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

Frank Maao - DNB Markets Henriette Trondsen - Artic Securities Peter Nielsen - ABG Maurice Patrick - Barclays Henrik Herbst - Credit Suisse Usman Ghazi - Berenberg Keval Khiroya - Deutsche Bank Andrew Lee - Goldman Sachs Ulrich Rathe - Jefferies Roman Arbuzov - JPMorgan Terence Tsui - Morgan Stanley

Good morning, everyone, and welcome to the Presentation of Telenor Group's Results for the Third Quarter. My name is Marianne Moe.

I'm Head of Investor Relations, and I have the pleasure of guiding you through the session here today. As usual, the results will be presented by our group CEO, Sigve Brekke; and group CFO, Jørgen Rostrup.

And I hope you all have the presentation material available. There will as usual be there a Q&A session after the presentation and after that there will also be a separate media session, for media present here today.

That media session will take place in the future lounge at floor four. So without much further I do, I leave the floor to our CEO Sigve Brekke to take you through the highlights of the quarter.

Well thanks Marianne, and good morning to all of you. Actually we have more people now than we use to.

So I am pleased to welcome you all. The third quarter is a quarter that shows that we continue to execute on the strategy we laid out at the capital markets day in 2017.

It's also a quarter with some significant milestone. The first one being the end on the concession in Thailand it process the spectrum a strategy we laid out in 2015 already, when we decided not to participate in the auction back then and now that time have to come to an end.

And with a broad spectrum portfolio we now have in Thailand, we have a solid platform for future growth. Another milestone in the quarter was the completion of our sale of the Central Eastern Europe assets.

The completion was in accordance with the plan and it now allows us to put more focus on the business units and the market where we think we can create the most value. The revenue development in the quarter is somewhat softer than expected.

The main reason to that it's a very tough competition in Myanmar, which I will come back to. However, I am pleased to see the improved growth in Pakistan and in Bangladesh also after the slow start of the year and I am also very pleased to see that for a first time in three years, we have a net positive mobile subscriber growth in Norway.

Our transformation and cost efficiency agenda continues, so far this year we have taken out NOK1.3 billion in costs and that represent around 4% of our OpEx base, so we are ahead of our programs. It's more to be done, and we still believe that becoming a leaner in the company position ourselves for capturing future growth.

And as usual, I am going to go through some of the markets, before I leave the stage to Jørgen. Starting with Norway, in Norway coverage and the quality of our mobile networks is now really showing that it gives us a competitive advantage.

And after several years of investment into our 4G network, I'm pleased, actually a bit proud to see that we won our Oopla after fastest network in the world not in Norway. And there are not that many market that can show and demonstrate an average 72 megabyte per second speed in the network and this is now giving us a competitive advantage.

In addition to that, in the quarter we also launched an urban IoT network. We put that on all of 4G based stations.

So we have it nationwide. And we will in a couple of weeks launch a pilot 5G in the City of Carlsberg.

As I said the mobile subscribers turned positive for the first time in three years, quite an achievement for our Norwegian team. This is driven by our flexi product, which is becoming very popular in the market.

And as you may recall, the flexi products starts at NOK449 and it's targeting the high-end consumer market. We also continue to have success on the upsell of our existing customers into richer data packages.

In the business segment, we now see that position we are taking on IoT products and services and also security services give us a very strong value proposition. And we now integrate those type of services into our offerings.

Within our fixed business in Norway, we added 9000 new fiber customers in the quarter. No we're up to the speed that we need to be.

Again, a little bit slow start of the year due to weather and also to get the machinery going but now we see that we are capturing market share on fiber connections. Yesterday we also announced a rebranding of our cable operator --- into Telenor.

That will enable us to use the Telenor brand across all our platforms and give a stronger and more focused customer proposition. On the EBITDA side Norway, the underlying EBITDA is stable.

And the cost reductions in Norway we see are continuing with in the efficiency agenda is now able to offset their decline in the copper-based legacy business. Short comment on Denmark and Sweden, both markets continue the transformation agenda.

They have solid cost development, we took out 3% OpEx in Sweden and 89% of OpEx in Denmark. And despite that we are able to stay competitive in the market.

Moving to Thailand, as I said the third quarter was a very special quarter for us in Thailand. It marked the end of all uncertainties we have had the last three-four years, when it comes to end of the concession.

It has been painful after not participating in the 2015 auction where we decided to stay out because of very, very high pricing, and that's been painful to then execute on the strategy we laid out back then. But now we have acquired a solid spectrum portfolio which is significant cheaper than it otherwise could have - we could have ended up with.

As you know we signed a lease deal with TOT to give us access to the 2300 spectrum earlier this year. We are now focused on full speed on the roll out on this spectrum.

We have 6,000 sites installed already and in the end of the year we hope to have at least 10,000 sites rolled out, utilizing the 2.3 spectrum. Already 30% of our 4G traffic is now carried by the 2.3 spectrum and we see a significant improvement, both in quality and in data speed for customers using then the 2.3.

Furthermore, as you know, we acquired 1800 spectrum in August and we have also announced that we will participate in the 900 auction that will happen in a couple of weeks. The prices are high but with the conditions we now saw at 1800 auction and we see at the coming 900 auction, we think that can create value out of buying this spectrum.

And we are also helped by being allowed to continue to use the concessionary 1800 and 850 spectrum in a transition period. In addition, we recently signed a lease agreement with CAT that gives us access to fiber and towers in the years to come.

Despite significant challenges and uncertainties in the market due to the spectrum situation, I'm pleased with the financial result that the Dtac is delivering in the third quarter. They continued the strategy of migrating prepared customers into postpaid and with that getting customers into data bundles.

And that has continued to give us an higher ARPU growth when people start using data bundles. They're also continuing their digital transformation agenda and I'm pleased to see that the cost control also in Thailand is in place, a 40% EBITDA margin, despite us now starting to pay the monthly fee for TOT utilizing the 2.3 spectrum band.

With the regulatory uncertainties now behind us, I think Dtac is very well positioned to take the fair share of the market growth going forward. Then to what we call the emerging Asia cluster, starting with Bangladesh.

When we met last time in second quarter we talked about a little bit disappointment for the first half of the year when it came to growth. Now we see a much stronger performance in Bangladesh.

8% growth in subs and traffic and an impressive 62% EBITDA margin in this market. The growth is driven both with voice and data usage.

We added 2.2 million new subscribers in Bangladesh in the quarter and as we've talked about before, the penetration is not - it's yet to be fully penetrated in the market. We still estimate around 55% to 60% mobile penetration.

So there are still lots of customers out in the rural market that do not even have access to the basic services. In addition to that, we continue to focus on existing customers starting to utilize data.

And in this quarter, we are now having around 50% of our customer base using data. Powered by the leading position we have on both 3G and 4G in this market and with the growth in new subscribers and existing subscribers using data, we see that the growth in Bangladesh will continue in the coming quarters.

In Pakistan, also a slow start of the year when it comes - when it came to the growth. However, now we see the growth picking up.

10% growth in subs and traffic and an underlying impressive 23% growth in EBITDA. Then Myanmar, the competition in Myanmar has become tougher than what we expected.

We knew that the fourth entrant which launched some few months back, were going to be aggressive, but it has been even tougher than what we planned for. The new entrant was allowed to price way below the price floor set by the regulator.

However, the new entrant was allowed to do that only for the first 90 days. Now everyone will have to comply with the price regulations.

However, the price floor is set a bit lower than it was in the past and now all the operators are having - taken their prices down to the price floor. But at least there is no difference now in regulations and we all have to compete with the same conditions.

Our strategy then is to continue to build a leading position on network, to continue to build a leading position on the widest distribution and to be competitive in our product offers. Then I want to talk a little bit about our transformation agenda and this time I will talk about what we do on - with our networks.

Investing in future proof networks, it's a very important priority for us, because it improves customer experience and it supports the data-driven growth and it reduces our costs. And we are then, because of that, investing significantly into modernizing our network.

And what you see on the left hand side of this slide is that, that is also needed. The throughput or the year-on-year growth on average in our network it's 63%.

And in the three emerging Asia assets we have, we are actually growing 92% data year-on-year. And of course with that huge data growth we need to do something on our cost base and we need to make sure that we are as efficient as possible.

And to do that we are ensuring cost efficiency in everything we do. We are leveraging standardization to a much larger extent than we have done before.

We are implementing new operating models and we are utilizing our global scale. Let me go a little bit more into detail on those three main points.

Starting with leveraging the standardization, again as you see on the left hand side of the slide, we are now taking the data traffic into hybrid cloud and we have so far touched 50% of data traffic is now on hybrid cloud, and that gives us a reduced total cost of ownership of 40%. This migration is happening faster than what we expected and we now see that during 2019 we should be able to take that 50% up to 80% of all data traffic being managed by the hybrid cloud, and a significant cost reduction coming out of that.

Than the one in the middle, is talking about a new operating model, where we basically leverage on partner scales. We are outsourcing than the management of our network to partners.

That has been implemented in Myanmar, Malaysia and Pakistan already, and there are more BU to follow. When we do that, we see that we can improve the process efficiency with approximately 30%, but we also see that we can ultimate the networks, and as such that we can increase function ability and flexibility.

Last, but not least, and then to the right hand of this slide, we are leveraging now the global scale in centralized procurement. This - we setup a company in Singapore a while back to take position on this, had led already to significant savings, in total around NOK3 billion of savings in 2018 compared with 2017 on the overall procurement area.

If you look at the network category, we see that we have realized prices in 2018, which are 25% lower than the 2017 prices. This is one of the reasons why Jorgen also talking about that the CapEx number on the Group level is somewhat lower than what we expected when the year started.

It's a result of what we do on this area. Then let me finish up with the operational priorities going forward.

As you know in 2017 the Capital Market Day, we talked about three operational strategies, one was growth, two was efficiency and three was simplification. We are very satisfied with what we have done on the simplification of the portfolio so far.

We have executed on Viom, we have executed on India, we have executed on online classified. We have also had some smaller other transactions.

We are almost done on the simplification area, almost done. We are also pleased with the efficiency agenda.

We said when 2017 started that our plan is to take out about 1% to 3% OpEx year-by-year. It was a four year program and we are midst of that four year now.

We are actually a little bit ahead of what our ambition was, but we have continued, there is more to be done on this. What we have done so far, of course is to reduce costs on areas which has been you can call it low hanging fruits, but now we are also way into areas which are more structural.

When it comes to the growth we will continue to focus on growth and what we call revenue renewable. And we see potential for doing that in all our markets.

The main priority in that, in the months to come is to return to growth in Thailand, is to monetize the continued data growth we see in our emerging Asia assets and is to strengthen our position on B2B, not only in Norway or Scandinavia but also throughout our portfolio and IoT. In addition we focus on fiber rollout in Norway, and we see that that gives us a good profitability.

With that, I will hand over to Jorgen to go through the financials. Thanks.

Thank you Sigve. Just let me have some water for - okay, let's start on revenues.

We see stable subscription and traffic revenues in the quarter, and we see a year-to-date increase of 0.5% percentage point. During the quarter, we have seen as we said we expected at second quarter, positive development both in Pakistan as well as in Bangladesh compared to what we saw the first half of 2018.

The Group's growth rate in total is as Sigve alluding to, somewhat hampered by tougher than anticipated competition environment in Myanmar. And then as Sigve said, we have learned that the fourth operator was granted, should we call it an asymmetric price regulation for the first 90 days of operation.

From beginning of September, we should all be on equal terms versus the regulator on this one. Then from a good and stable quarter on the main elements for Norway, we still see that fixed revenue growth in Norway is being a little bit under pressure from continued loss of legacy revenues.

We see growth somewhat lower this year partly due to also annualization of a price increase for broadband that we implemented last year. Dtac as Sigve said - been through an tremendously important transition this quarter from concession to license arrangement.

Leading up to this, obviously the organization the business and the revenue line has been under somewhat pressure. And now there is more clarity, we believe there is a solid foundation to take part in the mid-digit growth the market in Thailand is experiencing.

If we adjust gross profit for the approximately NOK300 million payment in spectrum lease to TOT, in Thailand that we have talked about before in the quarter, and also the loss of wholesale revenues and special numbers in Norway, we see gross profit follows the slight growth in subs and traffic revenues. Efficiency improvement is high on our priority list.

We have managed to reduce the cost base year-to-date NOK1.3 billion or 4%. And if I may, this in spite of meeting the much tougher comparables that we saw since we had significant reduction from second quarter 2017 onwards.

So we are building on top of the effort that we did last year. If we look at onetime items this year as well as last year they are more or less offsetting each other.

And we have close to zero currency effects. So the reported OpEx that we show here is a good picture of the development.

We are delivering more on the structural OpEx reductions. The low hanging fruits that Sigve was referring were not low hanging last year.

They were coupled with the cultural change toward more efficiency, but obviously they were different in nature than the more structural OpEx reductions that we now are having. Reduced call center volumes and a leaner more efficient organization is visible now through lower personnel costs.

Regulatory cost reduction is as before driven by Thailand. And then the structural initiatives by nature takes longer time to realize and we are starting then to see them also in operation and maintenance, which is of course a very important category for us to succeed in.

Two effects that Sigve talked about is contributing to this, the new operating model for network and IT, and the hybrid cloud solution. And then on the other side site rental and also network expansion or site rental and energy related to network expansion, 50% each on those two elements related to the Asian business and network expansion there.

So we are talking about a 6% increase in EBITDA in the quarter. If we take a little bit closer look at this and adjust for one - for a few one-time items both last year as well as this year, if we also adjust for the TOT payment, and the Phonero wholesale and three to five digit regulation in Norway, we have an underlying growth of 4% in EBITDA this quarter, similar also to the underlying growth for the year in total.

This is then, cost improvement, efficiency improvement of NOK0.3 billion and a half and a half split between interconnect gross profit and slight growth in subs and traffic on the last NOK0.1 billion. CapEx, was NOK4.2 billion in the quarter, around 15% of sales.

In particular the increased speed on the 23 megahertz rollout in Thailand is lifting CapEx for the Group and obviously for developed Asia. Norway continues to be below our ambition level and on the fixed side, on the fiber side.

Year-to-date CapEx is still somewhat lower than planned for and that is why we have chosen to revise our guidance to NOK16 billion to NOK17 billion full year from previously communicated NOK17 billion to NOK18 billion. Let's have a brief look at the P&L.

Net income ended at NOK5.8 billion for the quarter equivalent to NOK3.96 per share. As you can see we have NOK262 million charge on other items, preliminary related to workforce reduction.

Depreciation increased on NOK600 million year-on-year. 50% of that is explained by higher amortization of concession assets before the end of concession in Thailand as we have talked about before.

That will come significantly down in the fourth quarter. Net financial income and expenses this quarter is negative NOK359 million.

Financial expenses in that is in line with trend. So the difference is financial revenues was impacted by VEON dividend of NOK252 million.

Other than that it is not much to mention on the P&L statement. Maybe I should just comment on the right hand side with the IFRS 15.

We continue to see marginal P&L impact for Telenor with this implementation. Free cash flow in the quarter was NOK26.5 billion.

However than NOK22 billion of that is a result of the sale of Central Eastern Europe assets and the remaining EUR400 million of the total proceeds so our considerations of that sale will be down payments over the next couple of years. If you exclude M&A activity, the free cash flow was NOK4.7 billion in the quarter, a decrease of NOK1.3 billion compared to last year.

So on one side we had improved EBITDA and we had somewhat lower CapEx but this did not fully compensate for prepayments to CAT, the agreement that Sigve talked about and for license deposit for the 1800 megahertz spectrum acquisition that we did, NOK0.6 billion in Thailand. There are also some higher minority dividends in the quarter.

Year-to-date this gives us a cash flow of total NOK32 billion or NOK11 billion if you exclude the M&A activity. And net debt this quarter is positively impacted than by the proceeds from the sales of operations in Central and Eastern Europe, which results in a net debt-to-EBITDA ratio of 0.5.

But if we than take a few things into consideration, we have in October paid out special dividends related to the disposal of the CE assets. We have almost completed the market part of the buyback program, and we will shortly as the third element pay the second tranche of the ordinary dividend.

So in total this means that we will return approximately some NOK23 billion to shareholders in 2018, which is a record high, and adjusted for these payouts, the net debt-to-EBIT ratio is around 0.9. Our priorities for capital allocation remain unchanged.

We want to maintain a strong balance sheet. We are very committed to year-on-year growth in the ordinary dividend, and we will from time to time take a look at inorganic opportunities within our core businesses and core geographies, and I can assure you with a value driven approach to it.

We are approaching year end, and we are fine tuning the outlook a little bit. So far this year subscription and traffic revenue growth is, as I said earlier, 0.5% and we therefore now expect the full year growth to be in that range.

We are guiding on 0% to 1% growth for the year, on subs and traffic. The main change from second quarter is the intensified competition in Myanmar.

On the other hand we are then increasing the outlook slightly for EBITDA growth from previously 2% to 3% to now 3% to 4%. There are two elements to that.

It is primarily on the back of an increased visibility, and if I may say good execution in Thailand and also the positive one-offs in the third quarter. Regarding CapEx, we have very good traction on our planned investments in the markets and then the Cap spend so far is a little bit lower than anticipated, also supported by the CapEx efficiency achieved that Sigve talked about.

We now expect total CapEx will end up slightly lower at around NOK16 billion to NOK17 billion. To summarize, we believe we are delivering according to plan, and according to how we have delivered over the last few quarters, stable and good and consistent performance and are in a quarter by the way with a lot of milestones and our focus remain the same on value creation, on efficiency growth and simplification.

Marianne, should we check if there are Q&As?

Thank you, Jorgen. We will now as usual have a Q&A session and we will start with the audience present here at Fornebu before we open up for the conference call participants.

Are there any questions in the audience today? I think the first one is coming from Frank Maao, I think there.

Yes, good morning. Two questions if I may.

The first is to the CFO, and the second one is to the CEO. So you said that operational efficiencies are high on your priority list but when you think about financial efficiencies we know that cost of equity is far high than cost of debt and with that in mind, and your very low financial leverage, for a long time now, have the administration and board quantified and discussed what - how much this - the current capital structure is actually costing shareholders, I mean in terms of nominal figures, building figures and so on, by means of the higher capital charge.

So that's the first question, if there's any processes around that. The second one is related to SG actually.

SG is an important topic for growing number of investors and while Telenor is like arguably having perhaps an ethical dilemma in Myanmar, you also looking at a contract in the Philippines and evaluating if that could be an interesting option. And given the more financial corruption of the regime in the Philippines, including credible reports of death squads and so on, killings of journalists, why is this country not pre-excluded on an ESG basis from relevant geographies that Telenor should look at?

So that's my question basically. Thank you.

Should I go first?

Yeah. You take the difficult one.

And Frank, I don't think I should go into the details of the Board and an administration discussions, but I can assure you that my clear experience is that the board and administration are discussing all issues thoroughly also on the financial arena. So yes, we are discussing efficiency, development of values, value creation balance sheet and all other issues.

And I would however, like to say, and we are focused on the total set of good conduct in the financial area. But we are also working in a systematic way, the way we kind of made a contract with you guys in January 2017, we are working along those elements that we have talked about the whole time.

And we are ahead of that program. We are ahead on all elements, and we are also ahead on the shareholder remuneration part of that program, with the three elements, two buyback programs and one extraordinary dividend.

And that is where we are going to continue. We are maintaining the priorities of the strong balance sheet.

We have agreed before we can always discuss what a strong balance sheet is. And we have a very strong balance sheet now.

But we also have things to do going forward. We have a payment for the spectrum in Thailand.

We have an IFRS 16 implementation that will change ratios a little bit. That goes for the whole industry.

But we want to come through that and see how that is playing out. And we will make sure we are continuing also with extraordinary remuneration to shareholders when and if the Board concludes that, that is a good time for it.

Our prime objective is to stay very predictable on this, and to be very competitive in the business that we are operating.

To your second question, yes, this is very high on our agenda. And as you know we have learned some lessons on this.

I think the procurement bill [ph] history was a lesson that we have taken with us. So when we entered Myanmar for example, this was the main discussion in the Management and in the board, will we be able to operate in such a country.

That's why we've chosen Myanmar to go alone without any partner. And what we have learned over the years is that if you wanted to operate with old standards in this type of markets, you have to be in operational control.

That's why in the Philippines, we are looking at the condition for the upcoming license award. However, we have made it very, very clear that this is a market we cannot operate if we are not in control.

Currently the foreign ownership rules don't allow that. So we have said that if those rules are not changed and if we are not allowed to be the majority vote shareholders and in full control, we will not enter a market like that.

Next question please?

Henriette Trondsen from Artic. In Norway, first congrats with the positive net apps on mobile first time in three years and that's impressive also considering Telnet's negative net apps last Friday.

But revenues, on fixed they were quite weak this quarter. Can you give any color on this and what we can expect there going forward?

The second question, if I may on Bangladesh, the new voice tariffs might be more visible in the Q4, but how much of the overall growth in Bangladesh is you think is driven by these new tariffs? Thank you.

Which one you will have, you go Norway.

Can I go on Norway?

You can go Norway and then I can prepare on Bangladesh.

First of all, for us the performance in Norway on topline, on acquisition and also on the cost and structural work this quarter is good, solid and follows the trends that we have anticipated, that we are working on. And the mobile side on the revenue line is good.

So you are right. The potential weak element in this total picture is the fixed revenues.

The reason is of course the continued decrease in the legacy revenues on the fixed side and not fully compensated by the new fixed activities, including the fiber and the fiber rollout. We have a good rollout in third quarter compared to the previous two quarters, but we haven't seen the revenue stream fully reflecting that.

Second, we also had a price adjustment a year ago. So we are benefiting from that price adjustment in the fixed side, throughout a year now, but now we are on year-on-year comparables and that is actually the whole picture of it.

I just want to add one comment to Norway, because I think this is more than just being present to the trade [ph]. It's also that we have been able to constantly innovate new services for our customers and the latest security service is an example of that or the smart program that we came with is an example of that, or the flexi product is an example of that.

So I think that is what is enabling us now to be net on the subscribers. And we also see that Norwegian customers still want to go to physical distribution points.

So we also have expanded our presence in the third-party distribution. So I am very pleased to see how that innovation drive is continuing in Norway.

To your Bangladesh question , yes it's correct that there has been no reduction of uniform call tariffs and VAT from 15% down to 5% and we are benefitting out of that. I think that's what you're referring to.

How much of the growth that is coming from that reduction, I don't have a number on that. However the main growth there it's our ability to add 2.2 million new subscribers, and also the ability than to drive ARPU through getting people to start using data.

And as I said 50% we are close to 50% data percentage. So I expect that the growth figures that you see from Bangladesh in this quarter, the 8% to be in the range of what you will see also in the coming quarters.

On Pakistan it might be that the tax element is coming back. We regard it as a temporary relief but it remains to be seen what the authorities are going to do.

However the underlying business our developing continues as we talked about also in second quarter. So we see a positive development on the underlying business.

But in this quarter, there is a significant element of the tax effect.

Just to supplement on the Bangladeshi question, we believe that the new price regulation has a positive impact of three to four percentage points this quarter. So but that means that there is also an underlying improvement in the revenue trends.

Thank you. And one other question if I may.

In Malaysia with the new government, do you have any indications that this will impact the spectrum prices also considering that allocation of the 700 megahours spectrum was supposed to happen this spring was postponed.

Yes, it's, of course a little bit too early to say, but what we have heard so far, both from the Minister, but also from the new regulator, they are both new is that they want to continue the spectrum allocation processes that they have had in the past, including than the 700 - the awardance of the 700 spectrum. So there is no sign that, that will be changed.

Thank you.

Next question please. If there are no more questions from the audience here at Fornebu we are now ready to open up for questions from the conference call participants.

Operator, please.

Thank you. Good morning.

Just a question, rather two quick questions on Norway please. You have enjoyed very strong momentum on the high-end customer side in Norway for the last two quarters.

There has also been a corresponding impact on the margins I guess and could you - is this a strategy which we can expect you will continue to push for the coming quarters as well, i.e. we should perhaps also anticipate some margin pressures because of extra marketing spend.

Can I just ask why the rebranding of Canal Digital now after all these years? Is it to do with an increased focus on your fiber TV business and should we anticipate that there will be sort of material rebranding cost in Q4, as for instance we saw earlier in the year in Sweden.

Thank you very much.

Yeah, I think I can address that. Yes, you are right.

We are using more third party distributions. So there are some commission costs related to the very successful sales and know-how of the flexi product.

But however, we have then very, very attractive in the high-end segment, NOK449 and up. We will continue with that strategy and we will then also continue to then spend some commission in getting those figures.

However I think that you will see that in Norway is continuing to really have a focus on efficiency, trying to reduce cost elements in other parts of the business. So I do not expect any margin pressure because of that strategy.

When it comes to the rebranding, do not expect there to be any cost, I don't have exactly the number. But slight different from Sweden.

The reason I'll do it is just to simplify the offers. And our customers they know Telenor.

And some of them are a little bit confused with what is Canal Digital. Now we want to make it simpler.

And then use that simplicity to also look at can we give good bundled offers. We are not moving heavily into the fixed mobile conversion, but we do see that for example that family offerings that we have is very popular.

Thank you for that. That's useful.

Next caller please?

Yeah, good morning guys. Maurice here from Barclays.

So a quick question on innovative new services. You made the point earlier, Sigve around IoT and 5G, and in fact [indiscernible] were indicating one of the reasons why you are likely doing better than they were in Norway was due to your more innovative approaches around services and thus driving differentiation.

So I guess, is it mainly Norway where you are seeing this or can you see other markets where you can also see such innovative services like IoT being delivered. And just as a side point, you haven't really talked about it today, but convergence in Sweden, I believe you do have convergent products in Sweden, I think are going pretty well in the marketplace.

Perhaps just your view in terms of how popular are your conversion tariffs? How is management going, how you seeing it?

Just quite topical ahead of the impending Tele2, Com Hem merger? Thank you.

I do Norway and you do Sweden? Norway, I think we are - I'm pleased with the innovation both on the consumer segment.

And I used some examples on that, but also on the business segment. And we are maintaining our 70% market share on business, due to those innovative services.

So what is happening is that is in the business segment we are able to move now from only a price competition into more integrated solutions. And we have done that very successful.

And I think that the size of Telenor and the innovation resources that we have in Telenor in Norway we are able to do that very well in the competition. Now we will start to take somewhat those learnings also to our other markets.

Starting with Sweden and then also go from Sweden to Denmark, and also see if some of these services can be adapted into the Asian markets. We are as I said in my introduction, we are now looking at can we build a B2B position also in Asia, where we mostly so far have focused on the consumer segment.

And with that B2B also then take somewhat this innovation approaches. Especially on the SME segment, and we are more looking at that outside Norway and Sweden, that also then into the IoT.

So yes, the innovation that we are able to do in Norway we will try to cope and place into other markets. I think we have been - the main areas we have in Norway on this it's in the smart buildings it's in health.

And it's in smart cities and smart administration. So it's still early days.

We are not spending a lot of model on this yet. We want to grow and to learn and to work a little bit agile to build this business.

Maurice, Sweden was convergent plans, wasn't it?

Yes.

Thanks. So you know as Sigve was pointing to the rebranding that we did in Norway, we also mentioned we had the same in the spring in Sweden.

In Sweden it is also definitely related to being able to play forcefully in the fixed mobile conversion area. We probably see Sweden ahead of Norway and we haven't seen anything close to it in Norway and it's still probably in the beginning in Sweden.

We launched, when we rebranded, we launched more for same type of product. So we didn't do and we will hesitate to do discount plays, but we offered more for the same in Sweden.

And that has been good. We also see that we have a good starting point in a way because we have to a certain degree a low overlap in our two customer base, on the fixed and mobile side.

So that gives us an opportunity to make the overlap bigger, should this develop and should this be the trend in the market. Obviously Tele2, Com Hem could allude to this and they have - they have been vocal on it and also Telia, but it has been more talked than action so far.

We are ready.

So we did in Sweden -

It's very clear.

Yeah. Maurice, what we did in Sweden was not to launch specific convergent tariffs.

We haven't done anything with the price points but what we did in connection with the rebranding was that we offered benefits for customers, who take both fixed and mobile offerings. If you take both fixed and mobile you can get either some more mobile data, as Jorgen explained or you can get higher speed on your broadband connection, but no changes to pricing.

But we continue to see a good uptake and these offerings are popular among our customers.

That's great. Thanks, guys.

Next caller, please.

Hello. Thanks very much.

I had just want to follow-up on Norwegian fixed. You said you're gaining a little bit more traction with your fiber build.

I was just wondering where you were actually building. I know you've been building your cable network.

So how much of the new fiber footprint is in some of your cable areas? And also if you think about your legacy base which continues to be a drag on your business what can you sort of do to maybe improve the trends a little bit.

I mean Telia for example in Sweden is now trying to resell - challenge your fiber networks. Have you looked at that?

Could you maybe build fixed wireless access in areas where you've been overbuilt by fiber and compete with other products, so maybe your thoughts on that? And then also maybe if you could clarify on your CapEx guidance.

It sounds like a bit of a delay in terms of you were quite slow in starting building fiber in Norway beginning of the year and then the Thai spectrum allocation. But you're also doing things more efficiently now.

So maybe if you can clarify how much of a reduction in CapEx guidance is just Telenor just doing things more efficient and how much is timing? Thanks so much.

Yeah. On fixed I think the overall objective is trying to compensate for the reduction of the corporate legacy business with fiber rollout.

That's our overall ambition. We were not able to do that in the third quarter but going forward when we have got a larger speed on fiber rollout that's the ambition.

And the fiber rollout, it's mainly focusing on what I would call virgin areas where there is no fiber, but we are also now starting to roll into areas where we have cable or copper connection ourself. Exactly that's split, that I don't have a number on that.

And we see that there is a willingness to pay for fiber in Norway and fiber is the future proof access that our customers see. Of course we want to switch their legacy assets, fixed legacy assets we have as long as possible but there is a real demand in a market for fiber.

Then we will also experiment with fixed mobile solutions when we starting to get really into more rural part of the segment but it's - we are not there yet, there is more than enough land grabbing on fiber before we have to start implementing also other type of solutions but we are trying that out.

On the CapEx side, this is not a massive adjustment. It is on average a billion down if you want.

And I would at least say that we see strong traction now on the efficiency part in our portfolio. So we are able to invest more on networks for the same amount and we have ample capacity for that.

So that is a significant part of it. Then as you said Thailand, Thailand is up compared to our original plans for good reasons and we see good traction on that in the quarter and Norway is slightly down on fiber.

It's not massive. The third quarter was a good quarter, we assume fourth quarter will be even stronger.

So in the numbers there is also a significant pick up on the fiber side in Norway. So it's predominately that we have got the effects of the efficiency work and the procurement company in Singapore on the global price book and new negotiations that is taking it down, and then it is a little bit Thailand and Norway a little bit up against each other on the numbers.

The 2300 roll in Thailand - sorry. Please go ahead.

No, no, sorry, I just want to follow up on the Norwegian fixed part. I mean see you didn't follow up with a price increase this year, Should we view that as it's now becoming more difficult to raise pricing, or can you still sort of continue to put a pricing on fixed line?

Thanks.

I don't think that I want to comment on that, the price increase you're referring too. I think we executed quite well and there was a willingness to pay for that.

But going forward I don't want to comment on what we do on the pricing. Our main focus now is to get the speed up, the rollout speed up and I'm pleased now to see that after a slow start to the year we are now into the territory where we want to be.

Next question please.

Hello. Thank you for taking my question.

I've just got two please. Firstly on Norway mobile and subscription traffic revenue trends, obviously you're doing very well on the volume side but on the actual revenue for mobile it was down 1.7%.

I am just trying to understand if you are in the stage where you are prioritizing volume over revenue growth for the time being and how we should see that going forward. The second question was just on CapEx but on a slightly different note, I mean do you see any impact from these strong kind of tariffs on Chinese equipment makers in terms of read across for CapEx.

Thank you.

Now on the first question, no, we are not prioritizing volumes over revenue growth. We are trying to do both at the same time.

That's why we are so focused on the flexi product which is than bringing in a more high end customers and you will see that in the very price sensitive prepaid segment, we are continuing to lose customers. So our focus is definitely on the value creative customers or the high end customers.

The revenues you are referring to, if you look at the underlying revenues you have to adjust for the three and the five digit numbers effect that's about 50 million isn't it in the quarter, if I remember it right. And that effect will go away when we go into next year.

So if you adjust for that you will see that the underlying ARPU is flat and also the underlying revenue development is very stable.

On CapEx, no we don't see any effects of discussions around Chinese vendors. We have the Chinese vendors which we work well with and we also have other vendors, European vendors and we have a global approach to all this and we see no effects of that.

Maybe one more point on the revenues. We also did some price increases on the consumer segment, mobile consumer segment a year ago and now those effects are then analyzed one year after we did, that's also something to take into account

Next question please.

Thank you for some questions on Myanmar, please. We've now had a symmetric price regulation in Myanmar since September.

So can you talk a bit about how that's affect your trends since that's come into effect. And secondly, when you launched in Myanmar, you had an initial target of long-term operating cash flow margin of around 30%.

And can you remind us of when you expect to reach that? Thank you.

Yes, on the first question, yes, you're right, the price floor is now, everyone need to comply with that, however the price floor as I said, it's lowered compared with what it was. So at least now there are the same rules in the market.

Of course we hope that we will able then to stabilize the revenue drop we saw during those three months, where they were allowed to have very, very aggressive price offers. But it is yet to be seen, I will say when this market will be stabilized.

So I don't want to give any forecasts or any views on that. But we will do our very best to stay competitive with both offers the distribution and the network.

On the second question -

I think you have answered it. We have a pressure now on the EBITDA margin compared to last year for two reasons.

The main reason is of course the competition and then you also had the currency. And to do any prognosis on this we won't do.

It's been a very solid and good business. It came very quickly in cash flow positive.

So it's been a tremendous value creation. And right now we are only focused on doing what Sigve is saying.

That's clear. Thank you.

I think we have time for two to three more questions. May we have the next caller please?

Good morning, everyone. Thanks for taking my questions.

Firstly on cost cutting, your execution has been strong and you've done more than you expected so far during the full year program. Just wondered how you think about the sustainability of cost cutting outside of the full year period, now that you're kind of almost halfway through and it's a changing the type of cost reduction as we get to the end of that before your guided period.

And then secondly follow-up question on the questions on Norwegian mobile. Just wondered if you could give us any updates or color on the competitive landscape, you are seeing greater competitive intensity from the smaller players.

Any color there will be very helpful. Thank you.

Yeah, on the efficiency part, we are halfway through the program that we announced and significantly ahead of that program. The program was flat stabilizing in 2017 and then 1% to 3% the next three years.

And what we did last year and we are doing similar size this year. So well ahead.

We are just concentrating where we are now and we are concentrating on moving it more into as we have said, the structural part and adapting on the marketing side in a good way, which we are really pleased with the development on the sales and marketing effort. Not only the reduction of costs, but also the implication it has on how we work and how we high-grade and become more precise in our efforts.

And now we see those effects also into operation and maintenance. And we will continue to work through a more structural program.

And we will probably revert to during the winter, maybe fourth quarter talking a little bit more about our thoughts for the next couple of years in that respect. And then later on will come later on.

And just to add to what Jorgen is saying, coming from 10 years or 20 years history of growth, this is also about mindset. And I think we want this cost program started, we also used that opportunity to kind of change the mindset, and mindset that is not only looking on number of subscribers and topline, it's looking at actually the cash flow generation.

And fortunately, the digitalization opportunity also came along. So now we are trying to both use digitalization of our core business to improve costs and also customer satisfaction.

But also get the entire machinery to have a mindset that lean is good and that efficiency is good, because you prepare yourself for the future growth. So a lot of this has actually also been to work with our leaders, work with our organization and change the way we historically have been working.

On the second question, the Norwegian market has been competitive and there is real competition among the three network providers, but we also have several, and we're now service providers both in the consumer segment and also in the business segment, and I don't see any change to that competition. You have to be awake, you have to be out there, and fight for every customers and that's what we do.

And I'm very just repeating myself for the third time, very happy with the innovation driver. This is not only about price and not only about fueling distribution, it's about also focusing on new type of services to our customers.

Okay.

Next question please?

Yes. Thank you very much.

I realize you usually don't guide for 2019. So I'm not asking for your guide, but I'm just wondering when you sort of build scenarios for 2019, given what's now going on with the cost in Thailand, also the potential to the situation in Myanmar going forward.

Is there even a possibility of EBITDA growth in 2019, or is this really something that sort of has to be debated very closely given trends in those two countries? The second question I have is just a clarification, I apologize because I had a trouble getting on the call, so you might have answered it, and then please ignore the question, but the other than line item in the EBITDA mix was strongly positive this quarter and I think that was the first quarter since 2014 where it has a positive contribution.

And I realize there was a one-off in there. So I take the one-off out but even then it is materially positive.

Is there any particular explanation for this or is this underlying cost cutting in the Group overhead? Thank you.

Well, first on the EBITDA growth. No, you're right.

We are not guiding on that and we will of course give you our view at fourth quarter. It's more natural to take it then.

But as we've tried to leave as a message today first of all, we have come through a fairly turbulent period in Thailand, which we long prepared for and have worked on and prepared for several years and discussed a lot with you guys. And we believe that we have come through that in a very advantageous way including how much money we've spent, how we've spent it and how we have handled operation in that period.

And there is an - there is an underlying growth in the Thai market and hopefully we will take our share, as Sigve said of that development going forward. And by the way if you have followed what we have said and what dtac has said about this year we are very much in line with the guiding that they have set out all our way.

So then Myanmar right now there is low visibility and we will just have to come back to that but we have taken that fight every day in the streets and are building on our strong position. And then we will give you the guidance for 2019 when we get to fourth quarter.

When it comes to other and the development there, first of all you will see quite large effects on the cost changes under the other segments and this is also a real cost reduction, valuable cost reduction and significant efficiency and simplification were taking place, both on a group level and also in a portfolio of important and good companies and site activities which are supporting the total telco effort of Telenor. And there is an element more that we have talked about before, I mentioned.

We are now charging out more of the overhead costs of the Group than ever before. It makes sense because the services are reflecting that and voting for that.

It is also you know prudent to do from a tax point of view and so on. So the reduction in cost that you see in the BUs are actually also it is a net number after they have taken a significant higher charge from the Group.

From a CFO point of view it's also good because it creates a good balance between the business line and the Group when it comes to activity levels and these costs and service qualities and so on. So this is the change in the strategy on the digital side.

It is a higher charges of group cost out of the business units and it's also efficiency and leaner activities. So high grading the activities of businesses and corporate staff and service organizations in that cluster.

Very valuable for the Group, right, both now in terms of money and on the longer perspective in terms of being agile and taking new development on board.

Thank you so much.

I understand that there are still many waiting to ask the question. So I suggest that we take two more questions.

Next question, please.

Actually, all my questions have been answered. So, thank you so much.

Thank you, Roman.

Okay. Then to the final question please.

Thank you. I just have a quick follow-up on Myanmar.

You mentioned throughout that the price competition has been a bit more aggressive than you're expected. But just on the regulated price, you mentioned it's come down.

Can you just tell us what just come down by and whether you think that if all operators continue to operate at this new lower regulated price floor, this is really sustainable in the longer term. Thank you.

Terence before the new entrant came in there was - there has for a year or so being a price floor regulation. There is a fixed price per minute and megabytes and so on.

And then the regulations said that operators could go max 40% below this floor in promotions. After a period of asymmetric regulation between the three existing players and the new player, we are now back to symmetric regulation that the absolute price floor on per minute price and megabyte is the same as before.

The new thing now is that operators can go max 55% below in promotions. And the way, that this market works is that operators are constantly running promotions.

So the fact that we are down more or less at this 55% promotion level.

And to your second question, is this sustainable. It's impossible to answer the question, but so far so good.

After the 90 days of the fourth entrant, it's also then complying so far with the new price regulations. And all of us, the three existing players of course would like to - that regulation to stand.

Okay. Thanks for that.

And that completes the presentation and the Q&A here today. Thank you all for attending.

As indicated at the beginning of the session that will now be a separate media session for media presence here at Fornebu. You will have the opportunity to ask questions to Sigve and to [indiscernible] Acting Head of Telenor Norway.

That session will take place at fourth floor at the future lounge and my colleagues in the communication department will take you there. Thank you.

Thank you all for attending. If you have any further questions to the financial please don't hesitate to contact Investor Relations.

Thank you.