Good morning to everyone and let me welcome you to the Q2 Presentation for the Telenor Group. I will start off with some highlights followed by our CFO, Jørgen, and then we will open up for Q&A and the whole session will take around 1 hour.

Okay. The results for the second quarter is confirming our effort and our ability to execute on our strategy, a strategy that is driven by mobilizing our company and is a strategy where we are building value through our core business in the two geographical platforms we have in Nordics and in Southeast Asia.

Therefore, this quarter we also took several steps on the M&A side which I talk about later, but first some operational highlights. We see a continued strong performance in Norway.

The fiber growth momentum continues; 20% year-on-year growth on fiber for this quarter. I’m also pleased to see that we’re continuing to drive growth through increased ARPU on our consumer business with 2% ARPU increase this quarter.

We also see that the recovery in Thailand and Myanmar is on track, a clear quarter-on-quarter revenue growth and we are targeting a year-on-year growth in the fourth quarter of this year for both these two operations. The growth markets in Bangladesh and Pakistan are also continuing to deliver; double-digit growth in Bangladesh coming from new subscribers and data growth and 9% underlying growth also in Pakistan, however, due to tax reversals we are reporting a flat revenue development.

Let me dig a little bit more into Norway first. The second quarter in Norway reflects a steady progress on efficiency and our revenue renewal agenda.

As a result, we see that the S&T revenues remains stable despite continued decline in the fixed legacy revenues. I’m pleased to see, as I already said, a 2% ARPU growth in the mobile business.

This is coming from a continued upsell logic that we have where we take customers into price plans with more data. We also see that we are getting clear effects of the investments we have done over many years now into our mobile network and the superior position we have on our mobile network is paying off.

The same growth we also see coming true in the fixed broadband business, a 2% ARPU growth also there and we see a 3% growth in the TV revenues. In addition, we also see a steady progress on the efficiency agenda.

After several years with making our innovation operation more efficient, this is now becoming a way of work systematically attacking all efficiency potentials in our operations and also doing that with continuing digitalizing our core business. And if we adjust for the transfer of business from Group to Telenor Norway this year, the OpEx continued to decrease 1% reduction this quarter and this is mainly coming from improvements in sales and marketing and in operation and maintenance.

As we talked about in the last quarter, we are planning to decommission our copper network and this is a very important part of our modernization strategy. The ambition is to sunset the copper network within four years.

To do that, we will then migrate our customers to fiber and mobile replacement products. And now we have detailed plans on how we are going to do that.

So let me explain a little bit more in detail of what the plans are. On the left-hand side of this slide, you see that we are increasing our fiber rollout.

This quarter we added 11,000 new fiber subscribers and in the second half of this year we are going to ramp that up further. In the middle of this slide you see what we do on the wireless broadband access.

Outside the cities in more remote areas, we think that the fixed wireless product is very suitable to provide broadband access to our customers. This is done to use the access capacity we have in these areas.

A fixed wireless product on 4G was launched a month ago and we now have more than 2,000 customers using this product. It’s as the picture shows coming with an outside antenna and which has a geo lock.

We have launched three price plans; 10, 30 and 100 megabit per second. The 10 megabit per second, it’s approximately the same speed you will get on a copper network and the price is also approximately the same, but with a much better experience you have with our mobile network there is an opportunity here then to do upselling for these customers.

The yearly cost for our copper network, it’s approximately 1.2 billion. This is 2018 numbers.

And over the four [ph] gradually then shutting down the local exchanges and we have more than 4,000 of those illustrating on the right-hand side of this. However, in the four-year period we will also have some costs to alternative products and you can see the illustration of that.

We expect the CapEx level in Norway will be somewhat higher in the years to come compared with the previous years, but it will be within the overall sales. We have talked about now for the last few quarters about our recovery efforts in Myanmar and in Thailand.

I am very encouraged to see how things now are developing in accordance with plan. Both operations since the end of last year have seen a steady growth in subscription and traffic revenues and in both operations we are now expecting to come back to a positive year-on-year growth in the fourth quarter.

In Myanmar, the recovery started in the first quarter of this year and it continued into the second quarter. And in the second quarter we added 1.4 million new subscribers and the total subscriber base now in Myanmar it’s close to 20 million, 19.8 million.

Our strategy in Myanmar in this recovery period has been to continue to build our strength in distribution, our strength in brand and also our strength in network. We see now that this is paying off.

The year-on-year growth is still negative due to ARPU effects that we got from price regulations last year in September. However, this will be analyzed in September this year.

In Thailand, since we secured more spectrum last year, our strategy has been to use that spectrum rollout a new network and with that improve customer service and this is a strategy that our management in DTAC in Thailand explained when they had their Capital Markets Day in June. And we see that these strategic efforts are now paying off.

There are clear signs of recovery. And I actually want to take the opportunity to send a little bit of a greeting to our team in Thailand.

I’m very pleased to see now that the energy and the fighting spirit is back in the organization. The long-term strategy in Thailand has been to transform a prepaid, very promotion and high churn driven business into more postpaid data and service bundle packages.

And then because of that, I’m also pleased to see that the solid postpaid revenues growth is now continuing, a 5% revenue growth in the second quarter. It’s also good to see that we have a positive trend in uptake of new postpaid subscribers and we are now taking customers from other operators.

In addition, we continue to migrate prepaid customers into postpaid data bundles. This is now more possible because of the most aggressive prepaid offers are no longer in the market.

As I said in the beginning, Q2 has also been an eventful quarter when it comes to portfolio development. In April, we announced a transaction in Finland and in May we announced a discussion we have with Axiata.

You may remember that back in 2017 when we actually laid out our strategy that we are currently following, we said that we want to simplify Telenor with selling off some non-core assets and focus the future Telenor on core telecom businesses in the Nordics and in Southeast Asia. And during the last two and a half years, this is exactly what we had done and we now believe that we have the capacity to engage in transactions with significant value potential and we believe that both the Finnish transaction and the potential Asian transaction is creating the value and being a good fit for the future Telenor.

In Finland we announced to buy 54% of the Finnish operator DNA. And as you may be aware of, yesterday we got an approval from the EU commission and after some customary approvals in Finland that we also need, we will then close this transaction.

We expect that closure to happen in August. After closing, we will have to launch a mandatory tender offer of the remaining shares.

This will happen at the same price as we pay the two main shareholders when we bought the 54%, €20.9. We believe that the MTO price of 20.9 is very attractive and we anticipate that many of the shareholders will take the opportunity to tender their shares.

Then, early May as I said, we announced that we are in discussions with Axiata regarding a non-cash merger of our Asian operations. We believe that this is an opportunity that will create significant value through estimated synergies of US$5 billion.

We are currently in discussions with Axiata during negotiations and during their due diligence. We aim to conclude an agreement in the third quarter.

We are hopeful to reach an agreement and when we do or if we do, we estimate that it will take around 9 to 12 months before the necessary regulatory approvals has been achieved in the various markets. And with that, I’ll hand over to the CFO, Jørgen.

Thank you, Sigve. Good morning to everyone from me as well.

Modernization is as we have previously said many times a word that embraces more or less everything of what we do in Telenor right now and what we believe we will continue to do in the years ahead. I believe modernization we now are doing is critical if we want to stay relevant for customers, if we want to stay agile and competitive.

Growth, efficiency, simplification are all our most important elements in this modernization journey and a prerequisite for us to become more digital. While the financials for the quarter is impacted by some special effects and I could apologize for that, the underlying performance remains in our view very steady and we continue to make progress on our modernization program across the Group.

We see clear signs of revenue recovery in Thailand and Myanmar. We see continued underlying cost improvements and also good traction in planning of future structural initiatives.

Network modernization happens in several markets including but not with only the copper decommissioning in Norway. In addition, as Sigve said, we have taken important steps towards developing our portfolio also in this quarter.

The portfolio development we have been working on the last couple of years is again for Telenor an important part of the modernization journey and will we believe create an even better foundation for future value creation for shareholders. If we look at the Group figures, total revenue increased by NOK 0.5 billion, approximately 2% of which 1% was a result of favorable FX movements in relation to the Norwegian krone.

This quarter we see a slight decline in subs and traffic revenues or stable if we exclude Thailand as per our current guiding. During the quarter, as Sigve said, we continue to see strong subscription and traffic revenue momentum in Bangladesh of 13% and as you will see from the slide continued robust performance in Norway from fiber revenue growth of 20% and solid results also in the mobile consumer segment.

In Pakistan, the underlying growth remains at 9%. Reported growth, however, was flat in this quarter.

This is explained by a service charge of 10% which the industry in Pakistan reintroduced when the telecom taxes came back in April. According to Pakistani court, operators are not allowed to add this extra charge.

We believe that despite the disallowance of the service fee, we see continued growth potential in Pakistan, in particular from monetizing the increased data usage and the interest in buying our services more and more. The Group’s growth continues to be somewhat negatively impacted by fixed legacy, developed Asia and Myanmar.

However, both Thailand and Myanmar are now seeing sequential improvement in revenues and their growth rates will improve further going into second half of 2019 as the operational momentum is improving and also the comps by the way from last year are getting somewhat easier. Fixed legacy decline primarily in Norway continues along the lines of previous trends this quarter pulling down the Group’s growth by 1 percentage point.

If we then look at the next slide, modernization and efficiency improvements continues to be, as I said, a top priority to us. This quarter, FX adjusted OpEx decreased by 1% if you exclude a one-off in Bangladesh related to commission payments.

Due to the materiality of these effects, Grameenphone has chosen to restate their financials for last year while we at Telenor Group level take these as a one-time correction this quarter. We have positive one-offs in Myanmar and Malaysia this quarter but that is more or less offset by higher project costs related to ongoing M&A transactions and also some external support for the copper decommissioning in Norway.

The underlying decrease is, in my view, in line with the communicated ambition of OpEx reduction of 1% to 3% per year through 2020. Going forward the next few quarters we anticipate OpEx development to be somewhat impacted by cost related to the ongoing M&A activities.

If we take a look at the OpEx by category, there is an improvement in sales, marketing and commissions. We also see salaries and personnel costs coming in lower as expected and site rental cost the same for this quarter.

Site rental is mainly driven by a positive settlement in Myanmar and then renegotiation of lease contracts in Malaysia. In Asia, in particular, we see an increased energy cost in 2019 mostly due to higher prices; Pakistan and Myanmar predominately impacted by currency devaluation versus U.S.

dollar and energy prices in U.S. dollar, but also of course from increased network footprint and a latter effect also a result in slightly higher operation and maintenance costs this quarter.

If you take a quick look at the development per business unit, we see the result of efficiency improvements within corporate functions as we have discussed before coming from continuing simplification effort and structural changes across all staff units. In addition, we see continued solid efficiency gains in Sweden, slightly offset by increase in Pakistan and Thailand.

So we continue to see strong efforts towards ambition of OpEx reduction 1% to 3% per year through 2020. We believe there is significant efficiency potential left.

A quick look at the EBITDA development. We have had some extraordinary items this quarter which I have now mentioned already impacting negatively 4 percentage points.

Underlying development is then stable and if you exclude Thailand from the numbers again referring to the guiding we have had up till now, the growth on EBITDA is 3%. Solid improvement from efficiency initiatives in corporate functions is yielding significant improvement in Q2.

We also expect further benefits from this in the second half. The negative EBITDA performance in Thailand is primarily then explained by reduced S&T revenues of course and as we have talked about before one month extra TOT leased cost this quarter.

We see sequential improvements in both Thailand and Myanmar which we believe will ease the drag on EBITDA growth in the second half of 2019. Net income to Telenor equity holders this quarter ended at 3.1 billion or NOK 2.12 earnings per share.

This is 0.5 billion higher than last year and it was primarily due to 1.1 billion lower net financials due to currency as well as lower depreciation after the end of concession in Thailand, somewhat offset by higher taxes in the period. In addition, please bear in mind that the net profit from the discontinued Central and Eastern Europe operations was still included last year.

Free cash flow was negative in the quarter, 0.9 billion. So far this year we have free cash flow of 1.6 billion lower than last year of course.

The free cash flow was negatively impacted compared to last year with approximately 2 billion in a different facing of CapEx payments due to higher CapEx or investments in fourth quarter and first quarter this year as opposed to same period previous year. We have paid more CapEx or have a higher CapEx expenditure earlier in the period.

It is also 2.3 billion settlement for CAT in Thailand and also then Central and Eastern Europe operation included last year and grew cash flow with 1.8 billion. These three effects accounted for approximately 6 billion altogether.

Net debt/EBITDA this quarter increased with 0.1x EBITDA from previous quarter primarily as a result of paying out the first tranche of the ordinary dividend to shareholders as well as the start of the buyback program. Altogether, this accounts for 7.3 billion.

We will have a couple of elements, all other things equal, that will bring up the ratio further. We will have the acquisition of the 54% of DNA in Finland.

We will have the last tranche of ordinary dividends and we will continue our share buyback program. All-in-all, this will give a factor of 0.6 to the net debt/EBITDA ratio.

Then we have the MTO, the mandatory tender offer for DNA in addition and then we’ll have ordinary cash generation for the Group. Let’s then go to the outlook.

As you know, we chose to exclude the operation in Thailand from our guidance previously due to lack of visibility. DTAC hosted then, as promised, Capital Markets Day in June where they presented an outlook for 2019.

As such, we are now including Thailand in the Group’s guidance from this quarter onwards. The new outlook for 2019 is organic growth in subs and traffic revenues around 2018 level or stable, organic EBITDA low-single digit decline and CapEx excluding license in the range of NOK 16 billion to NOK 17 billion which is unchanged from the previous guidance.

In addition to a more technical inclusion of Thailand, the guidance also includes a couple of other items which I will take you through. So just to explain a bit the rationale for the new guidance.

Including Thailand in revenue, it takes the revenue growth slightly down as expected. In addition, Malaysia has this quarter revised their guidance for 2019 from flat to low-single digit decline.

Adding these two elements result in a guidance for Telenor Group of stable subs and traffic year-on-year for 2019. Then if we look at the EBITDA, including Thailand, it takes the growth down to around stable.

We also have the one-off in Bangladesh this quarter and the revised guidance for Malaysia from low-single digit EBITDA growth to low-single digit EBITDA decline. In addition, we have a couple of other new elements this quarter which has a negative impact.

This is the impact from the service charge regulation hitting revenues in Pakistan in Q2, termination of an MVNO contract and further regulation on special numbers in Norway. All-in-all, this takes the EBITDA growth in our review down to low-single digit decline.

And then I would like to remind also that we have a very tough year for comparables in 2019. We have 700 million in positive one-time effects in Q3 last year that needs to be catered for.

We have 400 million in higher cost related to TOT payment this year. We have the 300 million negative one-off in Bangladesh this quarter.

These factors alone have more than 3 percentage points negative impact on EBITDA growth. In addition, we have the transition from concession to license in Thailand and new price regulation in Myanmar affecting the numbers significantly.

So we believe that looking beyond these effects, the EBITDA development remains robust in 2019. So to summarize, it’s been another quarter where we have focused on executing on our strategic priorities.

However, they are somewhat less the numbers coming out this quarter and less visible than previous quarters due to a few one-offs and tax-related effects. Our priorities remain firm, as Sigve was saying, we will continue to modernize Telenor and should continue value creation for both customers and shareholders.

Sigve, join me for Q&A.

Sure. Then we are ready for a Q&A session.

Moderator, may we have the first question. Moderator, are you there?

We’ll see if we get the system to work properly. Moderator?

Thank you very much both Jørgen and Sigve. Just a question related to Norway please.

As you highlighted, there’s been a slight acceleration in the decline in the fixed legacy revenues. How should we view developments in these revenues?

We saw of course profitable revenues going forward now that you’re embarking on the copper decommissioning. Will this sharply sort of accelerate the decline?

How should we think about this and how do you think the scope you have for balancing this in the near term in terms of when you shut down on the copper network? And if I may just ask my follow up, any updates on your deliberations on the real estate and towers which you mentioned three months ago?

You haven’t sort of commented on them today. Thank you very much.

Yes, I can take the first one and then you can take the real estate, Jørgen. No, we don’t have any exact numbers to give you on that.

But as you know over the last few years we have seen kind of quite steady decline of the legacy business and also the legacy copper business and that will continue. We don’t think you will see a sharp decline.

It’s more that the line will continue. And then we will get more and more experience especially on the fixed wireless product and how that is working and to which extent we can roll that out further.

So I don’t have any more updates or figures to give you on that.

Yes, Peter, for the real estate initiative, we are as we said conducting a review of our real estate portfolio. It is related to the fact that we have several properties and buildings around which are also operationally less important going forward with the copper initiative that Sigve was talking about.

So we are in the midst of that review. You should anticipate that we will gradually and stepwise reduce that portfolio, but I’m not prepared to say anything more about it.

We are also looking into optimizing the way we operate our towers in Norway. We will also revert to that when we are ready to say anything.

Okay. Thank you.

Good morning, guys. Maurice here.

A quick question on Pakistan please and the slow down you’ve seen in the quarter because of the service tax. How should we expect the progression of the impact for the next few quarters?

You saw a huge or significant sequential slowdown due to the service tax. Should we consider that will continue for the coming quarters?

I know Jørgen in your comments you made some statements around how you’d expect to still see growth come through data monetization, but I guess that’s more gradual, so I guess the phasing of Pakistan for the rest of the year will be helpful. Thank you.

Yes, again I cannot give you an exact forecast on that, but we see a continuous strong underlying growth, also the 9% underlying we saw in the quarter and we see that coming from both new customers that never had any mobile subscription before but we first of all see it from customers starting to use data. And the percentage of our customers that are using data it’s still around 50% and the smartphone penetration is still quite low.

So we are now looking at – I think we called it mitigating actions for how we can mitigate some of the 10% tax effect and we are hopeful that we will mitigate some of that such that our underlying growth also can come out as revenue growth. But I don’t think I want to be more specific than that.

Okay. Thank you.

Yes. Two questions if I may.

First of all related to VEON, I think it expires in September if I’m not wrong and what are your views on what you will do with it at the time? Do you want cash and what do you want to do with that cash?

And second question actually relates to competition. In Sweden we’re seeing some intense competition from three [ph].

I guess you don’t see anything in the quarter, it doesn’t seem like it or haven’t made any impact. And in Norway do you see any change in competition in the quarter?

Thank you.

Yes, Johanna, thanks for the question on VEON, but we don’t have any particular comments. It’s due in September and we will follow the procedures related to these convertible bonds which means there are some timelines upfront that need to be respected and then you go into the execution according to the September timeline.

So you should just follow what we are doing.

On the competition in Norway and in Sweden, I don’t think we see any major changes. Both these two markets are competitive.

We have an attacker in Sweden with three; we have an attacker in Norway with Ice, but I wouldn’t say that the competitive landscape is materially changing. So what we are really focusing on in Norway is then to continue to give our customers more value and that’s not only with filling those upsell price plans with more data, it’s also to fill them with some new type of services, for example, the security services, the ID theft insurance that we are giving them, some family offers and so on and so forth.

So we don’t see that that landscape did change into the second quarter and we don’t expect that to change significantly in the quarter to come as well. Both in Norway and Sweden we see that there is quite tough price competition on some of the public tenders on B2B, especially in the public sector and some of them we lose because we don’t think they are profitable and you will see some of the effects of that both in Norway and in Sweden in the second quarter.

But that’s how it has been and how it is. However, we are trying to position our B2B business now on more upselling services, more integrated services to stay away from only price competition.

And which also belonged to the preferences with a lot of our customers to advance their business.

Exactly.

Thank you.

Yes. Thanks very much.

I would like to come back to the first question on the legacy revenues in a different way, the fiber rollout you’re saying instead of ticking along according to your plans and you want to accelerate it, but it does seem based on regulatory data that the sort of old net utilities are actually taking share in fiber. So the question I suppose is where do you see this settling down, what part of the country are you going to be incumbent assuming that you’re not going to be really overbuild head-to-head with the likes of Lucent and others given your current fiber rollout and the plans, how you want to accelerate that?

Where is this going to settle? What’s the end game there?

Thank you.

Well, let’s take a little bit holistic view on that first. I think there is another two years at least with land grabbing on fiber and that’s why we did decide last year to speed up our fiber rollout, things what we are doing now and we’ll speed up even further in the second half of the year.

I don’t think we are losing market share now in that land grabbing race and that will continue for the next couple of years. The competition on fiber is very different from region-to-region even more local than that.

So it’s difficult to answer your question. We don’t see ourselves being incumbent in that way, but we are now rolling out fiber in areas where there is no fiber at all but we are also rolling out fiber now in areas where we have the copper connection.

We have yet to kind of go in and roll out parallel [ph] fiber where that is already in the ground. So I think the aim here is that the current market share we have with fiber is probably 22%, 23% in that range and the aim is to at least keep that and hopefully also increase that, but also then to take share on the fixed wireless broadband product that I talked about.

And the combination of fiber and the fixed mobile broadband, as Sigve talked about earlier, is of course our way to maintain as much as we can of the customers that are stopping their use of the copper setup. And there will be other competitors also coming into that area and it should because that would be in some cases efficient, but we think we will do a very good coverage with the combination of fixed mobile broadband and the fiber rollout.

And we are quite bullish actually on the fixed wireless access broadband replacement product and that is due to our very good coverage in Norway and it’s due to the spectrum position we have and then the excess capacity we have out in these more remote areas. So the 2,000 customers that have signed up already in one month we expect to increase quite significantly.

Got it. Thank you very much.

Next question, please.

Good morning, everyone. Thanks for taking my question.

I had a big picture question around your general thinking on the Asian portfolio. Just given some of the challenging market dynamics and importantly some of the one-off surprises like you had in the quarter around Bangladesh and Pakistan, why do you feel confident about increasing your presence in the region and entering some of the new markets if the merger with Axiata were to go ahead?

And then related to that, how do you assess from the corporate governance risks that comes with entering potentially some of these new territories? Thank you.

Yes, two different questions. We believe that there is more growth to combination markets and the 13% growth you see in Bangladesh, the 9% underlying growth you see in Pakistan, coming back to growth in Myanmar; so these are markets, which is not saturated in terms of data penetrating it.

They start to be saturated on mobile connectivity but not on the data. And we see that when the smartphone prices comes down, we see people have both the appetite but also the affordability to pay for data.

So that’s the belief we have and that is also going into the potential of the other markets, like for example Indonesia as a big growth market. So we believe that that growth journey we want to be a part of.

At the same time we believe that there is an efficiency journey in these markets and that’s why you see that if you look at the EBITDA margin we have for example in Grameenphone with 54%, 55% margin; good margins in Pakistan as well and we also think that it could add some value on the cash flow growth not only on the revenue growth. On the governance side, I think that after having operated 20 years in Asia, I think we have developed the governance model which enable us to be close to both the market competition but also how to handle some of those risk elements that we have in these markets and that is the same governance model we then intend to use in a potential setup with a new company.

Next question, please.

Yes. Good morning.

I have two follow-up questions; one on Sweden, one on towers. On Sweden is you’ve highlighted trends got worse and that is in spite of the fixed line price rises that we saw in the market and I think I’m correct in saying you haven’t yet at least followed previous price rises in mobile.

I wonder if you could just comment on why not and how should we think about the growth rate going forward in Sweden on the consumer side as a balance to B2B? And then secondly on towers, the Axiata presentation when you announced the negotiations suggested that the plan would be to spinout towers in Asia post the deal.

You didn’t include that in your presentation but do you think this has logic with or without Axiata deal for your Asian assets and is spinning Nordic tower is something you would even entertain? Thank you.

Yes, Sweden first and then you can take the towers. We are not commenting obviously on price moves or things like that we might do on that.

But in all markets where we operate, of course we are also looking at how the competition is allowing growth to happen from a more industry point of view and that we will do in Sweden and that we will do in other markets as well. Some of the markets we are a market leader and in some of the markets we are a market follower.

So I think I don’t want to elaborate more on that. We hope that Sweden can overall be a growth market.

We see that Sweden is also relatively low on the data consumption. There should be more to do on that one and we also think that Sweden is a place where you should be able to demonstrate growth both on the consumers but also on fixed and not least on the B2B segment.

But we are small in Sweden, so we are dependent on what the other market pressures are doing.

Thanks. Andrew, let me comment on towers a little bit.

So first, Axiata discussions and edotco in that context. So Axiata has a joint venture with some other partners in the company edotco which has had a strong development in Asia.

Obviously that is a part of the discussions that we are having now. It’s included in the design of the potential future company and in that regard combining our towers into such a JV would probably be the most likely development should the JV or joint venture or should the company materialize.

And regardless, we have been looking for different setups in Asia simply to modernize and become more efficient. If you don’t do it in a large scale, you probably then will seek in market opportunities also related to the significant scale up and modernization build out of 4G and eventually in the future also 5G that probably will happen also in Asia.

If you go to the Nordics, I think we should divide Norway from Sweden and Denmark a little bit. In Sweden and in Denmark, we have collaborations and partnerships today which are very strong and good for us.

We share some spectrum. We share networks.

We share towers and these are long functioning and well functioning joint ventures already. So whatever we do there to take it to the next step will have to be seen in context of the setups that we have today.

But we have no reason to not continue with what we have started on, namely to be as efficient we can in these areas of our business. In Norway, we have a very strong network that we have built up over years and is being carefully developed in an environment and in a landscape which is demanding with mountains and lakes and fjords and so on.

And we have 99.5% 4G coverage and as Sigve was saying this is also an important element in being able to sunset the copper. We will look at future models also in Norway.

Right now we are mostly occupied with the fact that we have three different operational environments in Norway. We will probably bring that into one and then we’ll see where we go from there, also when we’re coming out from the copper actions that we are doing.

I would warn a little bit against thinking that we will do something in a hurry on the tower side. We work industrially with these issues, we work from an efficiency and business upgrade point of view and we are not working from generating significant cash on the balance sheet type of thinking right now.

Just to add on the last comment. I also think that we don’t think there is one-size-fit-all here.

This is very market dependent and that’s why we have to have different solutions in different markets.

Yes. But we can promise you we will stay as efficient and strong as we can at this and we see ample opportunities for collaborating also as I said in a 5G context going forward in several of our markets.

Thank you. That’s great.

Next question, please.

Hello. Thank you for taking my questions.

I’ve just a few on Norway please. The first one was just on some of these additional items that you’ve highlighted that will have an impact since the loss of wholesale revenue than this additional regulation on special numbers in Norway.

Could you quantify how big the impact is on revenues or EBITDA? And then related to Norway as well, you pointed to higher CapEx in Norway for the next few years.

Is that solely related to the copper network switch off or is there something else going on there as well? Thank you.

Yes, the last one is – my comment on the last one was related to the copper modernization program that we had and I said that it would be somewhat higher than what we are seeing in the previous years, but still within the Group guiding of 15% capital sales. So it is related to that.

Yes, I don’t think we have brought any numbers out on the two items in particular, the wholesale and the special numbers. The second element is a new directive from the regulator preventing us from taking an extra premium on those products.

They are wanted by the customers but we cannot take an extra premium anymore. But these are not large effects but you will notice them in the analysis going forward of course.

Thank you.

Thank you for taking my questions. So first a quick question on fixed wireless access which you said you would be installing in Norway.

Do you see any opportunities outside of Norway for fixed wireless access business opportunities for that present in Sweden or elsewhere? That’s my first question.

And the second question is more on a higher level with regards to the Axiata discussions and the due diligence. So given the experience that you’ve had with earlier partners with regards to anticorruption work and AFG [ph], do you see a risk that that could be a difficult hurdle to pass in the Axiata process?

Thank you.

Yes, I’m going to take the last one first. Of course, this is a part of the due diligence that we are doing and knowing that we are potentially going into new markets like Sri Lanka, like Cambodia, like Nepal, like Indonesia.

And this is – here we’re going to draw on our 20 years experience from Bangladesh, Pakistan, Myanmar and so on and so forth. So this is an important part of the review we’re doing now and the discussion we also are having.

I don’t think I want to say more than that and of course this is a very important part of what Telenor are doing to deliver on our agenda of being compliant, being anticorruption or being other parts of our compliance program. The other question you had is maybe on the fixed wireless product in other markets.

Now we are rolling it out in Norway and in a way we are testing how far we can drive that. We are testing a bit on how the geo lock is working.

And in areas where we don’t have enough spectrum and you have then underutilized capacity in your network, this we believe is a very interesting product. We are also going actually to pilot this on 5G to see if 5G also could be a cheaper way of delivering data over a mobile network versus a fixed network.

So I don’t want to say that we have plans in other markets as of now, but of course this is something we are going to look at going forward on broadband access also in other markets.

I think we are down to one or two questions. Maybe moderator we should end it after one or the two questions that you probably have left.

Thank you. I just wanted to follow up on one of the earlier questions.

I wonder what your thoughts are on the changes you might need to make to the organization and management structures in light of that perspective Axiata combination. You mentioned the simplification that has happened over the last couple of years but the portfolio is going to become decidedly more complex in Asia should that deal complete.

So just any help you can give us on the confidence that your systems are sufficiently robust there. And then a quick clarification, I’m sorry I may have misunderstood this but you mentioned the CapEx levels in Norway going forward will be a bit higher related to the copper switch off.

Did you say the Norwegian CapEx to sales wouldn’t be above 15% although the guidance wouldn’t change? Thanks very much.

Yes, I can take the latter. No, we remain with the guiding of 16 billion to 17 billion for this year and the medium-term indication has been 15% approximately to revenue.

We don’t see that that will change, so we are confirming now that we will still see that medium-term level is approximately 15% to the revenue for the Group and we shouldn’t make a big thing out of this. I think we just meant to indicate that due to the copper decommissioning, we probably need to fuel it in a short period a little bit extra in Norway but we have ample capacity for doing this in the investment budget for the Group.

And then to the Axiata question, we believe that this is a very good, in fact a rare opportunity. It’s a rare opportunity where we can build scale without using cash.

It’s a rare opportunity where you can do a merger and consolidate a company without using cash and it’s quite rare also to find US$5 billion synergy opportunity. So that’s the reason why we believe that this is really creating value for the company and for U.S.

shareholders. Having said that, of course we cannot do this if we don’t think we have the management capacity to implement our policies or to extract the significant potentials.

And of course we cannot do this either if we don’t think that our compliance program and what is very important for us in the way we conduct business is not achievable. So I cannot answer your question more than that, but this of course is the big issues that we are discussing internally in relation with now seeing the potential agreement and the potential setup.

Great. Thank you very much.

Okay, moderator, we probably have one question left or --

Thank you very much for taking the question. I just had one, hopefully relatively simple one and it’s on cost cutting in Norway.

Is the right way to interpret your chart on this slide, on Slide 5 in the presentation, the chart on cost, is the right way to interpret it that cost cutting momentum in Norway is going to slow down further from the levels that we’ve been seeing over the last few quarters because of the additional migration costs?

Are you referring to the slide I think on the copper decommissioning and that was the slide showing that we are over the four years, we are taking out the 1.2 billion costs that we currently have on copper but in that four-year period we will also add some costs on replacing the copper with replacement products. So over time of course the cost will be reduced.

That’s the way you should look at that slide without kind of being very exact on timing and on figures.

Can I just follow up?

Go ahead.

I guess the way you explained it just now, it sounds like the cost cutting is going to be incremental, right? So you are taking out additional costs within copper on top of what you’ve been doing already and kind of beat the current pipeline of the cost cutting projects, right?

And then some of it is offset or eaten up by the migration costs, but it still sounds like it’s incremental, so as in the pace is actually going to accelerate. Is that the correct way to interpret it?

I think we should be careful guiding too much on this, but what we are trying to do with the copper decommissioning slide and our comments today is to come back to what we said when we announced this in fourth quarter. We said there will be a gradual reduction of the 1.2 billion cost base related to copper and we said that the major bulk of that will come towards the latter part of the period.

And now we tried to reconfirm that shoulder level without being too detailed on numbers. The curves are still somewhat representative and you will see there that the migration cost is making what we said in fourth quarter, it is due to the migration costs coming during that period and obviously dropping when most customers are migrated.

So the profile is the same. We are confirming the profile from fourth quarter.

Then we have a continuous underlying efficiency effort in Telenor Norway as in all other business units. There we had an underlying 1% reduction this quarter if you adjust for some activities they have taken over on behalf of Group and that work will continue in Telenor Norway in parallel or over and above the cost profile you saw on copper.

We wouldn’t like to kind of give a more detailed number, but it falls into the ambition of 1% to 3% reduction for the Group every year including next year and then we have already indicated that that at least the efficiency work will continue after 2020 due to more structural work that we are now initiating.

Okay. Thank you.

I appreciate it.

Then, moderator, great questions we have received. There is one more question I think and then we end this session after that.

But one more question please.

Hi. Thank you for taking the final question.

I just want to come back briefly to the Swedish market. You obviously talked about pricing pressure in the public sector, but you I think gave a more constructive answer to Andrew’s question on consumer.

I just wanted to know if you’re seeing any early signs of sort of quad-play or bundling moves from Tele2 Com Hem, what are you actually seeing in the market in terms of them trying to target quad-play customers or push convergence? Is that having any impact you think yet or is it just too early to say?

Thank you.

Yes, we see some bundling. However, we don’t see what should I call it, destructive bundling.

We don’t see bundling as a way to actually reduce the prices. It’s more to increase the convenience with the customers.

And I think both Tele2, Telia but also ourselves are in a position to do that. Three is the one that are a little bit left out only having a mobile network.

So hopefully you will see that continue which is basically bundling in the sense of consumer convenience but also bundling in the sense of potential revenue uplift. That play we want to be a part of and I don’t expect neither Norway nor Sweden to go into more discounting bundling game we have seen in some of the other European markets.

Thank you everybody for participating and for engaging in second quarter for Telenor. We appreciate that.

Hakon and Marianne our IR team is ready to follow up with you if there are any questions or comments.

A good summer to all of you in Europe. Thank you very much.

Thanks.