Telenor Norway

Berit Svendsen, CEO Telenor Norway

Telenor Norway – Key focus areas

• Strengthen market positions

• Drive operational excellence

Norwegian telecom and TV market (NOKbn)*

Continued market growth, changing user behaviour

• Voice to data substitution

• Multiple devices

• Broadband and content convergence

*) Retail market revenues excl. wholesale. Source: NPT, Telenor estimates

2008 2009 2010 2011 2014

Mobile voice Mobile data Fixed voice Fixed data TV

37 38 40 40 41

Market leader position on all platforms

49

53

66

49

47

Mobile voice

Mobile data

Fixed voice

Fixed broadband

TV

Telenor market shares (%)

• User friendly services

• Optimal use of technology

• Infrastructure leadership

Subscriber market shares end of Q2 2011. Telenor estimates.

Stable financial development despite price pressure

Revenues (NOKbn ) and EBITDA margin (%) EBITDA and Capex (NOKbn)

LTM: Last twelve months (Q310-Q211)

• Continued fixed voice decline

• Reduced mobile termination rates

• Investments in modernisation of mobile networks

10.1 10.8 11.0 10.6

3.5 3.0 3.2 3.7

2008 2009 2010 LTM

EBITDA Capex

27.0 27.8 28.0 27.4

37 39 39 39

2008 2009 2010 LTM

Underlying revenue growth from mobile data and TV

Mobile Fixed Other

Telenor Norway revenue development (NOKbn)

LTM: Last twelve months (Q310-Q211)

LTM

27.4

Other Data

0.4 1.0

27.0 1.0

0.5 0.5

Voice Voice 2008 Internet & TV

Broadband and TV driving fixed revenues

• Strengthen market position

• Upgrade copper network to VDSL

• Further develop cable TV business

• Targeted fibre deployment

• TV and content increasing ARPU

2008 2011

Internet & voice Basic TV Pay TV

Canal Digital ARPU (NOK)

265

350

Infrastructure deployment to strengthen mobile data leadership

2100 MHz

900 MHz

2600 MHz

1800 MHz

800 MHz

LTE - urban

3G HSPA – urban/suburban

2G GSM

2G GSM EDGE

LTE – rural/urban coverage

LTE - suburban

2010 2012 2014 2016 2018 2020

3G HSPA – rural

• 2G/3G radio access network swap to be completed in Q411

• Increasing backhaul capacity

• Strengthening 3G coverage in urban areas

• LTE launch in Q1 2012

• Deployment based on optimal frequency resources

Smart pricing to drive usage and profitability

• Bundling voice and data – focus on total ARPU

Bundling mobile voice and data Mobile broadband price plans

• Introducing speed as a differentiator

Positive initial effects from bundling voice and data

0

200

400

600

800

High end Blended Mid/low end

Customers on new bundled price plans

Before

After

• More than 300,000 customers on new price plans

• Reduced churn among high-end customers

ARPU effect of new price plans*

• Up-sale largely compensating for price reductions

• ARPU increase among low-end customers

NOK

*) ARPU effect on customers migrating to new price plans

High Mid Low

Gross cost savings of NOK 1.2 bn Opex development (NOKbn)

A proven record of cost reductions – but needs to increase momentum

1.2

New activities

0.4

Salary increase

0.4

2008

10.6

LTM Gross cost savings

10.1

LTM: Last twelve months (Q310-Q211)

Process Sourcing

Field force IT outsourcing

Advertising

Operational excellence targeting major cost areas

7

8

24

41

Opex breakdown (NOK 10.1 bn)* Capex breakdown (NOK 3.7 bn)*

Personnel IS/IT

Field force Sales and marketing

Other

Fixed network Mobile network Product and platform development Other

*) LTM: Last twelve months (Q310-Q211)

Building tomorrow’s customer excellence model

• Simplified and more effective end-to-end processes

• Establish web as primary channel for self service

• More frequent, relevant and cost effective customer interactions

• Increase cost effectiveness in customer service

Operational excellence in IT and operations

• Simplification of processes and value chains

• Consolidation and offshoring of IT

• New delivery models for network development

• Explore outsourcing of network operations and maintenance

• Leverage on Telenor Group scale

Targeting significant reduction in opex/sales

• Transformational initiatives

• Continuous improvement

• Excellent execution

Opex/sales (%) Opex/sales (%)

39 38 36 37

<33

2008 2009 2010 LTM 2014

LTM: Last twelve months (Q310-Q211)

Investments to strengthen market positions and secure operational excellence

Capex/sales (%)*

• Building infrastructure for the future

– Mobile backhaul capacity

– LTE rollout

– Fibre and TV deployment

• Investment levels to be aligned with market development

• Continuous focus on investment efficiency

13

11 11

14

2008 2009 2010 LTM

*) LTM: Last twelve months (Q310-Q211). Excl. spectrum fees

Positioning Telenor Norway for the future

• Strengthen market positions

• Drive operational excellence

Telenor Norway

Berit Svendsen, CEO Telenor Norway