Telenor Sweden s focus areas. Monetise on mobile data Strengthen fixed 3 play position Continue operational excellence improvement.

Transcription

1 Telenor Sweden Lars Åke Norling, CEO Telenor Sweden s focus areas Monetise on mobile data Strengthen fixed 3 play position Continue operational excellence improvement 1

2 Solid market positions in both mobile and fixed Consumer mobile Enterprise mobile Fixed broadband 1.6m subscribers 20 % revenue market share 0.7m subscribers 23 % revenue market share 0.5m subscribers 18 % revenue market share Telenor Telia 3 Tele2 Comhem The transformation of Telenor Sweden has made great improvements in key areas Operational excellence Brand Opex/sales 40% 36% 35% Flexibility Sales transformation Network transformation Limited supply 2

3 Stable financial development despite highly competitive market Revenue (SEK bn) EBITDA (SEK bn) and EBITDA margin Mobile Fixed % % 24% % LTM LTM Fixed decline in DSL and voice in line with rest of market Mobile revenue growth driven by smartphone penetration Cost savings and increased mobile contribution Financial development 2012 pressured by competition LTM = Last twelve months (Q311-Q212) Flattening underlying mobile ARPU SEK per month Handset subsidies removed and replaced by discount on subscription from Oct

4 The Swedish telecom market Significant shift from voice to data Regulatory pressure and uncertainty Intensified mobile competition in 2012 Stable total market revenues going forward Swedish telecom market (SEK bn)* Voice Data IC & Roaming Other (incl. Messaging and TV) *) Source: Swedish Post and Telecom Authority Swedish data consumption diverging from European average Fibre share of fixed broadband technologies Data usage per mobile subscription (Gb) 8 30% 6 20% 4 10% 2 0% Sweden Norway Denmark Norway Sweden Denmark Aggressive start by challenger Bredbandsbolaget Adopting fixed broadband behavior to mobile environment High Internet penetration High quality networks and high caps Streaming and HD 4

5 Thousands Capacity Tusener The data monetisation opportunity Unlimited demand Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 60% 50% 40% 30% 20% 10% 0% Tot small screen Smartphone % share of customer base excl MBB Limited supply Time Demand Supply Spectrum distribution 32% 17% 24% 27% Tre Telenor Tele2 Telia 4 main principles for monetising on mobile data Differentiate product portfolio Differentiate to create clear up-sell logic Differentiate on speed, volume and functionality Pay for data volume From unlimited unique selling point to fair usage policy to hard capping Charge extra for extended caps Pay for functionality Tethering offered as add-on Fixed price per day data roaming add-on Small screen bundles Subscriptions bundle voice, messaging and data All small screen subscriptions are sold as bundles 5

6 Updated consumer postpaid portfolio launched in September 2012 Pott with Surf Fastpris Sverige Data volume 1 6Mbit FUP 15 16Mbit FUP 15 16Mbit 3000 FUP 15 16Mbit<< 3000 Large FUP 3000 SMS min Voice 200 min 600 min min Monthly fee Monthly discount Up to 250 Tethering (monthly fee) NA Included FUP = Fair usage policy Strong fibre position in fixed broadband market Penetration of fibre connections to Swedish households Telenor s share of all fibre connections Fibre 45% Telenor 26% Total fibre market 2.2m connections Telenor Sweden has ~560k fibre connections 12 6

7 Ambition to strengthen 3 play position Drive 3 play penetration to increase revenues Fibre ARPU Bredbandbolaget (SEK/month) 518 Increase number of homes connected - Organic growth within existing footprint - Selected acquisitions Play 2 Play 3 Play Distribution of fibre customer base Be a key player in the Swedish open net model 1 play 2 play 3 play Strengthen fibre position through consolidation Swedish total fibre market Fibre universe development Connections (000) % % 19% Closed Market universe (Est.) Open Market universe (Est.) Other operators Telenor Telenor share of fiber connections 7

8 The operational excellence agenda of Telenor Sweden New operating models Product and process improvements Partner solutions Strategic functions Execution and/or production In-house More satisfied customers, decreased costs Structural improvements Sales and marketing efficiency Consolidation of functions, systems and processes Leveraging on partners scale and cost efficiency Principle Strategic functions In-house Partner solutions Execution and/or production Split in order to ensure focus, flexibility, quality and cost efficiency /2013 IS/IT development Phase 1 IS/IT operations IS/IT development Phase 2 IT Field service Transmission Core, RAN, platforms Networks Service and tech. support Customer care Facility HR IS Group ERP Support functions 8

9 Network sharing paramount for cost competitiveness 3GIS N4M Tele2 Strengthening network and cost position towards incumbent Telenor Home network 3G 3GIS since 2001 Infrastructure JV with 3 Joint 3G network outside major cities Acc. capex savings of SEK ~5 bn Opex savings of SEK ~250 m per year 2G and 4G N4M since 2008 Infrastructure JV with Tele2 Joint 2G/4G network and spectrum pool Acc. capex savings of SEK ~900 m Opex savings of SEK ~70 m per year Strong opex reductions further efforts needed to continue trend Opex/sales development Sources for cost reduction towards % 21% 11% 23% 36% 35% 36% <33% 15% 30% LTM 2015 New operating model Structural improvements Product and process improvements Other Sales and marketing opex efficiency LTM = Last twelve months (Q311-Q212) 9

10 Focus and ambitions towards 2015 Key Focus Areas Monetise on mobile data Strengthen fixed 3-play position Continue operational improvement Ambitions 2015 Opex/sales below 33% Operating cash flow margin above 20% Operating cash flow defined as EBITDA before other items and capex excluding licence and spectrum fees Telenor Sweden Lars Åke Norling, CEO 10