Marianne Moe - IR Sigve Brekke - President and CEO Jorgen Rostrup - EVP and CFO

Andrew Lee - Goldman Sachs Fredrik Thoresen - SEB Peter Nielsen - ABG Roman Arbuzov - UBS Sanvir Dhillon - Exane BNP Paribas Thomas Heath - Danske Bank Ulrich Rathe - Jefferies Jakob Bluestone - Credit Suisse Dominik Klarmann - HSBC Keval Khiroya - Deutsche Bank

Good morning, and welcome to the presentation of Telenor Group's results for the First Quarter. My name is Marianne Moe, I'm Head of Investor Relations, and I have the pleasure of guiding you through the presentation here today.

The results will be presented by Group CEO, Sigve Brekke; and Group CFO, Jorgen Rostrup. There will also, as usual, be a Q&A session after their presentations.

And in total, we expect to finish here in about 1 hour from now. So without much further ado, I will now leave the floor to Sigve Brekke to present the highlights for the quarter and operational performance.

Thank you, Marianne Moe, and good morning to all of you. The first quarter, it's characterized by stable organic revenue, EBITDA margin expansion and an increase in free cash flow.

I'm happy to see that we have a solid revenue growth in core part of our operations. In the emerging Asia cluster, we have a double-digit revenue growth coming from data monetization.

In Norway and Sweden, we see that we are monetizing our efforts on fiber rollout. Where in the developed Asia cluster, we see a continuous pre-to-post migration, resulting in a double-digit postpaid revenue growth, but also with very challenging prepaid developments.

And as we talked about in the Capital Markets Day in February, we have -- making progress on our strategic agenda, having taken several steps towards simplification of our companies and I will come back to that. So all in all, Q1 is in line with our expectations.

Let me start with Norway. Overall, I want to say that I'm satisfied with the trends in Norway.

On the mobile side, we have total mobile revenues which are stable when they adjust for the data rollover. On the fixed side, this is the first quarter in a very long time where the growth in fiber and TV is more than compensating for the decline in the legacy fixed business.

And Norway is also continuing its focus on cost efficiency. So if we adjust for the one-offs and also for the data rollover, you will see that Norway has a stable EBITDA margin year-on-year.

Norway also took out around 180 FTEs in the first quarter, and we will see the effect of that in the coming quarters. Going a little bit more into each of the business lines.

On mobile, we see a continuous good uptake of the upsell efforts that we have. We have now upsold around 60% of the postpaid base into packages, which include Roam Like Home.

And we see an increased ARPU development coming out of those upsold packages. We will also include Roam Like Home for all the subscriptions with effect of from June 15.

We see that the introduction of the data rollover for the main customer plans have an NOK 85 million effect both on revenues and EBITDA in this quarter. We have during the quarter also launched a new concept for a new segment.

And so far, we have received very good feedback from the market. We continue the handset SWAP program in Norway.

This is a program which is very well-received by the customers. It has a negative revenue effect.

We're taking down the departure of the ARPU that came from the previous subsidy program, but it has a very positive EBITDA contribution. And we also see then an underlying ARPU growth, driven by the continuous increase in data consumption.

We also see that we are able to keep our position in the valuable customer segment. However, we see that we have some disconnection of data cards, and we also have lost some customers in the low-end price sensitive priced prepaid market.

On the fixed side, we continue our rollout. We have added 12,000 new households on fiber this quarter, giving us a 5% growth on the ARPU.

And so we're also upselling, not only adding, and we also see a supporting growth in TV subscription of 6%. Moving to neighboring countries, Sweden and Denmark.

In Sweden, we have a very positive revenue development, supported by a positive one-off in this quarter. But the underlying revenue growths are also very healthy, 3%, also driven by consumer postpaid performance.

We see that in the quarter added 20,000 new fiber connections, so we have -- we'll continue the SDU fiber rollout program, also then supported by fiber growth in -- through out the networks, resulting in a 5% growth in the fixed revenues in Sweden. Based on competitors' reporting, we also now see a slight increase in revenue market share during the first quarter both in mobile, but also on fixed broadband.

In Denmark, our focus is on improved efficiency in our operation. And as you can see from the figures, we have a significant reduction in OpEx year-over-year.

However, that's mostly due to last year high cost on implementation of a new business support system. We are also pleased by 9,000 new net adds in the mobile subscription.

Moving to the Central and Eastern Europe cluster. We see that in this cluster, market development, industry development and also our own performance is in line with the previous quarters.

In the cluster, our focus, it's on continuing to strengthen our network position. And we are continuing to build out our 4G network, independent speed tests shows that, that we actually are having the fastest mobile network now both in Bulgaria and in Hungary.

The other focus is that we continue to focus on the value customers. The pre-to-post migrations, the postpaid upselling, compensating then for pressure on the prepaid segment, but also with continuing to offer competitive customer offers.

We also have cost-efficiency focus, and it's starting to yield some small results. And as you can see from the EBITDA growth there, we are able to demonstrate a higher EBITDA growth than revenue growth in the cluster.

Moving to the developed Asia cluster, Thailand and Malaysia. In the cluster, we see that the market continues to shift from a typical prepaid price sensitive competition into more postpaid packages with the data and the voice bundles.

I'm happy to see in both the 2 companies that we have a very solid postpaid growth. In DTAC, we grew 20% year-on-year on postpaid revenues, and postpaid is now accounting for approximately 50% of the total revenues in DTAC.

And the same happens in DIGI, 12% postpaid growth, and postpaid is now accounting for 36% of the overall revenues in DIGI. We also see that we continue to focus on positioning ourselves in the postpaid segment with new innovative offers.

In Thailand, we introduced a speed-based pricing in the quarter. And we have also introduced a new brand platform to better position ourselves for the change in the market -- in the industry or the market.

We are continuing also to roll out our networks. In Malaysia now, as one example, we have 85% population coverage on 4G.

And we continue also to take position in postpaid distribution being the service points, but also starting to introduce this to sales and marketing. Then go a little bit more into detail on the 2 companies.

In DTAC, the revenue shows a minus 9% year-on-year, mostly due to lower handset sale in this quarter compared with the quarter last year. And the main reason for that is that we have chosen to stay out of the very competitive prepaid subsidy program that our competitors have had.

We then see that if you adjust for the handset revenues, we have now almost a flat subs and traffic development, minus 1% year-over-year. And I'm happy to observe now that it seems like the prepaid, decline in revenues is starting to flatten out.

And we also see that despite the intense competition, we are able to protect our EBITDA margin in Thailand. In Malaysia, as I said, postpaid is growing 12% growth in that segment.

And the minus 6% on the revenues is then mostly coming from an intense competition in the prepaid segment. In the prepaid segment, DIGI is the largest player.

So when the competition is more incentivized, of course, we are being hit harder. In addition to that, we are also having the highest position in the migrant base.

And we see that there are fewer migrants coming to Malaysia than it was in the past, and we also see pressure on the international traffic for the migrant workers. Moving to the emerging Asia, which is the growth star of this quarter.

In the cluster, we see that we have added now 10 million data users in the last year. This is coming from improved data networks.

And they are continuing to roll out 3G in Bangladesh, 4G in Pakistan and also starting to roll out 4G in Myanmar. And for example, we have now moved up the population coverage on our network in Myanmar from 62% to now 90% coverage in the end of the first quarter.

We also see that the data increase is driven by smartphone -- more smartphones out in the market. You get now a decent smartphone at a US$30 price in these markets and that's a 20% reduction in the smartphone prices year-over-year.

And we see that the smartphone penetration, especially in Bangladesh and Pakistan is still low, so we foresee a continuous growth in the data segment in this cluster. We also see that the growth on data, of course, is giving us a better margin than the voice, and that's the main reason why we are able to grow the EBITDA way above the revenue growth.

Plus, of course, also a continuous focus on cost efficiency despite also adding cost in increased network rollout. Then go a little bit more into the details again.

In Grameenphone, 11% revenue growth coming from both new customer additions and an increase in ARPU. And I'm happy to see that we are able now to not only reach more customers, but actually also grow the users with the customer base.

And again, we see that the data growth gives us a very high EBITDA margin growth, 70% EBITDA growth year-on-year. In Pakistan, 10% revenue growth and all of this growth is now coming from the mobile business.

In this quarter, we have moved financial services down to other units as of this quarter. In Myanmar, at 13% revenue growth, coming from again increased rollout and then reaching more subscribers.

And as I said, we have 90% population coverage now in Myanmar. And I'm happy again to see that despite now going into the much rural areas out into the villages, we are able to have a stable ARPU development.

In the quarter, we also introduced SIM registration in Myanmar, similar to what we have done both in Pakistan and in Bangladesh. And 88% of the SIMs are now registered, which covers 98% to 99% of the revenue generating SIMs.

Then closing up with what we talked about in Capital Markets Day. So what we focus on or what we told you about then was that we are going to step up our cost efficiencies, utilizing the digital opportunities to digitalize our core business, but also to leverage scale across our footprint.

We also talked about in Capital Markets Day that we want to prioritize and simplify our portfolio. And during the quarter, we have taken several steps in that direction.

We have, as you know, reached an agreement with Bharti to exit India. And as we said when we announced that, we estimate the closing of that within 12 months and we are now in the process of getting the necessary approvals.

We have also launched a new cluster-based organization, basically clustering our 12-plus India operations into 4 clusters. That is to get more focus on these clusters and also just to have a potential of developed cooperation and efficiencies in the clusters among the business units in the clusters.

We are also, as you know, taking next steps of exiting VEON or previously VimpelCom. We are now down to a 19.7% ownership in VEON, and our intention remains all having a complete exit out of this company.

Although minor, we have also sold Startsiden, which is a Norwegian Internet portal. And I'm using that also here as an example of our efforts of focusing our portfolio.

So to summarize the quarter, I'm pleased that we are delivering organic EBITDA growth, and we see solid revenue trends. I'm also pleased by seeing that our efforts on efficiency focus will lay a good foundation for strong operations in the quarters to come as well.

So with that, I will ask Jorgen to come and go through the financials. Thanks.

Thank you so much, Sigve, and good morning to all of you. As Sigve showed you, we are reporting a quarter with stable revenues, with increasing EBITDA margin and increasing cash flow.

On the cost side, we are starting to see sign of our efficiency initiatives. We continue to stabilize OpEx this year and prepare for a gradual reduction next year.

And then following our announcement in February of exiting India, our financials are now presented with India as discontinued operations. My comments on financial performance and the outlook for 2017 will, therefore, be made on the basis of the current group structure, excluding India.

We have reported revenues for the quarter of NOK 30.5 billion, which is down 3% year-on-year due to negative currency effects in the range of NOK 1 billion. Adjusted for these currency effects, revenue are stable year-on-year.

Then last year, we had a positive one-time effect of -- in the range of NOK 0.2 billion from a settlement in the Broadcast division. You will see it influencing the numbers in Broadcast quite significantly.

But also, adjusted for this on a group level, organic growth was around 1%, i.e., in line with the trend from last year where we had a 0.8% growth if you exclude India from the number in 2016 in total. Looking in more details on the revenue development.

The main positive contribution to reported revenues are coming from emerging Asia operations, as Sigve was talking about, which all delivered double-digit growth numbers or approximately an effect of NOK 0.4 billion on their top-line revenue increase. Then Thailand and Malaysia both contributes negatively in this slide.

Reported revenues in Thailand, in particular, as Sigve said, due to lower device sales, which accounted for 2/3rds of the drop; and in Malaysia, due to prepaid development and also negative currency movements, as we have seen in Malaysia for some time. The decline in Broadcast again is mostly explained by the positive one-time effect last year and a little bit currency effects.

As you know, it's our ambition to break the trend of increasing OpEx in 2017. This we talked about at Capital Markets Day in February.

We are looking both at initiatives to lower cost base long-term, but obviously, also everyday cost control is very high on the agenda in Telenor these days. In Q1, we reported an OpEx decline of 3% or NOK 0.4 billion, with lower marketing and also regulatory cost being the key drivers in addition to currency movements.

Among other things, we have continued our rightsizing activities during the quarter and we are approximately 600 full-time employees less at the end of this quarter than at the end of Quarter 4. And then also, obviously, OpEx are fluctuating quarter-to-quarter.

But when we measure it on a rolling 4-quarter rolling basis, we see a stabilization of OpEx, as has been the ambition for the year. EBITDA came in at NOK 11.5 billion in the quarter, equal to an EBITDA margin of 38%, which is 1 percentage point higher than the same quarter last year.

The EBITDA margin improvement is predominantly coming from a higher gross margin as the OpEx sales ratio were fairly stable. Organic EBITDA growth was 3%.

And then, if you adjust for the Broadcast effect, growth was 5% for the quarter. Looking at EBITDA, again, contribution per operation, the trends are similar to the revenue development.

Profitable data growth in Bangladesh and Pakistan translating into solid EBITDA growth contributions from these countries. In Norway, EBITDA was down approximately NOK 200 million in the quarter.

Then remember what Sigve said that data rollover in Norway during the quarter had a negative effect of approximately NOK 85 million. There were also a positive one-time effect related to our Star project in Q1 2016 of NOK 50 million.

And adjusted for these 2 elements, EBITDA margin for Norway is at the comparable levels. And then, as I previously mentioned, settlement in Broadcast also impact EBITDA.

All in all, we believe we have expanded the margin and delivered healthy organic EBITDA growth, even in times with a less top line growth in the numbers. CapEx in the quarter was NOK 4.5 billion, decreasing from the high levels that we saw both in Q1 and also in Q4 of 2016.

Investment in Thailand and in Norway constitute of half of the CapEx that we have spent in the quarter. In Norway, as Sigve had talked about before, it is fiber and it's 4G rollouts which constitute most of the CapEx in Norway.

And this quarter, fixed and TV investments is the key reason for the increase in Norway's CapEx, and it constitute around 30% of the CapEx spent in Norway in the quarter. In Thailand, investments are still focusing on network densification both on 3G and on 4G.

And DTAC in Thailand almost doubled its 4G sites the last year. The CapEx to sales ratio for the group is approximately 15%.

That is comparable to the 17% level that we held in 2016. There were no spectrum or licenses investments in the first quarter 2017.

The income statement shows a net income to Telenor equity holders of NOK 4.2 billion this quarter, representing earnings per share of NOK 2.78. I've already talked about the revenue line, about the EBITDA line.

And as depreciation, financial -- net financials and also taxes are approximately at the same level as Q1 last year, I would only comment on a couple of other items on this overview. Other items of minus NOK 178 million include restructuring costs related to workforce reduction, primarily in Norway, with approximately NOK 165 million in the quarter.

It also include a gain of NOK 65 million resulting from disposal of Startsiden, as Sigve commented on. The effect on associated companies and net financials are related to the change in market value in the period of VEON and the exchangeable bond the VEON shares as -- that has the VEON shares as the underlying security.

If you look at the other line, in Q1 2017, we have a marginal effect from continued operation -- discontinued operations in India. And then, bear in mind, according to the IFRS accounting principles, the profit from discontinued operations include only external transaction, hence it's not fully comparable to a standalone business overview.

Free cash flow of NOK 2.2 billion in the quarter. Net cash flow from operating activities this quarter is NOK 9.2 billion.

The reported EBITDA of NOK 11.3 billion is then partly offset by taxes paid of NOK 1.1 billion, net financial interest payments of NOK 0.5 billion and operating capital increase of NOK 0.4 billion. Net cash outflow from investing activities is NOK 5.4 billion in the quarter predominantly consisting of NOK 5.3 billion in investments paid in the quarter, heavily influenced by the high investment level that we saw in Q4 of 2016, having the cash effect now in first quarter of 2017.

In addition to the cash flow from operating and investing activities shown on this slide, the free cash flow reconciliation also have some effects from financing activities. This quarter, it includes NOK 0.3 billion paid in dividends to non-controlling interests of DIGI in Malaysia and also NOK 1.1 billion related to the supply chain financing arrangement in Norway, which is actually a working capital element.

In total, this gives a free cash flow of NOK 2.2 billion in the quarter, as I said. Telenor is in a solid financial position, which also is a key priority for us to maintain.

As you can see from this graph, the net debt decreased by NOK 0.7 billion in the quarter, while the net debt-to-EBITDA ratio remains stable at 1.2x. And then, the net debt reconciliation that we have put up on the right-hand side of the slide should be fairly straightforward.

The negative currency effects of NOK 1.2 billion this quarter comprised translation effects of debt held in other currency than Norwegian krone due to the weakening of Norwegian krone in the period. And then, we have capital -- changes in working capital of -- and other of NOK 1.9 billion, which is including the supply chain financing model that we talked about from Norway.

We continue, as Sigve said, to sell down our position in VEON in the first quarter. We sold 70 million ADS, American Depository Shares, comprising around 4% of the total share capital in VEON.

And this resulted in net proceeds for us of NOK 2.2 billion. It took, as Sigve said, our ownership down to 19.7%.

And the transaction followed the transaction we had in September where we sold shares and also established an exchangeable bond based on the VEON shares. Following the transaction in April, VEON will no longer be treated as an associated company with us.

We will treat it now as a financial investment in our financial reporting. This also means that all previously recognized currency translation differences, a total of NOK 7.5 billion effect, which has been accounted for directly to the equity on the balance sheet, will now have to be reclassified to the profit and loss statement, with no net effect on the balance sheet equity and a cash -- and this will happen in the second quarter.

Also, the cash effect from the sale, the proceeds of NOK 2.2 billion will be accounted for and registered in the second quarter. And then as Sigve said, we will continue with the aim to sell down, but the timing of this, we have no comments to and we have the time we need.

Outlook for 2017. To us, it's still very early in the year.

So we have simply made one basic adjustment to the outlook, and that is a technical adjustment due to the fact that we are taking India out of our financial core communication around our development of the business. So it reflects a current group structure, excluding India.

And excluding India from group numbers improved EBITDA margin, we believe, by around 1 percentage point. While the impact on the revenue and CapEx to sale is estimated to be marginal, hence this means that for 2017, we still remain 1% to 2% organic revenue growth.

We are seeing that EBITDA margin around 37%, which is up from around 36% when India was included. And CapEx to sales ratio, excluding spectrum licenses in the range of 15% to 16%, i.e., that is unchanged.

To summarize the quarter, we are reporting, we believe solid revenue growth in several of our core areas and are working actively to strengthen performance in areas where we see potential for improvement. For the Group as a whole, we delivered a quarter with stable organic revenues, with a margin expansion and increased free cash flow in the quarter.

All in all, I would say that the performance in first quarter was in line with our own expectations. Our approach to value creation that we talked about also in February when we met, a focus on innovative and customer-friendly offerings, efficiency operations and simplification.

These are the themes that goes through the group and through the discussions on a regular basis. Although still in an early phase, we believe that the activities we are ramping up within these areas will continue to take us to a -- in the wanted direction and shape the future of the group.

So with these words, maybe it's time for Q&A.

Thank you, Jorgen and Sigve. We will, as usual, start the Q&A session by taking questions here from the audience present here at Fornebu before we open for the conference call participants.

Fredrik Thoresen with SEB. First, can you provide some additional color on the use of proceeds from the latest VEON share sale in light of your revised dividend policy presented in February?

From what I can calculate, net debt to EBITDA is now, adjusted for this NOK 2.2 billion, close to 1. And on data rollover, can you also provide some insights into how we should think, model around deferred revenues with regards to seasonality patterns and also churn in Norway?

Thank you.

Yes. On the proceeds, the only thing that I want to say about that, it's to repeat what we said at the Capital Markets Day.

Our financial policy is to continue to have a very healthy and strong balance sheet, and it is to deliver on an increased actual dividend payout in the years to come. And that's something that everything we do is going to build it up against because we really want to deliver on that policy.

And on top of that, we are going to the Annual Shareholders' Meeting next week to ask to get an approval for a potential shares buyback. But more than that, I don't think we will want to go into comment on the proceeds.

You want to add something to that?

No.

No. On the data rollover, I think that's too early to say.

We need to see how our customers are adjusting themselves to a very customer-friendly data rollover package. So we need another quarter, I think, before we can be specific on where we see this developing and what type of effects it will have.

However, I think the NOK 85 million effect we saw in the first quarter, I think that's on the higher side. We don't expect that to continue.

Keep in mind that this is an accounting effect with no cash flow impact. Next question, please?

Okay, I don't think we have more questions here from the audience present at Fornebu, so I will then ask for the first question from the conference call participants.

Hello. Thank you very much for taking my question.

My question is on cost. With your renewed focus on cost reduction, can you just first at least clarify whether -- when you were talking about flat OpEx for the year, were you talking organic terms or reported terms?

And I was also wondering if you can just give us a little bit more granularity in terms of which cost line items perhaps we would expect to increase during the year? And where do you see a lot of room for improvement?

Thank you.

Yes. We haven't been very precise on the organic versus the reporting because following every effect on that is going to be very challenging.

So basically, we are relating to the reported numbers in this. When it comes to giving more information, we have been through this in Capital Markets Day.

And at the Capital Markets Day, we said we will get back to it during the year and that is probably going to happen in the third quarter. But it is within the large cost brackets, so to say, and in all parts of our organization and in all business units.

So it's a large effort, both with the short-term measures for this year in order to curb the trend that we have pointed to and then with longer-term measures in order to get a different development going further.

Okay. Thank you.

I just have a quick follow-up related to cost. For Norway, did you expect your costs and margin to normalize or broadly normalize for next quarter already?

Was it for Norway?

Yes.

Well, Norway has shown over several quarters an impressive development in taking down costs, in particular, obviously, on its legacy business. This quarter was flat and there was no further reduction in cost this quarter.

But at the same time, Norway has, this quarter, again increased efficiency by taking out full-time employees, according to our general development. And that will continue, and we will get effects from the actions taken this quarter, next quarter, we believe.

And then, there is a significant program in Norway that still is rolling quite well. But we shouldn't be prepared to, for every business unit, to see these effects every quarter.

We have to see this over time, but the program is going forward with full force.

Thank you. Next caller please.

Thank you. A question on Norway, please.

ARPU, as you highlighted, underlying ARPU trends are positive if we adjust for the sort of data rollover. So I assume part of this underlying ARPU improvement is to put a simple fact that you have been losing low-end mobile customers.

So could you comment on that, how much of an impact that has? And also, how long or how deep your tolerance levels are for continued loss of mobile customers in Norway, please?

Thank you.

Yes. I can comment on that.

I think the main effect behind the ARPU increase in Norway, it's that we are able to upsell customers, postpaid customers, to reach their packages. And as I said, so far, we have upsold now 60% of the postpaid base are now on packages, which includes more data and also includes Roam Like Home.

I don't have a number on the ARPU increase of that, but all those packages would be -- the ARPU effect of that is quite significant higher than the ARPU effect of the previous packages. So that's the main way that we are driving ARPU in Norway and it's all coming from a continuous increased mobile data.

On your second question, yes, we disconnected some data card users. So in the numbers, the 40,000 numbers you will see in the report, a part of that is actually the data cards.

We are not selling that actively in the markets anymore. So this is disconnecting of our old customers, moving then into more normal data packages.

And then, we are also losing some customers in the price sensitive segment. But this we have seen for some time, and yes, there is a competitive market in Norway.

I wouldn't say that that's getting worse than what we have seen over the last few quarters. But of course, this is something that we are actively monitoring.

We also are fighting this with our fighting brand in Norway, Talkmore, which I think is very competitive in this segment, thereby the modern brand, Telenor, is then making sure that we continue to keep our market share in the value segment.

Next question please.

Hi, guys. Just one question.

A lot of the OpEx simplification and reduced CapEx you just discussed, it kind of strikes me as a business that isn't particularly faster delivering top line expansion as happy with a stable revenue outlook. We'd love to get your thoughts on that statement.

And also would like to know if you expect to reinvest any of the efficiencies you expect to deliver in the coming years back into the business to deliver revenue growth?

So thanks for that question. So we believe that based on the very successful growth period that Telenor has been through for many years, that there is also a scope for adjusting the cost base without harming the growth top line.

We also believe that an investment level of 15% to 16% is more than adequate to also foster growth where we have good growth opportunities. So we are very careful about doing something that will harm profitable growth for the group.

That is a very key element in our discussions. But as I said, we still believe there are rooms to improve efficiency and adjust how we work and how we prioritize in some areas, simply as a very natural consequence of having a fantastic growth period behind us and still stimulating the growth that we see we can have in our portfolio going forward.

If this impression change we will have to discuss that, but we are not there at all now. And the 15%, 16% CapEx is a relatively high level CapEx-wise historically.

And we see that we are still fueling significant network expansion, 4G and 3G expansion in Asia and also the fixed development in Norway and Sweden.

Okay. Just a quick follow-up, if I may, and partially I've been looking at your annual report to find this out.

Is any of your shareholder remuneration linked to revenue growth? Or is it more free cash flow expansion?

You say shareholder, but do you mean management remuneration?

Management, yes.

Okay. Because the shareholders should be awarded for everything we do, I hope.

But management has a balanced scorecard, which means that the Board has a clear expectation to management, both on foster growth and also to work on efficiency and to work on portfolio, together with working on how we behave in the society and how we develop leadership agenda in general. So it's a balanced scorecard, which is deciding the bonus for management.

And the ambition to the Board is quite clear, along the lines that we have discussed at Capital Markets Day, a balanced approach.

Maybe just add to that. But I think in addition to what Jorgen is saying, I think it's fair to say that we are putting more focus on cash flow generation now than only keeping the top line growth.

That's a clear message from the Board and also then reflected in the scorecards that the management has. And that's also -- or of course, as a result of what I said, that we really want to make sure that we are driving shareholders' value.

And that's why it's so important for us to make sure that we are generating enough cash flow to keep a healthy strong balance sheet and deliver on the dividend policy that we are communicating.

Thank you. Next caller please.

Thank you. Good morning.

First question is just on Sweden. I just wondered what your -- on your early thoughts about the Kinnevik taking a stake in Com Hem.

I guess it makes it more likely Com Hem will get an MVNO Tele2. I just wondered if you would now think about offering Com Hem a competitive MVNO, and more importantly, what does this do to market dynamics and your view of your Swedish strategic positioning?

And then, the second question was just, I guess, following on from San's comments on growth, particularly on Norway, could you just give us a bit more color on competitive intensity in Norway and when and how do you get back to growth in your home market, top line growth in your home market?

Now I can, obviously, not comment on what our competitors are doing in the Swedish market. So, but I think we are very satisfied with the position Telenor has in Sweden.

As I said, it seems like we actually took market share, revenue market share, both on mobile and fixed in the first quarter. So we are continuing then to drive top line growth, both in mobile, but also seeing now that we are able to monetize our fixed position into these markets.

So that solid position we have, I think, we can continue to grow based on. You're second question was on the...

On competitive situation in Norway.

Yes. I think I already answered that question.

I will say that the competitive situation remains. Yes, there are 3 aggressive players in Norway and that we have seen for some time.

So I wouldn't see that we see any change of that in this quarter. And we stay competitive and we have launched several offers for the huge segment.

We are focusing on delivering value to our customers with the growing data demand. We have the SWAP program on handset, and so on and so forth.

So I think we are well-positioned. And to your question on the growth in Norway, I think where we see -- we are very satisfied with the growth we see now in fiber and TV, which is supported by that.

And we also hope that we can continue with the upsell logic. And we see that there is still data demand in Norwegian market that we would like to deliver on.

And that's why we also have, as you also know, taken a decision to invest on 4G, even faster than the original plan. So during the year, we will have 4G on all our 3G base stations, covering basically the entire population.

And with that network, I think we are in a very good competitive position.

Next question, please.

Thank you. But I would use my question on Pakistan, obviously, the deconsolidation of the financial business sort of changed your numbers.

But still, the first quarter margin looks exceptionally high compared to the restated numbers for last year. At the same time, you have somewhat slower intake.

I'm just wondering whether there's a new balance to be struck now that the ID sort of systems are in place or whether this is just a quarter with slightly slower growth and higher margin, or how this is sort of going to pan out in terms of the balance between intake, costs and margins in Pakistan? Thank you.

I think as both me and Jorgen commented on, the main reason for the margin development, of course, is that when you grow double digits on data growth, you will get a better margin than the traditional voice business. So that's why you see a significant EBITDA growth.

And I think this is also a competitive market. Even though it's now being consolidated, it don't do -- a fewer player.

So in these markets, competition is seasonal factors and that's the reason why you see the quarters going up and down. But, I think that what we see in the Pakistan market is that we are now well-positioned with our data network.

We are well-positioned with our customer offers. And we see that the smartphone penetration is still relatively low and that's why we foresee a continuous significant growth on data customers in the quarters to come.

Next question, please.

Thank you. Thomas here.

Just a question on IT part to be moved from other to Denmark. Does this mean that this will only service Denmark with the new IT platform?

And then on the fiber CapEx, is there anyway to quantify how much installation of residential fiber impacts CapEx and EBITDA in Sweden and Norway? Thank you.

On the first question, we now have launched our IT solution, BSS solution in Denmark. And we are still now making sure that we are adjusting this in such a way that it's giving us the customer values that we expect.

And before this is now completely stable, we will not take this out in other markets. But the overall ambition, of course, is to see if this a solution that also could be used in some other markets.

But right now, we are focusing on the Danish market to make it stable.

And on the fiber, I don't think we have any comment on that.

The only thing we can say that -- I think you know that there is a different business model in the Norwegian and the Swedish markets. In the Swedish market, the basic installation is paid by the customers, whereby Norway is paid by us.

So -- but both models, I think, gives us a good return.

We are, of course, receiving installation revenues from SDU connections in Sweden, and that has a positive impact. But of course, it's still small volumes.

In the meantime, are there any further questions from the audience present here at Fornebu, while we're trying to fix this technical problem?

Can you hear me? Your line went dead for a little bit.

Loud and clear.

Please go ahead, Jakob.

Not loud and clear.

Okay. We're hoping to solve this in a few seconds.

Bear with us for a moment.

Hello?

Hello? Is it Jakob?

We can hear you.

It is indeed. I had a question on the outlook, please.

I mean, the revised outlook is basically indicating that you expect EBITDA margins to be flat to slightly up in 2017, which I guess is pretty consistent with where you've delivered during Q1. However, Q1 was impacted by the rollover effects, the base effects in Broadcast and the later quarter should benefit from some of the OpEx reductions you have now, including the reduction of headcount of about 600 full-time employees.

So can you maybe comment on, is there -- are there any sort of particular headwinds later in the year that we need to bear in mind? Or is this guidance perhaps a little bit conservative, given that presumably your margin trend should accelerate later during the year?

Yes, thanks for that question. It is as simple as I pointed to.

We have simply made a technical adjustment for India in this quarter. Normally, we would expect very, very clear signals on a particular development.

If we were to adjust our forecast as early as first quarter, then it had to be something very, very significant. So some people would view that one of these are on the south side or the north side of what they believe in.

But simply, we have just made a technical adjustment for India, and we'll follow this and this is our best estimate.

Next caller, please.

Yes. Thanks for taking the question.

[Technical Difficulty]

Dominik, it's very difficult to hear you. Could you please try to...

Let's try again. Yes, so just an update on how you think about your ambition to simplify the guidance and so on and on things [Technical Difficulty]

It's very difficult to hear you, Dominik. So I hear you talking about simplification, but could you please try to shorten the answer -- the question so we can try to answer it?

The line is of very poor quality.

All right. So what assets are core assets for you?

Is it each core? Are you happy with CapEx now?

What are your impressions around [Technical Difficulty].

It seems to be a question about the simplification and the next step on simplification. I guess there are no precise answers from our side.

No. As we talked about in February, we want to simplify and we want to make sure that we have a prioritized portfolio.

And that's why you see that we take action on India, that's why you see we take action on VimpelCom. And that's also why we are clustering or grouping the business unit into clusters to make sure that we're also trying to take out synergies in these clusters.

And I also mentioned this, we had VHS as one small example. So we will continue to do that, as we also said in the Capital Markets Day, we will look through our non-core assets.

And all this will be done in the light of how can we make sure that we are driving shareholder value and how can we make sure that both management efforts, but also the money deployed are then giving us shareholders' value or yearly results. So more than that, I cannot say.

It's a direction which we have started to deliver on. And when we have more to announce, we will announce.

Thank you, Sigve. We have time for one more question, final question.

Thank you. I've got a question on Denmark, please.

Obviously, we saw very strong margin improvement in Q1. Do you see a scoped or further margin improvement in Denmark?

And if so, does it improve your organic case in the country? Or do you still feel the Danish market needs some kind of structured solutions towards consolidation?

Thank you.

Yes. The Danish market stays very, very competitive.

So in that sense, there is no real change. And as you know, we have been evaluating different alternatives.

Right now, we think the best alternative for us is to increase the efficiency and improve the profitability of the Danish operation, and that's the main focus that we have right now. Of course, we will have our ears and eyes open.

But in the meantime, to improve the bottom line and efficiency is the main focus that we have. I cannot give you any guidance on what that means in practice, but that is the focus and this is what we hope that we can demonstrate in the quarters to come.

That's clear. Thank you.

Thank you, Sigve. And that ends the presentation of the first quarter results here today.

Thank you, Sigve and Jorgen and all of you participating. If there are any further questions regarding results, I mean, the Investor Relations team is, as always, happy to take your questions after the session.

And there will also now be an opportunity for media present here at Fornebu to ask questions to the Group CEO and the Group CFO. That will take place in the room next to the auditorium and Meera Bhatia will follow away.

So please, please, follow Meera to that room. Thank you.