Mobile Strategy. Head of Global Coordination - Ragnar H. Korsæth

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1 Mobile Strategy Head of Global Coordination - Ragnar H. Korsæth

2 Continued Growth in Revenues and Cash Flow Strengthen local position and competitiveness Targeting the world s next billion mobile subscribers Selective international expansion

3 Internationalisation of Telenor Expansion Strategy Licence Hunting Control or Exit Selective Expansion Value Creation Strategy Network and Service Rollout Active Ownership Global Coordination

4 GrameenPhone Performance Subscriptions/Market share ARPU MoU/APPM ,8 62 % % 62 % 62 % 3,8 2,9 2, Q Q Q Revenues/EBITDA% EBITDA and CAPEX EBITDA CAPEX % 60 % 50 % All figures according to local currency figures are not according to same accounting principles and KPI definitions as EBITDA and CAPEX adjusted for change in accounting treatment of lease in 2005

5 Kyivstar Performance Subscriptions/Market share ARPU MoU/APPM % % 46 % 45 % 1,2 0,8 0,5 0, Q Q Q Revenues/EBITDA% EBITDA and CAPEX EBITDA CAPEX % 61 % 56 % All figures according to local currency figures are not according to same accounting principles and KPI definitions as

6 DiGi Performance Subscriptions/Market share ARPU MoU/APPM % 22 % 25 % 25 % 0,36 0,36 0,34 0, Q Q Q Revenues/EBITDA% EBITDA and CAPEX EBITDA CAPEX % 44 % 43 % All figures according to local currency figures are not according to same accounting principles and KPI definitions as

7 Mobile Norway Performance Subscriptions/Market share ARPU MoU/APPM % 56 % 56 % 56 % 176 1,8 1,8 1,7 1, Q Q Q Revenues/EBITDA% EBITDA and CAPEX EBITDA CAPEX 39 % 37 % 37 % All figures according to local currency figures are not according to same accounting principles and KPI definitions as

8 Continued Growth in Revenues and Cash Flow Strengthen local position and competitiveness Targeting the world s next billion mobile subscribers Selective international expansion

9 Telenor s Operating Model Market dynamics and responsiveness is local Operational decision making Control of value chain Production, marketing and service delivery Centralisation & Integration Global Coordination Stand-alone Operations Group standards Best practice sharing

10 Global Service Innovation Coordinated sharing of proven concepts Virtual service market place Common service delivery platform Innovation Centre in Malaysia

11 Investment Optimisation Telecom Equipment Prices Joint group procurement processes Aligning vendors on future low ARPU challenges Early adaptation of new technology Network Efficiency (Erlang per TRX) 4,5 5 Decreasing CAPEX per minute 2,4 3 3,

12 Continued Growth in Revenues and Cash Flow Strengthen local position and competitiveness Targeting the world s next billion mobile subscribers Selective international expansion

13 Strong Mobile Growth Potential Expected Subscription Growth by 2008 (million) 60 Current population footprint of 650 million Expect the total market to grow with ~130 million subscriptions by Russia Pakistan Bangladesh Ukraine Thailand Malaysia Hungary Source: Telenor estimates

14 The Next Billion Challenge The first billion subscriptions More than USD 25 ARPU The next billion subscriptions Less than USD 2 ARPU

15 How to Make Money on USD 2 ARPU

16 No Subscriber Acquisition Costs

17 No Customer Support

18 22:00 Example Hourly Traffic Profile (Traffic minutes per hour) 20:00 18:00 16:00 14:00 12:00 10:00 08:00 06:00 04:00 02:00 00:00 Monitor the Peak Hour

19 Extremely efficient distribution

20 From Scratch Cards to E-Refill

21 Vendor Revenue Share Model

22 Predicable Regulatory Regime

23 Continued Growth in Revenues and Cash Flow Strengthen local position and competitiveness Targeting the world s next billion mobile subscribers Selective international expansion

24 Selective Expansion Criterias Market size and penetration growth Political stability Regulatory environment Cultural fit Strong business case

25 Egypt Opportunity Subscriber development (000) Facts Population 2005 (millions) : 75 Penetration 2005 : 17% GDP/pop 2005 (USD) : 1380 GDP growth : 5% Mobinil Vodafone Strategic Rationale The MENA region has untapped potential Low penetration Large and fast growing market Utilize Telenor s greenfield expertise 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Market share (%) Mobinil Vodafone

26 Vietnam Opportunity Subscriber development (000) Facts Population 2005 (millions) : 84 Penetration 2005 : 10% GDP/pop 2005 (USD) : 616 GDP growth : 8% Strategic Rationale Within a core region Low penetration Large and fast growing market % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Vinaphone Mobifone Viettel S-fone Market share (%) Vinaphone Mobifone Viettel S-fone

27 Serbia Opportunity Mobtel/Mobi63 Subscriber development (000) 3500 Facts Population 2005 (millions)* : 7.5 Penetration 2005 : 65% GDP/pop 2005 (USD) : GDP growth ( ) : 5% Mobtel/Mobi63 M TS (TelekoM Srbija) * Excluding Montenegro and Kosovo Strategic Rationale Within a core region Synergies with Promonte and Pannon 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % Market share (%) Mobtel/Mobi63 MTS (Telekom Srbija)

28 Concluding Remarks Strengthen local position and competitiveness Targeting the world s next billion mobile subscribers Selective international expansion Continued profitable growth