Telenor Norway - Mobile · Telenor Norway - Mobile Ric Brown, Market Director, ... 3G 4G . We will focus on our customers by building on 4 strong differentiators 10 Speed & coverage

Telenor Norway - Mobile

Ric Brown, Market Director, Telenor Norway

London 2 June 2015

Solid market leader position in a postpaid bundle market

2 Source: Telenor analysis and Norwegian Communications Authority

Market share estimates adjusted for recent acquisitions

Mobile subscriptions (‘000)

5.6 5.7 5.8 5.9 5.9

73% 74% 75% 75% 76%

2010 2011 2012 2013 2014

Postpaid Prepaid Postpaid share

Mobile revenue market shares

15.8 15.9 15.9 15.5 16.0

21% 29%

42% 52%

59%

2010 2011 2012 2013 2014

Bundles Non-bundle Bundles share

Mobile revenues (NOK bn) Total mobile market (NOK bn)

56% 34%

3% 3% 3%

Telenor

TeliaSonera

ICE

Phonero

Others

10.3

5.7

Consumer

Business

An enormous customer appetite for mobile data

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e

+66%

+63%

+37% 10

6 4 4

1

50

29

16

+69%

+78%

Data traffic (PetaBytes)

3

Data consumption supported by strong growth in

4G coverage and handset penetration

4

9% 15%

20%

33% 35% 38%

41%

48%

Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15

41% 46%

53% 57%

72% 80%

84% 86%

Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15

4G handset penetration

4G population coverage

Increased data usage translating into increased ARPU

5

Median mobile data usage (MB/sub/month) ARPU (NOK/month)

287 304

320 309 312

Q114 Q214 Q314 Q414 Q115

Domestic Roaming Interconnect

180

232

265

319

389

Q114 Q214 Q314 Q414 Q115

9%

116%

MOBIL

S

MOBIL

M

MOBIL

M+

MOBIL

L

MOBIL

XL

NOK 249 Unlimited

voice & SMS

1 GB

10 Mbit/s

NOK 299 Unlimited

voice & SMS

2 GB

20 Mbit/s

NOK 349 Unlimited

voice & SMS

4 GB

20 Mbit/s

.

NOK 399 Unlimited

voice & SMS

6 GB

30 Mbit/s

.

NOK 599 Unlimited

voice & SMS

12 GB

40 Mbit/s

Cloud storage

10 GB

Cloud storage

25 GB

Cloud storage

30 GB

Cloud storage

50 GB

Cloud storage

75 GB

Insurance

3 months

Insurance

3 months

Insurance

3 months

Insurance

6 months

DATA-SIM

MOBIL

XXL

NO 799 Unlimited

voice & SMS

25 GB

50 Mbit/s

Cloud storage

100 GB

Insurance

6 months

DATA-SIM

Insurance

3 months

Data centric tariffs with clear upselling logic

6

Q3 13 Q1 14 Q3 14 Q1 15

≤199 249 ≥299

55%

38%

43%

23%

Q3 13 Q1 14 Q3 14 Q1 15

≤199 249 ≥299

…resulting in improved sales mix

7

Consumer postpaid subscriber base (NOK pr month) Consumer postpaid sales mix (NOK pr month)

18% 23% 30%

36%

..and strong growth in subscription and traffic revenues

8

Mobile subscription & traffic revenue growth

1%

-3%

-2%

2%

5%

10%

11%

9%

Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15

Mobile revenues (NOK m)

3 258

3 368 3 436

3 358

3 562

3 775 3 731

3 687

Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15

4G vs 3G enabled handsets in customer base (m)

There are drivers for continued growth:

Handsets, content, applications and 4G coverage

9

1.5 million unique 4G users

Rapid data growth in areas with 4G coverage

Strong innovation on handsets and services globally 0,0

0,2

0,4

0,6

0,8

1,0

1,2

1,4

1,6

1,8

2,0

Q2 13 Q3 13 Q4 13 Q1 14 Q2 14 Q3 14 Q4 14 Q1 15

3G

4G

We will focus on our customers by building on

4 strong differentiators

10

Speed & coverage

• Best nationwide network

• 95% 4G coverage in 2015

• Improved geographic

coverage

• 4G+ to more than 200

municipalities by summer 2015

What you need

• Attractive device bundles

• Cloud storage

• Mobile banking ID

• NFC

You’re in control

• Telenor app with full billing

overview and top-up

• Roaming and data control

packages

• Antivirus and security solutions

• Family subscriptions/bundles

Expert help

• 92 Telenor stores

• Customer service 7 days/week

via phone, mail or social media

• Award winning online customer

service

Building our brand on a combination of functional and

emotional attributes

11

Bringing mobile data

to new segments

• Move 500,000 customers from voice only

to voice and data over 3 years

• Offer courses all around Norway to help

people get online

• Moving to data-centric price plans

typically gives NOK ~80 ARPU uplift

12

Age distribution – inactive and new mobile data users

Inactive users

New users

6 18 30 42 54 66 78 90

3%

2%

1%

0%

Five distribution channels serving the consumer market

Telemarketing

• 7% of sales

• 100% SIM-only

share

• Increasing

share of sales

• Low cost and

high efficiency

• 80% of sales on

non sales

requests

Customer

service

• 92 branded

shops

• High service

quality

Branded

shops

• 1m visitors/day

• Sales mainly

triggered by

price

• Seen in

combination

with branded

shops

Digital

channels

• Large share of

handset lock-in

sales

• 20% of total

sales

External retail

13

A strong consumer brand portfolio with 3 different brands

Expect more

«Expect more»

• Premium brand with unique differentiators

• Leading customer service

• Strong distribution: Online, own stores and external retail

Expect more

«Afford to be demanding»

• Youth and data oriented

• Value for money data packages

• Postpaid only

• Device bundles and SIM-only

Expect more

«Money saved –

every day»

• Low cost low price

• No lock-in

• Pure online model

• SIM-only

• Postpaid and prepaid

14

57%

43%

62%

38%

Our B2B position is built on connectivity and solutions

that allow customers to focus on what they care about

15

Revenue (NOK bn)

Revenue market shares

business segment

Subscriber market shares

business segment

Business market overview

Subscriptions (m)

1,3

4,6

6,2

11,1

Business Consumer

Telenor Others

16

Delivering solutions for business customers across

the country

Well positioned to drive

continued growth

17

Continued upselling potential from increasing data consumption

Untapped potential from connecting currently non-active data users

Maintain market position through network superiority and other differentiators

Key takeaways?

Q&A