Telenor ASA — Earnings Release 2016

Jul 19, 2016

Telenor Group second quarter 2016 results

Telenor Group second quarter 2016 results

Telenor Group second quarter 2016 results

"We are pleased to deliver strong results for the second

quarter with an EBITDA* of NOK 11.5 billion. The organic

EBITDA growth exceeded 6 per cent, while revenues were

impacted by low device sales. We have taken several

initiatives to further strengthen our data position across

our footprint, and we see encouraging signs of data

monetization in several of our markets. Digitizing our core

business, combined with efficiency measures, will be key to

drive value creation going forward,'' said Telenor

Group Chief Executive Officer Sigve Brekke.

Key figures for the second quarter of 2016 (NOK millions,

comparable figures for 2015 in parentheses):

* Revenues: 32 477 (31 406)

* EBITDA before other items: 11 545 (10 695)

* EBITDA margin before other items (%):35.5 (34.1)

* Profit after taxes and non-controlling interests: 1 111 (3

456)

Second quarter revenues were NOK 32.5 billion. Organic

mobile subscription and traffic revenues were up by 4%,

while total revenues were impacted by lower handset sales.

EBITDA* was NOK 11.5 billion and the EBITDA margin improved

by more than one percentage point to 35.5%. EBITDA* less

capex (excl. licences) was NOK 6.3 billion. 3.4 million

mobile subscribers were added during the quarter, taking the

total mobile customer base to 211 million.

In Norway, Denmark and Sweden, we have removed roaming

barriers by introducing new mobile offerings enabling our

customers to use their voice and data packages while

travelling within the EU. While this is impacting our

roaming revenues and costs in the short term, we see solid

uptake on our new tariffs. The number of new high-speed

broadband connections is also showing encouraging trends,

both in Sweden and Norway this quarter. To maintain our

superior position in Norway, we continue investing

significantly in fixed and mobile networks, and we expect to

spend more than NOK 4 billion also in 2016.

In Bangladesh, Pakistan and India the strong revenue growth

continued during the quarter. We have secured additional

spectrum in Pakistan and completed a major 3G network

expansion in Bangladesh, facilitating continued growth in

data consumption. While market conditions remain

challenging in Thailand and Malaysia, we have succeeded in

the contract segment. Both dtac and Digi reported strong

contract revenue growth and improving EBITDA margins this

quarter.

In Myanmar, our investments remain high to secure service

quality to our 17 million customers and pave the way for

further expansion and growth. The strong EBITDA* has already

brought cash flow into positive terrain.

We recognize the significant operational and financial

improvement delivered by our Indian operation. We have

however, after thorough consideration, decided not to

participate in the upcoming spectrum auction, as we believe

the proposed spectrum prices do not give an acceptable level

of return. We will continue our efforts to meet customer

demands and grow the business based on the current spectrum

holding. As we evaluate our options in India, we will be

disciplined on capex.

Based on the performance in the first half of 2016 and the

outlook for the second half, we revise the financial

guidance for 2016. We expect an organic revenue growth in

the range of 1% to 2% and an improved EBITDA margin of

around 35%. Our expectation for the capex to sales ratio,

excluding licences, is lowered to around 17%.

*EBITDA before other income and other expenses.

Media Contact:

Atle Lessum, mobile: (+47) 41 50 56 45, al@telenor.com

Investor Contact:

Marianne Moe, mobile: (+47) 91 61 76 31,

marianne.moe@telenor.com

Helge Øien, mobile: (+47) 91 31 92 42,

helge.oien@telenor.com

Press and analyst conference

In connection with the publication of the financial results,

a press and analyst conference will be held on Tuesday 19

July at 09:00 hrs Norwegian time/CET. The presentation,

which will also be broadcast live via webcast, will be held

in Auditorium Voice, Telenor Expo Visitor Centre at Fornebu

near Oslo. CEO Sigve Brekke and acting CFO Morten Karlsen

Sørby will present the results. The presentation will be

held in English.

Conference call and Q&A

You may also call in and listen to the presentation over the

phone. This service allows you to ask questions during the

Q&A session at the end of the presentation. To participate

in

the conference call, please register before the conference

starts by calling +47 2350 0486 and state the confirmation

code: 2521474