Telia Company AB (publ)

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00:02 [Starts Abruptly] operational free cash flow year-to-date, of which two point nine [Technical Difficulty] clearly above the eight point two billion level needed for the minimum dividend. And looking at the structural part of OFCF, we've generated already seven billion krona year-to-date.

00:19 With our Norwegian Finnish tower transaction expected to close before year end, we have a pro forma leverage at the very low end of our targeted range. And even including the second tranche of the twenty twenty dividend due to be paid out in November, we expect to end the year at slightly higher level than the one point nine nine times here, but still comfortably at the very low end of the two to two point five range.

00:42 Our multiyear ambition to reinvent a better Telia is progressing to plan, here I would pick a few highlights from the quarter. We've just this past week won several customer satisfaction awards.

In Sweden SKI Award Telia the best operator in the enterprise segment for the eighteenth year in a row with an increased distance versus all our competitors, and Halebop was awarded the best in the consumer segment for the twelve out of fourteen years. 01:09 In Norway EPSI awarded OneCall the best consumer brand and within the enterprise segment, we not only won first place with Phonero, but also second place for Telia.

Both of these surveys are a good recognition for our renewed efforts to improve customer experience and are evident of the quality position we have set for ourselves across our footprint. 01:29 In the consumer segment, we're seeing solid momentum in our convergence strategy.

Sweden added eight thousand over households in the quarter, Norway six thousand and Finland fifteen thousand and sales are ahead of expectations on the high value Swedish 5G plus mobile bundle including Netflix and C More. 01:49 Also in Sweden consumer, the launch of Champions League and the associated campaign starting in LatAm has generated good engagement so far with overall brand consideration increasing and especially for our TV offering.

On C More, we have seen a thirty eight percent new sports subscription entry increase versus last year and we've seen a thirty percent growth of sports subscriptions within our Telia Sweden IPTV customer base. 02:14 We've also seen that viewing among our sports subscriber have been high for the ranks have been placed so far, and I hope you all stayed up to see Man United's win and Ronaldo get that, that goal in the eighty first minute last night.

02:28 Moving to Finland, where we're further ahead in the content with access strategy. We've seen a one hundred and seventy percent year-on-year growth in joint Telia and C More customers, now over two hundred and ten thousand providing us with a much better consideration towards Telia, up nineteen points and a lower churn of seven points and improved value for money perception.

02:51 In the enterprise segment, we are reporting service revenue growth for the second consecutive quarter for the whole of Telia Group with revenue growth in each of the enterprise segment in five of our seven markets. Our enterprise strategy aims to reverse the declines of the past few years through combining connectivity, alongside IPT solutions and security solutions, we call it the smart orchestrator.

03:16 In the quarter, our growth funnel was enhanced by deals that amplify our enterprise convergence and innovation strength, and specifically, we saw deals that combine data analytics, private networks and IoT solutions. And specifically, we signed our largest credit analytics deal to-date, where we will provide the Finish Road Authority with insights on traffic flows over its entire road network.

03:40 On private networks, we signed the largest private 5G enterprise mobile network to-date in our region with a mining company, Agnico-Eagle, and we've signed the deal to roll out our dedicated mobile network services for a major industrial project in Sweden. 03:55 On IoT solutions, we've extended the deal we have in utilities with Stockholm exiting.

And in real estate, we signed an eight year contract with Akademiska Hus, one of Sweden's largest real estate company. We are really building vertical strength in the real estate and the transportation areas.

04:14 In the TV Media segment, we continue to experience high commercial share of viewing levels in both Sweden and Finland. Earlier in the quarter admittedly we are in a quiet period for advertisers, we were somewhat hampered by the summer Olympics being broadcast by a competitor, but in September, we recovered to previous high levels.

04:32 Moving to our Connecting Everyone strategy pillar, 5G roll out continued in line with plan, and we retain our leadership in Sweden, Norway, Estonia and Lithuania. We continue to expand pop coverage now at fifty four percent in Finland, thirty one percent in Norway, and we've launched real 5G services to twenty five Swedish cities so far.

We remain the sole 5G supplier in Estonia covering seventy percent of the population across fifteen cities, and also was measured as the fastest 5G Capital in the world by Speed Intelligence during July, which we believe is due to the 5G leadership we took in Oslo early on. 05:10 Also in Norway, the 5G spectrum auction concluded successfully.

We increased our holdings in the two point six gigahertz band to two times, thirty megahertz and maintained our holding of a hundred megahertz in the three point six gigahertz band. We also obtained our desire position in the spectrum band, further cementing our position as the only credible challenger in the Norwegian market.

05:34 Turning to fiber, we've now surpassed the one million connected customer market in Sweden taking our film fiber subscriber base to above one point eight million across our footprint and an eight percent growth. Worth noting is that we know only have roughly two hundred thousand HDFL customers remaining in Sweden, which supports our view that the drag from decline in legacy revenues will become less and less ahead.

05:58 As we now modernize 4G and roll out 5G, we're accelerating the shutdown of legacy. Structural cost reduction related to these migrations amounted to one hundred and twenty million krona year-to-date, which is helping offset cost increases related to, for instance, an increased share of customers in open city networks.

In addition, we're utilizing 3G to a lesser extent having reduced traffic further in the quarter, now having only twenty five percent of total voice traffic left in the network and only three percent of data traffic. 06:30 Finally, we are on track to close the announced tower transaction in Q4, which is only pending final local and one market regulatory approval.

We've already received clearance from the EU. And as we've stated before, the experience from this transaction has left us with an appetite to do more elsewhere in our footprint, and we are actively preparing the next tranche for a transaction in early twenty twenty two.

06:54 Moving to digital transformation, we're also on track. Our IT transformation is about optimizing the IT platform for use and optimizing the strategic partners we select.

This quarter we've selected VMware as our strategic partner with Insight Solutions aiming to scale the nascent cloud infrastructure further, thereby gaining efficiencies. We've also selected PluralSight as our strategic partner to support our technology skill transformation.

07:22 This quarter, we reduced IT cost by sixty eight million krona, largely driven by the decommissioning of IT platforms, further utilization of near-shoring and our ongoing selection of strategic partners, which results in vendor consolidation. So far this year, we reduced IT cost by one hundred and seventy three million krona.

07:41 From a KPI perspective, we continue to see positive momentum in our digital transformation of products and processes, and year-to-date, we shut down more than a hundred legacy system and fifty product lines leaving us well on track to remove up to eight percent of our existing products by twenty twenty five. 07:59 Amongst our people and our workforce planning, we are on track to deliver the one thousand FTE, FTC reduction commitment and five fifty FTEs have already exited the company so far this year and we've reduced the number of consultants by around two hundred despite increasing consultants for a short term basis in our Swedish market.

08:20 And in our free to air channels, we are transitioning towards offering our advertisers, a higher value, where addressable sale of customer target by our digital platform and building our inventory and ad tech platform accordingly. In the quarter, we saw an all-time high digital consumption, which led to digital ad revenue growing twenty four percent.

08:41 On delivering sustainably, the transformation of Telia towards consistent and sustainable growth is progressing as planned. We are on track to deliver on the financial ambitions we have set out both for this year, as well for the midterm and long term, and we're building the foundation that will enable that.

This is despite some headwinds that we faced this year, such as clearly the development in Finland. 09:04 Cash generation to enable attractive shareholder remuneration remains strong and our balance sheet is very strong looking at the end of the year and into twenty twenty two.

As you know, we note sustainability is thoroughly integrated into our business strategy to both inform and strengthen execution, and looking at the progress we've made in the quarter, I'd like to highlight a few things. 09:14 First, we've been awarded the Gold level recognition, top five percent among the seventy five thousand companies globally for our sustainability achievements by Ecovadis, the world's largest provider of business sustainability ratings.

And that's for our combined work across environment, labor rights, ethics and sustainable procurement. 09:46 Secondly, having already hit zero carbon in our own footprint, we're making good progress on emission tracking of our total supply chain.

Looking at the total emission levels in our entire value chain, the supply chain represents eight five percent, and as such we very happy to see that our effort to make our suppliers set science based target has yielded results at seven out of two of our largest CO2 emitters have either set or committed to set such targets. 10:16 Thirdly, our monitoring suggest consumers ranked us number one and number two in all our markets when asked about Telia's association with strong privacy measures.

And finally, I'd also like to refer back to the data insights on IoT deals I talked about earlier. These are packaged example of how we can innovate around our core, keep creating products that are good for our customers and good for society.

10:40 On the back of Crowd Insights, which clearly was a big enabler to -- to governments during the pandemic, we've just launched travel emission insight, where we enable municipalities to instantly get a view over the emissions generated from travel within a certain geographic area, and we're in time provide solutions on how to reduce emissions and the tracking of them. Our strength in IoT will clearly benefit us, as 5G industrial use cases develop providing us with further opportunity to monetize our 5G investments smarter than anyone else can in the region.

11:15 Now to the market, and starting with Sweden, where it's great to see a return to growth. Despite the continued legacy headwinds, you can see here service revenue actually were back to growth for the first time in almost six years.

Yes, the increase is small, but it's broad based and it's driven by both mobile and fixed and by both consumer and enterprise. All sub-segments grew this quarter, except interconnect and pure legacy segments.

11:44 More importantly, you can see our underlying service revenue excluding legacy and roaming grew by three point five percent, the strongest rate since we started calculated underlying in a -- revenue in this way. 11:54 The Enterprise segment grew by one percent with positive growth in mobile and all, but one customer segment grew mid-single digits, with only SME declining low single digits, but relatively stable to prior quarters despite us continuing to carry a premium because of our quality position versus competition.

12:15 In consumer, TV revenues grew at a healthy ten percent helped by strong sports content, fiber grew twelve percent and mobile growing one percent. Our cost base increased slightly, as it was impacted by sixty million of pension payments, mostly non-cash, so underlying EBITDA delivered a small growth in the quarter, if you also exclude last year's one-offs.

12:37 Moving to KPIs, the performance is solid with increases in mobile, broadband and TV customer bases, as well as in ARPUs. In mobile, we have positive net adds in both consumer and business with a slightly improved ARPU versus last year, mainly as a consequence of increased value added service usage similar to the second quarter.

We did see a slight increase in churns within the consumer segment due to the price increases taken on share plans, but this is compensated by lower B2B churn returning to the lower levels after the loss of a large public contract, which had a negative churn impact in Q1 and Q2. 13:14 Broadband net adds returned to growth this quarter, as the growth in fiber more than offset the copper decline, even after adjusting for a small one-time adjustment to the base.

And the fiber growth was generated both within our own network, as well as within open city network. 13:30 Likewise, the TV customer base continues to grow by six percent year-on-year and ARPUs for both broadband and TV grew as well by three percent and four percent, respectively.

Encouragingly, these strong trends are supported by attractive sports content, as we increasingly become the aggregator and home of entertainment with a wide range of entertainment both from C More, from Viaplay, and now as of September adding Champions League. 13:57 Moving to Finland continued to be tough -- a tough market for us, but the revenue did improve sequentially and its nearing stability around the three billion krona level per quarter.

Both the consumer and business segments were largely stable on revenues on a like-for-like basis, supported by 5G and the start of the sports season on TV. 14:19 TV revenue grew by a healthy six point five six point five percent and mobile revenue was stable, and our B2B datacom business started to growth for the first time in over two years.

We did, however, see declines in our legacy fixed broadband and telephony products. 14:33 In an overall tough environment though, there are some bright spots.

We're seeing TV growing positively as an access to content products. 5G continues to come with an uplift and ARPU of more than three euros in consumer and the premium is even larger for enterprise.

And with the 5G customer base just shy of a one hundred and fifty thousand subs by the end of the quarter, we're continuing to roll out and upgrade 5G at pace. Beyond the revenue challenges, we did have some increased pension cost impacting EBITDA resulting in a four point five percent decline.

15:06 From a KPI perspective, the mobile subscriber base is growing, but it is driven by enterprise, where we had customers in the public sector, although a lower ARPU, which dilutes the overall ARPU. Positively, churn has continued to reduce, and it is looking like 5G could help us sustain this positive trend on churn.

15:27 Now just to give you an update on our turnaround efforts, they are very much focused on a value versus volume commercial strategy alongside structural cost takeout. Specifically, we are restoring our brand and network perception to improve value for money perception and the early signs are positive.

Secondly, we're expanding 5G pop coverage, increasing our potential to migrate more customers to 5G. And when we combine 5G, the content from C More we see much improved consideration and reduced churn.

15:58 Third, we are shifting to our own channel by exiting expensive third party channels that encourage churns. And fourth, we're shifting sales incentive to a value versus volume focused incentive scheme and have stopped our historical practice of pursuing subsiding costs.

And finally, we are in a process to restructure our workforce to be finalized during quarter four. 16:22 In summary, we now have a plan and we're executing on it.

Yet, it will take a few more quarters, but we're very confident that the turnaround will come and it will have a material impact going forward. 16:34 Moving to Norway, service revenues are reverting to positive territory again, despite they were still impacted by the ICE National roaming agreement, although, as you can see is sequentially lower this quarter at fifty five million.

Underlying momentum has continued to improve with the enterprise segment growing a very healthy three point four percent pace, driven by mobile and the consumer segment now growing two point three percent, driven by both mobile and broadband. 17:02 The stability in our consumer customer base, we're aiming for this growth to continue as we have now implemented speed based pricing in our premium unlimited offerings under Telia X.

And at the same time, we continue to see great strength in the enterprise segment, both through Phonero and Telia. New customers such as the Norwegian Postal Service will start to migrate over to us during the next few quarters.

17:25 Churn in both segments have been broadly stable in the quarter and ARPU is growing due to value added services more specifically insurance, files represented just over half of the year-on-year ARPU development that you're seeing here. And OpEx declined by three point six percent, which helped, but could not fully mitigate the lower revenue from the wholesale contract leading to a small EBITDA decline.

17:48 Moving to what we call our LED market, the trends remain very strong in our Baltic operations. In Lithuania, service revenue growth accelerated to eight point one percent with EBITDA following and growing nine point three percent.

This quarter, our mobile trends particularly standout growing above ten percent, but this is also stronger than in prior quarters growing just shy of seven percent. The consumer segment remains the main revenue driver, but were also seeing enterprise -- the enterprise segment growing too.

18:19 In Estonia, both service revenue and EBITDA grew by six percent. And just as in Lithuania, the consumer segment was the main driver, but the enterprise segment is not far behind and both segments showing growth in both mobile and fixed services.

18:34 As we said in Q2, that Danish service revenue is stabilizing and even turn to a growth of two point two percent in the quarter. However, this was driven by interconnect and roaming, which came with limited or no gross margins.

To drive further improvement and sustainable Danish revenue and EBITDA growth, we have changed management during the quarter, where [indiscernible], a Telco inspector, who is being advising us on our strategy since the time of the year and someone I have known for many years, who is stepping in as acting CEO until we have a permanent solution in place. The costs are impacted by a non-cash balance sheet clean out, and excluding it, EBITDA is broadly unchanged year-on-year.

19:15 And finally, to TV and Media, service revenue grew fifteen point four percent from both growth in advertising and pay. Advertising continued to recover, albeit slower pace than previous quarter, as the recovery did already start in Q3 last year at twelve percent, but driven in no small part by a twenty four percent increase in digital ad revenue.

19:39 Pay grew by over twenty percent helped by stronger sports content. And looking back over twenty four months, revenue in TV and Media is almost back to pre-pandemic levels.

As you know and expected, content costs are increasing with both the Euros and Champions League affecting the quarter, which clearly affects our EBITDA. And content cost will ramp up further in the fourth quarter, as we take a full quarter of Champions League and incur the usual fourth quarter cyclical jump in content.

20:07 Our C More subscriber base grew twenty percent in both Sweden and Finland, and in addition, there was a transfer of sixty thousand customers from Finland to the TV and Media unit, so that we ended at five sixty and two seventy five thousand customers, respectively. 20:22 I'm sure you are all curious about Champions League, it's early days, but we have indeed, beside the already mentioned positive impact on Swedish TV subscribers, a positive subscriber uptake on the back of it recovering the outflow of sports subscribers after the Euro, which ended at the beginning of the quarter.

20:40 All-in-all sports related subscriptions have increased by forty percent year-on-year. These movements are however masked by the fluctuations of the lower ARPU in non-sport subscriber base, but despite that, revenue is growing positively.

We have now marked into -- embarked into a multi-year feed of a stronger content offering, and we'll be monitoring the different aspects in which Champions League impacts our business, both on IPTV, on streaming, but more importantly, on the attachment to our access product that ultimately drive convergence and customer lifetime value. 21:16 So now, PC, I'm going to hand over to you for the financials.

21:19 21:19 Thank you, Allison. Let me quickly summarize the financials, starting with service revenue.

At the right, we see the growth of two point three percent broken down by unit and market. And as mentioned we have growth in all the markets of Finland driven by growth in all key product categories.

21:39 On the left hand side, you see the same growth split by segment, and as you can see, also covered by Allison, we have a solid growth momentum, both in our consumer segment and also in our enterprise segment in the third quarter. Year-to-date after nine months behind us, we have recorded a service revenue growth of one point zero percent and are well on track to deliver our outlook for the year of flat to slight growth.

22:08 If we move to OpEx, starting from the left, versus last year total OpEx increased by one point one percent or sixty one million. In Q3 this year, we have more than two hundred million of structural cost efficiencies, mainly driven by the seventy fifty few resources combined with significant IT related savings.

However, in the quarter, this is more than offset by pension phasing effects, combined with inflationary pressure mainly from salary inflation. 22:42 Moving to the right and take a look at cost development by category, resource costs increased by one thirty four million versus last year.

The reduction of seven fifty resources has given us more than one hundred million of savings in the quarter with resource reductions more or less in all units and functions. 23:00 This is, however, this quarter offset by three main factors; first, the mentioned effect from pension phasing impacting the quarter more than one hundred million with a significant part of this being the effect relating to last year; second, salary inflation effect of around one hundred million, slightly higher than the regular quarterly average; and thirdly, also from the temporary investment we have done in Sweden customer service to protect and develop our customer experience.

23:30 Marketing costs are flat in the quarter with some increased activity level is offset by marketing efficiency in many of our markets. Going forward, we expect to see more efficiencies from our transformation program on marketing costs, but of course, the reported cost will vary depending on the quarterly activity level.

23:51 Within other OpEx, we have solid reduction driven by the mentioned sixty eight million lower IT costs from the transformation initiatives related to near-shoring, vendor consolidation, system decommissioning, and increased use of common products and platforms. Year-to-date we are down zero point seven percent or one thirty five million, in line with our plan.

24:16 With the reduction of seven fifty resources after nine months, we are well on track to reduce total resources by one thousand during this year. This will both secure a good result for this year, but more importantly, secure strong run rate going into twenty twenty two.

And to summarize, we are well on track versus our plan and have good visibility how to reduce OpEx of two billion by twenty twenty three and four billion by twenty twenty five. 24:44 If we move to EBITDA, at the right-hand side, you can see the total EBITDA decline of one point nine percent, broken down by market and unit, where the main reason for the decline is, as mentioned, Sweden impacted by pension phasing, Finland hurt by lower revenues and pension and TV and Media impacted by increased content cost offsetting the service revenue growth.

25:10 After nine months behind us, we have recorded an EBITDA growth of zero point eight percent. If we look at the full year, we expect to end twenty twenty one at the lower end of the flat to slight growth outlook range.

The main reasons for this are mainly due to the lower than expected performance in Finland, combined with effect from a slower rebound of the non-EU roaming. As Allison mentioned, we see positive signs in Finland already, and the global roaming is hopefully starting to return a bit during first half of next year.

25:48 On CapEx, starting from the right, as expected we see an increase in mobile network activities related to the ongoing mobile network modernization and 5G roll out in all our markets. This investments are bit down due to less fiber related investment in Sweden, while we see a slight increase in the quarter within product development and IT due to some key transformation related investment in Q3.

26:14 As we can see on the left side, total cash CapEx on a rolling twelve month basis has increased to thirteen point six billion or fifteen point four percent of net sale. Cash CapEx will increase further in Q4 both from higher planned activity levels, but also from the delayed effect of completed activities due to our long payment terms.

26:38 It's worth to note that the ongoing global supply chain situation is starting to impact our business, and therefore, could have some delay effect on the CapEx levels going forward. However, so far we have been able to mitigate this relatively well.

All-in-all, we are on track with our investments agenda and given the expected increase in cash CapEx in Q4, we expect to land around fifteen billion in cash CapEx in the middle of the targeted range. 27:10 Moving to cash flow, starting from the right, we have reported a total cash flow two point nine billion in the quarter down from last year.

This is a combined effect of lower EBITDA, slightly higher CapEx, and a slight negative contribution of working capital in the quarter. 27:28 On a rolling twelve month basis, we see a solid cash flow at eleven point nine billion, somewhat reduced from last quarter.

And excluding contributional working capital, we are on a rolling twelve month basis at seven point five billion, in line with our expectations. 27:45 After nine months, we now have generated a solid nine billion of cash flow, well above the needed eight point two billion to cover the minimum dividend commitment, as we are on track from twenty twenty two onwards to cover the minimum dividend commitment with cash flow excluding working capital contribution.

28:03 On net debt and leverage, as mentioned, we have reduced our leverage by almost three billion, driven by operation. If we take the Q3 results and add the expected proceeds from the tower transaction, pro forma leverage is at one point nine nine.

But keep in mind that we have four point one billion to be paid out in dividend during Q4. We expect by end of twenty twenty one that this will put us at the lower end of the targeted range.

28:32 On outlook for twenty twenty one after nine months of the year behind us, and with our finances well within the targeted range, we reiterate the outlook for the year. As mentioned, we expect EBITDA for the year to be at the lower end of the outlook range with cash CapEx expect to be in the middle of the range around fifteen billion.

On the mid-term ambition, given the top -- solid top line momentum we see, the ramp up of the structural cost agenda and a clear plans on how to turnaround our low performing unit, we are well on track on our mid-term ambition. 29:08 And with that, I hand back to you, Allison, to summarize the presentation before we go into Q&A.

29:13 Thanks, PC. So to basically summarize the quarter, I'd say we are delivering on our plan.

We're proud our commercial position took a step forward in the quarter with the expanded next generation networks both fiber and 5G and new enhanced content and digital services being added. The momentum in all markets and all key product segment are strong, including in our largest market, Sweden, where, as I've said, we've seen service revenue acceleration for several quarters now and getting closer to that sustainable and consistency EBITDA growth too.

29:48 Our transformation is building the foundations for sustained structural customer experience and cost advantage, which is helping to mitigate some, but not all of the recent headwind. Furthermore, our ambition to crystallize value from our assets are on track with the tower transaction expected to close next quarter as previously communicated and more will follow.

But the tower transaction already announced, it's sitting already at the lower end of our leverage range as we move into next year. 30:16 Our outlook were flat to double-digit growth in both revenue and EBITDA remains.

And as PC just said, we will be at the lower end of that range on EBITDA this year and CapEx will be in the mid part of that range. So we're finally on our way out of the pandemic and moving forward with even more confidence on our transformation journey to reinvent a better Telia.

30:37 We do believe that the pandemic has strengthened our role in society and cemented the need for ubiquitous connectivity seamlessly combined with the best digital services provided by the most trusted provider. And as a result, we're really looking forward to playing an ever more important role in our customers lives in the post-pandemic world and for improved market and structural position to generate consistently attractive shareholder returns for our owners.

31:03 Let's go to questions.

31:05 Operator, can we have the first question, please.

31:16 Yeah. Hi, guys.

Thanks for taking the questions. Maybe a question on TV and Media and some of the puts and takes for twenty twenty two.

I believe Allison, you said, I think it was at the 2Q, you're happy with consensus around nine hundred million for EBITDA for twenty twenty one. I mean, that would imply sort of quite low for the fourth quarter, I guess that's your point around the Champions League.

Has TV and Media got back to its old run rate yet. I can't -- what are the puts and takes in terms of costs and revenues for next year can EBITDA grow in that division?

Probably linked to that is, will the full benefit from the Champions League be seen mostly in TV and Media or should we see some come through in the Opcos like in Sweden as well? Thank you.

32:03 Thank you, Maurice. So yes, we've been saying, and I think we definitely said last quarter EBITDA shouldn't be much more than nine hundred million for the year, and that's basically what we've been guiding to this year, this morning.

The different puts and takes are clearly we are very happy with the return of the ad business and we actually all -- as I said, they are always back to twenty nineteen levels, when you look at Q3. So the return of the IP is very positive and even more positive with a bigger mix moving into digital ad revenues now, where you get more of a premium and clearly that's the future.

So good progress there. 32:54 In terms of EBITDA development, so we'll have to next year consume the full -- a full year of Champions League, which we've not had this year, so that will clearly have an impact on TV and Media EBITDA next year.

But where do we expect benefits to accrue? We expect benefits to continue to accrue on C More, we expect benefits to continue to accrue on the Telia IPTV, which -- where we're actually really delighted of how that's developing at the moment.

33:23 And what we will -- we will also continue to expect to accrue is improved convergence and reduced churn, as we see attachment to our access products. And that comes over time because some of the subscribers that want to come to us to get Telia after that locked into contracts with other providers that will diminish over time as well.

33:46 So I expect next year because we'll be consuming a whole year of the cost of Champions League that you won't see much EBITDA development in the TV Media sector, but you will start to see a coming through in our core Swedish and Finnish telco businesses [Multiple Speakers].

34:06 Great. Very clear.

Thank you, Allison.

34:09 Yeah.

34:10 Thank you, Maurice.

34:12 And I think, Maurice, if you see in Sweden, in the quarter, twelve percent fiber development, mobile still growing one percent , TV up ten percent , there is clearly an impact there of everything we're doing, not just Champions League, and I am really hoping for more of that next year, particularly with reducing legacy headwinds.

34:33 Great. Thank you.

34:35 You almost got two answers there, Maurice, on one question. That's a new one.

Next question please.

34:49 Hi, good morning and thank you for the presentation. I guess, Finland is a big topic.

So if I can have a couple of questions there please. So first of all, you're now saying that you're targeting the turnaround in twenty twenty two.

Is there any kind of more specific timing with respect to that? 35:08 Second, if you could remind us of some of the progress you've made and what's left to do from your point of view before the business starts to perform as you wish or at least in line with the market.

And then finally, and I guess most importantly, regardless of your specific issues in Finland, is there some kind of -- rather can you kind of rule out any kind of pricing disruption associated with 5G and consumer that would be a kind of peg to turn this business around? And specifically I'm asking because some of your peers are kind of pointing to Telia specifically in the enterprise segment being a bit more aggressive.

So is there something that you can rule out in the consumer segment? Thank you.

35:51 Hi, Ondrej. Were you focused on Finland there or overall?

It was Finland or am I misunderstanding?

35:57 That's a Finnish specific, yeah, all three of them. Yeah.

Thank you.

35:59 Yes. Very clearly, yes, we have a multi-pronged turnaround in Finland planned.

And just to be clear, we don't need to take market share in Finland to turn around this business. We just need to grow at the same rate as the market leader, monetize 5G at the same rate as them and that alongside the structural interventions that we're making on our cost base, on our channels, and on our go-to-market will enable us to grow at the same way as a lease.

So it's not a value their volume-focused strategy. 36:43 What we've discovered is what peeled the onion in Finland is both by dependency on third-party channels that encourage churn and our own sales incentive model that we're just pursuing subs at any cost, we were being irrational in the consumer segment.

We are stopping that as of now, so that we -- and we are seeing good traction, as were starting to shift the perception of the brand on the back of 5G roll out. We're seeing good traction to 5G and the churn of 5G is lower.

So it's very much a value versus volume focused strategy in the consumer segment. 37:22 In the enterprise segment, we've seen return to growth in our core datacom business and just as we are seeing in Sweden, our breadth of services beyond connectivity are really becoming attractive to the large public and key account sector.

We signed -- as I said we've signed the biggest enterprise mobile network deal in the region in Finland during the last quarter really attaching IoT services. And those kinds of services helps us minimize the ARPU dilution that can happen when you have irrational players in the market and help us above [ph] market share.

We think we are holding market share in the enterprise segment and clearly that's our -- that's our intention going forward as well. Does that answer your question on Finland?

38:14 Yes. Thank you.

And maybe just if you could be a bit more specific in terms of when exactly in twenty twenty two you would expect the turnaround to occur?

38:22 I think it's more likely the second half than the first half, Ondrej to be honest. We need a few more quarters because as we pull out third party external retail and move to value versus volume, that obviously has an impact.

And as I said, we are actively talking to the unions regarding changes and restructuring in the workforce. That will happen starting Q4.

38:49 That's very clear. Thank you.

38:51 Thank you, Ondrej. As a reminder, please limit yourself to one question each, otherwise we won't be able to capture you all.

Next question, please.

39:08 Thanks, Andreas, and good morning, everyone. I'll just stick to the one question regarding the comments that you made earlier around towers and fiber, just specifically interested on your thoughts on the assets in Sweden.

You obviously got quite a high price to this set of towers in Norway and Finland, so the market is clearly quite hot. But maybe you can just talk about some of the potential disadvantage you could see from any deal or doing any deal in Sweden as well, please?

Thank you.

39:37 Clearly, don't see any disadvantage in doing Tower deal at all when we keep majority control and working with a partner such as Brookfield and Alecta, Alecta that are very long term in nature and Brookfield bringing real competent, being the biggest owner and operator of towers in the world. 39:56 So as we said at our Capital Markets Day, we have just over nine thousand concrete and steel towers.

We have three times that if you include all of the sites. Norway and Finland accounted for just around half of our tower footprint and Sweden make up a chunk of the balance of that, not all of it, but a chunk of it.

And we -- as I said, we are proactively preparing the next tranche for a similar transaction and we'd love to get similar multiples, and we hope to be able to do something in early twenty twenty two there. 40:34 In terms of fiber, we have a great footprint of fiber already, but clearly, we have some white spaces and we have some opportunities, particularly where you see like the Swedish government really keen to co-invest in rural fiber.

So we will clearly be looking at where we can partner with others to fill out our white space of fiber footprint in the coming quarters and years as well. And the fact there's so much interest in that area, we don't need to do it all ourselves now, if we can find great partners who have very long-term view and will be a good partners for us in our fiber strategy.

So yes, lots more to do in the infrastructure area and excited about the potential there.

41:22 All right. Thanks, Allison.

41:24 Thanks a lot, Terence. May we have the next question?

41:34 Yes, hello. I have a question regarding the B2B market in Sweden.

Tele2 alluded to that there has been some stabilization in the pricing of -- on the corporate side in Sweden, and I just wonder if you agreed to this picture so that the B2B market could see a good recovery going forward. Thank you.

42:04 Yes, I would agree to that position. We saw a relatively stable quarter.

And as I said, we actually saw low to mid-single digit growth in all segments apart from SME. The SME segment still remains very competitive and a key competitor is being quite aggressive at times.

There's always one that's more aggressive any one quarter, but I'd say in totality, it's pretty stable and even in the SME segment -- sector where we carry a real premium on ARPU, we are seeing stability with low single digit declines, which has been very consistent in the last couple of quarters. So yeah, I'd say it was a fairly stable quarter from a competitive point of view in the enterprise segment.

42:51 Okay. Thank you.

42:51 Very good, Stefan. Thanks a lot.

Next question, please.

43:03 Thank you very much. And good morning, everyone.

I had two questions, but on Andreas' strict instructions, I'll speak to the second one. Allison, obviously OpEx reductions is an important part of your three year to five year plan going forward.

We seem to be entering an environment with an accelerating and increasing inflation. Could you talk a bit about how and where you see that impacting Telia and how you see the opportunities for mitigating that including passing on some of those costs to your customers.

Any color here would be appreciated on your sort of medium term view? Thank you.

43:42 Yes. So clearly, we have built in -- we've built in salary inflation into our plans, so that was always built in over the three year to five year period and that two billion is a net ambition.

We are seeing a bit of inflationary pressure on energy. We don't -- we hedge the majority, but clearly with spot pricing going up, we're seeing a little bit of an impact there.

But we try to pass that on as much as possible, for example, our data centers, we pass on any inflationary pressure there. 44:15 And clearly, we see continued inflation -- and where we see inflationary pressure on devices and equipment we pass that on.

And we will be monitoring the situation over the coming months as we create our plan for twenty twenty two onwards. We're looking at if there is going to be inflationary pressure what more can we do from a pricing point of view, but at this point, all manageable.

44:39 And based on our strategy to consolidate the number of products, platforms and partners that we have, we will use that strategy to leverage scale and mitigate some of the headwinds as well. And that's something we can do because of the scale of the business we have throughout the region and because we started with a very fragmented set of partners as well and that's not just helping us from a cost mitigation point of view, it's also helping us from a supply point of view at the moment.

And I'm very happy that our network providers are giving us all the support we need, so that we can keep our 5G roll out on track despite clearly the supply chain pressures, which at the moment, we just need to get much more forward-looking forecast to our suppliers. [Multiple Speakers].

45:33 Thank you, Allison.

45:35 Thanks, PK. I know your first question was why we only highlighted Man United, so congrats on the jump win in the last as well.

45:43 Yeah, but it'll be normal, Andreas.

45:45 Yes, I know. I know.

It's birthplace tonight by the way. Next question, operator?

46:00 Hi, guys. Thank you for the opportunity.

I wanted to go back to the question of Finland turnaround. So I appreciate it's work in progress and require a few more quarters, and thank you for earlier comments Allison on what needs to be done.

Do you think it does all come down to mostly the distribution and the go-to-market strategy. And when I look at your results, it looks like you are building up your 5G base, so there's clearly some up-selling going on, you're not really losing market share, your postpaid customer base has been growing for a number of quarters.

So the ARPU is not really firing up and can that be down to maybe back end systems? And how you manage your existing customer base and things like data analytics, smart targeting, something along those lines or do you think it's more of a distribution and vending question, just additional color at that would be helpful?

Thank you very much.

47:04 Well, its market position, its network position, ran position on the back of the -- and then distribution, go-to-market and much more modern day tools to drive business. So it’s kind of all of that.

But -- but you're right, if Telia can get one Euro uplift from 5G, there is no reason that we can't do that considering the market position we have as well if we are changing the perception of the network, which we are, we have proof point. If we're changing the perception of the brand still -- still to do work on the brand.

But you know our CMO, who started on fixing Denmark, he has done Sweden, he is now off to Finland now, that is work in progress. 47:51 But all of the -- what we are doing to build a data analytics capability for the Group is being prioritized for Finland at the moment.

And so the more we move into our own channels and more we will be able to use, the customer, we're calling our customer value management boost we're really pushing ahead in Finland first for the whole group to see how that can really improve cross-sell, up-sell and convergence in general. 48:20 So it's a distribution and go-to-market also focus we are and that's more -- we're getting rid of some distractions around the edges that have been built up, whether it be eSports or gaming in the consumer segment or in the enterprise segment, we're getting alarm businesses and other smaller periphery businesses that were built up over the year.

So focus, distribution, go-to-market, analytics and then really going after the workforce and the cost structure.

48:55 Got it. Thank you very much.

By the way Elisa is explaining that it's as much as three years or 4, 5G uplift. So plenty -- plenty to play for.

49:02 Yes. And that's -- that's what we are getting, we are getting three in the consumer and more than three in enterprise.

But if you look at Elisa's ARPU over the last year, it's gone up by one, so that's what I'm referring to. They have probably go at least double the 5G customers that we have, and they have already got an extra one euro on their ARPU, but clearly wasn't much more to go after.

But even one euro a year from now makes a big difference and we're going after structural cost interventions as well.

49:39 Thank you very much. Allison, thank you.

49:39 Thank you, Roman.

49:40 Thanks a lot, Roman. And next question, please.

49:48 Thanks very much. I have slightly more technical question on the pension -- area of pension.

It has been a source of volatility for the quarters now in three -- in the third quarter again. So three sub questions in particular maybe to address the first one is, what is the nature of this -- this what you call phasing.

It sounds to me that this is actually more like one-off, but could you explain what you mean here by phasing? And could you talk about pension reimbursement to be expected in the fourth quarter, as in the prior two -- years in the fourth quarter, whether that's coming again and then, what amount whether that's possible to comment on that?

50:25 And then, in the IR email this morning that there is sort of a comment that, that you're aiming to improve the accounting. Could you just comment on what would improve and how would -- how it might improve?

Thank you.

50:39 Yes. I'll try to address those questions.

So just to remind last year, we reported an OpEx reduction of one eight million, where two-thirds of that was non-structural and phasing. So a big part of what we are reporting this year is relating to last year.

And last year, there was some different kind of technical effects hitting in a positive way the third quarter. 51:02 On top of that we also have some, as we mentioned some phasing effects from this year.

And what is coming from is there are some, let's say, one-time effect, which is hitting this quarter, that's kind of longed through other quarters this year and last year. And on the improvement, I mean, what we are doing now, we have changed the way we accrue for pension to avoid having this noise on the numbers and results of that is we kind of getting a double costs because we are carrying the one-time charge, in addition, that we're not doing a more proper accrual on the pension cost and more specifically is related to salary inflation and also on bonuses.

So that's very technical part. So overall, these kind of effect mostly belong to Q3, where a big part of it is Q3 last year, and there are some effects for Q3 this year.

51:53 On your second question around reimbursement, we are looking into what room we have for pension reimbursement. We're not going to guide anything more on that at this point, and then I think I covered the third question in my first answer.

52:08 Yes, you could say it's a one-off because it was a big negative last year and a big positive this year, but moving forward, we're trying to kind of smooth this out and there is no bad news in there.

52:21 Got it. Thank you very much.

52:23 Thank you, Ulrich. I think we have four questions left.

So let's speed up and we can fit all in. Next question please.

52:37 Yeah. Good morning folks.

I hope you can hear me okay. Thanks for taking the question.

Just a question on balance sheet and return on capital. Folks, the balance sheet looks in very good shape.

You've got the dividend clearly coming out in Q2 -- Q4 we understand that, but still be in good shape, the tariff goes close. And can you just update us me thinking on returning sort of excess capital through buybacks to shareholders and then maybe the timing and the sort of the puts and takes on that and why you wouldn't return excess capital, I guess, would -- if you weren't to do that with full-year results, would that be because you see your opportunities elsewhere to reinvest, because maybe some concerns about the outlook.

How should we read any decisions not to return excess capital? Thanks a lot.

53:16 Well, I think our capital allocation policy is very clear for the year. It's a minimum of two knona per share dividend and we want that through, and in line with our EBITDA going forward.

You're right -- right at the low end of the two knona to two point five knona range. We're still in the two knona to two point five knona range.

So whilst we're in that, I would expect the Board to change anything, but clearly if we were to do anymore, for example, tower transactions that would obviously have to trigger the Board to look at an excess capital return, and I'm sure they would lay-off the pros and cons of buybacks versus extraordinary dividend at that time. But that's not really a dialog for today, but we do have a very shareholder friendly Chairman and there is no incentive for us to go below the two knona to two point five knona range.

54:09 And in terms of -- we've laid out our CapEx investments for the coming years. We don't see any immediate major acquisition needs.

So I think, if anything -- if we were to have a question regarding the B2B market in Sweden. Tele2 alluded to they would clearly -- our board would consider a return to shareholders.

54:30 And still very open minded, whether that's through buybacks, through special dividends at this stage?

54:35 Yeah, I think that's something for the Board to really discuss alongside our -- you know, our mid-term outlook when we get together in January.

54:43 Okay, great. Thank you.

54:45 That we will consult with shareholders as well before that.

54:49 Thanks a lot, Steve. Next question please.

54:57 Hello. Thank you very much for taking the questions.

Just so I have a question on the -- how we think about your mid-term EBITDA trajectory. As I think today's guidance change suggest that there will be probably about seven percent , eight percent EBITDA growth required over the next two years.

And during the call, you made a comment about higher content costs and also Finland might not return to growth until the second half of twenty twenty two. So I was wondering should we think about the delivery of your three year EBITDA growth target to be more of a back end loaded, is that's the right way to think about it?

Thank you.

55:43 No. We are very comfortable with our low to mid-single digit outlook that we gave for the period and some of that we are starting the Finland turnaround that will start to benefit us next year.

Roaming will start to return, and we'll start to get more and more benefit from the transformation program. So very much on track.

And we stick to our guidance and are confident in that.

56:10 Okay. That's very clear.

Thank you.

56:12 Thank you, Siyi. May we have the next question, please.

56:21 Yes. Good morning, and thanks for taking the question.

I'm sorry to come back to Finland again. I think it's fair to say that past management teams have also talked about going ahead with the value versus volume approach in Finland.

I guess, my question is what is different this time, is it just that under new management you'll be more sort of discipline in your approach in Finland or is it simply that will be 5G sort of opportunity you see a chance to essentially grow service revenues by being sort of more rational on competition? Thanks.

56:56 Yes. I think the past management teams have never been there long enough to actually deliver any discipline or focus.

So what's different this time, yeah, we've got the opportunity of 5G, and we've got the opportunity of content. And I really do believe we will a management team that's really getting to the root of the problem in Finland and starting to turn that around.

And we'll certainly be able to leverage the Group transformation towards common product, platforms processes and partner and that's what gives me the confidence. PC has been around a little bit longer than me.

Do you want to comment, PC?

57:37 No. It also goes in the focus of execution right, so build the capabilities and ensure we actually execute.

The distraction itself it's not rocket science, that is actually making sure that we deliver on it.

57:48 And we have a much more robust integrated strategy planning process now that cascades all the way down to country and functional and something that didn't exist in Telia before.

58:01 Thank you very much.

58:02 Thank you, Abhilash. We have one more question in line.

So I think we take that and then we end.

58:08 And this -- and by the way, this is the last ever question for Andreas, the Head of IR of Telia on his 20th set of results. So make a special question.

58:26 Wow, my pleasure. There's actually a bit of a follow-up to that last one if I could.

But I wanted to ask a little bit about the balance between group level policies and how they see down into the countries. So one thing specifically like pricing and the balance of gross adds and churn, how much of that is really coming from the center and implemented locally?

What is locally focused and is then monitored from the center, because a lot of the conversations, I think, we're having around Finland, in particular, over the last few quarters seems to suggest maybe oversight wasn't quite where it could have been. And I just really like to hear how that's changed basically?

59:07 Yes. So, great question.

We -- the local market own their go-to-market strategy, which includes pricing, growth adds, go-to-market, everything, that they are overseen by group. And we -- we set the targets and the ambitions.

Rainer equips the countries with the product platforms and partners they need to take the market. And then we -- and then by getting the transparency on the plans from the countries at group level were able to scrutinize challenge support and have much better understanding of the feasibility of the plan relative to the target that we're setting.

So it's a real mix of top-down and bottom-up and a collective ownership for the plan in the end between group and local markets.

60:06 Okay. Thank you, Allison.

Good luck, Andreas.

60:08 Thank you. On that note, I would like to end the call today by saying, thank you, Andreas for twenty fantastic quarters.

I know they've not always being good. You did yet turnaround Finland, but we wish you all the best in your future career.

You're going back to the dark side, but I know you'll put a dial on it.

60:31 Yeah. And I look forward to what Finland turnaround from the dark side.

Thanks a lot everyone. That concludes the call for the Q3 report.

Have a very nice day and reach out if there is anything you want to ask more. Eric is dying to take calls.

And as said, have a nice day. Take care.