Telia Company AB (publ)

Jesper Wilgodt - Head, IR Johan Dennelind - CEO Christian Luiga - CFO

Thomas Heath - Handelsbanken Maurice Patrick - Barclays Barry Zeitoune - Berenberg bank Georgios Ierodiaconou - Citi Terence Tsui - Morgan Stanley Henrik Herbst - Credit Suisse Peter Nielsen - Saturna Capital Corporation Nick Lyall - UBS Allan Nichols - Morningstar Dominik Klarmann - HSBC Ulrich Rathe - Jefferies

Good morning, everyone, and welcome to TeliaSonera's Q4 presentation. I'm Jesper Wilgodt, Head of Investor Relations.

And with me today to present, as usual, I have our CEO, Johan Dennelind, and our CFO, Christian Luiga. We hope to close this session within one hour and after the presentations, there will be plenty of time for Q&A within this hour, we hope.

So please go ahead, Johan.

Thank you, Jesper. And good morning everyone.

Also good morning to you on line. To you I can it's a grey and windy misty morning here in Stockholm.

Looking at the Q4 and yearly numbers we thought about starting off with one number, and the one number we would like to talk about today is four. And it's all related to Sweden because Sweden is in the report as you may have already seen quite a solid quarter.

First of all 4G population coverage is now exceeding 99% which has been a target set early on for us, which we achieved in Q4 and that’s great. We also saw 4G traffic overtake 3G traffic for the first time, also sign of the data boom and the internet boom that we see in our networks.

And on the fixed side we are now connecting villa every 15 minutes. So four villas per hour last year moving up to five villas per hour this coming year '15.

So four for Sweden, maybe four out of five for Sweden as a rating as well. And then moving on, some of the highlight for the year at least, we label the year 2014 as the year where we laid out good foundation and started to execute on our new strategy and the new generation Teleco that we presented in the Capital Markets Day earlier in the fall of '14.

We have as you know implemented a country based model, a new strategy, a new operating model and also -- I think you're one slide ahead of me. I’ll took back up -- I think this is technology very well.

Remembering the Capital Markets Day we committed to investors save and investor grow and we'll come back to how we're doing on that. Also a lot of work to strengthen our governance and compliance and sustainability in Eurasia and our other markets.

And then we have been quite active on the M&A side in the Nordics, with results in the Nordic I should. Hopefully also shortly announcing the Norwegian deal to be completed, we're expecting the results of that next week.

We’ve also been active on other M&As and other business development but maybe not with the same results yet. We have talked a lot about Spain last year and Turkey.

And the latest news by the way on Turkey, as you saw yesterday, the CEO of Turkcell is stepping down and I'll come back to that a little bit later. Now we can move on and talk about Q4.

We have some -- I'll see if this can also move -- and some highlights and lowlights for the quarter. The Swedish operations is strong especially on the mobile service revenue and I'll show you a bit of those numbers later.

We talked about executional on 4G and fiber are highlights. And then to mention one of the Eurasian countries that are managing to stay clear of the macro-turbulence is Nepal, which is delivering strong performance in the fourth quarter.

On the weaker side we see Finland for the quarter, especially on the cost side also having some headwind as you know on the interconnect regulatory side in Q4. We are seeing quite heavy pressure on the service revenue and revenue in Kazakhstan and Azerbaijan which we'll cover separately as well.

And then you know already our over $2 billion write downs mainly related to impairment of our operations in Q4. So those would be our key messages for the quarter.

Then taking a look at the key numbers then, you have them, you've gone through them, but just to recap there is a net sales decrease in 2.2%. We are keeping the margins for the year but declining slightly in Q4.

And as usual if you look to the right our CapEx goes up in Q4. It tends to do that in this industry, ending on a high CapEx delivery and also this year that goes for TeliaSonera.

And moving in then to Sweden, being part of the highlights for the quarter, a very steady performance, mainly driven by the mobility side, but also the fiber side is delivering steady results. We have a slight decline on the margin side, but overall a fairly solid set of numbers.

If you take a closer look at Sweden going into mobile service revenue, we are coming into positive territory in Q4, 1.5%. And if you take a look beyond that number you have consumer service revenue, mobile service revenue around 5% growth for the quarter.

But the enterprise mobile service revenues are still in negative territory. And we see also the mobile data revenue growth picking up 16.4% for the quarter, and as I said strong execution on the fiber rollout in Sweden and reaching the announced target of 1.1 million reached homes past.

Out of that around 750,000 are connected. Then moving into Norway and Denmark, see if this can also move or I will have to go back to this old fashioned way of presenting, which still seems to be the preferred.

I’ll do [indiscernible] stable development in Norway and Denmark. Norway has stayed focused on their performance in spite of all other activities going on, on trying to get Tele2 deal through.

They have delivered a strong set of numbers, or a steady set of numbers. Also Denmark was keeping up, high commercial activity in Denmark with good new propositions to the consumer and also to the enterprise segments with the new launch of SOHO propositions that are picking up.

So quite pleased with also Denmark. And as you know we are moving into a deal hopefully also in Denmark, announced last year with Telenor and that process will take some time but hopefully we will be able to get approval for that during the year.

To remind you that deal is the 50-50 JV with Telenor generating over DKK800 million in synergies yearly and creating a very, very strong mobile player in the Danish market. And on the Norwegian side, February 5th, the NCA is expected to come with their verdict on our proposed deal with Tele2.

We are still as you say hopeful that this deal will go through and we will revert hopefully then next week with those positive news. And then we move from good steady into slightly worse in Eurasia.

For the first time in long time I think ever with negative service revenue growth in the Eurasia portfolio as a whole and also net sales we’re negative. We are keeping up margins on levels that are as I said before very high and are coming down, but still above 50% for the quarter.

CapEx which have been lagging during the year also picked up in Eurasia, investing in our internet networks, 4G in some countries but also 3G, taking up on the data demand that also is picking up in Eurasia. We have a couple of big drags on Eurasia relating to the big companies and countries unfortunately and it’s Kazakhstan and Azerbaijan.

In Kazakhstan, there is -- you could say that the decrease in service revenue relates to three main things. One is regulatory effects which is about a third.

One is competitive and macro-dynamics. And the last third is one off effect that shouldn’t be recurring into next year, adjusting some accounting.

So then moving to Azerbaijan, you have similar effects of interconnect and regulatory, but also market campaigns in order to regain market share in some regional parts of Azerbaijan. So very heavy rough quarter, both commercially, competitively, but notably of course also the economy, which is under pressure from the ruble and the oil prices, which are spilling over to many of these countries that are dependent not just on the Russian trade, but as an energy economy they are affected.

So this is our main focus now and we’ll come back to that in a bit I’m sure in the Q&A. And I mentioned initially that the year has been strong focus on our corporate governance and sustainability activities.

We have been talking about these throughout the year and we’ll keep talking about this and we’re making strong progress in moving from words to action, upgrading our framework, our policies, our people throughout the region and also spreading to the parts of TeliaSonera. In this coming week we will also publish our second transparency report which now includes more countries talking about our freedom of expression where that we are standing up strongly and taking a point of challenge every time we are forced to comply with local laws that are violating our policies.

But I’ve to say that I’m very pleased with our progress. At the same time I’m always stressing the fact that we’re still operating with quite high risk in many of these markets that are very difficult.

Then we’re looking at the dividend and we are proposing or the Board is proposing SEK3 per share to the AGM for approval, which is in line with last year's absolute dividend and also in line with our Capital Markets promise to be at at least SEK3 per share. Then we move on, and this is the slide reminding us again about where we are on this journey.

This is a year where we are investing heavily in our transformation, both invest to save and invest to grow in order to come out on into '17 with a 2 billion lower cost base. But to do that we need to invest SEK2 billion per year -- sorry for the two years, and about SEK4 billion to SEK5 billion invest to grow in order to ensure that we get a growth platform for the coming years.

For this year 2015, it then means that we are looking at an EBITDA that's going to be around 2014 level and we're looking at a CapEx around 17 billion, including the invest to save and invest to grow investments which then leads us to our Capital Markets promise or ambition to deliver at least SEK3 per share also for 2015. So those are our key parameters for our outlook, and as we have noted we have removed revenue.

We will also remove relative numbers from this guidance and protecting EBITDA and insuring around same level as '14 is important for us. At the same time we need to stay firm on our investment plans in order to transform TeliaSonera into the new generation Telco.

With that I will leave it to Christian to talk about some more details and the numbers.

Thank you. I'll take the liberty to use the old fashioned technology here instead.

Good morning everyone. I like to take us back one year first and remind us where we started.

We started with an outlook for the year, with a flattish revenue and stable EBITDA margin, and also CapEx to save around 15%. In the mid of the year, we came back due to equipment sales in Spain and said that we will have to lead the guidance on revenue to be slightly below and this is how it has come out also on the revenue, minus 1.8%, which is directly related to Spain in this sense.

If we look at the net sales for the year, this is for the full year, not for the quarter, its 2.2% point that relates to the decrease in Spain, 1.8 in equipment. The picture is very similar for the fourth quarter or 2.4% related to Spain or the decrease of 2.2%.

The Spanish company still has done quite well and achieved an increase of 4% in customers and reached above 4 million customers and therefore protected its market share which has been important and then stabilizing the profitability meanwhile. Other than that over the year, we can see that Interconnect has had a slight impact and then the bill revenues in mobile have been going up and the fixed going down as we have seen so many times before.

Net sales growth has been lower than zero in the full year. We have compensated that on the OpEx side throughout the year.

This has not been enough to keep the margin stable. So just a slight improvement on gross margin as well.

And we can see it went up a little bit, the OpEx levels, or the decrease was less in quarter three and now down again in quarter four year-on-year comparison. CapEx is important.

I think we have talked about it before and we work much more strategic with our CapEx today I would say. We think about it more at least in the Group Management and discuss how we're going to reprioritize and work with it.

This has been the case also throughout the year. Eurasia is below last year and it started slow, has catched up in the end of the year.

Meanwhile we have taken the opportunity to think about how we need to invest and reprioritize. We have prioritized very much in fiber, 4G, the 2G-3G rollout in Finland to make sure we are on par has also been important for the year.

I'm very impressed with the Norwegian and the Group Team that has rolled out 4G during the second half year after we went out to the market and promised a better coverage in Norway after the Tele2 deal. That has been a very good example of where we can very quickly and swiftly make a commitment and deliver on that.

The Swedish CapEx is up and its fiber and its 4G. The 4G and fiber together is about 60% of this year CapEx and it was about 40% last year on average over the year.

If we looked at our cash flow, it's down from 16 billion pretty much last year to 13 billion and that difference is coming from CapEx. CapEx is high this year.

So part of it is that we have a higher cash CapEx in the CapEx part, but also we have higher CapEx per se in '14 to compare to 2013. On the working capital we are working on different elements.

We're still lagging a little bit on the comparisons. I would say there is two positive drivers and there is two negative drivers looking forward.

The positive is the handset setup we are building now for Spain and the Nordics. That will have positive impacts.

The vendor side will also have positive impacts. The negative side will be the CapEx and it also will be the Eurasian handset sales when we start launching that.

Those will be the drivers in the future on the free cash flow -- on working capital or cash CapEx. This is an interesting picture.

Currencies fourth quarter. You all have seen that it turned around and gave us a positive effect.

I have highlighted here on the picture to the left some of the main currency impacting us in the quarter. We can see both Azerbaijan, Nepal very positive.

Euro is also a positive impact. We have a big Euro contribution from both Finland and Baltics et cetera.

It gave us 2% plus on revenue and pretty much the same with service revenue in the quarter. And what we can say, it's very hard to predict going into next year where this will go.

And of course the risk for devaluation in Eurasian countries is high at this moment. Where?

We don’t know. But it is high.

So we should expect volatility in the currencies I think next year as well. On the profitability side we have made a little bit different view that we are used to.

Eurasia is down. We are used to see a positive development in Eurasia and Johan described before that Azerbaijan and Kazakhstan, the biggest countries still are on the high end on their revenue and that impacts profitability.

The cost side is also slightly up in Eurasia. Salary cost is something that goes up with -- like the devaluation in Kazakhstan and energy cost has been for the year in total higher than last year, much higher; both from capacity build out but also from the pricing.

Now of course with the oil price going down we'll see how it develops next year in this region but it has a high impact on the profitability in Eurasia. In Finland we have a decrease in profitability and I'll come back to that in a second, but that has also impacted Europe and Sweden.

I'm fairly happy with it. I think it's a quite stable picture.

Those who remember, we had a strong cost in quarter four last year which impacts the comparison, but still without that it's a positive development in Sweden and it's a stable situation and I think we will do a good job working with cost side, that we will see more of going forward. I'd like to say that of course going into next year, the pace right now puts high risk on quarter one and I would see that there is a risk for quarter one being lower than the average for the year on EBITA margin development, and of course if needed we will act on cost to protect EBITA for the full year.

If we then take a look at Finland, Finland had high cost than I wish they would have in quarter four. It's a result though partly of customer activities.

We have been driving a customer operation activity called always open during the fourth quarter that have been driving constant in customer care. It's where we try to increase the reachability.

But it's also been other kind of resource cost for driving the industry growing, industry save activities, and of course we will have to manage this and work with this going into the first quarter. On the service revenue side and maybe remember from last quarter that in September we had a regulatory change on the Interconnect.

We can see the short decline then into quarter four of the service revenue graph and I have here service revenue with and without Interconnect. I think the positive picture with the service revenue in Finland still is that for the last eight quarter it has been improving.

It's still positive or flattish. We are gaining customers in Finland.

It's a positive net on total in the fourth quarter and on the mobile side it's up around 20,000 customers. So I'm quite happy with this side of the equation in Finland on the revenue side and we will continue to look at that.

There is a slight indication that ARPU is stabilizing also in Finland and we'll see. We'll follow that.

It's too early to say this -- if it's there to stay. EPS SEK0.51 last year, SEK0.68 from this year.

It's a very low number. Both year it has been reduced pretty much with 50% from non-recurring items, and these items are a little bit different between the years and therefore the difference is coming from non-recurring items and minority interest and it's write down -- non-recurring write downs, only goodwill but also if you remember last year IT systems that impacts these two lines.

Otherwise it’s quite flattish between the year. The interest cost has gone down on average, which helps us on the financial net.

And it’s very visible here in this picture. Net debt between where we ended quarter three and going out now quarter four, it’s remained on the same level.

We have funded ourselves in the fourth quarter with another 4 billion at a five year deal around 1.2% and making sure we are having a good liquidity position and strong balance sheet also going into 2015. That’s my presentation, thank you.

Thank you, Christian. I think we should open up for some questions and I think we start here in the audience.

So should we start with Thomas?

Thank you. Thomas Heath with Handelsbanken.

A few questions if I may. Firstly, on Sweden, you continue to add a lot of fiber, connected fiber households.

And you've spoken before a little bit about take-up rates and so forth. So any sort of trends shifts, or what's happening in the financials of Sweden fiber would be very interesting.

Secondly, on Eurasia and Uzbekistan, you had a new competitor enter. And I just wanted to see if you could update us on a little bit, what getting cash out of Uzbekistan, if anything is changing there, and how much you have restricted in the country today as it is.

I'll stop there for now.

Okay Thomas, thank you. I’ll start with the Uzbek question and Christian can cover the fiber.

So the new entrant MTS came in during Q4. No major impact in the market in terms of dynamics or disability on our numbers or our intake et cetera.

So I think that remains to be for 2015, where of course a third entrant will have an impact. And unfortunately with regards to the repatriation, no good news that we can report on.

But we are continuing our efforts to resolve that.

Okay, on the fiber side, if you look at the onetime charges, they are remaining at the same level. There's a shift upwards a little bit between ‘13 and ‘14 but trend in ’14 is pretty much flat and you want to say something on that?

Yes, if you look at on the FTU [ph] side or the villa side. What we have been talking about that was mentioned [indiscernible] to be to gain roughly 36,000 for the full year last year as is mentioned, four new villas per hour and that roughly a third of that came in the fourth quarter.

[Indiscernible]. If you could say something about -- you’ve been little bit in between efficiency programs as you ended the last one a little bit ahead of time and you have embarked on the new one.

And now you’re fragging [ph] that maybe Q1 will be a little bit weak. Is that mainly related to efficiency?

So when do you expect to see an effect of the new program? And then the second quarter was related to fiber.

Is there sort of a timing between getting the revenues in and getting the households connected, as you had a big chunk connected in the fourth quarter? So your broadband revenues were the growth there was a little bit weaker in the quarter.

Thanks Yana [ph]. Let me take the efficiency program.

As the 2 billion investment, invest to save will not generate savings until after the investments in two years. Of course we will maintain a cost focus and efficiency focus during these times to protect EBITDA for ’15.

So I think with regards to Q1, your question, that’s more related to what we see, also the macro impact in Eurasia. The growth is negative in Q4 and Christian mentioned that we see that Q1 may be weaker than average and that also has an impact on the margin.

So protecting EBITDA is also important for Eurasia, but no new earmarked efficiency or cost program beyond 2 billion that we have announced but strong focus on all costs.

Yes, on the fiber side I think you've asked about fiber revenue trend down. We had better and more positive impact from the onetime payments in the third quarter if you look year-over-year than we had in the fourth quarter.

And that’s what we’re seeing.

But the growth rate on that is lower in the fourth quarter because we had a quite high pick up also in the fourth quarter last year. So it’s still growing but at a lot lower pace.

[Indiscernible]. I would like to start on Eurasia, and particularly Kazakhstan.

You had a negative subscriber intake and quite a big ARPU pressure. Can you say anything about the competitive situation?

Has this changed with the launch of Altel? There is also, for both Kazakhstan and Azerbaijan you state one off items.

What is this and what type of magnitude did this have on the revenue side? And then also, why are you just talking about softness in Q1 given the weakness we see in Q4?

Shouldn’t this spin over to the other quarters as well? And finally on the guidance, given you talk about flat organic EBITDA, given the recent development on the top-line, this would imply improved margins.

So where do you see improved margins to come from?

Let me start to take off a few and then you will take what's remaining. The Kazakhstan situation, as we have talked about throughout the year, we have had initiatives to regain market share, especially in some of the regions where we have been weak.

Those campaigns have been quite aggressive and that has still not generated the revenue uplift, but has stabilized market share in some of the regions. So it's positive effect on market share, but not yet on the revenue side.

And I think just on your point on Eurasia on weakness, yes it may continue on top-line beyond Q1 but then we have had time to adjust on cost side to protect the EBITDA. So that's what we're referring to.

Guidance. improved margins Christian.

Well I should make it easy for myself. We don’t comment on margins.

We comment on the [indiscernible] in absolute number and actually I would say there, but on the one-time charges that are effected in Eurasia in Kazakhstan, it is actually just accounting around how we take in the buckets that we have, the three buckets and the data bucket you have outside and how we handle those. And you could put it on non-recurring or other items, but we think it's more just fair to have it in revenues.

In Spain it's one-third. And these items are actually not changing the picture.

So if it's 8% or 11% down in Kazakhstan, it gives us the same pattern that we need to be working with.

[Indiscernible] back to Finland. You said that cost in Finland is going up, but that must be taken care of, what do you mean?

Which way?

Well, the cost cannot continue to go up in Finland of course. We need to have a sustainable EBITDA development also in Finland.

It's a big part of our Company. It's 10% and therefore we need to work with it.

And we did some bit on the customer side and which have been positive, and it's been easy to reach but we need to find other ways to balance the cost.

Which ways?

Well as Johan said, we work all over the place. Actually three days I went through all the travel in Sweden and I will do that probably in Finland.

We work quite closely with procurement, working both on the CapEx side and the OpEx side and it's been slow implementation but an implementation first in Sweden and now in Finland on the procurement side. We have a new Head of Procurement starting actually just this week.

And those are the type of activities we will work with. And it will go all over the place.

I think we should open up for some questions from the telephone line. So please Operator, can you open up.

This is Maurice here from Barclays. So question really relates to the dividend and the guidance and some of the FX risks.

You talk about the FX volatility and credit as a risk of I think some downgrade to the FX currencies. Your guidance for EBITDAR is based upon I think average 2014 FX.

If you could confirm that? And on the flat dividend for '15, if you do see a material change to the Eurasian FX rates, would that impact that dividend, or is that your pay regardless of what happens on the foreign exchange?

Thank you so much.

Let me take the last one and then Christian can confirm the FX, but the dividend is as we say at least SEK3 per share and that is an ambition and a very strong commitment that we have. So it should not be FX impacted.

If that happens that will be of course an announcement and a completely different discussion than we've had so far.

So on the FX rates, yes, of course we stand now today, the latest one we know is the 2014 rates. But in the end it shouldn’t matter so much as long as you use the same FX rates when you recalculate that.

We have about the same level on both 2015 and 2014 EBITDA in absolute numbers.

Just coming from that last point, so is the 35.3 based upon the sort of current spot FX though, or is it the average rates you had during the year?

Rates during the year.

Average rates. Okay.

Thank you so much.

Yes. I've got three questions, please.

The first is on the Swedish broadband and TV ARPUs, which were both negative this quarter. I understand that you have had a six-month free TV promotion for fiber customers, which is partly impacting the TV ARPU.

I was just wondering whether you can give any comments in terms of what kind of stickiness you're seeing on those TV customers. Are you typically keeping most of them after the six-month free promotion expires?

Or are many dropping away? Secondly, I was wondering whether you could talk more generally about the OTT threat in the Swedish market, and whether you see it actually as an opportunity for Telia, or more as a threat.

And then finally, in your CMD, you mentioned the opportunity to invest in adjacencies close to your core. I was wondering whether you see content just fitting into that profile.

And do you see content providing a good complement to your current fiber rollout? Thank you.

Let me start on that. First of all, we have campaigns both on broadband and TV, slightly different propositions, but some are discounted to get on our broadband fiber or DSL, We have a lower monthly fee the first three months and some are as you mentioned the try TV and then pay later basically if you want to stay.

And we see stickiness on that. But then it actually relates to your second question to OTT, which from that perspective may be seen as a threat, but from an overall perspective we see more as an opportunity because as I pointed out in my presentation, data revenues are growing strongly, and of course OTT is part of that strong data growth.

So here it's a balance about having good propositions out in the relevant households or consumer segments. We do invest in agencies.

I'm glad you mentioned that. We've launched a couple of strong initiative here in Sweden around health for instance.

We're stepping up our internet -- machine to machine, Internet of Things, where we are a leading player in the Nordics. With regards to content I think we are still on partnership discussions and not acquiring content level.

But it is an important component of the consumer demand. So we need to have it one way or another.

Right now we have a good proposition TV, and it's growing. We're launching it in more markets.

We also have our own OTT TV product that has been launched in Finland and Denmark and in the Baltics as learnings from the Swedish success. So yes we are very active on OTT and traditional business models here.

If I can ask just one follow-up. On the TV ARPU point, do you expect that to stabilize soon, or do you think it stays negative?

I think it's a little bit in our hands how aggressive we are now on the try and buy propositions. We're still in kind of building up a base, securing the base.

So we'll come back to that specifically as we move along.

I've got a couple. The first one is around the associates.

I think Maurice earlier asked about the impact of ForEx, potentially on your mid-term dividends. I was just wondering if you see any risk of potentially MegaFon dividends, given where we are today, and whether that could impact your medium-term dividend policy.

And I think at the start you mentioned, you commented a bit on Turkcell. I'd be interested to see if you are a bit more optimistic around the Turkcell dividends resuming.

And then my second question is around Finland. You mentioned the customer care cost.

I think during the quarter you had a network outage that lasted a day or two. Is that a negative impact you've already seen in the fourth quarter, related to this and is it on the top line or on the cost side?

Or is it something we may see in the first quarter? Thank you.

Let's start with our associates' related questions. I think MegaFon we -- as you know 25% to Board seeds [ph] and following the company closely which is well positioned in Russia, even if the macro and the impacts in Russia is getting very much tougher.

But there are no indications at this point of time that that should be in any danger. If so then of course -- then the MegaFon would have to update on that.

And with regards to Turkcell, a lot of things were going on. We're approaching dead line.

We have talked about as a dead line but it's actually more of the date in March where we have some pressure to resolve our shareholder matter before the Capital Market board in Turkcell has the potential or the opportunity to take control of the AGM and we don’t want that to happen. So we're working very hard to find solutions to a very complex situation.

And as usual we will have to come back if we have any updates regarding cooperate governance, regarding a dividend or any other resolutions to the matter. And then just noting them that the CEO resigned yesterday and on a personal note I think he has done a good job for Turkcell and we are looking forward to getting a new strong CEO on board.

And then can you repeat the last question on Finnish cost?

Yes, if I could just follow up on that. If the MegaFon dividend for some reason is no longer recurring, will that affect your own dividend policy or you think you can sustain a dividend without it.

In our dividend policy we’ve taken into consideration various risk obviously, and we are sticking to our at least SEK3 per share. And then if there are material developments then we have to talk about them as we go along, but there is not at this point in time any risk to the SEK3 that we have mentioned.

And on the Finnish side, the outage did not impact the top line or the cost side and actually we have seen a positive development on our customer satisfaction measures and the MPS that we measured in Finland. Even if the outage was of course unfortunate it didn’t have a material impact on the quarterly financials.

It’s Terence from Morgan Stanley. I just had a couple of questions.

Firstly on the Swedish mobile market, you posted a quite solid top line, made by service [ph] revenue growth. I was just wondering if you can share a bit more data behind that in terms of things like data usage, what's the average, what's the median data consumption that you're seeing?

How many customers are beginning to exhaust their data package and whether you're seeing a material change in data usage from the new iPhone 6 or whether it's too early to say? And then secondly, maybe you can just give us a bit more of an update on Denmark.

I know you hosted a conference call not so long ago, but maybe you can share with us maybe what's from the discussions are -- being with regard to remedies such as potentially selling spectrum, giving NVNO access. Just a bit more update on that would be much appreciated.

Thank you.

Thank you, we’ll come back on the data points in more detail if you want later, but generally speaking, 4G now, 100% pretty much of the handset sales, and I said 4G traffic overtaking 3G traffic. Stronger growth in Q4 on data revenues.

More people, we are not specifying, topping up, reaching the limits. More people and customer upgrading to larger buckets.

And of course then we are reviewing our propositions here if we need to adjust them and the market is fairly rational in this space in Sweden right now. So I feel that we don’t have to rock the boat in the Swedish data pricing for a moment.

On the Denmark and potential remedies, there is no possibility for us to comment on the remedies right now. As you say there is lot of spectrum portfolio, both in Telenor and Telia.

They are with different dates and different wavelengths. So it’s a little bit complicated story there.

We have to wait and see the discussion with the regulator and then come back later with an answer.

I have two questions on Swedish mobile as well. I guess looking at the data usage, you're seeing a bit of an acceleration.

I guess a lot of that is continued adoption of 4G. Can you maybe talk a little bit about the customers who've now had 4G for a year or two?

Do you see data usage continue to grow after that kind of initial uptick? And then secondly in terms of competition, we saw Comviq obviously in the lower end doubling the amount of data in the bundles and maybe if you have any view, do you view that as quite an aggressive move?

Do you think it's not going to change very much or any initial thoughts on that? Thanks very much.

Thank you. In terms of the competitive dynamics in Sweden, obviously there are many brands out there, premium brands, fighter brands that are launching various propositions.

We are very careful by doubling or throwing away, giving away too much data. We’re taking it step-by-step, Telia brand specifically.

And our fighter brand Halebop is a little bit more aggressive, a little bit more up against the price players out there, which we are of course reviewing. But I note the Q4 as a 5% service revenue growth and consumer is very solid, from picking up to -- highest in the long time.

And that is on the back of this increased data demand and people and our customers starting to like the propositions that we allow. So we shouldn’t change radically but we need to fine tune to make sure that we stay relevant.

And I think the question on 4G, if the traffic is picking up? And of course the answer is yes.

And that we’re monitoring the one-off effect of going from 3G to 4G, and how it develops from there onwards, but we’re not sharing that externally for the moment. We may review that going forward.

And we can say that if you look at the share of 4G subscribers in our network, now it's up to roughly one third. So it’s from around 25% last quarter.

So it’s increasing quite rapidly.

And the 4G traffic has passed the 3G as we said earlier, and the total traffic in our network has gone up around 50% in one year. So gives you a view that it is increasing.

A couple of questions, please. Firstly, the last 12 months, we've obviously spoken a lot about the B2B market, particularly in Sweden.

I believe obviously you've made some investments, some new products were supposed to be introduced in November and Johan was mentioning that you're seeing improvements in the Danish B2B market. Could you talk a bit about what you're seeing in Sweden?

Have the new products arrived? And are you seeing a tangible positive impact on this, please?

And secondly, I appreciate there probably is a limitation to how much you can tell us Johan, but you sound pretty optimistic about the Norwegian transaction here for approval next week. Do you see any risk, if you can comment on this at all, that the remedies might involve a potential worsening of the market conditions overall?

Do you think there's a risk here? And thirdly, if I can just ask a question related to Turkcell and I guess I appreciate perhaps there's a limit to what you can tell us, but the solutions you are seeking in Turkcell and the negotiations, could this involve sort of a broader solution which also involves not only corporate governance, but also economic ownership potentially related to the Eurasian businesses as well?

Thank you.

B2B first. I'll give you a little bit of a hint on the SOHO in Denmark looking promising.

With regards to Sweden, as rightly pointed out Peter, we launched a couple of things late last year and taking them further early this year with new campaigns. Even if the numbers look slightly better, it's too early to say whether we have turned corners.

So I will still -- and that's SME I'm talking about mainly. We'll keep our focus and keep monitoring that, see if we can call it a trend shift soon, but it's a bit too early.

On the larger segment, still strong price erosion, mainly on the fixed, but on mobile side still in negative territory. As I mentioned the mobile service revenue for enterprise is still in negative territory, bringing down the overall mobile service revenue growth.

So -- but it's looking better, even if it's not seen in the numbers. That's how I would summarize B2B.

For Tele2, acquisition in Norway, yes I have been optimistic all along as it hasn’t changed. And now we're getting very close to the date.

I think we have a very strong proposal that keeps a competitive dynamics that is desired and required and we have listened and have a very constructive dialog with the NCA. And I hope that we have done enough to please both the NCA and the consumers.

So we will revert hopefully next week Peter with some news on that. And Turkcell I can't go into route of speculating on the various options and I can only say what I've said throughout last year, that we have a different approach in the way we talk to stakeholders, where we are not locked into one corner.

That means that we're looking many options, how to resolve the situation in Turkcell.

This is Nick Lyall from [indiscernible]. Could I ask two, please?

On the Swedish side, again on mobile, could you just talk about any impact you may have seen from the November changes in Tele2 tariffs? So that was the move to zero contract length and some of the cut in mobile-only tariffs.

It doesn't look as if your churn has gone up. So any impact at all?

And was that your reference Johan, to rocking the boat? You don't see the need to change anything and rock the boat on Swedish pricing?

Also there's a -- you talked about a temporary B2B effect. Could you just detail what that is this quarter and whether it's significant?

And the final one was on Spain. What are your options now?

The rest of the market's consolidating fast. So what are the options and how long do you think you'll have to wait to sort things out?

Thanks.

Swedish -- well let's start with Spain. It took some time to get that question.

We -- as you recall from last year, we wanted to find a level where we both maintained or increased customer base, at the same time profitability and I think the team has done a tremendous job in delivering that balance, that delicate balance in a market that is going to converge. We still have that mindset to not lose share, to stay strong, to be a challenger in the market.

And there is definitely space for the overall to make impact. At the same time, we are open and talking to various people about solutions that are good for us and our shareholders.

On the B2B side, as I said, there are no positive signals in the numbers. What is positive is that it's high activity, a lot of loan shift and propositions and good spirit in keeping and gaining new customers.

So that that's what I referred to. So still in negative service revenue growth, both on mobile and fixed for Sweden B2B.

Swedish mobile, you were referring to, can you just repeat to…

Well, actually it was the Tele2 -- the cuts, if you remember, they cut -- they raised handset prices back in November, maybe not the best timing into Christmas, but lowered the SIM-only, and introduced a few sort of weird and wonderful things like no contract length. So has that made any changes at all to the way your customers react?

You don't seem to have seen extra churn? So I wanted to see if you'd seen an effect or not.

All I can say, there's been a high traffic in our stores. We have a positive customer development and we have a strong revenue growth on service mobile and that we can always speculate what that comes from right now.

We are pleased with the Swedish mobile development.

Allan Nichols from Morningstar. A couple of them first.

Tajikistan and Moldova, your EBITDA margins dropped quite a bit. I was wondering what happened there.

Is that temporary or is that going to continue? And in Nepal, your subscriber growth in the fourth quarter slowed dramatically.

Is -- are you approaching saturation in that market, or is it just something temporary?

Allan I'll start with Moldova and Tajikistan and then say that one big impact we have in both these countries is the incoming traffic from aboard and there is high dependencies on these two countries, and also Georgia on incoming calls from workers outside the country. And that has a big impact.

Also on Nepal I would say we haven’t done any -- we don’t see a trend shift in the overall long term growth. It's going down from 20%, 30% a couple a years ago to 17% right now.

And that trend will continue slowly, but it's going to be very positive still thinking to next year.

Just two left really. On Nepal again, what's the risk of a new entrant?

Is there any news there you can share? Is that still a 2016 risk at the earliest?

And then on convergence. You're not really talking about your family plan initiatives in Sweden any more.

Is that just not a focus anymore? Has anything changed there?

And then, how important is being able to offer fixed line in other Scandinavian markets you feel at this stage?

So Nepal, we repeat what we said last year and hope maybe it will take as long as it has taken but it will be a new entrant. And we monitor and see what happens but expected too in 2015 is our cautious advice.

And then with regards to conversions, the family plan is still there. It's called Komplett for Mobile.

We're working harder to find the right proposition here also for the full portfolio converged offer, that makes sense and that has the right balance of customer loyalty and price proposition. But we are very, as you know well positioned in Sweden to drive that.

We will do it responsibly. And then we have opportunities conversions in other markets, Finland, Baltics which is also very high activity in finding the right balance of those launches.

So I think expect more of that during 2015.

And in markets like Denmark and Norway?

Sorry in terms of?

In terms of being able to offer convergent products.

Well, we'll take it step by step then. Let's see how we do with JV proposal in Denmark and then we'll have to see what that means.

In Norway we are creating a true strong alternative to TeliaSonera and then we'll see what we need in order to take that to the next level. Now let's see and complete this transaction first.

Just a question on Swedish Mobile. Clearly all the questions have indicated that you've delivered very strong growth in consumer again, and your monetizing that data is great execution.

But what do you think could see this growth faltering? Does the slowdown of smartphone take-up a reduced ability to upsell those data packages?

Do you see any competitive risks for the monetization in the near to medium term or is there anything else we should think about in terms of the opportunity in mobile data monetization?

I think we don’t view that as a threat that people are now getting 4G and getting fully penetrated on 4G handsets to our customer. That’s the starting point as we see it.

And how we then monetize is a lot up to how smart we are. And it's a lot in our own hands to understand how we delivered to the customers what they need and that’s ongoing.

And I have high expectations on our Swedish Mobile how to monetize data going forward, because that’s where we need to be excellent.

And the level of customer on data centric models is now around 56%. So still some to go before we have all our customer there.

And leading on that is Norway, around 85 on our data plans, data back lifts.

I think we have time for one final question actually.

Two maybe, if I'm allowed. In Kazakhstan, would you just be willing to give a bit more color on your expectations with regards to Altel?

For example -- or your strategy; either what you've baked into assumptions here, whether there's the room to simply make a bit of room for them, or whether you want sort of a tough, to-the-bone sort of competition in Kazakhstan to keep them as small as possible. I'm just wondering how you think this is going to unfold in 2015?

And the second question is there are several references and debates so far about this Q1 revenue risk that you will address with cost measures if it happens. Could you just explain what costs you would cut only if revenues come down?

It sounds a bit -- I'm not entirely sure what exactly this could be, because if there are costs you could take out, why not take them out anyway? Why would you wait for a revenue shortfall to do so?

So what sort of costs and measures are you actually talking about there?

Thank you. The Kazakhstan situation then, there is a new entrant that’s going national, but I also think in terms of challenger proposition we already have a strong challenger that has gained a lot of share and is the price leader and that’s to which -- to whom we have reacted a lot during the year in regaining share.

So, I don’t think the introduction of Altel and going more national is going to change the dynamics that much to be honest. We are already reacting and acting on the market share loss that we’ve had due to the challenger in the market.

But of course we are staying very close. We have a new CEO in Kcell, Arti.

He has a new team building and they seem to be on a good path in delivering here in tough environments as Christian also touched up on. On the cost side, it’s more cautious measures, making sure that we stay efficient and maybe some of the efficiencies can be accelerated and also to protect our EBITDA guidance for the group on a full year basis everybody needs to contribute if worst comes to worst.

I understand. Can I just follow up on this?

Are you simply talking about taking market investments, commercial investments out of the market if revenue goes down, or are you talking about more structure things? That's really what I'm after.

We are starting a structure of things of course and ending with the growth investments if need be.

Okay, done that’s one hour. Thank you everyone.

Yes, lot of question. Thank you very much for your interest.