Mobile Strategy Head of Global Coordination - Ragnar H. Korsæth
Continued Growth in Revenues and Cash Flow Strengthen local position and competitiveness Targeting the world s next billion mobile subscribers Selective international expansion
Internationalisation of Telenor Expansion Strategy Licence Hunting Control or Exit Selective Expansion 1995 2000 2005 Value Creation Strategy Network and Service Rollout Active Ownership Global Coordination
GrameenPhone Performance Subscriptions/Market share ARPU MoU/APPM 5 542 6 427 1 099 913 227 244 233 196 674 516 4,8 62 % 1 141 2 388 62 % 62 % 62 % 3,8 2,9 2,6 2003 2004 2005 Q1 06 2003 2004 2005 Q1 2006 2003 2004 2005 Q1 2006 Revenues/EBITDA% EBITDA and CAPEX 29 524 19 302 EBITDA CAPEX 20 890 12 695 65 % 60 % 50 % 2003 2004 2005 14 667 11 59211 636 8 269 3 545 2003 2004 2005 All figures according to local currency. 2003-figures are not according to same accounting principles and KPI definitions as 2004-2006. EBITDA and CAPEX adjusted for change in accounting treatment of lease in 2005
Kyivstar Performance Subscriptions/Market share ARPU MoU/APPM 13 925 14 965 68 67 98 110 83 49 40 56 47 % 3 037 6 252 45 % 46 % 45 % 1,2 0,8 0,5 0,4 2003 2004 2005 Q1 06 2003 2004 2005 Q1 2006 2003 2004 2005 Q1 2006 Revenues/EBITDA% 5 769 EBITDA and CAPEX EBITDA CAPEX 3 341 3 212 2 896 2 001 60 % 61 % 56 % 2003 2004 2005 2 044 2 065 1 195 744 2003 2004 2005 All figures according to local currency. 2003-figures are not according to same accounting principles and KPI definitions as 2004-2006
DiGi Performance Subscriptions/Market share 4 795 5 086 62 ARPU 60 58 54 175 MoU/APPM 166 169 162 3 239 2 205 20 % 22 % 25 % 25 % 0,36 0,36 0,34 0,33 2003 2004 2005 Q1 06 2003 2004 2005 Q1 2006 2003 2004 2005 Q1 2006 Revenues/EBITDA% 2 899 EBITDA and CAPEX 2 231 EBITDA CAPEX 1 714 1 259 41 % 44 % 43 % 2003 2004 2005 979 699 688 563 520 2003 2004 2005 All figures according to local currency. 2003-figures are not according to same accounting principles and KPI definitions as 2004-2006
Mobile Norway Performance Subscriptions/Market share ARPU MoU/APPM 2 364 2 645 2 731 2 722 323 323 309 305 184 184 186 57 % 56 % 56 % 56 % 176 1,8 1,8 1,7 1,6 2003 2004 2005 Q1 06 2003 2004 2005 Q1 2006 2003 2004 2005 Q1 2006 Revenues/EBITDA% EBITDA and CAPEX 10 909 11 730 12 243 EBITDA CAPEX 39 % 37 % 37 % 2003 2004 2005 4 262 4 305 4 471 973 1 218 500 2003 2004 2005 All figures according to local currency. 2003-figures are not according to same accounting principles and KPI definitions as 2004-2006
Continued Growth in Revenues and Cash Flow Strengthen local position and competitiveness Targeting the world s next billion mobile subscribers Selective international expansion
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
Global Service Innovation Coordinated sharing of proven concepts Virtual service market place Common service delivery platform Innovation Centre in Malaysia
Investment Optimisation Telecom Equipment Prices 100 80 Joint group procurement processes Aligning vendors on future low ARPU challenges 60 40 20 0 2002 2003 2004 2005 2006 Early adaptation of new technology Network Efficiency (Erlang per TRX) 4,5 5 Decreasing CAPEX per minute 2,4 3 3,8 2002 2003 2004 2005 2006
Continued Growth in Revenues and Cash Flow Strengthen local position and competitiveness Targeting the world s next billion mobile subscribers Selective international expansion
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 2008 12 15 18 20 1 4 Russia Pakistan Bangladesh Ukraine Thailand Malaysia Hungary Source: Telenor estimates
The Next Billion Challenge The first billion subscriptions More than USD 25 ARPU The next billion subscriptions Less than USD 2 ARPU
How to Make Money on USD 2 ARPU
No Subscriber Acquisition Costs
No Customer Support
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
Extremely efficient distribution
From Scratch Cards to E-Refill
Vendor Revenue Share Model
Predicable Regulatory Regime
Continued Growth in Revenues and Cash Flow Strengthen local position and competitiveness Targeting the world s next billion mobile subscribers Selective international expansion
Selective Expansion Criterias Market size and penetration growth Political stability Regulatory environment Cultural fit Strong business case
Egypt Opportunity Subscriber development (000) Facts Population 2005 (millions) : 75 Penetration 2005 : 17% GDP/pop 2005 (USD) : 1380 GDP growth : 5% 8000 7000 6000 5000 4000 3000 2000 1000 0 2003 2004 2005 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 (%) 2003 2004 2005 Mobinil Vodafone
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 4000 3500 3000 2500 2000 1500 1000 500 0 100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 % 2003 2004 2005 Vinaphone Mobifone Viettel S-fone Market share (%) 2003 2004 2005 Vinaphone Mobifone Viettel S-fone
Serbia Opportunity Mobtel/Mobi63 Subscriber development (000) 3500 Facts Population 2005 (millions)* : 7.5 Penetration 2005 : 65% GDP/pop 2005 (USD) : 2.500 GDP growth (2006-2007) : 5% 3000 2500 2000 1500 1000 500 0 2003 2004 2005 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 (%) 2003 2004 2005 Mobtel/Mobi63 MTS (Telekom Srbija)
Concluding Remarks Strengthen local position and competitiveness Targeting the world s next billion mobile subscribers Selective international expansion Continued profitable growth