ownership, so we have full compliance with the foreign ownership laws, including also the laws [ph] that the certain percentage of our public shareholders need to be hold by shareholders [ph].

In Thailand, I haven't seen this issue emerging more than what we have reported or so. So, I don't see any development at this moment.

However, in all of these markets, we need to be relevant. And so, at the end of the day, we are a foreigner, that's why are focusing so much on also being seen as a relevant part or actually growing the societies and that's why actually regional Telenor empowers societies as we need to be seen through our services that we are bringing something good to the country.

And maybe the best example of that is Myanmar where we are changing the work, help, and security standards in the countries, where we have no corruption policies, where the way we work is different from the standard in the country. And this is something that we really spend time on explaining to the various stakeholders in these countries.

To the first question, yes you're right the growth this year has not been as we have seen previously. However, you see now that data monetization has started to come through in Asian markets, 14% growth in Bangladesh, 10% or 11% in Pakistan, growth in Myanmar.

And what is really in Asia now hampering the growth, it's a very rough competition we have seen in Thailand and Malaysia. However, we hope that these two markets are coming back to a little bit more what should I call it normalized competition.

And there should be growth potential both in Malaysia and in Thailand when we see there the digital or the data appetite among growing digital segment. And of course, in Norway I am quite positive that when we are true, the roaming effects and when we are continuing to upsell our packages, there is a room to charge a little bit more for the data growth we see among the customers in Norway.

And still Norway on a medium level is consuming less data per customer than we see in Sweden. So, I don't see think there should be a reason why Norway also should come back with the very positive growth element.

If you combine all this together, and then going to the future, I don't want to give any guidance on that. But this is also an element, we will try to go a little bit more in depth on the Capital Markets Day.

So, if I may just add from a CFO point of view. Of course, revenue growth and the continued revenue growth is important.

But I also think what we are trying to do here is the pinpoint that value creation happens through the cash generation. And I think what we have been able to evidence over the last quarters is an improving EBITDA, which is translating into cash flow.

And to me this has been very important to monitor the fact that yes, growth is important and we are not moving away from that, but even more important is our ability to generate cash as such. And very happy with the third quarter in that perspective.

Thank you to you both. Next question.

Hey, good morning. First of all, just had a question on fibre demand in Norway, you said that is you’re going at full force now but, if you had to deliver at faster speeds I've seen with B Plus or G Fast technology.

So just wondering how you’re progressing with trials on this and particularly what you discussed with the regulator to allow you to commercialize it without giving three years warning to your competitors and also customers? And then secondly just to follow-up on Ulrich's question, in particular Norwegian mobile growth, as you describe [indiscernible] has launched and what are your thoughts on a realistic sustainable level on mobile and so as revenue growth into 2017 and can the market in your positions support mid-single digit growth again in that market.

Thank you.

I can take the second one and you can take the first one. On the second one, yes, the competition is definitely present in Norway.

We see that ICE and also Talia, it’s quite aggressive and but that aggression is especially in what I will call the price sensitive markets. It's in a prepaid segment.

And overall I see that we are not losing any shares at all in a premium segment and the revenue market share for our self, it’s stable. And I think that you’ll - and that’s why also we have a fighting brand talk more, which is down there trying to secure our fair share on that market.

So, having also said that, I want to give a little bit credit to our main competitor to Talia, I don’t see any different focus from them than our self, they are also focusing on profitability and I also see that ICE takes steps as expected as being number third operator. So, I don’t think that - that the competition should be an excuse for not the Norwegian market growing and that’s why I am a little bit bullish on going back to revenue growth for tender in the Norwegian market when actually this EU effect, the roaming effect.

Morten?

When it comes to your question on G Fast et cetera, et cetera which is operating of the ADSL, VDSL networks there are some regulatory hurdles in Norway, which I will not go into detail and I will say that’s regulation has made this very, very difficult and I will just ask you to discuss this further with the IR. I think what we are concentrating on with those hurdles now we have seen, we are very much focusing on our fibre rollout and the upgrades on the cable network, so that’s the main purpose for the time being.

Thank you, Morten for that. Next caller please.

Yeah, hi guys. This is Maurice here from Barclays.

So, a couple of very quick questions, number one, on 5G, there’s been a lot of noise and height around potential launch timings of 5G, it seems a fairly consistent message from many of the operators however there’s a lot to go on 4G still and most of the capacity increases - from that your thoughts on this 4G and this 5G evolution. And just secondly, could you quantify the positive impacts on EBITDA from the handsets leasing change in the quarter and if that likely to increase for the coming quarters?

Thank you.

On your second question, if that question was about Norway. I think we had a positive EBITDA effect in Telenor Norway of approximately 45 million in the Q3 from the revised handset program.

When it comes to 5G, I think you’re right, we are still concentrating a lot on 4G and moving people into 4G, we are started looking now into 5G but I wouldn’t expect trials in the near-term future and the commercial effects from 5G I would extent till around 20-20. That doesn’t say that we are negative to technology as such, but we just see that the efficiencies we will be given through 5G launch it still some way into the future but we are monitoring the development carefully but for all commercial purpose of the next three to four years I wouldn’t anticipate any efficiency gains from 5G rollouts.

I don't think we have any different position on this time our European peers. We are testing it out in our own networks and we are looking for the right time to commercially launch it.

So, and we are all talking to the vendors on it.

Thank you. Next question please?

Hi, good morning, everyone. I've just got one question on spectrum in Thailand, we're getting some details about the quantity of spectrum and possible reserve prices that could come into effect in 2018.

I just wondered where are your thoughts on those proposals and also give us an update on the timeline thank you.

Yeah it seems like the government has decided to an auction on the 1800 spectrum in '18 that's at least what they are communicating. And as you know there will be our current spectrum of 25 megahertz plus 25 megahertz on new spectrum meaning 50 megahertz coming in ours.

We don't know anything about the pricing other than the realized price in their auction of that year ago which was around $45 billion, if I recall that right. So, I assume that realized price will probably be this starting price plus and how much they want to add to that that I don't know.

So, it's a significant lower than what the realized price on [indiscernible] which was more $75 billion. So, it's almost half.

Then the government seems also to wanted to do something on the 2.3 and the 2.6 spectrum. And there is talk that there will be some sort of beauty contest on that in the start of next year.

And of course, we will also be an interested party in looking into the possibility to consider that if that comes out. On top of that it's an 850 spectrum, there is 10 megahertz also 850 that we are currently using and the consolidation on that is also expiring in '18.

It's a little bit unclear if the government want to protect that - in auction or if they want to use at least part of that for the trans-national railway that comes from through China from let's say to Thailand from China. So, I think that on overall spectrum situation it seems like it's the government want to follow the schedule or the timeline so we have expected.

And yeah, I think that's about it.

Thank you, Sigve. Moving onto the next question please?

Hey guys, just one simple question. To you guys assuming you can't do both what is more of a priority for Telenor is it to grow revenues or to expand margins?

It's both. Yeah, I am coming to that.

I think that we definitely have cost challenges. And I think I've said that I don't say that several times.

And that's why we are so focused on bringing down our operational costs. And we have said many times already that every time we grow faster in revenues.

So, profitability and value creation is definitely the main focus area we have or the main aim that we are going after. And this also why we have now put in place several structural initiatives to yield much more efficient to use our assets.

But at the same time, we are also in markets where we think we can participate in revenue growth. And our mindset is not that the growth is over.

In Asia, we definitely see that is a long way before data monetization and the data potential has been taken out. But even in the European markets or in Norway we see that that should be able to create growth.

So, it's both. So, when we meet our me and Morten meet our business units yields, we are talking about both areas.

But of course, it's easier to control the cost development. Because that something we have control ourselves but at the same time we are not letting full go the revenue opportunities there.

Thank you again, Sigve. We will have time for two more callers.

Could I please ask you to limit yourself to one question each? Thank you.

Hi, it's Nick from SocGen. So, can I just ask on the - just two very quick ones, apologies.

But on Denmark your ARPU slipped again by 10% now I think this quarter. You said, you were going to try and make progress by end of the year, you're having to resort to discounting heavily again, I notice you capped CBB prices as well.

And then on India, is sort of step change on how are you running the business, I mean the subs are down, it looks like cost are down have you pulled back on all marketing cost and everything else as you run the business and have you been changing things in this quarter. Thank you.

If I talked with India, I think if you take quarter-over-quarter is that reduction of approximately 200,000 subs, I think we are as in all operations monitoring OpEx and that is the case in India as well and surprisingly because we have claimed ourselves that the India is one of the best OpEx efficient operations, they have been able to find more OpEx, so that’s correct observation. I would say, we have been slightly less aggressive on the customer acquisition putting more value to the high ARPU customers in India.

So, that's the explanation to your question. When it comes to Denmark, we have had as earlier stated some issue with the business support system implementation and we still experience some issues with that which we aim to solve during this quarter.

And of course, in addition to our price pressure and we have discussed that for several years now for Denmark and also India market see roaming effect. But I don’t see a major change in the Danish marketplace through the quarter.

Thank you, Morten. Final question of the day, please.

Yes, thank you for taking the question. Just on the internet, TV revenues within Norway, the trend earlier this year was negative, I think you've managed to reach parity in the quarter versus Q3 of last year, is this a trajectory, which you think it will continue into Q4 and into early next year and should be expecting low to mid-single-digit revenue growth to come back to effective viewing in TV business?

Thank you.

I have some problems really catching the question. So, the revenues also from the TV further developing of TV into our packages will continue.

I think what you have seen in the third quarter as we have discussed earlier, it’s a good uptake on fibre. We made some price changes during spring and the summer, which will have positive impact going forward and we also see more fibre customers taking the TV packages, which we are offering.

So, in that respect, I think if you look into the figures, you will see a positive trend during the third quarter and that will - that should continue going forward.

Thank you very much to you both. This was the final caller.

Sigve any closing remarks or are we done?

No, I am eagerly waiting actually to see you back in February and our Capital Markets Day because there is a lot of questions here that I would like to go into much more depth about and more strategic questions and that’s the aim we have for that day.

Thank you very much.

Thank you.