Telenor Stock

Good morning, and welcome to Telenor's Second Quarter Results Presentation for 2026. With me here today, I have our CEO, Benedicte Schilbred Fasmer; and our CFO, Torbjorn Wist. Today's agenda follows our usual structure. Benedicte will start with the main developments in the quarter, including the Nordic markets, transformation, M&A and defense topics. And Torbjorn will then take you through the financials. As usual, all revenue and EBITDA growth, just as a reminder, in terms of rates are organic and made on a constant currency basis, and EBITDA always refers to adjusted EBITDA. At the end of the presentation, we will open the line for questions. And with that, Benedicte, over to you.

Thank you very much, Frank, and good morning, everyone.

The results in the group's business units were mixed this quarter with a more demanding mobile market in Norway, tough competition in Finland, but good financial progress in Sweden, Denmark and Amp. In Amp, the net asset value of the portfolio has grown to around NOK 15 billion, reflecting the new connection partnership and solid performance in KNL. The inflationary effects from the Iran war still weighs on Grameenphone in Bangladesh. We have particularly tough year-on-year comparables due to the national roaming agreement, the timing and size of pricing adjustments, phasing and step-up of robustification and transformation costs, and we faced a more promotional market in Norway this quarter, where we also needed to make a provision related to a dispute on VAT for TV news channels dating back to 2020 to 2022.

In Q2, we report a decline in service revenues of 0.7% and a decline in EBITDA of 4.8%. However, underlying performance on a fully comparable basis was better with 0.3% increase in service revenues and a 2.3% decrease in EBITDA. In Q2, we've taken active measures to build a stronger Nordic franchise going forward. We took multiple important steps to strengthen our Nordic market position, expanding our broadband footprint in Norway and becoming the #2 fixed provider in Sweden.

We announced a value unlocking partnership for Telenor Connexion to scale growth within IoT, and we also were awarded important contracts within defense and mission-critical communications. 2026 is a transition year for Telenor from several perspectives. And as you remember, we have just sold 2 of our Asian businesses and focusing more on the Nordics. We also advanced on our transformation agenda, which is set to bring substantial cost improvement in the years to come. However, due to the performance year-to-date, we are revising down our outlook for the year, and we will elaborate on this later in the presentation. This said, our strategic direction and mid- to long-term financial ambitions remain unchanged. We are building a simpler, more Nordic-centric and more profitable Telenor.

Turning to the Nordics. As mentioned, performance was mixed across the markets this quarter. In Norway, we faced an exceptionally tough comparison with 16% EBITDA growth in Q2 last year. Reported results were also affected by the TV VAT provision and the business transfers we mentioned earlier this year. Excluding these effects, service revenues increased by 0.6% in Norway, while EBITDA declined by 2% due to timing effects on both revenues and OpEx, including transitional IT costs.

In mobile, we grew well in B2B and also won a frame agreement with the Armed Forces that will add approximately 25,000 subscriptions during the year. In B2C, a quite promotional quarter and market put further pressure on our ARPU growth, although we saw some positive pricing trends towards -- in the market during June. Sweden added 36,000 new mobile customers and grew mobile service revenue by 3.1%. The fixed transformation continued and helped drive an EBITDA growth of 5.2%. Denmark sustained its commercial momentum and delivered service revenue growth of 3.5%. EBITDA improved substantially from the previous quarter, in line with our expectations. In Finland, we saw modest improvement over the previous quarter with a low level of churn in B2C mobile. The recovery in new sales consumer ARPU was modest as earlier campaign pricing continues to affect the customer base.

As ARPU for DNA's new sales did not improve much from March through June, we expect new sales ARPUs to still take a few months to potentially coming back to year-over-year growth. We also see a more competitive fixed market in Finland. Transformation initiatives supported good cost control and underlying EBITDA growth of 4.8%. Overall, the underlying development in the Nordics is more resilient than the reported figures suggest.

But we also see that the competition has picked up in some of our markets compared to what we saw earlier this year. Let me briefly give you a status on our transformation agenda. As mentioned at our CMD, 2026 is the peak transition year with significant activities across several programs driving an uptick in Nordic OpEx in the short term. We execute the transformation on a country-by-country basis, and you see examples of this on the slide. We are also scaling pan-Nordic programs in selected areas like, for instance, shared services, common products, AI, procurement and network and IT. In the near term, this means supporting dual IT cost structures and incurring implementation costs, which will start rolling off from 2027.

In May, we announced a new and simplified organizational structure with effect from mid-August, leading to a leaner operating model supporting our more focused portfolio. By removing the business area layer, we will be reducing costs, FTEs and complexity and annual OpEx savings will be around NOK 0.3 billion from 2027. Additionally, we have scaled down our office in Singapore following the exit of True and Pakistan, which -- with annual OpEx savings of NOK 75 million already effective from this quarter. We are confident that these efforts will drive meaningful cost efficiency with average annual OpEx reductions in the Nordics 0 to minus 2% from '25 to '28, while increasing operational leverage and organizational speed. Let me now share a more concrete set of examples from Norway, where we see the greatest complexity and the most significant benefit from simplification.

We have a strong and long track record of reducing costs in Norway. We currently have multiple large-scale transformation programs running in parallel across 4 key dimensions: improving robustness, modernizing platforms, reducing systems and product complexity and digitizing remaining manual interfaces. And we are now carrying out the heavy lifting on IT migration, legacy platform exit, cloud transformation and robustification. And as you may understand, this temporarily increases our cost because parts of the old and new platforms run in parallel, in addition to implementation costs on top. But from January 1, we are set to exit one major legacy vendor platform and move workloads to public cloud. This alone would lead to NOK 0.4 billion OpEx and CapEx savings ramping up from next year. In addition, our private cloud initiative targets further savings of around NOK 0.4 billion over the next 4 years.

And these are just 2 examples of the large transformation program we have in Norway. In short, we are taking transition costs now and to build a stronger and more efficient platform for the years ahead. Our strategic momentum this quarter extended well beyond transformation. We started by unlocking value in Telenor Connexion through a partnership that supports further scaling globally in IoT. The IoT transaction is strategically important and financially attractive and will release close to NOK 4 billion in proceeds upon closing expected in Q3. We also made some important progress within broadband. In Norway, the GlobalConnect transaction was approved by the competition authority in Q2. And as a result of the announced broadband transactions, Telenor is set to become the #2 broadband provider, both in Norway and Sweden, pending regulatory approval.

The 3 broadband deals will add around NOK 3.5 billion in revenues and are expected to generate around NOK 0.75 billion in annual synergies from 2030 and beyond. Together, these actions sharpen our portfolio, strengthen our Nordic center of gravity and positions Telenor for longer value creation over time. Let me spend a moment on the acquisition of Bahnhof in Sweden, which was announced just last week.

This is a strategically important expansion for us in the largest Nordic market. The acquisition is set to make Telenor the second largest fixed telecom provider in Sweden, increasing our market share from around 15% to around 27%. Bahnhof is a service provider that brings 0.5 million consumer fiber customers to our portfolio, a very strong B2B position and a differentiated brand built on privacy, security and technical expertise. The company also brings secure infrastructure capabilities, including military-grade data center assets, representing a strong fit with Telenor's focus on resilience and security. And the industrial logic is clear, strengthening our competitive position, enhancing cross-selling potential and transforming the profitability of our combined fixed businesses.

And this will create a foundation for renewed growth after a 3-year period where we have peeled off layers of unprofitable fixed business due to suboptimal segment scale. Finally, let me also highlight our progress in defense and mission-critical communications. KNL is seeing substantial traction with its international expansion and has qualified for a framework agreement with the U.K. defense on tactical communication. While the individual contracts have not been awarded yet, the opportunity is significant over time.

KNL has also received pilot orders from another non-Nordic NATO country and has just been awarded a EUR 6.5 million contract with the Finnish Defense Forces, the third so far. In Norway, Telenor has secured a 4- plus 3-year mobile agreement with the Norwegian Armed Forces with NOK 750 million in estimated revenues over the contract period. For Telenor, these wins signal growing traction within secure and resilient communication, a key strategic focus area for us. And with that, I'll hand you over to Torbjorn for the financials.

Thank you, Benedicte, and good morning, everyone. Let me start with the group financial highlights for the quarter. The main financial message is that Q2 was affected by tough comps, timing effects and the TV VAT provision in Norway, combined with the soft home market. Group Service revenues were NOK 14.7 billion, corresponding to a decline of 0.7%. Adjusted EBITDA was around NOK 8 billion, down 4.8% Free cash flow before M&A was NOK 1.8 billion, up 13% year-on-year, while adjusted EPS was NOK 1.94, down 12% year-over-year.

The CapEx/sales ratio was 14.5% and leverage ended at 1.4x, still well below our target range. ROCE was negatively affected by the CelcomDigi impairment we booked in Q1 in addition to the softer operating profit this quarter. ROCE, excluding associated companies, was still a solid 12%. Now let me now walk you through the main drivers, starting with the top line. The service revenues for the group were in a soft patch this quarter. The organic decline was mainly driven by Nordics and Asia, partly offset by continued growth in Amp. In the Nordics, service revenues were affected by Norway, the VAT provision and timing of price migrations. In Asia, Grameenphone remained under pressure from lower voice and data revenues in a challenging macro and competitive environment.

On an underlying comparable basis, group organic service revenue growth was slightly positive at 0.2%. Turning to OpEx, which grew 1.5% for the Nordics, while growth in Amp as well as special projects on the HQ level drove group OpEx growth to 2.6%. The increase was mainly related to transformation, robustification and M&A activity as well as amortization of commission costs. Moving to EBITDA. The combination of the service revenue development and higher organic OpEx resulted in a 4.8% organic decline in adjusted EBITDA.

However, the underlying decline is 2% when adjusting for VAT in Norway, the coastal radio transfer to the state and with like-for-like accounting in Finland. This is still an outlier quarter, reflecting several moving parts, tough comps, timing effects, transformation spend and the macro pressure in Bangladesh. There was also a negative contribution on the HQ level reflected by the other and elimination column here. This was due to the cancellation of a procurement contract with True and higher spending on special projects this year. As a side note, we are adjusting the procurement organization as part of our reorganization to address lower income from Asia on the procurement side.

Before I go into the Nordics overview, let me now zoom in on Norway, where these effects are particularly visible this quarter. On Norway, it is useful to take a step back and look at the development in more detail over a 2-year period. Compared with Q2 2024, Norway has delivered 4.6% EBITDA CAGR on an underlying comparable basis even when excluding revenues from the national roaming agreement. In Q2 2025, growth in Norway was 16%. We were clear back then that this was exceptional on many levels. It was driven by commercial timing effects, new but temporary roaming revenues and supported by counterseasonal swings on the COGS and OpEx lines.

In Q2 this year, Norway's underlying adjusted EBITDA declined 2%. The reason is that we lapped last year's larger-than-usual back book pricing effects. The price uplifts we made were more spread out and last year's boost from the national roaming revenue agreement went into a gradual reversal this quarter. As Benedicte said, we also had an OpEx increase, partly driven by transitionally higher IT transformation spend as well as robustification projects, which included transfer of sites from infrastructure. Q2 '26 in isolation is, therefore, not a clean quarter in terms of assessing the long-term earnings trajectory in Norway. Our focus is on driving commercial performance while progressing the transformation that will support a structurally lower cost base over time. For the Nordics overall, adjusted EBITDA declined 3.1% organically.

Norway was the main negative contributor. Sweden contributed positively, supported by subscriber growth, fixed transformation and structural OpEx reductions. Denmark remained in the red on EBITDA due to amortization of commissions, but made a 12 percentage point uplift quarter-on-quarter as introductory campaigns rolled off. While the near term in Denmark will be challenged by an increase in OpEx, we do expect return to sound growth in the fourth quarter.

DNA improved EBITDA as transformation initiatives offset higher sales costs. On an underlying comparable basis, Nordic adjusted EBITDA increased 0.6%. And again, the OpEx level is affected by the temporary IT transformation spend, which particularly weighs on Norway and Denmark for 2026 as well as the mentioned year-on-year timing and phasing of both price changes and costs in Norway. Let me then move to Asia. In Bangladesh, Grameenphone continues to operate in what can only be described as a difficult environment. Service revenues declined 3.2% as the inflationary effects due to the situation in the Gulf rippled through the economy, creating pressure on consumer wallets, further intensifying price competition on the data side.

EBITDA declined by 6%. Still, commercial momentum improved sequentially with 3.5 million new data subscribers and overall 2.1 million new subscribers added. To support the voice to data transition that is taking place in the country, the 700 megahertz low-band rollout has started. While this increases CapEx across Q2 and Q3, we continue to manage spending diligently and with tight focus on operational and capital efficiency. The timing and strength of any recovery remains uncertain and a risk given macro sensitivity and the wider regional situation. Let us then move to the P&L, cash flow and leverage.

The P&L is fairly clean this quarter, apart from the mentioned VAT item, which is spread out across fixed service revenues, OpEx and a minor effect on financial items. Reported EBITDA was impacted by workforce reductions and restructuring-related costs of NOK 337 million (sic) [ 357 million ], which is higher than last year. You can expect more of this in coming quarters. Also, last year, we recorded NOK 0.5 billion in M&A gains from the Jottacloud merger. Net financial items improved materially year-on-year, supported by higher financial income and items related to True. In total, we generated NOK 2.5 billion in net income to our shareholders. Turning to cash flow. Free cash flow before M&A was NOK 1.8 billion, an improvement of around NOK 0.2 billion year-over-year despite lower EBITDA.

The improvement was supported by lower net interest paid, dividends from associates and financial investments and lower dividends to noncontrolling interests. Working capital was a negative driver in the quarter, mainly due to timing effects year-over-year. Also, handset financing in previous periods was a headwind on this line. CapEx paid was around NOK 2.3 billion, and total free cash flow was NOK 2 billion, including almost NOK 200 million in M&A cash flow from a True deferred installment. Now our balance sheet remains very strong.

Net interest-bearing debt was NOK 51.5 billion at the end of June with leverage at 1.4x. The increase in the quarter was mainly driven by the half year dividend payment to our shareholders. Our 3-year NOK 15 billion buyback program is now well underway. We bought back 2.9 million shares in the market for a total of NOK 0.4 billion during June. Our financial position gives room to sustain shareholder returns while also pursuing disciplined value-accretive Nordic investments. Even following the recent M&A announcements, we still have significant financial flexibility for either acquisitions or additional shareholder returns.

So with that, -- so we're just having a little bit of a technical issue here. If you can give me the speaker -- thank you very much. Apologies for that. Now let me turn to the financial outlook. In light of the market developments and performance in Q2, we have updated our financial outlook for 2026. The revision is driven by a combination of technical and market-related effects. The more technical effects relate to direct and indirect effects of recent transactions such as the loss of procurement revenues in -- from True and the expected deconsolidation of connection from September. In terms of the market-related effects, the main issue is revenue momentum in parts of the Nordics, especially in Norway, where B2C ARPU has been affected by promotional activity and only modest scaling of our new services in the quarter.

Finland is also improving more modestly than expected, while competition in both mobile -- sorry, with competition in both mobile and fixed and Bangladesh continues to remain uncertain. Given this, for Telenor Nordics, we now expect organic growth in both service revenues and adjusted EBITDA of flat to low single-digit for 2026. Note that the guidance, as usual, excludes prior year activities, which in Q2 means that we have excluded the impact of the TV VAT provision. We continue to see Nordic CapEx to sales at around 14% for the year. For the group, the updated outlook is for flat to slightly negative organic growth in adjusted EBITDA, obviously, with Bangladesh remaining a key sensitivity. Note that our Nordic transformation activity and the profile of our commission amortization schedule is set to drive OpEx increases in the very near term.

This means that the underlying EBITDA improvement in Q3 will be temporarily held back by OpEx. However, transformation benefits will soon once again start to offset implementation costs, becoming more visible from late Q4 and especially into '27 and '28. So with that, Benedicte, I will hand it back to you for the concluding remarks.

Thank you very much, Torbjorn. To sum up, Q2 was a bit softer financially, but it was also a quarter with clear strategic progress. We advanced heavy lifting on IT simplification, strengthened our Nordic broadband position, progressed in defense and continue to sharpen both the portfolio and the organization. As Torbjorn said, we also remain financially strong with leverage well below our target range and the buyback program is well underway. As we move through this soft patch, our focus is firmly on execution. Improving commercial momentum, delivering transformation benefits and turning this year's strategic actions into stronger cash flow and returns over time. Our long-term ambitions remain unchanged, and we are confident in the direction we are taking. I'll now hand back to Frank to moderate the Q&A. Please, Frank.

Thank you, Benedicte. So we'll now open the line for questions. And as usual, please limit yourself to one question each plus a brief follow-up if needed. So that everyone gets an opportunity to participate. Operator, please go ahead.

[Operator Instructions]

Our first question comes from Andrew Lee with Goldman Sachs.

I have a question clearly around the guidance cut today. The share prices are telling so that investors have lost confidence in the structural growth outlook for some of the Nordic markets and also in execution. So I have a question around -- that hits on both those things.

On the structural side, the concern is in Norway is have we run out of road on the more-for-more growth and the value-added services. It's worked well for the last few years, but it hasn't -- it's not working this year. Is that just poor execution? Or is there a structural problem of us running out of road there? And then also on the execution side, the cost of transformation, cost reduction is always a black box, but it's unprecedented the amount of EBITDA headwind that this IT stack transformation is generating to your business. Investors haven't seen that before across the sector. Could you just tell us what the total cost of the IT stack transformation is and what the anticipated boost to Nordic EBITDA is, so people understand that better because it's confused a lot of people.

Okay. I'll try and pick up on -- so it's the structural in Norway, right, on the...

Yes. The value-added services.

Yes.

Yes, exactly.

Okay. Firstly, I'll just like to repeat that the service revenue in Norway, adjusting for the VAT effects and the business transfer, even with the different timing effects of price increases this year compared to last year was at -- or grew by 0.6%. What we saw in the second quarter was that there was much more rotation in the market and much more campaigns, which means that our ARPU was still growing, but had a lower growth than it had in previous quarter. We still have our more-for-more strategy. And on top of that, we have our services-first layer on top. However, the services-first products that we've launched, the first one in November of last year and the second now in March have not picked up with the pace that we anticipated.

But we are adjusting and fine-tuning that and hope to be able to prove that, that also is a viable way forward for Telenor. And we continue, of course, with the more-for-more concept as well. On the transformation side, would you like to cover that, Torbjorn?

Sure. I think the way to think about the -- we're not going to the specifics about the cost themselves, but clearly, what is driving a lot of cost right now is the number of IT people we have involved in, one, the IT -- the sort of system out in Norway that needs to be done by the end of this year as well as the implementation of the BSS stack in Finland -- sorry, in Denmark. And those 2 things in combination with running 2 systems in practice in parallel brings additional cost. And of course, when you look at the efficiency savings that will come on the back of that into next year and beyond, that is, of course, that those costs that we are now running to implement those systems will be taken out.

So this is -- but the IT stack is not just important from a cost perspective, it is also an important part of our sort of customer journey because the old, what I call technology debt systems often stand in the way of good customer journeys. And this is, of course, important for our customer experience to ensure that we have proper future-proof systems that will deliver a whole new level of customer service in the future.

And just add a tiny bit to that, which is -- has to do with the paying off on robustification, which is one of the key elements of the transformation as well. And in light of the global context, if you could put it that way, one of the reasons for winning, for instance, the Norwegian defense contract is that we have stepped up on the robustification and resilience of our networks as well.

I might just add before you go to the next question, the element -- an element as to the aspect you raised, Andrew, on whether or not this type of development that caused by the IT transformation in terms of the EBITDA growth, which, by the way, on an underlying basis is down 2% year-on-year on a very tough comp is unprecedented. I think what is also unprecedented is what we're actually doing in terms of creating a cloud-native incumbent telco in Norway. I don't think many operators out there have been doing what we are doing now with the combination of going to a public cloud and private sovereign cloud production stack for the IT part. So I think that's fair to add, and that will bring significant benefits in the years ahead.

Our next question comes from Christoffer Bjørnsen with DNB Carnegie.

Can you hear me? Yes, there's some IT issues here this morning. I just wanted to follow-up on the competitive dynamics. It seems like a theme across, like Andrew said, the different telcos in the region and your report is increased competition and the commentary on the Tele2 call was also quite strong on that front. So could you maybe give some more color on what you're seeing across the different countries? Is this like a new norm of higher competition and what is driving that? And if not, what will change going forward? And then I have a follow-up, please.

It's always difficult to kind of have forward-looking statements and particularly on markets. And I guess that's what's hurting us a little bit also this quarter that we didn't see that a very good and stable 3-player market actually turned more rotational in Norway with much more aggressive campaigning and -- but we saw some recent improvements at the -- towards the end of the quarter. So that's the story for Norway. In Sweden, it's a 4-player market, as you know, and it's quite stable and seems to continue that way.

In Denmark, the -- which has been at highly maybe the most competitive market in Europe, we've seen an improvement in the way the pricing and the market is behaving. And then I guess, in Finland, which has also been confirmed by some of the other market players, the price shock we got in Q4, which has -- remember, you have a 12-month binding period for new customers takes some time to recover, but it seems to be stabilizing and recovering from that price shock.

Right. And then my follow-up is more on the dividend and the buyback program. You're obviously making some big moves with Bahnhof and other deals and you're having these transitory headwinds to the cash flow and the earnings this year and next. Can you just help us understand how to think about the buyback program and the dividend going forward if you're still committed to those? I think when you launched the buyback program, you said it gave you flexibility, but if anything, to increase it if you did not do any big deals. I just wanted to kind of get confirmation that there's no risk to the program or the dividend from the near-term weakness you're seeing now in all these deals. So just getting a lot of questions on that from investors.

The short answer is no. We have a 16-year track record on paying dividends. So there's a strong fundamental commitment to the payment of dividends, both in the Board and in the management. So...

Increasing dividends. Not only dividends.

Increasing dividends. Thank you, which is now being complemented by a share buyback program, which is well underway. And of course, the buyback program, a, it returns capital to shareholders; but b, it also reduces a little bit the absolute amount of dividends that we pay out, which is important given that we have sold off businesses, which, of course, where the cash is no longer coming in. Then with the acquisitions we are making, this will, of course, add to the financial profile going forward. We think they are good acquisitions that will support our development in the years ahead.

And then we will -- we always have good discussions with our own Board on, call it, alternative uses of the financial strength we have. And that is something that you would have to wait for until we have that discussion with our Board and communicate something. But there is a strong commitment to compensating our shareholders in a good way, Christoffer.

Yes. And the flexibility, if anything, was more on the upside rather than downsizing the program, the buyback program if you do these big deals.

As I said, now we are -- we have kicked off on the NOK 15 billion program. Of course, in sizing up these things, it's -- one is, of course, returning a good amount of capital to the shareholders, then that needs to be conducted in accordance with market regulations. But yes, there's always flexibility to add additional shareholder remuneration. But that's something that I'm not going to preflag here. That is something that we would have to communicate as and when we make a decision.

I think we need to move to the next question, which seems to be from Felix at Nordea.

Our next question comes from Felix Henriksson from Nordea.

I'll actually follow-up on Christoffer's question on capital allocation more broadly. I'd like you to discuss about the financial and operational headroom that you still have left for larger maybe mobile M&A, given that you've now announced 3 acquisitions on the fixed side of things, you have the buyback going, and it seems like the earnings trends are worsening because obviously, there's been speculation about mobile market consolidation in the Nordics. And historically, it seems like you've been quite open to that. So just curious to hear your thoughts about your both financial headroom as well as operational capacity to do anything larger on top of what you've already announced.

Yes. I think we will not do anything that will not benefit our shareholders from a financial perspective in the areas of M&A. And I think the 3 -- or actually 4 proof points you have from this quarter is a testament to that. And that would also, of course, apply if we were to pursue any other consolidation efforts or acquisitions within our markets. And of course, as we -- Torbjorn just said, answering Christoffer's questions, we have a very strong balance sheet at the moment. We have initiated a share buyback program, which will take down the number of shares and give higher returns per share.

And if we cannot apply or invest in things that we think yields more to the investors, of course, we will suggest to our Board that we, in some way or form, repatriate that to our shareholders if that occurs.

Okay. I hope that answers your question.

Our next question comes from Nick Lyall with Berenberg.

I hope you can hear me. It was to come back to Norway, please, if possible. You mentioned competition in broadband, I think, in your comments. So would it be possible -- there's loads of moving parts, obviously, in the Norwegian numbers this quarter. But could you tell us where we find, if anything, in your KPIs, it looks like mobile is. So could you just help us and tell us exactly what the effects are on the numbers and what you've penciled into guidance? And then just a very quick sort of clarification on the last point. You didn't mention CelcomDigi as a stake in the last point. Can you just remind us what the criteria are for you thinking about sale or keeping the asset, please?

Sure. So when it comes to the Norwegian market, what we saw in Q2, which, of course, is you can think of also as a little bit of a bridge to -- which is a bridge to the outlook for the year is that we saw a lot stronger promotional development in B2C mobile in Norway, which led to higher churn and then pressure on ARPU growth. Q2 is typically a very promotional quarter with summer campaigns, et cetera. And they were quite aggressive campaigns this quarter. And that when you do get rotational churn perhaps into lower price points, that has a carry-on effect, which affects the outlook for the year. Then as Benedicte talked about, we had a bit of a slower start to our value-added services.

We had growth in -- on the security products, but less so on the entertainment products. So we're now, of course, taking steps to recompose that package. So those were the main things that was affecting the performance in Norway. On the broadband side...

Well, there is one more thing, which is the price adjustments that were a bit more staggered this year compared to last year. So it kind of comes in, in different periods of the year between quarters.

And on the broadband side, the main focus there has been to -- we've taken a couple of steps now to strengthen our market position on the fixed side in Norway with the acquisition of GlobalConnect, which was recently approved as well as the announced acquisition of Enivest. And then sorry, the second part of your question, Nick.

CelcomDigi?

Yes, CelcomDigi. Yes, briefly. I mean, what we have said is that long term, we see ourselves becoming more of a Nordic-centric group. And of course, with the acquisitions we make, we are just by nature of the weightings, becoming more Nordic-centric. Our main focus there is to be active owners. And if we do see opportunity -- structural opportunities, we will, of course, consider those. But that is about as far as we go when commenting on the future of our Asian assets.

Our next question comes from Ulrich Rathe with Bernstein.

My video doesn't seem to work. I apologize for that. So I wanted to ask a little bit about this competition situation, particularly in mobile Norway. I mean you're describing it very distantly, right, as an externality, you're sort of saying there is higher competition. But could you dig a little bit more into the dynamics of it? For example, it is imaginable that you have enabled Ice through the NRA to become the national roaming agreement to become more of a quality player, and they might sort of be emboldened to be more aggressive in the market. So in this sense, it's not simply an externality of other players. It's also Telenor's contribution to the situation? Or if that's not true, any other sort of underlying reasons for this flare-up of competition that you would see here?

Do you want to take that, Torbjorn ?

Yes, I can start. Look, it's -- I wouldn't sort of peg it on a particular operator. But there was some significant campaigning that was going on in Q2. We've had campaigning from all the MNOs. We've had campaigning from the MVNOs. So that's just part and parcel of operating in a market with several players. But of course, when there are packages being offered with lower price points, all you can eat on data, et cetera, that will always create a certain market dynamic, which has affected our numbers. And when the market is more competitive, we do see that sometimes there is rotational churn, which has led to people switching into -- we've had, a, had to spend more cost in order to secure -- to keep customers and secure them. But sometimes they will then switch into lower price points.

As a result of which you do get some pressure on the ARPU, which is what is evident in our numbers. I think it is important to say that we did see some normalization towards the end of the quarter. Some of our competitors has increased their price points. But Q2 will always be a very dynamic quarter on the competition front.

Can I just clarify one thing? It's a very quick one on the clarification, Frank. Sorry about this. You seem to say during your prepared remarks that the guidance actually excludes -- so for the year, the comparison to guidance would exclude the TV VAT issue, whereas in the organic growth rates, the VAT issue is included. Can you just confirm that? And if it's true, explain why you would play it that way?

Yes. Well, we have had a caveat for some years now on issues or claims or other factors relating to prior periods activities, such as this TV VAT, which was a claim from the tax authorities on 2020 to 2022. So that comes in that category where we basically have said that our guidance doesn't include that sort of periods not related to the period in that way. So that's consistent with how we have done it. The adjusted service -- I mean, the service revenue growth, the organic growth and so on, does the reported numbers, as we touched on in the presentation, are affected by the TV VAT -- but the first half year rates that you see on our outlook slide have been adjusted for the TV VAT so as to be consistent with the guidance, which excludes the TV VAT, if that makes sense.

Our next question comes from Fredrik Lithell with Handelsbanken.

I had one on Sweden. The announced acquisition of Bahnhof, if you have any regulatory approvals that is needed is the first one. And then secondly, if you can come through with this acquisition, do you feel you have your base ready in Sweden? Or do you have white spots that will make you continue to look for M&As in Sweden on the fixed side as well?

Yes, we do need regulatory approval from the competitive authorities, which is put in motion, but we hope to get an answer to that within third to fourth quarter some time. And as you may remember, we are also -- at that point, we will make a mandatory offer for the remainder of the shares. And then when it comes to, are we satisfied with our base? I think I'll just answer that. But if we have financially viable opportunity that would kind of be incremental to our business, then we will look at it. And if not, we won't. We have a pretty good position now and improved with what we've done in Q2, crossing finger that it goes through. And we'll continue to be open, but not too eager, if I can say it that way.

Okay. And then maybe a quick follow-up on Sweden. You said, Benedicte, that Sweden feels quite stable and hopefully, it will continue that way. We just had a conference call with one of your competitors that said it has been a flare-up of competitions here late spring into the summer. Is that something you can confirm and how you sort of deal with that?

I think from our perspective, we've progressed quite well in the market. And we've -- our experience is that it has been quite normalized market. And we've added, as I said, 36,000 new subscribers. We have still a decline in fixed. But remember then that they have been -- some of it is now reported under mobile for the fixed wireless access customers. But we are pretty pleased with how we are progressing in Sweden at the moment.

Our next question comes from Ajay Soni with JPMorgan.

My question is just on Finland. So you mentioned inbound ARPUs have somewhat deteriorated during Q2. I suppose this is a slightly different message to what Elisa said yesterday who had seen an improvement.

So can we read this as Elisa are raising prices, creating a gap between themselves and the other operators. So do you see this? Or do you still see pricing as quite tight within the market?

We can speak for ourselves. But why don't you cover that, Frank?

Yes. I think it's difficult for us to kind of talk about the differences between the individual players and so on and gaps and the things you ask about from a price perspective, those type of discussions, we don't do.

But I think what we can say, focusing on ourselves is that the we do see that the ARPU -- because remember, it was a hypercompetitive Q4. We did see normalization of pricing as we moved into Q1. So keeping pricing aside, you still have the issue that in Finland, people are signing up for 12-month contracts. You also have that additional thing that, let's say, if you're a subscriber with one operator and you have 3 months to go, you can then sign up for the promotional package in December and then that starts kicking in, in sort of April time or whatever. So you do get this delay in the improvement of the ARPU curve.

And what we did see was that -- there was some improvement in -- throughout Q1, but then that kind of tailed off. So you're going to have -- for the first, I would say, 3 quarters of this year, you're going to have an ARPU development, which will take time to build itself up to where it were before. And I think that is one of the key things that has been topical for not just us.

And I think just to give a more -- a bit of a better answer to my previous one, Ajay, on your question, I think in terms of the profile that you said that the ARPUs -- inbound ARPUs seem to have deteriorated during Q2, which is a bit of a different message and so on. That's not quite precise. What we've said is that if you think about month-on-month inbound ARPUs during Q1 to -- I mean, January to April, we were consistently improving. And even though we have seen continued improvement on average for Q2 versus Q1, kind of the intra-quarter development from April to June showed no further improvement and actually rather with June being slightly lower. So -- but pricing -- remember, there's a lag between the actual pricing in the market and what is being -- what we're able to book in an individual month or quarter because of how the market works. So pricing is moving in the right direction.

But with a lag.

I think we need -- if that's good, Ajay, we have other people in the queue. So I think we need to move on to the next one, please.

Our next question comes from Keval Khiroya with Deutsche Bank.

I think some of the promotional activity in Norway has been on the unlimited offers and not just the lower-end options in mobile. Do you think there's been more competition on unlimited than usual? And how do you think about your price premium in Norwegian mobile for unlimited? Do you see it as sustainable? Or is the lesson here that maybe that level of price premium is a little bit more difficult to sustain?

I think I'd like to start with the second half of your question, if that's all right, where we've built a unique coverage, a unique brand position, a unique resilience over time, and we are also expanding that with products, both for the retail and for the business segment. And I think -- and we experienced that our customers are willing to pay for that quality. And that has not changed. However, we do see more competition in certain pockets of -- within the segments. And as you say, unlimited data usage and so on, that's been one of the promotional characteristics within the second quarter, as you say. So I can confirm that. But we don't -- we have not experienced that our market position as such is changing.

But you're right, I think the promotional activity in the market has lifted up from low to mid-end towards kind of the more unlimited bracket, which is a higher bracket in the consumer market.

Our next question comes from Abhilash Mohapatra from BNP Paribas.

I'll ask one on Asia, please. So just on Bangladesh, obviously, you mentioned all of the sort of various macro headwinds, which make it difficult to have a lot of visibility on the pace of the recovery. Can you just explain to us what you're now baking in for Bangladesh during H2 in your new revised guidance? I think previously, you had said that you were assuming stabilization. Has that view changed? Can you just sort of clarify what you assumed for H2? And then just on the topic of Bangladesh, is there any update that you could perhaps provide on the spectrum auctions? Obviously, quite a lot of spectrum that was set to come up for renewal from your past spectrum bands. Any updates there would be very helpful.

Shall I?

Yes, please.

So in terms of the outlook for the year, and of course, Bangladesh hits, call it, EBITDA in terms of -- when we look at the sort of group guidance. We do expect that it's still a form of normalization for the second half. You got to keep in mind that I think management has done a very good job in terms of focusing on costs when the top line is challenged. And of course, that's important in terms of confidence in the guiding. But look, we will follow the Gulf war. No off-ramp has been secured yet for the parties there. So of course, if that situation deteriorates, it's difficult for me to sit here and be bombastic about what's going to happen in Bangladesh, which is dependent on energy imports from the Gulf.

But again, management is definitely focusing on managing costs in order to protect cash also in a challenging situation. When it comes to the spectrum auctions, there is no news there. I will refer you to our website in terms of when these are up for renewal. We, of course, have our own dialogues with authorities there. But so far, no information has come out on the sort of nature, pricing, et cetera, of that spectrum renewal process.

But you're right, there are 2 spectrum auctions expected this year -- or running out, sorry, this year.

Up to 4 bands actually, which depending on how we define them, which, will come up for renewal. The format is still to be seen as there's nothing official on that. I think that concludes our call for this time. That's all we have time for. And if you have additional questions, please don't hesitate to reach out to IR. And operator, I think that concludes our call.

Good morning, and welcome to Telenor's First Quarter Results Presentation for 2026. Joining me today are our CEO, Benedicte Schilbred Fasmer; and our CFO, Torbjorn Wist. Before we start, a quick reminder, unless we state otherwise, all revenue and EBITDA growth rates are organic and on a constant currency basis. And EBITDA refers to adjusted EBITDA.

Today's agenda will follow our usual structure. And at the end of the presentation, we'll open the line for Q&A. To give everyone a chance, we kindly ask each of you to limit yourself to one question.

And with that, Benedicte, over to you.

Thank you so much, Frank, and good morning, everyone. In the first quarter, Telenor continued to execute on its strategy and deliver steady performance despite challenging external backdrop. The closure of the Strait of Hormuz pushed up consumer energy prices and created a new supply chain uncertainty, particularly across parts of Asia, including Bangladesh.

We delivered service revenue growth of 1.6% and EBITDA growth of 3.1%. Free cash flow before M&A was NOK 2.1 billion, a solid start to the year on cash generation. We also progressed well on our portfolio simplification, supporting our strategy to become a more Nordic-centric company over time. After divesting Telenor Pakistan at the end of 2025, we completed the sale of the 25% stake in True Corporation in March, receiving NOK 30 billion in proceeds. The remaining 5% stake in True will be sold within 2 years. Including the True proceeds, total free cash flow amounted to NOK 32 billion in the quarter.

Following these simplification milestones, we have a strong financial position. Leverage is at 1.2x, and we plan to commence our 3-year NOK 15 billion share buyback program after the AGM. In the Nordics, competition is still intense, but it has eased somewhat compared with the pressure we saw building through 2025.

Mobile service revenue growth was around 3% when adjusted for business transfers. Fixed service revenues rose by 1% year-over-year. In March, we launched Sikre in Norway, an innovative security integrated subscription. This is a good example of the services first strategy we presented at the CMD. In Asia, Bangladesh remains challenging. Energy supply vulnerabilities and cost of living pressure continue to outweigh the positive effects of the February election. And Grameenphone returned to negative growth due to affordability pressure and tough data competition. However, we remain confident in our medium- and long-term ambitions as we invest in transformation and simplification to build an even stronger future-fit Telenor.

However, we are lowering our EBITDA growth outlook for 2026 due to the top line headwinds in Bangladesh and Finland and because of the effects of the transfer of managed IoT and Coastal Radio in the Nordics. Torbjorn will explain that in more detail.

Turning to the Nordics. Growth has softened compared with the strong momentum we saw in 2025. In Q1, Nordic Mobile Service revenues grew by 2% or close to 3%, excluding the internal transfer of the managed IoT business to Telenor Connexion. Fixed service revenues grew 1%, supported by fiber growth in Norway. EBITDA in the Nordics grew 3.8%, driven by service revenue growth and higher wholesale revenues in Norway. And we continue to see cost benefits from transformation, most notably within customer service and due to closure of legacy networks in Sweden.

And in line with what we said at the CMD, 2026 is and will be a peak year for implementation costs of transformation initiatives. Overall, OpEx increased 2%. Nordics had higher amortization of sales commissions and continued high activities in transformation projects, particularly in Norway. And the higher sales costs reflect the churn increase we saw last year.

Encouragingly, in Q1, we were able to bring churn back towards a more normal level across most markets and segments. And we are so proud because OpenSignal's latest user experience measurements recognized all our Nordic business units for top-performing mobile networks, underlying the value of our continued investment in network quality.

This slide summarizes market-by-market performance across the Nordics. Starting with Norway, where we continue to execute on our now very well-established commercial strategy with more-for-more and services first. Value-added services within entertainment and security are key elements of this and stand-alone value-added services revenue in Norway grew 8% in the quarter. ARPU increased and EBITDA grew strongly, supported by higher wholesale revenues and easier year-on-year comparisons following last year's NOK 100 million TV VAT charge.

And while B2C campaigning held the mobile ARPU uplift back somewhat in Q1, we are encouraged to see a positive shift in B2B as we work to turn around the previous negative trend. The Norwegian Competition Authority is reviewing our latest remedy proposal on the deal with GlobalConnect, and we expect to be able to close the deal within the next 4 to 6 months.

In Sweden, mobile continued to grow, supporting profitability despite a managed decline in low-margin fixed revenue. Denmark sustained customer momentum, particularly in fixed wireless access, while EBITDA was pressured by introductory offers and higher third-party commission costs. Overall, Denmark is executing in line with our plan, and they are in the middle of a very ambitious transformation. So we expect a clear pickup in EBITDA growth over the coming quarters.

Moving to Finland, where mobile competition eased somewhat in Q1, and DNA delivered underlying mobile service revenue growth of 2.2%, while competition in the fixed segment intensified. Churn normalized, and we saw gradual improvement in new sales ARPU. However, the pricing impact from Q4 still held back reported service revenues.

And even though pricing is gradually improving, volumes have been softer and prices on new sales renewals are still not back to the levels we saw in the first half of last year. In some cases, there is also a lag between sales and when revenue is recognized. So improvements may take time to show up in the reported numbers. As such, we believe it will take a couple of quarters before Finland returns to the mobile service revenue growth level we are aiming for even with a continued gradual recovery.

So turning on to Asia. In Q1, we reached a major milestone by completing the sale of our stake in True, receiving NOK 30 billion in cash proceeds from the first tranche. At the same time, the region is being affected by the fallout from the Iran war. And unfortunately, Bangladesh is among the most exposed markets, given its import dependency, limited LNG storage for power generation and the risk of further pressure on energy costs.

Grameenphone's service revenues declined 2% in Q1, while EBITDA was down 1.5%. The quarter also reflects the continued shift from voice to data alongside intense price competition. Year-on-year, the decline was driven by a weaker macro backdrop, which intensified in March as customers were affected by shortages, saving measures and energy prices. We are mitigating some of the top line pressure through cost measures. And while we remain focused on supporting customers, we are keeping spending highly disciplined in this environment.

In Malaysia, CelcomDigi showed continued top line progress in its most recently reported quarter, and we received stable dividends. Importantly, new 5G spectrum is underway for the company's network JV, DNB, and we believe it's key to the improvement of the longer-term financial prospects of DNB. We also recognized an impairment of the recorded value of our shares in CelcomDigi after the market value fell significantly below our carrying value.

And with that, I'll hand over to Torbjorn to walk you through the financials in more detail.

Thank you, Benedicte, and good morning, everyone. Let me kick it off by taking you through the group financial highlights for the first quarter. Overall, service revenues came in at NOK 14.8 billion and EBITDA was NOK 8 billion. Service revenues grew 1.6%, while EBITDA grew 3.1%, resulting in an EBITDA margin of 44.2% based on the total revenues of NOK 18.2 billion. Free cash flow before M&A in the quarter was NOK 2.1 billion. And if you include the True proceeds, total free cash flow was roughly NOK 32 billion in the first quarter.

Net income was NOK 3 billion, and EPS was NOK 2.22, both up 15% year-on-year. Note that most of our operating currencies weakened materially against the NOK during the quarter. In nominal terms, FX effects reduced reported service revenues, EBITDA and free cash flow by some NOK 0.4 billion, NOK 0.3 billion and NOK 0.2 billion, respectively.

The group's CapEx to sales was 12.5% in the quarter. The leverage ratio strengthened materially to 1.2x, driven by the disposal of our stake in True. On the other hand, Group ROCE was negatively impacted by the impairment of our stake in CelcomDigi. While the True transaction improved leverage, the accounting gain in that sale is not included in return on capital employed because True is no longer an associated company.

The CelcomDigi impairment, however, reduces return on capital employed. Importantly, return on capital employed, excluding associated companies, was 13.6%, demonstrating a strong underlying result for our controlled assets. Finally, please note that we have changed the calculation of capital employed in our ROCE definition. In essence, we have moved from defining capital employed as equity plus net interest-bearing debt, including license obligations to noncurrent assets plus working capital.

This makes the definition of capital employed a more influenceable management metric in measuring business unit performance. This is very important because as you may remember, Benedicte and I highlighted the importance of implementing ROCE throughout the organization and the new definition is better suited for that.

Now starting with the top line. In reported terms, service revenues were down year-on-year due to FX, while growing 1.6% organically. This growth was primarily driven by mobile in Norway, Sweden and Denmark. In the Nordics, mobile service revenues increased 2.7% when adjusted for the transfer of the IoT business, supported by the ARPU uplift across Scandinavia.

Finland was impacted by carryover effects from lower campaign prices in Q4 last year and front book pricing in Q1 was still below the level we saw a year ago. On fixed, service revenues grew 1.3%, driven by a larger fiber subscriber base in Norway. Asia was, as Benedicte highlighted, the main drag on growth, driven by the weaker performance in Grameenphone.

Turning to OpEx, which came in at NOK 6.2 billion, down 2.4% year-on-year in reported terms and up 0.5% organically. Higher personnel costs and higher amortization of external retail commissions from prior periods were partly offset by lower O&M costs. This was achieved despite significant implementation costs for transformation and robustification, which we went through in detail at our CMD in November. In '25, these costs were more back-end loaded than we expect the profile to be this year. Transformation continues to deliver cost benefits in the Nordics, as highlighted by Benedicte. And in Bangladesh, cost measures also helped mitigate the top line decline.

Then moving to EBITDA, which was just above NOK 8 billion, roughly flat in reported terms, but up 3.1% organically. The Nordics delivered 3.8% growth in EBITDA, driven by ARPU growth in Norway and continued fixed transformation benefits in Sweden. After the improvement in the second half of '25, Grameenphone unfortunately declined again. As a result, EBITDA for Asia was down 1.7%, weighing on the group results.

Now then let's zoom in on the profitability in the Nordics. EBITDA in the Nordics increased 3.8% or 4.9%, excluding the impact of the transfer of managed IoT and coastal radio. Norway and Sweden were the strongest contributors, and Norway also benefited from easier comps in Q1 last year, including the VAT-related item and the limited national roaming revenue contribution in the prior year quarter.

Denmark and Finland contributed negatively, reflecting the commercial and cost dynamics we discussed earlier. Denmark stands out at minus 13%, and this mainly reflects introductory offers that weighed on gross margins, combined with higher amortization of commissions from previous periods following a shortened amortization period. Overall, Denmark is executing in line with our plan, and we do expect EBITDA growth to pick up meaningfully over the coming periods.

Now then moving to Asia and focusing on Grameenphone. As Benedicte highlighted, growth turned negative in the quarter, consistent with what the company communicated to the market in March. The quarter reflects the tough macro environment, election-related restrictions and a lower-than-normal uplift from the Eid festive season. Higher fuel and gas costs have added to cost of living pressure in the country. That increases price sensitivity when customers shop for data packages at a time when competition remains intense.

Tight cost control and a one-off settlement with the supplier contained EBITDA decline to 1.5% in Q1, somewhat better than previously announced by Grameenphone. Now in this environment, we remain focused on tight cost control and disciplined release of investments.

Now then let's move to the P&L and cash flow. In the P&L, there were several material movements on the associated companies line this quarter. Operating profit was broadly flat in nominal terms, held back by FX. We booked a net gain of NOK 12.2 billion from the disposal of our shares in True Corporation. But on the other hand, we also recognized an impairment of NOK 8 billion related to CelcomDigi as its market value at quarter end was significantly below the carrying amount in our books.

Net financial items were positive at NOK 549 million. This was driven by net currency gains of just over NOK 1 billion, mainly related to derivatives hedging the FX conversion of the True proceeds as well as improved liquidity and lower interest rates. Tax expense was NOK 1.1 billion, corresponding to an effective tax rate of 12%. Net income to equity holders was NOK 8.2 billion. Adjusted net income, excluding the associated companies, FX impacts and other smaller items was NOK 3 billion, corresponding to an adjusted EPS of NOK 2.22.

Then turning to cash flow. Total free cash flow was roughly NOK 32 billion, including cash proceeds from M&A activities of roughly NOK 30 billion. The sale of our 25% stake in True, which was the first tranche, generated cash proceeds of NOK 29.8 billion, excluding the hedging effect mentioned earlier. The related positive cash impact of NOK 0.6 billion was offset by the first installment of NOK 0.6 billion for residual obligations in India.

Free cash flow before M&A was NOK 2.1 billion. The year-on-year reduction in free cash flow before M&A was NOK 0.8 billion and was mainly due to timing effects last year and the divestment of Telenor Pakistan. In addition, FX reduced free cash flow by some NOK 0.2 billion in the first quarter. The first quarter of '25 benefited from working capital inflows, driven by Grameenphone due to the Eid season timing as well as handset financing in the Nordics.

Q1 last year also included NOK 352 million of cash flow from Pakistan, most of that entity's full year contribution, which is no longer part of the portfolio. The main contributors to free cash flow before M&A were the Nordics at just shy of NOK 1.8 billion and Asia just over NOK 1 billion, the latter supported by NOK 342 million in dividends from CelcomDigi.

The quarter was also relatively heavy on spectrum payments with NOK 0.7 billion paid, including incremental right-of-use prepayments related to the recent awards in Sweden and Bangladesh. Overall, it was a solid quarter for free cash flow before M&A, keeping us on track versus our full year outlook and, of course, a very strong quarter in terms of M&A cash flow.

Now this, of course, has clear implications for the leverage and capital allocation going forward, in line with how we outlined the use of proceeds on our Q4 call. We can now see the True proceeds impact on the balance sheet. Leverage ended the quarter at 1.2x, well below our target range and net debt declined to NOK 46.2 billion. This creates headroom for incremental shareholder returns such as our proposed buyback and disciplined value-accretive investments in our Nordic core markets.

Of the NOK 15 billion program, we will propose to start with up to NOK 6 billion in the first year, which includes the government's portion, subject to AGM approval and available liquidity. And again, if value-accretive investment opportunities do not materialize, we will consider further return to shareholders.

And that brings us to the 2026 outlook. On our full year guidance, we have updated the 2026 EBITDA outlook for the Nordics and for the group. For Telenor Nordics, we still expect low single-digit service revenue growth and around 14% CapEx to sale, excluding leases. We now expect low to mid-single-digit EBITDA growth, updated from mid-single digit. The main reasons are the somewhat slow market normalization in Finland and that we have chosen to not adjust for the impact of the business transfer of managed IoT and Coastal Radio from the 1st of January, which we had assumed in Q4 when we made the original guidance.

As stated in the Q4 report, these transfers reduced EBITDA by around NOK 0.2 billion for the year, equivalent to about 1 percentage point of growth for Nordics. For the group, we now guide flat to low single-digit EBITDA growth updated from low to mid-single digit. In addition to what I just mentioned, the key driver is the impact of the unresolved situation in the Persian Gulf and what effect that is having on Bangladesh.

While everyone hopes for a quick resolution to the conflict, Bangladesh is a vulnerable economy and the exposure increases the longer this situation persists. That said, several factors help protect the flow-through to free cash flow from EBITDA sensitivity in Grameenphone. Key shields, I remind you, are the 44% minority ownership and the 40% corporate taxes and of course, our own operational measures in the company.

We maintain our free cash flow guidance of NOK 10 billion to NOK 11 billion before M&A and incremental spectrum commitments post CMD, excluding dividends from associates, despite a negative FX impact of around NOK 0.4 billion from the stronger NOK. On the quarter-by-quarter profile in '26, please note that Q2 will be particularly challenging for EBITDA growth due to a difficult comp given the standout second quarter last year in the Nordics, lapping of the Norwegian roaming agreement from mid-March, a smaller year-on-year impact from already implemented back book price migrations, continued high transformation activity in the Nordics in the first part of the year and bigger impact of energy shortages and related inflation in Bangladesh.

And while '25 had a back-end loaded cost profile for both sales and marketing and transformation costs, we expect a more even distribution throughout 2026. For Grameenphone, we expect service revenue growth to remain negative in the near term. The timing of recovery remains uncertain given the indirect exposure to the Iran war.

And then finally, just to point out, our medium- and long-term financial ambitions, they remain unchanged.

And with that, Benedicte, I'll hand it back to you for the wrap-up.

Thank you, Torbjorn. To sum up, we delivered steady performance against a shaky international economic backdrop in Q1. We continue to execute on the strategy described on the CMD to build a stronger and even more future fit and Nordic-centric company. The True deal was another milestone in this respect, materially strengthening the balance sheet and enabling increased capital returns, including initiation of the 3-year NOK 15 billion buyback program after the AGM.

At the same time, we are realistic about near-term headwinds, particularly in Bangladesh. And we have, as a result, adjusted our 2026 EBITDA growth outlook accordingly while maintaining our free cash flow guidance. Our long-term view and ambitions remains unchanged. We will continue to drive service revenues through relentless improvements of the customer experience based on excellent networks and services-led growth. We will accelerate the pursuit of efficiencies through continuous simplification and tech-led transformation. And we will continue to honor our track record of effective capital allocation and shareholder returns.

And now I'll hand you back to Frank to moderate the Q&A.

[Operator Instructions]

Thank you, Benedicte [Operator Instructions] Operator, please go ahead.

Our first question will come from Ondrej Cabejsek from UBS.

I wanted to ask on your guidance. So I understand that Grameenphone is obviously challenging. You've also had some reclassifications, as you pointed out, in the Nordics and obviously, the weakness in Finland. You also flagged some kind of IFRS effects that have been, I think it is clear, kind of expected by you in Denmark.

So in terms of the Nordic EBITDA specifically, can you speak also about the kind of Norway and Sweden developments, whether these are kind of in line or perhaps in the case of Sweden, maybe even better than expected? So what is the outlook kind of outside of the things that you already touched upon in the Nordics, specifically on EBITDA. And associated with this, the weaker EBITDA outlook, is it kind of absorbed on the free cash flow level simply by the fact that you've got this kind of NOK 1 billion range within the guidance? Or are there some mitigating measures that you are kind of taking or have to take to actually preserve free cash flow guidance at this kind of NOK 10 billion to NOK 11 billion range?

That was a lot of questions in one question. But if we try to kind of pick up your main points, to start with Grameenphone, I think it -- in our guidance, we expect the situation to remain challenging for the first half year. If the challenges persist, of course, we might have to change our guidance going forward. But we are pretty tight on both OpEx and on CapEx, and we are taking measures in order to alleviate the consequences as best as we can. However, we also do need to take our new spectrum in use and to have some investments in order to meet the competition on the transition from voice to data.

Would you like to cover Denmark, Torbjorn?

Yes. No, Denmark, as we said, the 13% negative was a bit of a standout, but that was due to costs associated with new offers in addition to the shortened amortization period. But Denmark is certainly expected to perform much stronger in the quarters ahead. I think in terms of the bridge to free cash flow, there are, of course, many different elements that contribute towards that. Yes, you have some FX that is pulling it down, and then you have some of the negative impacts from the likes of Bangladesh.

Then as you remember, when we guided, that excludes incremental spectrum and there's been some incremental payments into this year, that needs to be added back. We also have significant efforts to mitigate cost of goods sold, OpEx, working capital measures across all business units. And then in terms of the flow-through of the Grameenphone, remember that there's a high corporate tax rate. And whenever there is dividends paid out to shareholders, there's some significant minority leakage, which, of course, gets reduced if the results are lower. So there's a number of shields and sort of the rough rule of thumb is that if you assume that there was NOK 1 billion effect on EBITDA, maybe only 1/4 of that would flow through to the cash flow.

And then you had a question -- you had again, many questions in one. But we saw the competition is very stable in Sweden. And in a way, which is one of your questions and not to offend our Swedish colleague, but in a way, boring is good, which is why we didn't highlight that many news. However, we were in Sweden last week. They are doing a lot of good initiatives in order to improve our market position, particularly in the fixed wireless access. We have a good growth and we -- which adds to the mobile net adds. And again, we do see positive effects on the gross margin on the very deliberate phasing out of unprofitable products on the fixed side. So good performance also in Sweden.

Our next question comes from Keval Khiroya with Deutsche Bank.

I appreciate you probably don't want to give quarterly EBITDA growth guidance. But can you talk a bit more about the moving parts on Nordic EBITDA growth for the rest of the year? Q2 has a tough comp that you mentioned, but how do we think about the second half growth? I guess Finland has an easier comp, but just some comment on the setup and key factors for H2 would be helpful.

We don't really break it out. I think we highlighted clearly some of the things that is going to affect the Q2 growth given the rather difficult comp last year when you had, for example, the full inclusion of the national roaming agreement in the numbers. And then I think we've also highlighted that some of the sales and marketing related and transformation costs are spread more evenly out throughout the year relative to a more back-end loaded profile last year. I think that's about the degree of detail we will go into.

Yes. And as I just mentioned, we have anticipated a difficult situation in Bangladesh throughout first half of 2026.

That's helpful. And just by way of follow-up, can I ask, I mean, obviously, there's been a little bit less price rise support in the Nordics in Q1 and it sounds like for Q2 as well. How much of a factor is that for those 2 quarters? And at this stage, can you say anything about price rise support for H2, where that's a delta?

Sorry, you said price rise support? Yes, just we -- as you know, we don't comment on sort of forward-looking price initiatives, what have you. We stick to what is behind us, obviously, for competitive sensitivities. So I will not comment on sort of price rise support going forward.

Our next question comes from Nick Lyall with Berenberg.

It was a quick one about the -- well, the usual question about consolidation really. On the Swedish and Danish consolidation, you've got the cash in now for the True deal. So do you think you've got the political support you need from the local competition authorities, that being Sweden, in particular, or the political support from Sweden?

And Torbjorn, when you mentioned looking at value-accretive deals and then if opportunities don't materialize, how long would you wait to decide whether those are going to materialize or not, please?

I think as you know, we cannot comment on any particular transactions. But I think we need to close the gap in Europe on building scale within technology. And I think we need a framework that enables scale and the emergence or the possibility of emerging stronger national and European champions. So in light of that, we really believe that consolidation in our industry is key in Europe. And at present, there are still mixed signals from EU to whether that might be allowed. However, the latest -- last week's change in signals might imply that it's easier now than it has been for a while. However, I think to sum it up, we are taking a wait-and-see approach pending the further developments in the EU.

Just to come back on that point, does that mean you'd rather wait to see some draft of the merger guidelines first before you're prepared to take any -- or would you go for it first before you see drafts coming out. Is that a sort of prerequisite for any sort of action, do you think.

I think you can rest assured that we contribute to the extent we can on advocating what we believe is right, both for our industry and for Europe and the countries. And in light of the geopolitical unrest, I think to head in a more lighter environment to merge is key. And then I will not comment on what we do first and last, and that we'll have to come back to you when we have something to communicate.

Yes. I think there are many promising developments in terms of what you hear, but there's a lot of conflicting messages. I guess it will be interesting to see how some of these live deals that are out in the market will be treated.

With respect to the second part of your question, very quickly, we have just closed the transaction. I think we have just announced a very shareholder-friendly buyback program, and we'll implement that as soon as we have the necessary approvals. And then we will have to wait and see in the future in discussions with our own Board on any future remuneration initiatives.

Our next question comes from Christoffer Wang Bjornsen with DNB Carnegie.

So first of all, on the GlobalConnect, the pending transaction of GlobalConnect, can you just help us understand, I know you can't give all the details on the post remedies, but at least can you give some color on the -- on how material they are looking to be. Like are they material enough to change the financial trajectory you gave for the effect of the deal if it closes? Or is it more minor. That's the first one, I guess.

We can't comment on any specifics, I'm afraid, because the process is ongoing. However, we do expect the competition authority to conclude within the end of June, and we just received their so-called 70 days notice. We are still optimistic to close the transaction. And then the underlying of that, you do understand that we still can calculate or have a good decent return on the investment if it goes through.

All right. And then just a quick follow-up on the lease and ICE agreements. So just to me, it seems like if you pencil in typical seasonality for that business that you are tracking a bit ahead of the revenue last year, but you're still kind of saying that you expect it to be broadly in line with last year. So is that kind of factoring in some kind of tapering off of that business as they move to their own network. Or am I getting that wrong?

I think we obviously don't discuss, call it, the overall prognosis and the sort of quarterly movements of it other than to say that we still expect the contributions from the Lyse Tele agreement to be in line with what it was last year.

Our next question comes from Andrew Lee with Goldman Sachs.

So obviously, everyone is just trying to unpack this morning the changes that are just accounting adjustments with what's actually going on underlying from a structural perspective. I think one of the key structural concerns that investors have from today is on your Finnish fixed broadband trends where you've got basically a weaker Finnish fixed revenue growth or decline. What is driving that? That's question number one.

Secondly, what exactly surprised you in Finland and Denmark in the first quarter more broadly? I mean we knew Finnish competition was intense in the second half of '25. I guess you knew their introductory offer investments in Denmark. So what surprised you within those 2 markets that caused the underlying downgrade to guide?

And then just lastly, in Sweden, your broadband trends look a bit weaker despite easier comps. Have you got any commentary around that?

Okay. Let's just start with -- on the fixed side, what we saw there was that there was quite a lot of activity, particularly on the SDU segment, which traditionally is a more attractive relative to MDUs in terms of ARPU. So we saw a lot of activity there. We also saw more -- and that impacted some of the, call it, cable subscribers that we have in Finland on the SDU. We also saw more activity on the MDU side. So just in general, there was a sort of a switch out from both fixed wireless access and cable customers activity in the first quarter in Finland.

And as you may remember, we announced last year that we have an investment activity on the MDU side, replacing our cable network with fiber. And that's ongoing, and it's progressing according to plan, although there is also increased competition in that segment.

Yes. And that's an important upgrade because keep in mind, Andrew, that in Finland, the degree of cross ownership between, let's say, fixed and mobile customers is over 50%. So there is a strong ability in that market for cross-selling of products, not bundling, but cross-selling, which, of course, is important.

Just in terms of -- yes, on your second part of your question about surprising, I don't think Denmark was particularly surprising. It was competitive intensity, which had more introductory offers that weighed on gross margins. And then we had the change in commission -- the amortization of commissions. But in Finland, the flow-through effect perhaps was a little bit bigger than we would have liked to see in Finland, but we are pleased to see that things are normalizing back slowly but surely in that market now.

And then just on Sweden. So Swedish, your broadband trends looked a bit weaker this quarter despite having relatively easy comps. Anything going on that?

Yes. Well, as you said, it's a managed process where we are phasing out unprofitable products. And you'll find actually some of the fixed market in our mobile subscriptions because we've had quite a good success in fixed wireless access. So -- but that's reflected in the mobile subs numbers.

And keep in mind that the managed out of unprofitable customers on the fixed side in Sweden has been a very strong contributor to gross margins and also to EBITDA performance in the country.

Our next question comes from Ajay Soni with JPMorgan.

My question is just around Finland. So you mentioned lower volumes. So I just wanted to know where are you seeing the pressure? Is it from the main operators, the MVNOs? Is it within B2C or B2B? And then just related to that, Elisa mentioned they were maybe less reactive to commercial offerings from other operators. And is that a similar strategy that you guys might follow where you may accept some short-term subscriber losses to encourage a more rational market within Finland?

I think we have seen some uptick in the numbers for the MVNOs, but it's still manageable within -- in the market. On the B2B side, that's actually quite colored by the macro conditions in Finland, whereby there is 11% unemployment. There are not a good growth in the B2B market, which is impacting the market conditions as such. However, we actually progressed fairly well on the B2B market, and we've also had some new solutions and launches to the customers that have been well received. So in a bit of a slow growth market, we are performing fairly well in that segment.

And I think you said lower volumes in your opening of your question, it is more lower churn that we're seeing in the country. It's actually normalizing back to the same levels that we saw 12 months ago. And lower churn is better than lower volumes, so to speak.

And then just on the second part, which is around maybe the behavior from Elisa saying may be more rational. Is that something again that you guys are maybe trying to encourage just to encourage the market to become more rational?

Look, we -- yes, that's -- we try to avoid sending signals to the market. We were very clear that Q4 was a significant competitive intensity, thanks to one of the players. I won't mention the name. And what is good is that we have seen that come first quarter, the situation has definitely improved.

Our next question comes from Ulrich Rathe with Bernstein.

I have actually 2 clarification questions only, if I may. The first one is on the Nordic EBITDA downgrade, you talked very much about the factors already. I was just wondering whether you'd be willing to talk a little bit about the scale of these different factors, in particular, the inorganic versus organic factor. I think from Investor Relations, we learned this morning that the inorganic factors were about 160 basis points in the quarter. Is that for the Nordic EBITDA? Is that sort of representative of how it might look for the full year? Or is there anything particular going on in the first quarter for the inorganic contribution? That will be my first clarification question, please.

Yes, I wasn't part of the call, so I don't know what that was.

No, we didn't have a call, but it's just in the summary. It's -- I would say the business transfer effect is about a bit north of 1 percentage point for the full year, Ulrich. So there were some other factors in there in the first quarter, the VAT effect from last year and so on. So don't recognize the 160 in terms of the organic, nonorganic switch there. But about 1 percentage point for the full year is relating to the business transfers for the Nordics.

Yes. And just to be clear, that's the internal move of managed IoT services from Nordics to Amp. So it's internal moves, right.

In addition to the Coastal Radio, of course. So -- but it's -- that's the main part. And then there's a contribution of -- to some extent, also in Finland, which has picked up in a bit of a slower pace than we had anticipated in January.

Okay. So it sounds like sounds like 1%, a bit more than 1% from inorganic and probably then 1% or so from Finland, right, I mean give and take. The question on the -- the second question is a follow-up to Nick's question. So just to discuss the motivation of the wait-and-see approach. And obviously, operators in France are taking a more active role there. They're trying to test the EC views. Why is it the right choice for you to go into this wait-and-see mode in relation to the potential change of the EC views on in market consolidation?

Yes. Look, the -- I know that the interest is high, and we spend a significant amount of time in most investor meetings fielding questions on this regard. We tend not to go into any details about motivations. But clearly, the sort of slight positive signals, but still contradictory signals from the EU Sphere makes us take a more cautious approach because we need to see how this is implemented in practice. We've been very clear that we think consolidation is good for Europe if they want to have a thriving digital sector. But so far, not everybody is seeing from the same him sheet. And as a result, we're taking a little bit more of a wait-and-see approach.

If I may challenge you on this, if there's uncertainty, right, in this regard, one could take the view that there's really a pot of gold at the end of the rainbow. So why is it the right approach not trying to test it? I mean I understand if the signals were very negative and cautious, then you don't want to try, right? But if there's uncertainty and then there is a significant benefit, why not try?

Look, we will not go into tactics. And if we test it and succeed, then you'll be the first to know along with all other investors if and when we have something to announce.

Thank you, Ulrich. We'll go on to the next questions. We have a few left. So please let's all keep and stay short.

Our next question comes from Felix Henriksson from Nordea.

Just a couple of clarifications on the Nordics. Firstly, on Denmark, you mentioned that execution is basically in line with your expectations, but there was a fairly large drag from legacy DSL broadband in the quarter and also these higher commissions on FWA. So can you just expand a bit on why you're so confident that trends in Denmark will improve in the coming quarters and why this will no longer be an issue?

Denmark is -- or Telenor Denmark is conducting probably the most fundamental transformation of any of our operations. And we are very confident that, that will deliver results longer term. On top of that, you have the change in amortization on the marketing cost, which was shortened, which took the EBITDA down somehow. And then on the broadband in Denmark, I think you need to help me a little bit, Frank.

Well, on the broadband, we closed down broadband going into the year. But I think the main part really as to the last part of your question, why we're so confident that this will improve is basically due to the introductory prices that we mentioned during the call. We have a few offerings, especially in fixed wireless, but also, I think a few other ones in Denmark, which have been on introductory prices, obviously lowering gross margins as well, and they will normalize during the second quarter and beyond.

Yes. And on the fixed wireless access side in Denmark, we have good traction. But again, please remember that, that is reported under the mobile volumes.

In Denmark and Sweden. Yes, they're mobile. Okay. I hope that answers your question.

Absolutely. And if I may, just a quick follow-up on Finland. Was there anything that went incrementally negative in Q1. Because it seems like this slowdown in growth that you're seeing is mostly due to the carryover effect from Q4, which presumably was already in your knowledge when you were giving out the original guidance for the year.

I think I outlined that in my answer about the development on the fixed side, which was quite intensive in the first quarter.

And of course, that was not Nordic, that was on group. But of course, what happened in Bangladesh was also incrementally negative in Q1 due to the global situation.

Yes. Okay. Thank you, Felix. I think we have a couple of questions left. So operator?

Our next question comes from Fredrik Lithell with Handelsbanken.

Fredrik. Are you with us?

Fredrik, please unmute your line, turn on your video and ask your question. We will move on to our next question. Our next question comes from Abhilash Mohapatra with BNP Paribas.

I had one around Bangladesh, please. Can you just maybe give us an update on what's happening around the spectrum renewal process if you've had any further updates there, that would be helpful. And then just related to that, a clarification on your guidance comment from earlier. You mentioned that you're essentially assuming that the backdrop remains tough in H1 before potentially getting better during H2. And you said that if that changes, then you might have to sort of revisit the 2026 guidance. Could you maybe just clarify that a little bit? Is that sort of EBITDA or sort of free cash flow guidance that might be impacted if things don't pick up in H2?

Just in terms of the spectrum, we do have a policy of not making predictions or forecast or comment around spectrum renewal processes, as you know, and you can see on the IR website, you can see there which spectrum bands are up for renewal. So those -- we will, of course, look at what we need and all those things, but we don't comment on that.

There's nothing public either, which is new on the process.

Right. And then with respect to some of the guidance, I think there -- to the extent things get prolonged, it mainly comes on the EBITDA side, less so on the free cash flow side. But keep in mind, we are, of course, and as I said in my presentation, focusing on mitigating the effects on the top line with cost initiatives and also disciplined release of investments in order to offset the negative impact on the top line.

I can also refer you back, Abhilash, to the sensitivity Torbjorn mentioned in his main address about if you have NOK 1 billion on EBITDA, just to pick a number for sensitivity purposes, in plus or minus in Bangladesh, kind of the rule of thumb is that you'll have a NOK 0.25 billion impact from that EBITDA billion on to the free cash flow.

That's very helpful. If I may just follow up very briefly. So for example, Q1, I think we saw the EBITDA there decline 3% year-on-year without the one-off. Are you sort of assuming a return to stability in H2 within your guidance. Or is that something you can provide on?

Yes. That's what the underlying anticipation is.

Yes. And that is, of course, subject to what happens on the energy supply in particular. I think we need to move on because we've got a couple more people. Thank you.

Our last question comes from with Siyi He with Citi.

I just have 2 follow-ups, please. And the first question is really on the OpEx development in Nordics. Just wondering if you can share with us how should we think about the actions that you could take during the remaining of the year to balance the OpEx inflation that you saw in Q1. And also in Sweden specifically, I think a lot of the OpEx reductions that you have achieved is through migrate traffic off the legacy network. Just wondering if you can give us an update on how far along are we with these activities? And when should we expect the comp getting harder because of the completion of the movement?

Yes. Should I jump into it or you?

Go ahead.

Yes. I think there was a lot to unpack there, but the migration of traffic is mainly a COGS situation, I believe. But on the transformation agenda, we -- that combines local programs in each business unit with Nordic initiatives where, call it, scale and collaboration create value. And I think we went through those in some detail. So I'll refer you back to the CMD.

So we do -- '26 is a year where there are significant implementation costs on legacy out in Norway, implementation of BSS in Denmark. So we -- I think we've highlighted that. Of course, when things are -- if there's a little bit of headwind, we will, of course, turn every stone to ensure that we focus on initiatives that mitigate those effects. And that will, of course, continue to offset things like we have seen in Finland and we've seen in Bangladesh.

And then also remember the back-end loading difference from last year that Torbjorn mentioned with this year, which is going to be more even. So that also is the reason for that partly being the robustification transformation projects ramping up towards the end of last year and continuing through the first half of this year and into the second half before then gradually starting to give benefits as you approach year '27 and beyond.

Well, then we're at 10:00. So I will just thank everyone for their attention. And if you have further questions, please reach out to IR through [email protected]. And all the presentation material is available at our website at telenor.com/ir. Thank you very much, and have a nice day.

Good morning, and welcome to Telenor's Q4 2025 Results Presentation. I'm Frank Maao, Head of Investor Relations, and our Group CFO, Torbjorn Wist, will take you through the presentation today. As previously communicated, our CEO, Benedicte Schilbred Fasmer, is not here due to a planned surgery. And as you can see, we've a packed agenda, including an update on dividends and capital allocation.

Before we get started, a few quick notes. All service revenue and EBITDA growth rates are organic and made on a constant currency basis as always. When we mention EBITDA, we're referring to adjusted EBITDA. Note that this time, Telenor Pakistan has been booked as discontinued business and is thus excluded from the P&L figures that we show you today.

And with that, I'll hand you over to Torbjorn.

Thank you, Frank, and good morning, everyone. Now let me start by saying that Benedicte is recovering well from her surgery, and she sends her warm regards to all of you. We certainly look forward to welcoming her back. Now knowing Benedicte, I wouldn't be surprised if she has joined us online to follow this exciting results presentation.

Now what a year we have behind us. We closed 2025 with strong operational momentum and disciplined execution across the Nordics and Asia. Our results underline some clear messages. First, we delivered a strong Q4 that brought our full year financial performance in line with the outlook we communicated earlier in the year.

Our customer first approach and disciplined operation enabled us to deliver EBITDA growth of close to 9% in the Nordics despite brisk competition, particularly in Finland. Our full year free cash flow before M&A reached NOK 12.9 billion for the year, in line with our around NOK 13 billion outlook and financial ambitions since 2022. The free cash flow, including M&A, was NOK 17.3 billion in '25.

Secondly, consistent with the strategy we outlined at our recent Capital Markets Day, we continue to simplify the group portfolio, reinforcing the group's Nordic center of gravity. We remain committed to long-term value creation in our remaining Asian assets.

The third message today is that we propose to make the 16th consecutive increase in dividends per share and prepare for a NOK 15 billion buyback program. And I will come back and talk more about the capital allocation and distribution later in the presentation.

Now 1 year ago, right after Benedicte and I stepped into our roles, we outlined our priorities for the first year. These included strengthening customer centricity and reinforcing our people and execution culture, sharpening our focus on return on capital, and delivering on our 2025 financial ambitions, including our strong commitment to shareholders on dividends. One year later, I'm pleased to say this is exactly what we have done.

During the year, we evolved and refreshed our strategy, which we presented along with the detailed financial ambitions to the investment community at the CMD in November. Over the last months, we have also stepped up on execution on portfolio simplification, closing the clean, and I underline the word clean, exits from Pakistan and Allente, and last but not least, with the agreement to sell Telenor's ownership in True announced on the 22nd of January.

The True transaction represents significant value creation for our shareholders as we will be exiting Thailand at more than 3x the NOK 12 billion market value we had in dtac at the time we started the merger talks with True 5 years ago. All in all, we are pleased with these steps to further sharpen the group's focus.

Now as mentioned, delivering on the '25 outlook was a top priority, and I am happy to confirm that we delivered on all parameters. During the year, we saw solid operational performance in the Nordics, in line with the outlook provided for all three parameters and an EBITDA growth of 5.8% for the group compared to the outlook of 5% to 6%.

Note, however, that the 5.8% excludes Telenor Pakistan, as Frank mentioned initially, while our outlook included Telenor Pakistan. If Pakistan had been included in the actuals, EBITDA growth for the group would have been 1 percentage point higher. As such, we outperformed the outlook on this metric. And as mentioned in the highlights, free cash flow before M&A ended at NOK 12.9 billion, in line with our guidance.

Then moving to the highlights for the group financials. Group service revenues reached NOK 15.3 billion, up 2.6% year-on-year. Adjusted EBITDA increased 11.7% to NOK 8.6 billion, driven by the strong performance in the Nordics, while being helped 3 percentage points by effects related to accounting adjustments and reversals. In Q4, adjusted EPS was NOK 2.21, a material uplift from last year.

Free cash flow before M&A came in at NOK 4.1 billion, up 33% year-on-year. The group CapEx to sales ratio was 15.5%, 4 percentage points lower than in the same period last year. For the Nordics, the ratio was 17.2% for the quarter and 14.3% for the full year. The leverage ratio closed the year at 2.2x, returning to its target range, mainly driven by positive year-on-year effect in total free cash flow.

Now as we repeatedly stated, driving return on capital employed, return on investment and the like over time remains a top priority for us. We are pleased to note that for the last 12 months, ROCE came in at 9.2%, up 1 percentage point over the previous quarter. If you exclude the associated companies, the group ROCE would have been 13.6%.

Then zooming in on the top line. The group service revenue growth of 2.6% year-over-year remained constrained by macro conditions in Bangladesh. If you exclude a VAT adjustment in Norway and a revenue correction in Grameenphone, both in Q4 last year, the underlying growth for the group would have been 1.8%. Our Nordic business area was the main contributor, as usual, while underlying growth was flat in Asia.

Now turning to OpEx. OpEx declined by close to 2% in Q4, helped by relentless cost focus throughout the group, a NOK 75 million withholding tax reversal related to Telenor Pakistan in other group OpEx and OpEx adjustments in the Nordics in the same quarter last year. Adjusted for these effects, OpEx was practically flat year-over-year for the group and for the Nordics.

In the Nordics, OpEx in Norway increased by 3.4%, mainly caused by high activity related to robustification and transformation, as previously flagged, as well as reparation expenses following the Storm Amy. Now sales and marketing expenses also increased in the Nordics, in line with the expectations we shared with the market early last year.

Moving to group EBITDA, which grew strongly at 11.7% in Q4. As you can see from the chart to the right, all business areas contributed to this growth, even though the main part came from the Nordics. Amp delivered significant improvements across most of its businesses and Infrastructure continued its stable EBITDA growth. EBITDA contracted in Asia. However, this was due to timing of internal cost allocations between the Asia headquarters and the Telenor Group.

Then regarding the reporting segment called Other, which mainly consists of our corporate functions, in Q4 '24, a retroactive true-up was made for internal charges from Asia to the Other segment, while in '25, these charges were more evenly spread out through the year. On the chart to the right, we have visualized this effect.

As you can see, the negative year-on-year in Asia from these timing effects offset the similarly positive year-over-year effect in the other segment. Finally, excluding this effect, the other segment also contributed meaningfully year-over-year, largely explained by external revenues in Telenor Procurement Company, which tends to vary significantly between quarters.

The positive growth contribution from group eliminations was due to the mentioned NOK 75 million reversal. Now clearly, 11.7% is a significant number compared to recent quarters. In this regard, note that 3.2 percentage points is a result of the mentioned effects I talked about earlier. Adjusted for this, EBITDA growth for the group would have been 8.5%.

Then turning to revenues in the Nordics. The Nordics continued to deliver top line growth in line with recent trends. This quarter, we reported 2.8% organic growth, driven by our more-for-more strategy. Adjusted for the reversal effects I mentioned pertaining to Q4 last year, the service revenue growth would have been 2.5%. Norway was the largest contributor but we did see solid execution and solid contribution from across our Nordic markets.

We grew mobile service revenues 4% driven by ARPU uplift across all markets in addition to customer growth in Sweden. Fixed service revenues grew only marginally with growth in both Norway and Finland being offset by active base management with focus on profitability in Sweden, as we've talked about in previous quarters.

Across markets, churn continued to rise. We also expect a significantly sharpened price competition in Finland. We nevertheless added 59,000 new postpaid customers in Sweden and Denmark during the quarter, while seeing a total of about 24,000 prepaid -- sorry, postpaid subscribers leave us in Norway and Finland amid high promotional seasonality.

I'll now take you through each market in some more detail. Norway remained the strongest contributor at 2.9% growth, underpinned by healthy ARPU trends with 5% for mobile and 6% on fixed broadband. In Sweden, mobile service revenues rose 4.5%, offsetting a 5% managed decline in fixed service revenues as talked about.

And we posted strong mobile net adds of 45,000 in Sweden, helped by a successful Black Month with strong traction in 5G broadband. In Denmark, service revenues grew by 3.6%. A new development is that all Danish operators have increased list prices over the last months. Still, the market remained highly promotional in Q4.

In the Finnish market, we saw a more visible presence of the new MVNO as well as deep promotional discounts led by one of the network operators. While DNA defended its customer base well amid elevated market churn, the price level on incoming subscriptions was significantly dilutive compared to DNA's back book ARPU.

Still, DNA grew mobile service revenues by 4.3%, driven by upselling, solid commercial execution and a larger mobile subscriber base compared to last year. As a result, DNA kept its postpaid smartphone base steady during the quarter as the negative net adds were driven by a prepaid cleanup and some decline in mobile broadband.

Total service revenues rose by 3.9%. Overall, Nordic's 2.8% service revenue growth reflects continued strong performance of our value-driven commercial strategy, despite broadly pronounced seasonality and increased competition in Finland.

Now moving to EBITDA. EBITDA growth in the Nordics came in at 8.7% for the quarter. Gross profit was up more than 4%, supported by upselling, pricing, product mix, wholesale revenues and the fixed transformation in Sweden. Ongoing transformation programs helped reduce OpEx by 0.7% despite higher commercial activities and increased spending on robustification.

Yet again, Norway remained our top contributor with 9.3% EBITDA growth, helped by the VAT reversals in the same quarter last year. An additional 5 percentage points of growth came from the national roaming agreement, and adjusted for these factors, EBITDA growth would have been about 3% in Norway.

In Sweden, the continuation of the mentioned fixed transformation had a positive impact on gross profit, which grew 3.4%, contributing to the 11% growth in EBITDA. Further helped by disciplined OpEx and customer service transformation efforts, this brought EBITDA to the 40% margin, which is a milestone for Telenor Sweden, which just surpassed the incumbent on this metric on a last 12-month basis.

Even when excluding the VAT-related reversal last year, EBITDA growth was still rock solid at 7.6%. Telenor Denmark continued to execute commercially while relentlessly tweaking cost, leading to an EBITDA growth of 5.8%. The small OpEx increase was mainly due to higher commissions from external retail.

DNA both grew its top line while cutting back on costs, resulting in a 6.6% organic growth in adjusted EBITDA. This is quite impressive result given the demanding market conditions just described in Finland. Now in summary, we are pleased with the continued strong execution in the Nordics.

Now then let's move over to Asia. Before enjoying the fireworks on New Year's Eve, we closed the sale of Telenor Pakistan, which is now out of the books. As a consequence, our Asia revenues and EBITDA, as charted on the left side of this slide, are nominal NOK amounts that only reflect Grameenphone in addition to the cost of regional Asian hub in Singapore.

Grameenphone delivered organic service revenue growth of 3.4% in the quarter. But as you can see, the NOK amounts came down due to a weakening -- a 14% weakening of the Bangladeshi taka. Note that when adding back the accounting corrections last year, Grameenphone revenues and EBITDA were basically flat year-over-year amid cautious consumer spending environment and continued tough price competition on data.

Grameenphone was just recently awarded important spectrum resources in the 700 megahertz band at the reserve price, which will be key to improve indoor and outdoor coverage for our customers going forward.

As for the associated companies, the major event was the recent announcement of the True exit, which will be a two-stage deal, as mentioned earlier. This transaction is a major value creation milestone for Telenor as it concludes our 25-year history in Thailand.

Benedicte and I would like to thank both current and previous employees that have contributed a big part of their lives to this fantastic journey. Note that we expect to close the first sale of the first tranche before True will pay its Q4 '25 dividend.

CelcomDigi managed to improve commercial execution in its third quarter, swinging back to top line growth. While Q3 EBITDA declined due to higher data costs and bad debt, the company paid out a stable dividend in Q4.

We continue to work with partners to support CelcomDigi in strengthening its associated 5G company, DNB, whose financial situation was, as described in their own report, distressed. Our goal is to ensure a setup with more efficient use of spectrum resources and network assets to the benefit of customer and society in Malaysia.

DNB is expected to secure an additional 100 megahertz of key mid-band spectrum ahead of the government's planned exit in Q2 '26, which will be a helpful step for the company.

Now finally, we have noted a lot of speculation about our other Asian assets in the wake of the recent announcement of the sale of True. As such, let me be clear, as an active owner, Telenor is a committed partner for long-term value creation in both Grameenphone and Celcom Digi. And the sale of True should not be interpreted as signaling any imminent or near-term plans to sell our other Asian assets.

Now then let's turn to Amp, which delivered a strong quarter. At our recent CMD, we presented a focused approach to portfolio management in Amp. Part of that is to develop companies close to core within security and IoT, and we saw meaningful progress in several business units but would highlight two here.

Firstly, KNL made a strong contribution on both revenues and EBITDA. Now KNL offers mission-critical services for defense, more precisely software-based and ultra-secure tactical defense communication solutions for use over long distances.

Crucial to this progress were deliveries on contracts with the Swedish and Finnish national defense forces announced earlier in the year. This is a truly scalable business with telco margins but far higher growth, and we look forward to see what the future holds for KNL.

Secondly, the largest -- Connexion, the largest single contributor to Amp's EBITDA and cash flow on a yearly basis. This company is the #5 IoT player in Europe and #10 globally within managed IoT connectivity. In Q4, Connexion delivered 9% organic revenue growth, thanks to its solid volume growth, achieving 24% year-over-year growth in its global SIM base.

EBITDA in Connexion was, however, affected negatively as FX and OpEx growth weighted on the margins. Overall, we are pleased with the development of the Amp portfolio, which is seeing continued value uplift from a net asset value perspective. Further details on this, including a portfolio overview, can be found on our website.

Then moving on to the profit and loss highlights for the group. We're pleased to report that strong growth in adjusted EBITDA and net profit from associated companies drove adjusted EPS to an 89% increase in the fourth quarter while growth reached a solid 24% for the full year '25.

In terms of special items and notable swing factors this quarter, other income and expenses was higher than last year due to increased scrapping of IT equipment as well as workforce reductions. The NOK 0.5 billion fourth quarter fluctuation in net financial items was due to fair value changes related to True.

And finally, there was a NOK 3 billion loss on the discontinued line in addition to a NOK 0.4 billion tax expense in conjunction with the divestment of Telenor Pakistan.

Next, let me walk you through the main variables behind our free cash flow before M&A of NOK 4.1 billion in the fourth quarter. In addition to our EBITDA of NOK 8.6 billion, we need to add back the discontinued contribution from Pakistan of NOK 0.5 billion since this was part of our cash flow in the quarter.

As indicated, we had a solid contribution from working capital, including about NOK 900 million from the use of handset financing. We received NOK 1.3 billion in dividends from associates and CapEx paid amounted to NOK 2.9 billion, of which NOK 2.2 billion came from the Nordics. Telenor Sweden made a scheduled NOK 390 million prepayment on its share of the multiband spectrum license won in '23, bringing the total spectrum spend for the group to NOK 0.5 billion in Q4.

On the M&A side, net cash proceeds included NOK 4.6 billion for the sale of Telenor Pakistan, along with NOK 0.6 billion for the sale of Allente on top of the pre-closing dividend the company paid. And this led to a total free cash flow of NOK 9.1 billion this quarter.

Now then let us take a look at our leverage ratio. Our leverage ratio edged down to 2.2x, within our target band of 1.8 to 2.3. The net debt reduction happened despite a NOK 1 billion increase due to NOK weakening during the quarter and the NOK 6.3 billion payment related to the second tranche of our dividend paid out in '25, which was now more than by the mentioned NOK 9 billion free cash flow in the quarter and the deconsolidation of NOK 1.8 billion in net debt relating to Telenor Pakistan.

Then let me move on to shareholder remuneration. Telenor has a 16-year track record on delivering on our dividend policy of year-on-year growth in ordinary dividends per share despite significant structural divestitures in the same period. The group has changed over time, as you know.

Over time, this ordinary dividend has been complemented by extraordinary dividends and share buybacks when appropriate. As you may recall, we reconfirmed our strong commitment to our dividend policy at our CMD in November. Adding another year to our track record, the Board has proposed a dividend for '25 of NOK 9.7 per share for approval at the upcoming AGM with payments happening in June and October 2026.

Now then let me move on to the use of proceeds from True once the transaction has been completed. At the recent CMD, we explained our capital allocation priorities and our return mindset as part of the value creation engine of Telenor. How we distribute capital back to shareholders is a very important part of our capital allocation priorities.

We need to ensure that we are effective and targeted in how we allocate capital to the best projects to create and compound value over time expanding the return on capital employed. This includes organic reinvestments, but also value-accretive inorganic investments that help us strengthen our customer proposition and enable us to drive further scale and efficiencies.

We are now preparing to allocate the first NOK 32 billion of proceeds to be received from the first tranche of the sale of 25% in True. And we plan the following use of proceeds: NOK 15 billion will be allocated to a share buyback program, and I'll give you more details on that in a minute; NOK 11.5 billion will be allocated to repayment of the EUR 1 billion bond, which matures now in May; and NOK 6 billion will be allocated to finance the closing of our announced acquisition of GlobalConnect's Norwegian consumer fiber division likely due in the second quarter.

The remaining NOK 7 billion to be received from the second tranche of True in a couple of years, we will deal with the use of proceeds at that point in time. We will be retaining some extra financial flexibility near term to consider further value-creating acquisitions in the Nordics.

We will be looking at opportunities that offers attractive long-term return on capital by driving customer reach and satisfaction, scale and efficiencies. Now to the extent that sufficient inorganic investments would not materialize, we will, of course, consider further return on capital to shareholders to ensure balance sheet efficiency while protecting our credit rating.

Now then let me talk a little bit more about the buybacks. The Board has stated its intention to initiate a share purchase program over 3 years once the first sale of shares in True is completed. The buybacks are to be confirmed each year by the AGM. The objective is to support per share value accretion and dividend coverage by reducing the number of shares over time.

As in the past, our stock exchange repurchases will be executed by a broker on an arm's length basis and will be made in full compliance with market abuse regulations. The exact time to completion may therefore depend a little bit on the liquidity of our shares on the Oslo Stock Exchange. As usual, the Norwegian state is expected to participate with its proportional share of ownership in line with historical practice.

So then if I move on to the financial outlook. The financial outlook is in line with our indications at the Capital Markets Day. Our mid- and long-term ambitions remain unchanged and are shown here only for context. For 2026, we expect a low single-digit growth in service revenues in the Nordic. As for Nordic's EBITDA, we see mid-single-digit growth while we forecast CapEx to sales, excluding leases, of around 14% in the Nordics.

Please note that we do foresee quite significant variations between quarters in '26. While we have solid momentum into the start of the year, in Q2, the Nordics is facing a particularly tough comparable period.

Firstly, we benefited from particularly favorable timing of back book price increases in Q2 last year. Secondly, the year-on-year uplift from the national roaming contract in Norway will be lapped in mid-March. We had around NOK 550 million in national roaming revenues from Lyse in '25, which was more than originally expected.

We have said we would expect these wholesale revenues to start fading during '26 and particularly in '27. Following this week's news from our competitors, this remains our view. Our best estimate is currently that these revenues will be around the same level in '26 as last year, although quite low, if at all present, in 2027. I might add on this that in terms of the financial ambitions for '28 and '30, there are no national roaming revenues.

In Bangladesh, we are, of course, hoping for a gradual macro upswing following the February elections, but we find it prudent to have modest expectations. For the group, we anticipate adjusted EBITDA to grow in the low to mid-single digits. A key sensitivity for the outcome will be the shape and strength of a potential macro recovery in Bangladesh.

Finally, we forecast free cash flows before M&A, excluding dividends from associates and incremental spectrum, to come in at between NOK 10 billion and NOK 11 billion. We expect to see a somewhat back-end loaded profile on this metric in '26, similar to '25. All in all, outlook for the current year reaffirms our overall traction and long-term trajectory.

To conclude, in '25, we delivered on our financial ambitions. We are executing on the strategy of top line growth through customer excellence, efficiency through transformation and overall simplification, including becoming more of a Nordic-centric group over time, and we are executing on our long-standing commitment to capital distribution to our shareholders.

With this, I would like to hand the word back to Frank.

Thank you, Torbjorn. Good presentation. We will go through then to the analyst Q&A. And as usual, please limit yourself to only one question and, if needed, a quick related clarification follow-up to give your colleagues a chance to ask their question as well.

So operator, please go ahead.

[Operator Instructions] Our first question will come from Sofija Rakicevic with Goldman Sachs.

Just one question for me, and that is, what potential headwinds are you factoring in your medium-term Nordic EBITDA outlook given that underlying 2025 growth for this year is around 5% and a bit more than that if we exclude Ice and one-offs? And you're guiding for mid-single-digit growth in 2026. So what do you expect to deteriorate on an underlying basis over the medium term?

Yes. As far as our outlook is concerned, the -- of course, the market will continue to be competitive as it has been in all our Nordic markets. And we expect this to continue, whilst at the same time, we will, of course, do what we can to strengthen our competitive position with our leading network position in Norway and a strong network position in the other areas to ensure that we compete on a normal basis.

So we don't have any particular headwinds over and above the normal competitive behavior. Competition has always been tough and will continue to be tough. And those are normal assumptions that we have into our overall ambitions going forward. So in terms of the forecast for '26, we have been clear on that there will be step-ups on sales and marketing spend to ensure that we defend our positions.

At the same time, we will continue to push forward on our strong transformation program as we have over many years now to ensure that we offset these effects. So that gives us comfort that the forecast for '26 in terms of our Nordic expectations is something that we believe we can deliver on well.

Our next question comes from Ondrej Cabejsek from UBS.

That took a while. And let me join Torbjorn in wishing Benedicte a speedy recovery, if indeed she is listening. I just wanted to follow up on the point that you made in terms of capital allocation opportunities in the Nordics as a key focus area for you going forward.

And I just wanted to understand from where we are standing today, what in your view are some of the key hurdles preventing you from moving ahead? And when do you expect these to be cleared?

Sorry, which hurdles are you referring to then, Ondrej?

So some of the -- well, there are clearly hurdles, I guess, when you're looking at the capital allocation opportunities in the Nordics, which you mentioned, which Benedicte mentioned in the summer, et cetera.

Yes. No, look, we -- first of all, we obviously don't comment on specifics. But clearly, we've been very clear at the Capital Markets Day that we see ourselves becoming more of a Nordic-centric group over time. That means, of course, that we will be looking at value-accretive opportunities that will help strengthen our footprint in this region.

And the regulatory hurdles that you may allude to will, of course, depend on whichever transaction would be considered. What is key for us is to ensure that any transaction is value accretive, will strengthen our customer offering, ensure that we get scale and efficiencies that will help drive return on capital employed.

And we will, of course, have a good process with the regulators, as we do in any particular deal, to ensure that we maximize the chance of success for whatever we decide to pursue. But if we don't find appropriate opportunities, then we will, as mentioned in my presentation, of course, consider further returns of capital to shareholders.

And if I may follow up on this. So obviously, we've had the development in Norway, where Telia is now signing the RAN with challenger Ice, which you are now hosting. Is this something that is placing a bit more urgency on you to kind of do anything in the Nordics?

Not this deal in and of itself. Just a couple of comments on this one. We are, of course, used to network cooperation, and we have that in some of our other Nordic markets. As I mentioned in my presentation, the revenue effect, we do expect revenues from this agreement to be similar to last year in '26, but then taper off. We don't have any NRAs into the future plan.

I think what this deal really brings to the forefront is that Norway is the only market that we remain regulated in. We believe it's long overdue that this regulation is removed and particularly now with the creation of a strong second network. So our strong message to the authorities will be now is the time to take away this regulation for the future.

As far as them pulling together their network assets or whichever structural form they do it, we're used to competition. We've had competition here for a long time. We are the leading network in our way, both on scale, coverage, quality. And we will, of course, continue to defend that position and, of course, invest in services, whether it be cyber or entertainment in order to reinforce the strong customer relationship and the market position we have here in this wonderful country.

Our next question comes from Christoffer Bjornsen with DNB Carnegie.

Can you hear me?

Yes.

Great. Yes. Congrats on all the exciting news over the last period. I just wanted to kind of follow up on the Telia JV thing and trying to ask a question without asking the question. But given that, I would expect it's fair to assume that they are a decent customer both Lyse and Telia in the tower business, can you maybe help us understand a bit like what the exposure is there?

Like are there significant overlaps where they could consolidate? I think I saw in the local accounts of the TowerCo in Norway that the external revenues was about NOK 650 million in 2024. So just trying to gauge in the longer term for that 2030 target of NOK 14 billion to NOK 15 billion of free cash flow, what kind of effects could be there in like a base and a bear case scenario or -- yes.

Yes, on our towers we have been working consistently to, of course, raise the tenancy ratio, which, of course, is other operators using our infrastructure. As far as -- if there should be, call it, an effect from this -- the recently announced agreement between our two competitors, we estimate that we have about NOK 120 million to NOK 160 million potential negative revenue impact from 2027, which is about 4% to 5% of the towers revenue.

I think -- so it's not something that we deem substantial. There are other parties like emergency network, et cetera, that is on our infrastructure. So it's about 4% to 5% or NOK 120 million to NOK 160 million. And we don't anticipate that to hit before maybe '27 at the earliest. I would like to add that using infrastructure, co-locating on towers is, of course, a capital-effective way. So whether or not they will decide to remove this NOK 120 million to NOK 170 million remains to be seen.

NOK 160 million.

NOK 160 million. Thank you.

And mind you, that's due to the overlap that is present in the colocation of the towers between the two parties.

All right. That's helpful. And then just finally to follow up on the Bangladesh, you mentioned the spectrum award there and so on. Still there are material parts of the portfolio coming up for like renewal or expiry later this year. Can you give any indications of how confident you are that there will be timely auctions and whenever they could end up being?

I don't have any new information on that. These will be renewals, and I'm sure that there will be an orderly process there. We were satisfied with the 700 auction and the result of that. And so we'll deal with the renewals when the time comes.

Our next question comes from Felix Henriksson with Nordea.

The question is on Finland, where you saw a tough competition in Q4. The market leader, last week commented that they've seen some easing in the environment in January with one of the MVNOs becoming a bit more passive and also the market leader raising prices also followed by the peers. Do you sort of agree with this? And have you seen easing in the competitive environment in Finland into Q1?

Yes, we see the same or have the same observations of what's happening in the Finnish market. It was a very competitive December, but that seems to have normalized then into January.

Okay. Fair enough. And then if I may, just with a quick follow-up, partly unrelated, apologies for that, but I noticed that Bangladeshi CapEx in Q4 were still quite low. I think you've commented that you plan to ramp that up a bit into 2026. So can you sort of confirm that, that is still the plan? And if you have anything to share about the expectations regarding the spectrum renewals in Bangladesh as well?

As I think I've covered the spectrum renewal in Christoffer's question. But as far as the CapEx is concerned, we've been very clear that Bangladesh is a country where there is a voice to data transition going on. We have, of course, now secured low-band spectrum, which is critical for excellent indoor and outdoor coverage of data in the country. So that will, of course, entail some CapEx.

We have -- due to the macroeconomic situation in the country, we have been very prudent in how we release CapEx into the country so that we're not pushing in a lot of CapEx when the market environment is very muted. So we continue to release CapEx on a quarterly basis. And that is also to ensure that we help protect the cash flows in the business.

Top line has been challenging. I think the team has done an excellent job in terms of managing costs there. So of course, we are very mindful to ensure that we release CapEx on a staged basis, but that there will be some increase in CapEx to ensure that we strengthen our data position is something that we have clearly flagged, but we will always do this in a very disciplined manner.

Yes. And I might add that we're not going to see a big surge in the CapEx even in case of a decent macro upswing. It's a more normalization to what you've seen in the past.

Thank you, Felix. For the coming questions, I would remind you to please stick to one question and potentially a related follow-up. Thank you. Next question, please.

Our next question comes from Keval Khiroya with Deutsche Bank.

You're still waiting for the GlobalConnect deal to be approved in Norway. Do you see merits of exploring other fixed deals in the Nordic footprint? Or do you think mobile is the main focus for Nordic M&A?

Yes. Look, I'm sure you would love for me to answer detailed on that question, but which areas and which companies we will be looking at is something that you would hear about along with everyone else at the same time. But we have, of course, now taken a step in strengthening our fiber position in Norway with the proposed acquisition of GlobalConnect. And it's, of course, natural that we will look at both mobile and fixed in the years ahead, given that both are an important part of the critical infrastructure we provide.

Great. And just by way of follow-up. You mentioned that you will explore Nordic M&A. And if not, if that doesn't -- if that's not available, you could return additional capital to shareholders. I appreciate you can't be precise on timing of M&A, but is there any form of time line by which you want to decide whether to still leave that capacity for M&A or actually explore giving additional returns back?

Well, I think we've obviously announced a significant return of capital to our shareholders today with the proposed ordinary dividend as well as the NOK 15 billion buyback. So we will have to come back and update you as and when we see potential for additional return on capital in the absence of any value-accretive opportunities.

Our next question comes from Fredrik Lithell with Handelsbanken.

I would like to listen a little bit to you digging into your OpEx and what your plans are for OpEx in 2026 in the Nordics, not maybe so much on the actual numbers, but on the operational work you intend to do or that you have ongoing that will sort of give you effects in '26 would be interesting to hear.

Yes. I think we obviously spent quite a lot of time on the transformative efforts and initiatives at our recent Capital Markets Day. So sort of to -- could be a very long answer, if I'm going to go dig into all those details. But clearly, we continue to work on getting rid of what I refer to as technology debt, which, of course, ties up a lot of costs.

These are important aspects of managing down operations and maintenance costs. It is ensuring we drive down the cost of procurement, using common products to ensure we get scale benefits. It is deploying AI in the consumer side, the networks and IT. We've talked about use of shared services where we have added additional elements into shared services. And then, of course, local markets will also have some specific -- market-specific transformations ongoing.

So that kind of gives you a flavor. We have extensive programs running that are being coordinated and are being very well run, and they will continue full force into '26 as well.

And I may add, as we said on the Capital Markets Day, '26 will be kind of on a peak level when it comes to the implementation costs related to some of these transformative efforts, particularly in Norway and Denmark.

Okay. So it's fair to assume that you see in front of you a slight sort of OpEx decline sort of on fixed FX figures in '26.

Well, as Frank said, in '26 there are still costs related to the transformation efforts, which we'll carry out through the year. As we've been clear on the past, in Denmark, we have a big BSS project on the go.

So it is -- but of course, the transformation program will continue with some local variances, depending on where they are in their relative transformation efforts. But the areas that I touched on, whether it be shared services, getting rid of technology debt, procurement, those are things that will span across.

Our next question comes from Ulrich Rathe.

Ulrich, are you there still?

I believe we have lost Ulrich. So we will take our final question from Ajay Soni with JPMorgan.

Yes. So the question was just on Sweden. You mentioned that some of your growth there came from 5G broadband net adds. So just wondering what the contribution was from that and what that currently represents within your mobile base? And then I'll just ask a follow-on now, which is that is this going to be an area of growth, given that you've been phasing out maybe some of the less profitable fixed lines in the last year or so?

Yes, I don't think we're going to go into sort of trying to break out what contribution that we'll give. But clearly, focusing on our sort of the mobile broadband effort, as you talked about. It will definitely be key. We added, I believe it was about 12,000 5G broadband in the quarter in Sweden. And that, of course, is an important contribution to the growth in this particular area.

And I think Telenor Sweden is doing a phenomenal job in pushing this product going forward. And I think that's -- the great thing is to see that in combination with the cleanup of the fixed portfolio that they have been working on, which has contributed so strongly to the growth in gross profit and hence, EBITDA in the country.

Okay. If that -- that was the last question, operator?

There are no further questions.

Okay. All right. Well, in that case, let me use this opportunity to thank everyone for listening in, and I wish you all a very good day. Thank you.

Good morning, everyone. I'm Frank Maaø, Head of Investor Relations, and welcome to Telenor's Capital Markets Day. Today, you'll hear from a strong lineup of executives and topic matter experts as we outline our strategy and ambitions for the years ahead. And after lunch, our physical audience here at Fornebu may join our breakout sessions for deeper dives with managers and specialists.

And online participants will have access to session videos later today. Now there will be 2 Q&A sessions today. The first on strategy and transformation and our Nordic businesses. And then the second one on Asia and financials. Please save questions about the other business areas and financial ambitions for the second Q&A.

Now please welcome our Group CEO on stage, Benedicte Schilbred Fasmer.

Thank you, Frank, and hello, everyone. Today, I'll focus on 3 things. How we will sustain and drive growth by delivering outstanding connectivity and great services to our customers, how we will build a stronger Telenor as digital infrastructure becomes ever more important and how we will drive increasing return on capital and long-term value creation for our shareholders. And we are starting from a position of strength.

We serve close to 210 million people through our total footprint in addition to connecting more than 27 million IoT units. In the Nordic, we are the telecom operator with the largest footprint with strong operations in Norway, Sweden, Finland and Denmark. In Asia, where we have 3 leading market positions through our majority-owned telco in Bangladesh and our 2 associated companies in Thailand and Malaysia.

We are, as we speak, in the process of exiting Pakistan, and we expect that deal to close within the coming months. The Nordic is our core region. And over the years, it has consistently proven to be one of the most attractive and successful environments for telecom business in Europe. Some of the drivers for that are advanced economies, broad affordability, digital advanced customers, stable regulatory environment and also actually a very digitalized public sector. And this makes it a prime region for profitable growth.

So given the increasing importance of our industry and our strong base in the attractive Nordic region, how do we ensure that investing in Telenor continues to pay off for our shareholders. The largest -- we continue to operate across 4 business areas and where the largest one in financial terms is Telenor Nordics, leveraging on truly world-class networks, service innovation and continuous transformation.

Asia is a portfolio of positions in, as I just mentioned, 3 listed market leaders. And our agenda is to unlock further shareholder value through being an active owner and pursue potential structural opportunities. Telenor Infrastructure is the leading provider of tower infrastructure in the Nordics.

And lastly, we have Telenor Amp, where we nurture innovation and growth in close to core services such as IoT and security and with a develop or divest approach. At our previous Capital Markets Day, we set out some ambitions for these areas. And through the presentation today, we will score ourselves and review how we have delivered against those commitments, along with our plans how to take it forward.

So let me start with reviewing our group ambitions from back then. Our commitments were growing dividend per share, covering these dividends with free cash flow before M&A by this year and staying within our target leverage range. And I'm really proud to say that we have delivered on those goals. And despite deconsolidation of assets, merger integration costs in Asia, peak investments and unfavorable currency movements.

When I joined Telenor close to a year ago, the company had been simplifying for a decade. We have sunset legacy technologies such as the copper network. We have made several exits and we have a successful entry to Finland and DNA. We have executed 2 mega mergers in Asia, and we have managed a very difficult exit from Myanmar. Then 3 years ago, we presented a reshaped Telenor at the CMD. Whilst we have taken lots of steps in order to future-proof Telenor, we still see a significant room for improvement.

And now as we are entering a new phase, we are building an even more future fit, easy to understand and profitable company as we approach the end of this decade. And going forward, we will grow our top line through services-led growth and customer excellence. We will drive transformation by building a future-ready, fully cloud-based and increasingly AI-driven technology stack. And that will lead us to tapering both OpEx and capital and take down the capital intensity, particularly in the Nordics.

And of course, we will have a relentless focus on return on capital and shareholder value creation. Since joining, I've focused and communicated very strongly that we have to put our customer needs at the center of everything we do. And we think that there is a room to utilize our strategic assets to an even greater extent. And we will do that by integrating more into the great Telenor execution culture, which you can touch and feel as you're here within these walls to attract and to develop amazing talent and people through our organization.

And with that, with our talent, culture, our trusted networks and growing partner ecosystem, we are building a stronger company by 2030. So let me elaborate on our key priorities. First, we will drive customer excellence through embracing the customer mindset in our culture even more than we perhaps do today. And we will make sure that to become a Telenor customer is a smooth process and that to stay a Telenor customer is actually a given. And that will happen, thanks to great service and quality solutions.

We will take our successful more-for-more upselling approach to the next level by something we call Services First concept, starting in Norway, and you'll hear more about that later today. We have a solid track record in service innovation, which is based on joint efforts from our people, partners and technology, including AI. And we will scale AI-powered customer interactions to deliver smarter, more targeted and improved services. And again, you'll also hear more details about that later.

Lastly, we will also deliver differentiated connectivity and services to meet customer needs, particularly in the B2B segment, powered by end-to-end 5G. A key element in our continuous transformation is simplification. And that's a cornerstone in our second element, the technology-led transformation.

We aim to transform our technology stack to be fully cloud-based and work systematically to become an AI-powered organization. And this will form the basis for a more effective and efficient platform, which is key for creation and delivery of services in order to cater for evolving customer needs. And I'll cover that in a little bit more detail very shortly.

Thirdly, the path to Telenor 2030 requires continuous streamlining of our cost base and leveraging our already upgraded world-class networks as that is actually the basis for expecting our OpEx and capital intensity to taper, particularly in the Nordics. Lastly, all this is set to drive shareholder value, and we will, of course, scrutinize all levers for meaningful expansion on our return on capital. And this also includes our aim to simplify our group -- portfolio of group assets also over time. Now let's look at how we will execute on these priorities across our business areas. And again, you'll have more details on these topics later today. Telenor Nordics will drive growth through enhancing customer experiences and service value.

We will transform and simplify our operations while extracting synergies across Nordics and making sure that we are close to our customers in all our local markets. This summer, we announced the acquisition of Global Connect's Norwegian consumer fiber business, and that highlights our approach to work selectively with attractive structural moves in order to further strengthen our position.

In Asia, we'll manage our leading telco assets for long-term value, working closely with our partners. And we believe there is significant room for transformation-driven improvements in Asia, similar to what we've actually executed with great success here in the Nordics. And at the same time, we continue to look for structural value creation opportunities for these leading telco assets, aiming for simplification of our group portfolio to become more of a Nordic-centric group over the medium to long term.

The focus for Telenor Infrastructure is to drive operational excellence in how we run and develop our infra assets. And they also may grow through partnerships where appropriate. And Telenor Amp have ambitions to develop positions, particularly in IoT and cybersecurity-related businesses and also leveraging partnerships where appropriate. And that will be on top on our strategy to develop and divest assets as and when we see fit.

Our networks are our key strategic assets. And over the years, we've actually built some of the world's best mobile networks, covering nearly every person and almost all land in the Nordics from very dense cities to remote forest and even polar regions. And this reach is not only impressive, it's actually critical and essential for us and our customers' daily lives and for the societies we serve.

Next year, we will gradually launch 5G stand-alone across the Nordics, and we are now focusing on software enablement and end-to-end 5G over the long term. Technology is at the core of everything we do. And our goal is to become an AI-powered telco with smarter networks that monitor and improve themselves, aiming to enhance the return on our network investments.

Second, becoming cloud-driven or truly cloud-driven is essential for resilience, for speed and for innovation. And we are tackling this head on. We already have moved over 60% of our IT workloads to cloud-based platforms. And our ambition is to become practically cloud native, which will, again, unlock simplicity, speed, resilience, scalability and all the good things, including faster innovation. AI is top of mind in all our strategic areas.

And as mentioned earlier, we will scale AI-powered customer interactions to deliver smarter, more targeted improved services. On this note, we have actually now launched a global program within Telenor called AI&I as the umbrella for all our learning and testing activities across Telenor. Our approach to AI is deliberate and it's focused. We are not there to win the AI race by developing the next language model, but to be brilliant at using AI where it actually truly matters.

And we've defined 3 core areas for us in that regard: smarter customer experiences, smarter, more resilient networks and smarter tools for us, Telenorians to build AI competence. And I can tell you, this actually energizes our teams as well as myself and will position us to lead in a rapidly changing digital world. So let's zoom out a little bit and take a look at the bigger picture because our infrastructure and services represent more than ever the critical infrastructure for society.

Geopolitical shifts and competition are raising the bar for high performance and giving new demands on reliable and secure connectivity. At the same time, I guess we all see new risks like undersea cable attacks, drone intrusion and cyberattacks, extreme weather and all of these type of incidents have -- we've seen just over the last few weeks and months.

Our response to this is to build even more resilience, remove legacy and co-develop security services because we also do see that these challenges also create some quite interesting opportunities. We have good traction on our commercial success in integrating security into our connectivity offerings. And we do see a potential or a strong potential in providing business-critical and mission-critical services.

And it's increasingly important with national champions to deliver sovereign solutions that actually safeguard sovereign national and customer interests. As we deliver safe connectivity, we also have a responsibility to make sure that we support the green transition and promote digital well-being and inclusion. Building a business that is sustainable for the long run is at the heart of our strategy.

In our view, sustainable business is good business. And this is not about politics. It's what is good for our customers, what is actually expected from us from society and what builds long-term value for our shareholders. For example, increasingly adverse weather conditions are a threat to our infrastructure. And today, we set new and quite ambitious targets midterm within the areas of climate, social responsibility and governance.

And we are working to improve our energy efficiency of our network, making us more cost effective and climate-friendly. We are also working with our supply chain to secure that they also have high ESG standards. And we work consistently to have a broad -- access to a broad and interesting talent base. And that is actually the key driver for us and for our policy to promote diversity in our workforce. And we also work to improve digital well-being.

To us, building a sustainable business is building a good and long-term viable business. All in all, we have a robust strategy to develop our strategic assets and operations, all aimed at driving returns and long-term value. Our engine for value creation is a propeller with 3 blades, and I hope you recognize it. First, it's based on top line growth in both connectivity and value-added services through customer excellence, enabled by our world-class networks, our great people and talents and technology.

Second, we pursue simplification and transformation for operational excellence by use of technology. And by streamlining our operations, we not only improve customer outcomes further, but we also drive efficiencies, both operating and capital expenditures. And finally, we have a capital allocation process with targeted and return-guided reinvestments, further enhancing our networks, our IT stack and improving and empowering our talent pool.

And we believe this brings us momentum facing forward. Together, these are the levers that power our earnings and cash flow growth, expand our return on capital and, of course, supports continued growth in shareholder return over time. Today, we will also share with you our financial ambitions for the rest of this decade. And this slide shows some snips of the slides that Torbjorn will actually elaborate on a little bit later.

But overall, we have a solid traction in the Nordics and where Sigvart will talk about how to look -- how we look to triple our cash flow to 2030 from our 2022 baseline. In Asia, we've gone from a portfolio of companies with operating control to owning 1 majority and 2 minority stakes in leading telcos within their respective markets. And we believe there is further potential to create shareholder value in Asia through our active ownership approach, which Jon Omund will talk to a little bit later.

And for the first time, we include return on capital, Torbjorn, my darling, and it's consistent with -- as one of our parameters in our financial ambitions, and this is consistent with the strategy that I just outlined. You will also notice that we had a long horizon view also in line with our strategy to develop the company for the long term. Our free cash flow ambitions for the coming years are based on cash flow from operating company, thus excluding the dividends from our associated companies.

Our confidence in the long-term dividend capacity in these companies, mainly True and CelcomDigi in Asia remains strong; however, we want to limit the presentation of our ambitions to entities that we control. Taking into account that our 2 Asian noncontrolled entities are listed separately and under strict stock exchange regulations in their respective markets. But most importantly, we have a strong commitment to our financial policy for the group.

And we aim to grow dividends per share every year and to stay within our target leverage range. I may add that we have now 15 years track record in growing our dividends and are strongly committed to cover dividends with free cash flow before M&A over time.

And with that, I'll hand you over to Torbjorn, who will take you through how we work systematically to -- with operational excellence and simplification. Off you go, Torbjorn.

Thank you, Benedicte. Thank you, Benedicte, and good morning to everyone. Great to see you here in our headquarter at Fornebu. So before we dive into the business areas and then, finally, what I consider the juicy bit, the financial section, I would like to take some time to talk about how we drive operational excellence and change here at Telenor. We have a long track record for continuous change within the group. However, deep and continuous change is more than just about financial performance.

For us, this starts with how can we ensure that the customers are a little bit happier every day, every month compared to the customers of our competitors and how can we run our business more efficiently. To ensure this, we have multiple transformation agendas across the group to ensure operational excellence and strong customer outcomes. We make sure we have a decentralized commercial decision-making in business units, which are the closest to our customers.

Therefore, we have transformation and change agendas for practically every business unit's local needs. On the business area level, our biggest effort is the Nordic transformation program that Sigvart, our Head of Nordics, will talk more about later. And then finally, on the group level, we are driving group-wide change through procurement, effective capital allocation and M&A, talent rotation and people development and, of course, technology.

So let me start with the technology topic, which is at the core of everything we do in Telenor. As Benedicte laid out in brief, there are 4 key elements in our group tech agenda, making our already world-class networks smarter, simplification through migration to the cloud native, continuously enhancing customer experience through a platform that foster faster service innovation; and finally, accelerating end-to-end impact through AI.

These should all be considered key enablers to deliver world-leading user experience to our customers and to fortify our security and resilience foundation. Now we are well positioned to monetize the user experience that into sustainable growth and financial returns while also driving operational efficiency. And I will now take you through a couple of these areas. The first area is smarter networks.

While our network quality and performance are generally second to none, we still have a way to go when it comes to running these networks with a greater degree of automation. Today, our network operations feature a fairly good degree of basic automation of manual tasks. By bringing intelligence to the networks with data and AI over the next years, we will move from more task-based automation to networks being gradually more self-managed and self-optimized.

Supervised by our experts, the networks will themselves find and fix problems and make necessary optimization to fulfill the expectations our customers have of their network experience. The left-hand side here on the chart behind me shows how we are measuring and driving automation from a basic to a far more advanced level using the TM Forum framework.

Now we have an ambition to make a major leap in one particular city first with high level of network intelligence implemented by '27 shown as Level 4 on the chart and, in parallel, scale out the learnings across all our networks over the following years.

By bringing intelligence into our networks, we will be addressing up to 50% of network operations costs to provide significant efficiencies with potential to optimize 20% to 30% of network processes and to improve process quality and accuracy, for instance, by resolving network issues 90% faster, reducing the time needed to resolve faults in the network from hours to minutes. The result is more consistent performance for the customer and more efficient operations within the group.

Second, we also need to simplify IT operations and remove legacy complexity. Smarter networks alone will not deliver full operational excellence. Our main vehicle for simplifying our IT stack and making sure it is more future fit is to move all relevant systems to cloud-native technology. By driving simplification through the cloud, we are enabling a business transformation that will further enhance the customer experience through improved customer journeys, faster and more dynamic launch of improvement as well as new services. And that ultimately ends up in more cost-efficient processes overall.

Now let me take you through some of the examples of our midterm IT aspirations. We are already on a good path with more than 60% of IT systems now being cloud native, and we aim for more than 80% by 2028 with all relevant systems being cloud native by 2030. And on this slide, we will show a few examples from across the organization of the savings we think this will bring. As for Norway, please do check out our separate breakout session on the Norway IT transformation later today. We think they are doing a great job in terms of managing this agenda.

Now the final element in our group tech agenda is becoming an AI-powered telco. We focus on high-impact use cases, which is why AI is now a key driver of simplification and operational excellence across Telenor. We will digitalize manual tasks, automate the repetitive and empower our people with AI, which frees up capacity for innovation. Now our focus is on 3 domains where AI delivers impact at scale for the customer, in networks and IT and for our employees.

Now let me show you some examples. First, in Grameenphone, we use AI to deliver relevant and real-time personalized app interactions to a small but increasing part of Grameenphone's 85 million customers. By connecting data across segments, products, touch points and geographies, we predict the next best action uniquely tailored to each user. Now our goal in Grameenphone is to scale this and have 80% of all customer interactions through the myGP app with a high degree of AI-driven personalization. And by doing so, we will drive both sales and customer retention.

The second example is an intelligent voice agent that handles calls effectively and efficiently from start to finish using speech recognition and natural language understanding. We are currently testing this in Finland. And so far, we think this looks very promising, and we expect significant adoption within 6 to 12 months.

The third example is from the technology domain. Now we are constantly softwarizing our business to serve our B2B and B2C customers better. And increasingly, our code is written and maintained by deploying AI agents through the entire product life cycle. Now this initiative is designed to accelerate delivery, reduce manual effort and improve system reliability. Beyond tech and IT, we are also driving operational efficiency across the organization, including in how we run procurement.

Now procurement is a strategic enabler for us. By centralizing the procurement capabilities across Telenor, we have unlocked group-wide scale, securing better pricing and terms that reduce costs and improve quality. Now this translates into more reliable networks, better access to new technologies and better services for our customers. Green sourcing and ethical supply chains also support our sustainability ambitions. Today, 2/3 of our spend is with suppliers that have science-based targets.

This is a milestone for us that has been very much driven through our procurement effort. In 2022, we set a target to increase globally managed spend by 50%, and we achieved this by expanding procurement as a service to both Telenor as well as our associates, True and CelcomDigi. Now we believe more can be done to centralize and coordinate procurement, and this effort will now be expanded with particular focus on category spend in the Nordics.

Now we recently announced, as you may have seen, a strategic procurement partnership with Vodafone. Through this partnership, we can leverage combined annual spend of some NOK 300 billion. Now Telenor procurement effort manages around NOK 50 billion annually. And through the Vodafone partnership, we believe we can realize additional savings in the mid-single digits over the medium to long term. And in addition, we should be able to leverage the volume we manage on behalf of our associated companies to drive savings there as well.

Now in the Nordics, we have a long track record of working with operational excellence and workforce optimization. Our transformation programs have resulted in structural efficiencies. Consistent workforce reductions have been a part of these efforts, averaging 4% for many years. We expect this to continue at a similar level going forward. And this has contributed to keeping OpEx growth significantly below inflation in our markets.

Now looking into the medium to long term, we see a long runway of continued improvements from our transformation and simplification agenda. And as a result, we aim for flat to negative 2% yearly development in nominal OpEx in the Nordics over time and a reduction in OpEx to sales from around 29% in '25 to around 27% by '28. It is worth noting that we drive the same efficiency agenda in our Asian assets as well in the forest where we participate.

Now going forward, we see increased capital efficiency in our core markets. We have come out of a period of substantial investments in our 5G and fiber access networks across in the Nordics. Now we see, of course, a lot of attention on future innovation and technologies like AI-RAN and even 6G. Now we, of course, will always applaud the focus on innovation, but we will take a prudent approach and monitor the development in these areas as it matures.

Our anticipation is that software will be the key driver in the upcoming network technologies. All investments we do at scale will always be based on clear demand visibility as well as a return on capital focus. Now our focus now is to monetize the large investments we have made into 5G. And we see that this infrastructure has a long runway of capabilities for new services and features, which can be introduced in the years ahead.

In the Nordics, CapEx intensity has declined from 19% in '22 to around 14% this year after a significant step down so far in '25. Now in terms of CapEx allocation going forward, we will see CapEx increasingly channeled towards 5G stand-alone, which is a network architecture where 5G radios are paired with a dedicated 5G network. Fixed infrastructure like the fiber upgrade we have announced in -- for MDUs in Finland, robustness, security and resilience, so important in today's global situation.

Cloud-native IT to ensure we clean up and remove legacy systems that keep holding us back, and I might add, tie up a lot of unnecessary costs. On the other hand, we will be dialing back on 5G RAN rollout as this is largely complete, and we will also dial back fiber rollout in Norway given the relatively high degree of overbuild in this market.

So with that, I'd like to hand over to Sigvart, who will double-click a little bit on the efforts in the Nordics. Sigvart?

Thank you, Torbjorn. Thank you very much to Torbjorn and, hello, everyone. It is a fantastic pleasure to be back on stage for Telenor and to be here today. My name is Sigvart, and I'm heading up the Nordic business area. I'll take you through the Nordic section today. And with me, you'll also hear from Ric Brown from Telenor Norway; and Jussi Tolvanen, DNA, Finland.

So in 2004, I was part of the first attempt at creating a cross-border integrated operation in Telenor. Needless to say, it failed. And we tried to merge Sonofon, now Telenor Denmark, with Telenor Mobile Norway. Many of our competitors have tried, failed and rolled back similar attempts at creating centralized integrated operations and so have we. I believe we're probably at #5 or maybe the fifth attempt in Telenor Nordics now, depending a bit on how you count.

But what is really, really encouraging, though, is to see the spectacular turnaround in performance since the last CMD. We see it across all 4 BUs, which I believe it must be a sign that we've found finally a model that works, a model which combines local autonomy and decision-making close to the customer with centralized Nordic organizations and collaboration in very carefully selected areas. I will, in my presentation, share some of the secret sauce behind this success and explain why there is still significant potential for improvement despite all of this success.

I've divided my section into 3 parts. Number one, I will give a bit more color on the Nordic market. Two, where we're coming from and how we've delivered on the ambitions that we set out in the last CMD. And three, finally, where we're heading next and how we plan to get there. So let's dive in and let's start with the market.

So as Benedicte touched on, the Nordics is one of the world's most digital regions. People have high purchasing power and expect reliable and high-quality connectivity. The region provides a solid base for sustainable growth built on world-leading mobile networks, extensive fiber coverage and a very predictable regulation. Recent geopolitical developments have made our role even more important. There's a stronger focus on resilience and security than ever before, and there is closer Nordic collaboration since Sweden and Finland joined NATO.

Telenor is uniquely positioned with the largest Nordic footprint. We have a proven track record of efficient operations and cross-border collaboration. This naturally influences our opportunity space and also serves as a backdrop for our priorities going into the next period. Over the past 2 years, our Nordic business has delivered very strong progress on the ambitions we set out at the last CMD. Revenue and EBITDA have grown solidly given -- driven by our more-for-more strategy and transformation.

Excluding currency effects, our CapEx reduction target remains on track. Cost reductions progressed largely as planned. That said, we did not quite meet our 3-year OpEx ambition, but that's mainly due to inflationary pressure being stronger and also lasting longer than what we anticipated. But we said back then that the effect would be back-end loaded, and that's exactly what we're seeing now.

We kept OpEx flat last year, and we are on track to 1% to minus 2% year-on-year reduction by the end of 2025. Our B2B ambitions have admittedly developed slower than planned. The red dots that you see is mainly due to price pressure in large enterprise and slower-than-expected adoption of 5G use cases. But as you can see on this page, we have delivered solid revenue growth and margin expansion across every single business unit in the Nordics. There is clearly something that must be working in this Nordic model.

We're executing well in all countries, and it clearly shows in the results. So since 2022, we have more than doubled our cash flow, surpassing even our own ambitions. And in the last 2 years, performance has accelerated across all key metrics. So our focus going forward remains on free cash flow through margin expansion. We realized this with revenue growth combined with continued transformation. This means that we are entering the next period with a very strong momentum.

So let's face forward and talk about where we're heading next. By 2030, we expect to generate more than NOK 15 billion in free cash flow, supported by a fully streamlined organization and operation. Alongside sustainable top line growth, we're planning for OpEx reductions in the coming 3 years of 0 to minus 2% annually and a tapered CapEx profile like Torbjorn just mentioned. That means that by 2030, we aim to deliver more than 3x the cash flow we generated in 2022.

Our ambition in the Nordics is clear. To be the most trusted telco, continuously developing value-added services, delivering secure, reliable connectivity while upholding a strong financial discipline throughout. And I see Torbjorn is smiling now. Good. This ambition rests on 3 pillars as highlighted here on the left side of this slide. First, we will drive sustainable growth and expand our services-led agenda to meet our customers' needs.

Second, we will continue to capture benefits from our transformation programs, both locally as well as across the Nordics. Our scale is an opportunity for us to differentiate, simplify and drive out efficiency. Third, we will build on our strength in resilience and security. So let me now zoom in on each of these 3 pillars. Our growth going forward will be services-led. B2C will remain the largest contributor to growth in the Nordics.

The more-for-more strategy has been exceptionally successful for us. We have increased the value to customers in our core products while increasing ARPU. This has applied both for sales to new customers and for back book migrations of existing customers to higher price combinations. The approach has given customers higher speeds, more mobile data and more attractive hard bundled services. In Norway, we have one of the highest shares of value-adding services in the world.

Now going forward, we will talk about services-led growth. This augments our more-for-more strategy with service concepts that will be sold as Services First and with connectivity embedded. This approach is adding a strong new set of tools, complementing our proven back book more form more upselling with targeted individual more-for-more sales. It adds a new growth lever to our business, laying the foundation for more sustainable long-term customer relationships and increasing our share of wallet.

You'll hear Ric -- Ric, there he is. He will talk more about this in detail in a little while. However, it's worth noting that while Norway is really showing the way on this, we also see traction and potential with this approach in other Nordic markets. DNA has had one of the most successful product launches in recent times with their so-called DNA Huoleton. I'm sorry if I'm pronouncing it wrongly. It is a separate subscription with secure Internet browsing included and with the flexibility to add other security services for an additional charge, connectivity embedded.

Services-led growth will also be true for B2B. The largest opportunity in B2B remains with small- and medium-sized companies, which are expected to drive around 70% of total B2B growth in the coming years. And as mentioned, we have struggled to reach our ambition in the B2B segment. Thus, we need to revitalize our core, simplify customer journeys and service portfolios and improve our sales to strengthen competitiveness.

To achieve this, we're transforming our IT and service delivery platforms across our markets, both locally through BSS transformation programs, but also by leveraging scale on select Nordic delivery platforms. Our business customers are rapidly digitalizing and they need seamless cloud-based solutions that just work. From security and collaboration tools to connectivity and automated call routing systems, we are very well positioned to deliver across all our markets.

An increasing demand for differentiated connectivity means we are seeing that our investments in 5G are finally paying off. We also see increasing demand for mission-critical services from sectors such as defense, health care and energy. These customers need secure, differentiated and sometimes also dedicated solutions, for example, through 5G slicing, which guarantees performance even during network congestion in times of crisis.

Across both B2C and B2C, we're elevating the customer experience. Every interaction should be simple and seamless. And that's how it all comes together. Now the second of our 3 pillars is transformation. It's at the core of how we strengthen efficiency, competitiveness and scale across the Nordics. This is also probably the most important ingredient in our -- in the secret to our success. Our transformation agenda combines local initiatives in each BU with selected pan-Nordic programs where scale really creates value.

We have a rigorous follow-up across the Nordics with a local transformation organization in each BU reporting into a central rig. There, all progress is tracked in a common system. So a structured approach with a focus on long-term value creation at the core has proven exceptionally powerful for us. Let's dive in and let's cover our pan-Nordic initiatives first. Our shared services setup is operational, and it's delivering results. It will provide 5% cost reduction annually on existing services to our BUs, while at the same time, improving the quality. We intend to continue expanding the scope to capture more of the cross-market synergies that we see going forward.

Then moving to common products. Our go-to-market remains local, but we do leverage Nordic scale where it makes sense. Managed services and TV are very strong examples, and Ric will share more about our new and super exciting TV service that we will launch very, very soon. So stay tuned for that. We'll continue to replicate this approach to other areas where joint development adds value. AI. AI is a game changer also for us. It transforms how we serve our customers, the way we work and how we make decisions. Our focus, however, is on a few high-impact proven use cases.

One of these larger initiatives is customer service automation. In Finland, all customer care contacts for consumers are AI-first, with our chat bot resolving almost half of the incoming requests. AI has enabled significant efficiency gains across all our customer care operations in the Nordics. And then alongside these larger initiatives, we're running long tail -- a long tail of smaller experiments and then we scale rapidly when we see that we get impact.

Now let's talk about procurement. We centralized Nordic procurement in April to capture value and benefits from a coordinated approach. Early results such as recent content negotiations show clear impact potential. And a recent diagnostic indicates potential to unlock another NOK 1 billion of savings through a centralized program. Then finally, we're pushing hard to make our network and IT more resilient, forcefully removing legacy and moving to a cloud-native and unified Nordic architecture.

This will strengthen resilience, drive efficiency and enable better customer experience. So let's double-click on the legacy removal journey. The copper decommissioning in Norway shown here is a very good example, where the only remaining costs are equipment-related rent that will be phased out as we remove the remaining equipment. Not only has the decommissioning reduced cost, but it has paved the way for fiber and fixed wireless access. This means not only can we move to a more modern infrastructure, but we can radically simplify our IT systems.

In the past period alone, we have retired over 250 systems across the Nordics from our tech stack and the accounting continues. Removing legacy lets us focus on the future. It frees up capacity to invest in new technologies, and it is an absolute necessity for us to go cloud native. So far, we have focused on our pan-Nordic transformation programs. So let's turn to a few of our local programs, where most of the near-term value will be realized.

So as I said, each market runs its own transformation agenda, tailored to local priorities and coordinated across the region. We'll cover examples from Sweden and from Norway later in the breakout sessions. So for this part, I will focus on Denmark, which is a great example of how local transformation create very, very tangible results. In Denmark, we are completely rebuilding our business and our customer experience. A new customer-facing IT stack enables a fully digital customer journey.

Our customers will enjoy a Netflix-like experience with instant top-ups, tailored cross-sell offers, credit card-only payments and an app-first support that simply just works. And for most of us who are used to digital experiences, be it Uber, Bolt, Disney+, this sounds normally. But in the telco world, this is actually a small revolution. The new platform simplifies operations, it standardizes products and removes legacy, effectively reducing cost and complexity while improving customer experience at the same time.

We'll use the Danish example as a template for thinking boldly. We can try out transformation locally and then apply what we learn and scale across all markets. The program alone is expected to deliver more than NOK 200 million in annual run rate improvement. So the third and final pillar is infrastructure and resilience. Delivering secure, resilient and future-fit connectivity is not just our responsibility, it's our strategic advantage that really sets us apart.

Our multi-cloud setup combines public and private cloud to balance flexibility and control. Our world-class networks with their incredible coverage and performance enable advanced 5G services. Infrastructure resilience exemplified by dual homing and multi-redundant networks keep customers connected even during outages, sabotage or extreme weather. We're also in the forefront of cybersecurity, preventing billions of attacks each year and offering a robust portfolio of trusted security products.

Trust, reliability and innovation remain at the heart of absolutely everything that we do. And Telenor Norway is out in front, having consistently demonstrated its ability to turn trust and brand position into tangible business value. And once again, Ric will touch on our security position in a little bit. So let's now focus in on our 4 Nordic operations to see how each contributes to our overall performance.

While each has unique challenges, the focus everywhere is on services-led growth and transformation. This consistent focus across the business is another element of our secret sauce. Telenor Norway has delivered stellar financial results since 2022, driven by a clear focus on profitable growth and an expanding portfolio of both bundled and stand-alone services. This has resulted in an industry-leading share of value-added services.

We'll also strengthen our #2 fixed position through the Global Connect acquisition, which will increase our customer base. So looking ahead, our priority is to continue growth through services, where increasingly our services-first agenda will augment our more-for-more approach. We are mid-journey in our transformation program. We'll continue simplifying operations and reinventing our IT foundation going cloud native while driving out legacy.

Telenor Sweden has delivered a very successful financial turnaround over the last 2 years. We have achieved market-leading profit growth by improving both customer -- our customer base as well as ARPU. And this is in a 4-player market where we currently hold the #3 position. As you can see on the right-hand side, we see clear opportunities as the B2C market is expected to grow another 3% per year. Our 5G leadership gives us a strong platform for future profitable growth.

We have Sweden's fastest network, covering 99.9% of the population, and we're now entering a monetization phase across our customer segments. After a strong turnaround, Sweden is now set for sustainable growth, building on its network advantage and growing customer trust.

Now Denmark. Telenor Denmark has delivered a fantastic turnaround in one of Europe's most competitive markets. In an environment of constant price pressure, commercial discipline and effective base management have driven value creation, improving both customer satisfaction as well as ARPU. We have combined this with tight cost control with a leaner organization with faster decision-making, we have reduced our FTEs with 7% per year over the last 9 years. These efforts have translated into solid results with revenues up 4% and EBITDA growing 7% annually since 2022.

So if you turn your eyes to the top right of this page, you can see that we are the #2 player in mobile with market-leading scores in both customer satisfaction as well as employee satisfaction. And Telenor Denmark will be positioned for further services-led growth with a renewed and improved platform in 2026. Now to sum up this section, the 2 most important ingredients in our secret Nordic sauce is our track record and continued focus on services-led growth and a relentless execution on our transformation agenda. That gives me reason to be optimistic also about the coming period.

So with that, now I'll hand over to Jussi, who will share our exceptional journey in Finland and also talk to why we're continuing to invest in fiber. Go ahead.

Thank you, Sigvart. It's great to be here at CMD. I'm Jussi Tolvanen, Head of DNA, which is the Telenor brand in Finland. I'm very pleased to go through our story, what we've done, a little bit of facts about our performance, our ambition and our strategy, and then I'll talk a bit more about the recent fiber investment announcement that we did on the multi-dwelling units. In Finland, we have already come a long way since Telenor acquired DNA in 2019. And we are successfully on the journey from moving from being a challenger to becoming one of the market leaders in the market with the most loved brand.

As you can see from the graphs, we have delivered growth across the board. We've been adding subscribers. We've been increasing ARPU in both mobile and fixed and also reducing OpEx at the same time. So there's a lot to be proud of. The previous strategy period has been very successful for DNA, and it's thanks to our employees. We now hold #2 position in mobile and #1 position in fixed subscriptions in the market. We have captured market shares in both B2C and B2B, and it's due to our focus on customer experience. When the customers are happy, they tend to buy more.

And also the -- on the customer experience, the customers reward us with one of the highest customer satisfaction scores in the market. Our networks are in great shape, and we are receiving awards on the network quality. And we actually transmit the highest amount of data subscription in our mobile networks in whole Europe. And that is a proof point of the strength and quality of our networks. But we are not standing still. We have ongoing transformation on our -- both business side and tech side as well so that we are able to remove legacy systems.

We are able to continuously simplify our operations, which then frees up capacity and boost efficiency and that makes us future-fit DNA. And all of this actually, as said previously, reflects the exceptional people we have at DNA. And we want to be the best place to work and learn with our humane and one-of-a-kind working culture.

Looking ahead, the Finnish market remains dynamic. We expect increasing competition. There is new MVNOs in the market. Also, we expect stronger demand from businesses for secure and reliable connectivity. Our competitors are increasing investments, especially on the single dwelling units. And also, there are certain regulatory changes in the fixed space in the market. But we have clear ambitions in place to meet these changing market demands.

First of all, on the consumer side, we will -- we believe we are able to kind of sustain our growth through our differentiated dual brand strategy combined with AI-driven efficiency. On the business side, we will expand our operations and growth through secure and seamless connectivity supported by predictive automation. And finally, we are stepping up on the fiber investment to capture attractive market opportunities as illustrated in our recently announced investment to multi-dwelling units to upgrade from cable to fiber, which I will return to shortly.

With this combination, we have a strong foundation and kind of forward-looking actions to be well positioned to strengthen our market position also going forward. As many of you know, we recently announced that we are investing EUR 120 million to upgrade on our multi-dwelling networks from coax to fiber. I will go through, first, why the demand of fiber is continuing to grow. Secondly, why this investment is strategically important for us. And thirdly, what kind of impacts we expect to have from this investment.

Finland lags behind Norway and Sweden on fiber maturity, and it's because we have very good mobile networks and alternatives. At the same time, we see clear indication that the fiber demand in the market is increasing continuously. Our customers demand high-speed, low latency and reliable connectivity, which then powers everything from streaming and gaming at home to cloud-based tools at work. Fiber is a great technology to meet those demands. And there are several reasons why we are investing into fiber.

Firstly, we want -- it's about protecting revenues. We are delivering about NOK 1.2 billion of direct revenues of fiber -- sorry, fixed in Finland and still 25% of that is based on coax networks. Secondly, fixed is a highly effective entry point for cross-sell. So more than 50% of DNA's fixed broadband customers also takes mobile from us. And thirdly, fixed improves loyalty. Customers with both fixed and mobile churn 40% less compared to mobile-only customers.

There has been a lot of build-out on the single dwelling units by infrastructure investors in the market rather than traditional operators. But that segment is now largely mature. The next wave of growth will come from multi-dwelling units, and this segment actually offers attractive growth potential with higher profitability. This upgrade is an investment to design to future-proof our current and future customer base. We want to stay ahead of the rising customer expectations and position DNA for sustained leadership. We want to protect our customer base today, but also we want to win new customers going forward.

From the technology point, coax is fine today, but the expectations are rising. And we want to ensure that our customers get superior experience before they look elsewhere. This also ensures our market leadership, both through growth, but also reduce churn. And that is critical -- the strong fixed position is critical for our overall long-term competitiveness in DNA. Although this is a significant investment, we believe this is a scalable investment with solid expected returns.

When we do this upgrading area by area, we build once and connect many homes at the same time. This means we can avoid repeated construction work and which then maximizes the efficiency and also expands our connection ready footprint in the market. So to summarize, this is a targeted and scalable investment that strengthens our fixed position, protects our base and sets us up to lead in the Finnish market, not just today, but for the long term.

Now having covered Finland, I'll hand it over to Ric to talk about Services First strategy in Norway.

Great. Thank you very much, Jussi. Really inspiring to see what you guys do in Finland. Good morning, everyone. It's great to be here. My name is Ric, and I'm CMO in Norway. And I have the great pleasure today of talking to you about our -- Services First strategy for the consumer market. But before I dive into it, I just wanted to start with a quick definition of Services First. So by Services, we mean value-added services in contrast to our underlying mobile and broadband connectivity products. Specifically, we're talking at this stage about digital security and entertainment services.

And then by First, we mean that if a customer first chooses a security or entertainment product from us, then it's much more likely that they're also going to buy the underlying or embedded connectivity service from us at the same time. This means that the Services First strategy allows us to take a larger share of the strongly growing security and entertainment markets, whilst at the same time, strengthening our underlying connectivity business.

Now this is a theme that we're a bit bullish on in Telenor Norway. We think that we've done a little bit better job than most of our peers are driving the value-added services agenda. And you can see that to an extent in the figures that you see from our financial reporting. However, if we choose to dig just a little bit deeper into our figures, and we look at the share of our mobile revenue, which is due to the bundled security and insurance services, then we can see that already today, somewhere around about mid-30% of our B2C revenue in Norway is driven by our security, insurance and TV and entertainment portfolios, so already about mid-30s percent.

And we think in the next 3 years that this is going to be the key driver of our growth and that, that percentage is going to rise to low to mid-40% in the next 3-year period. So incredibly important driver of our growth. And we've been looking for what we might call a holy grail of services first value propositions. Now what do I mean by that? Well, I mean essentially 3 things. The holy grail of a Services First value proposition would be a customer offering, which is attractive to many customers, when they have a high willingness to pay and when there's a high attachment rate of the underlying connectivity products.

Now since I'm standing here talking about this today, I guess that you can guess that we think we found one of these holy grails. And in fact, we think we found 2. So after more customer interactions, more tests than you can shake a stick at, we've now have strongly validated concepts for Services First concept in security and entertainment. And that's what I want to talk about today.

So let's start with cybersecurity. Our customers, the Norwegian people are worried about cyber threats. They're very worried. In fact, they're so worried that if we show them a list of different services, security services that we could deliver to them and ask them how they value them, then customers value 8 different security functionalities at NOK 50 per month or more, showing a very clear and high willingness to pay for security. But it's not just that the customer wants the products that protect them. Customers are uncertain.

So they're looking for advice, help to set themselves up to be safe. They're looking for notification or warning if they're in particular danger and not least, they're looking for help if they get in trouble. So it's important for customers that, that comes from a credible local supplier who they know and trust and that who's easily available for them. Now who could that be?

The Telenor brand is about the most trusted brand in Norway for digital security. 3 to 4x as many Norwegians trust Telenor for their digital security as other operators. In fact, this is so important for us that our brand promise in the market now is based on security. It's what we call hele Norges sikkerhetsnett, which roughly translated to English is, The whole of Norway's safety net. Our aim is to be the natural supplier of customers' digital peace of mind.

So we have now defined and strongly validated a concept that we're calling internally fraud-stop, which is a suite of cyber protection services. And this validation is great. I mean I have to say the first time I saw these validation figures, I thought, wow! In fact, I thought it was a little bit more colorful language but because these figures are great.

So as you can see behind me, stated interest from customers seeing this fraud-stop concept is at 77%. Now just as a comparison, that's more people than voted for Red, Socialist Left Labour; Green Center Liberal Christian Democrat and Conservatives at the last general election. So whilst we may disagree about politics, we can pretty much all agree that digital security is important.

And then 24% of customers when shown a realistic price for this concept, state an immediate intention to buy. And this is without any prior information, without any marketing, without any salesperson encouraging them and without any special pricing and discounting, very high figure. I'd almost say through the roof for this type of test. So that's 2 of the 3 elements of the holy grail.

But then the third part is that if you want to enjoy the full protection of the fraud-stock concept, you also have to be a customer on the underlying connectivity services. And this slightly strange graph on the -- on your right-hand side, indicates that of the customers who say they would buy this service, if they're already a mobile subscriber, 54% of customers said that they would then include a new broadband subscription into the concept.

And if you're already a broadband subscriber, then 69% would include a mobile subscription or more, more than one into the concept. So that's then the last part of the holy grail. And for us, it's a way that we can drive fixed mobile conversion in the market without using heavy discounts. We plan to launch a concept based on fraud-stop in the first quarter.

Okay. Let's just switch mode. Now go to entertainment. And here, I'm going to be talking about streaming services, think Netflix streaming services. Now according to our customer surveys, 33% of Norwegians say they've lost control of which streaming services they subscribe to. 40% are frustrated that they can't find the content that they want to watch or it's not available to them. And whilst 90% of people in Norway use streaming services, almost none of them understand how much they pay each month for that.

So we've developed this concept that we call Streamix, which is a pretty simple concept in many ways, but it's something that fixes these pain points for our customers. It gives customers one place to buy their streaming services at a fixed monthly price. So customers can choose 3 services, let's say, HBO Max, SkyShowtime and Viaplay. And then on a monthly basis, they can swap in and out other services. So after a month, you might want to swap one of those out with HBO Max.

And you can do this for a fixed monthly price of NOK 499 or if you're a Telenor mobile customer, NOK 399. Now for that price, you get your 3 services. You get the standard version without any of that irritating advertising. But you also have an opportunity for an extra charge to upgrade to premium versions of the services. So for example, including premium content like football or you can add a service 4, 5 or 6 again for an additional charge.

And again -- and for launch, we have what we think is a real stellar list of content providers. So we have, as part of our launch package, Netflix, HBO Max, Viaplay, SkyShowtime, Apple TV and TV 2 with an upgrade possibility to Disney+, most -- almost all of the really big players in the market. And with this content lineup in these prices, almost 7 out of 10 customers express interest and a whopping 30% state an immediate intention to buy, again, off the charge for our figures.

And again, in a similar way to Svindlestopp, we see there's also an impact on the underlying attachment to the connectivity services, again, allowing us to drive that business. So Services First is about delivering great new customer experiences. It's about fixing real pain points and it's about making a step-up in the way that the customers interact with and experience us. But it's also, for us, a way to sweat our market assets. We've got a really strong brand. We've got strong distribution.

We have 3.8 million paying customer relationships, which create 13 million customer interactions every year. So you can think of that as a foundation in our business. And then we can layer on top of that, that we now have a state-of-the-art data analytics and AI platform from Google that allows us increasingly to target just the right offer to the right customer at the right time in the right channel at the right price. And that takes us back to what Sigvart talked about on how this augments the more-for-more strategy.

So whilst more for more is about taking existing product areas and creating more value in the existing products, both back book and front book, Services First Is new value propositions to customers. It's about building individual one-to-one upsells, which then over time, lead to new customer bases that we can then do the same sort of value creation in the future. So we think that this is the key to our growth. We think that we deliver more deeper long-term customer relationships.

It makes us less vulnerable to price attacks on individual product areas, and it's the key to accelerating our growth as we move forward and contributing to the NOK 15 billion in cash flow we expect to see in 2030. So just a last word. In case you're wondering, Streamix launches in the market on Monday. So if you're a Norwegian, [Foreign Language]. Thank you.

Thank you, Ric. Thanks for a great and engaging note. So please, you might actually remain on stage, Ric, because now we're actually going for the first Q&A round for the day. And I would like to also welcome our Group CEO, Benedicte; and Torbjorn, the CFO; and also Sigvart, Head of Nordics on stage with me.

So we'll now invite the analysts to ask their questions. And an important note, please save questions relating to the next part of the agenda regarding the other business areas and the financial ambitions to the second Q&A we have today. Also, please limit yourself to only 1 question to give everyone a chance. And we have quite less than 20 minutes, so please keep it short, and then we'll have a break.

Operator, are you there?

[Operator Instructions]

While the queue forms, we will start with questions from the physical audience here today in Oslo. So to those in the room, please wait for the microphones, will be passed on here. And we'll start with the first question from Nick Lyall in the front row here. So if you could pass Nick the microphone, please, that would be great.

It's Nick Lyall from Berenberg. I'll keep to one as you say. But you talked about all levers on ROCE being used potentially. Anything new? Why not talking about M&A in Sweden and Denmark, for example, which seems a very, very big lever in terms of synergies you might be able to use. Could you talk us through maybe some of the criteria you think about when you're assessing that for the long-term plan? And what might be the restrictions at the moment?

Benedicte, do you want to take that question?

Sure. We certainly do see that also some of the Nordic markets would benefit from structural changes. And we would definitely be on the alert if there's anything moving in that space. However, I do not think it's wise to communicate any details around that until we have something concrete to communicate.

Can I just maybe come back on that. I mean you did mention this back in sort of Q1 or Q2. So is it just a difficult slow process in terms of selling? I mean what's holding things up in a sense? Because you seem prepared and the plan is prepared as well. So what's taking time?

Well, I guess, I mean, first, elements in the market have to be on the move, right? And there has to be some opportunities to grasp that one thing. The other thing that is still in the open is, of course, whether there will be a regulatory environment allowing structural changes to happen. We do see now that there is some positive signs in EU on this point. But any transaction in any country in Europe would require approvals both on a country level as well as on the EU level. And that's -- the jury is a bit out still. But we hope to see some positive movements there as well.

The next question is from Felix Henriksson of Nordea. And Andrew, we will get to you next.

Felix from Nordea. It's on CapEx, where you've communicated the desire to lower the capital intensity in the Nordics down to 11% to 12% by 2030. So I'm just curious on what kind of assumptions that number sort of bakes in, in terms of, let's say, newer business opportunities relating to AI-RAN, 6G and also sovereign cloud for that matter. Are those something that are sort of embedded in that number?

Torbjorn?

Yes, sure. The -- as we made clear -- as I made clear in my presentation, we've gotten to a point now where sort of 5G RAN rollout, et cetera, is -- we've kind of passed that. So the focus now will be more on adding features that will allow 5G stand-alone and like. And if you look at the profile of it, we do see a tapering off, fcall it, the network related, but a continued investment in IT, which is, of course, important in part due to the transformation, taking legacy out and also adding new features over time.

And like with any CapEx, this will be based on the visibility we have today. We note, like everyone else, the chatter in the market about 6G AI-RAN, et cetera. We think we encourage, of course, innovation. But we think that 5G has a long runway of features and capabilities that kind of removes the need to look at those type of upgrades in sort of the near to medium term, I would say. So those are some of the fundamental things that underpin our CapEx forecast.

Yes. And we will take the next question from Andrew Lee of Goldman Sachs.

Just a simple question on the EBITDA growth, hopefully. You've guided to low to mid-single-digit EBITDA growth on a compound basis over the next 3 years for the Nordics. You presented your guidance you had set out in 2022, which was for mid-single digits. You still sound pretty confident in top line growth, sound pretty confident in cost cutting. You've delivered more than mid-single-digit growth even ex the ICE impact. So what's getting worse and driving you to guide to worse EBITDA growth than you've delivered and guided to in the past?

Could I perhaps -- maybe we should hold the financial questions to later when I have the financial section so that we can prioritize questions on the first part of the presentation, if that's all right, Andrew, and then we will try to address your question then.

We'll elaborate on this in detail in the next section. So that's why.

Okay. So just a Nordic question then operationally, what's getting worse?

Switch it to me then. I think in all fairness, we've been running consistently now with transformation over a long period of time. And I think particularly the last 3 years, you've seen what has come out in terms of cost improvements, et cetera.

So to a certain degree, we've taken some of the low-hanging fruits. So I think having said that, we have also built up a very, very strong muscle in managing the transformation, both locally as well as across the Nordics. So the difficulty is increasing, but I also think that our competency in actually running these changes has increased as well. So that's why I remain sort of pretty optimistic with our ability to continue this journey.

Okay. Thank you. Thank you for that. We'll have the next question from...

I'm Max Findlay from Rothschild & Co. Redburn. You've clearly discussed the benefits for AI, both on the top line and for your OpEx, but I'm interested to know what are the threats. One risk appears to be perhaps accelerated churn if AI enables consumers to more easily switch providers and have clearer visibility on tariffs. So making products like Streamix less relevant in Norway. What do you see the risks of AI being?

That's an interesting question. You might want to elaborate together with me saying that. I think I'd like to start with that we actually have many AI projects across Telenor in order to make our operations more effective. And as you say, we are doing that mainly to -- on the areas where we can actually control and use AI to improve our operational efficiencies. How it pans out in the market on consumer services and how they apply it? I mean, it's just early days to say, isn't it? I mean it will be -- it's difficult to predict. But I think Jussi has the answer, the holy grail to that.

Not a holy grail, but how we try to look at AI is that it has more or less kind of 4 buckets. So first one is the kind of personal productivity in our own operations. The second one is how do we redesign and reinvent business processes and innovation. Third one is about how do we monetize AI-driven products. And fourth one is about agentic AI. and what it means in practice internally, but also how the customers are going to use Agent AI going forward. So those are the buckets that we are all the time analyzing and try to find solutions and offerings based on those buckets.

Okay. Thanks for that. I think we'll have the next question over here from Ondrej of UBS.

Congratulations on the presentation. I had a question on the growth in the Nordics because you've had one of the strongest top lines in the sector for a couple of years now. A big part of that is, obviously, as you flagged, been, at least in Norway, some of the value-added services that you've scaled up to some degree.

I was wondering, with this new presentation, you seem to be highlighting a couple of material opportunities. So how do you see the contribution from value-added services going forward? And then how do you, I guess, emulate the success from Norway into other countries in the Nordics, if at all?

Sigvart?

Yes, I can maybe start and then, Ric, if you want to chime in...

We don't have that much time for that.

So I'll take it then. No, I think without sort of repeating my presentation, I think this is a key focus. When we look at the growth going forward, we see mainly -- or one of the key contributors is the services and the value-added services. Ric has pointed to 2 of the really exciting concepts that we are just about to launch. And those -- or what we constantly do now is to replicate those successful concepts across the Nordics. And actually, Streamix is inspired from Denmark and a concept called CBB Mix, which was launched already some time ago. So this is how we work together in order to take inspiration and also scale those concepts that work.

Okay. With that, I think we'll need to go to the online audience to also give them a chance to ask their question. Operator, are you with me?

Yes. So our first question will come from Ajay Soni at JPMorgan.

I've got one question just on Finland. So it appears that the coax upgrade continues to increase beyond 2028. So could you provide a bit of detail on how many households you would have upgraded by the end of 2028? And then how many households are still remaining to be upgraded beyond this?

Jussi?

Yes. So currently, we have about 700,000 customers connected to our fixed broadband. And as I said, about 25% of that is based on coax. So by the end of '27 -- sorry, '28, we -- our plan is to move it all to be based on fiber. So that's where we are. At the same time, of course, we expect to drive growth in the customer base at the same time.

Good. I hope that answers your question. We'll take the next question from the line.

The next question is from Ulrich Rathe at Bernstein.

Sorry, I'm facing a video constraint here. My question is on the services in Norway. If I understood the presentation correctly, you're including the TV revenues in the revenue share of the VAS? Could you comment on the outlook that you see for linear TV? Obviously, there is an active debate in sort of the balls and the bells. What are your assumptions with regard to the VAS element of the linear TV service?

Okay. I'll take that. Yes. So the first question is that the TV revenues are included in the numbers that I was sharing on the value-added services. So that's a simple yes. We've seen a decline in the usage of linear TV in the market. We expect that, that decline will continue. What we're focused on now is to ensure that no matter how the customers want to consume their TV content, we have an appropriate solution for them.

So we're, in a sense, derisking our business from exactly whether that's going to tip a little way -- a little up or a little down by making sure that we have the Streamix concepts and some other stuff we're doing on our TV and entertainment business to make sure that we always have a relevant offer to the customer and that we can continue to drive that as a good and healthy business for ourselves.

Thank you, Ric. Do we have one more? Thank you, and that concludes our online question for this round. We have a question from Christoffer Bjørnsen with DNB Carnegie over here. And that will be our last question before we need to take the break.

So on the CapEx side, you noted that you've been dialing down the fiber investments over the next couple of years, except in Finland, but you still have quite a material customer base of households in Norway still on cable or coaxial. So just interested in hearing your view on how you think about those in the years ahead. Will they just remain on coax and be up for grabs by competitors? Or are those included in the plan to kind of convert those to fiber?

Yes, Sigvart.

Yes. I think we've signaled a somewhat tapering of the investments, but that doesn't mean that we are stopping the investments. So we'll continue to invest also in the Nordic market and rolling out fiber in the coming period. So I don't think we're guiding on the exact number, but that's the general answer is that it's tapering, but not stopping.

And by the way, we'll have a breakout session on the Nordic fixed markets and comparing those later today at 12:30. But for now, that concludes our first Q&A round for this CMD. We'll have a second one later, as mentioned. And now we'll have a 10-minute break. And please be back here at 10:30 sharp. Thank you. At 10:50, of course. 10:50 sharp.

[Break]

Okay. Hello, everybody. Welcome back. My name is Jon Omund, and I am Head of Telenor Asia. So let me now take the next few minutes to wake you -- to wake you up again -- to walk you through the performance of Telenor's portfolio in Asia and our plans going forward. Here something happened. At the 2022 Capital Markets Day, we unveiled a strategy for Asia that is to modernize and improve our portfolio of companies to continue to deliver leading cash returns.

So we have created market-leading players in Malaysia and Thailand through Southeast Asia's largest telco mergers where synergies are realized through network integration and digitalization of operations. And by these mergers, we have also taken down the direct risk to Telenor. Grameenphone in Bangladesh continues to be the #1 player in that market and has continued its transformation journey to drive operational efficiency.

Then we announced back in 2023, in December 2023, the sale of Telenor Pakistan and we did that as we did not see a path to a #1 position in that market. That sale has recently received approval from the Competition Commission of Telenor Pakistan, and we expect the transaction to be completed and the process to complete quite soon now.

Overall, Asia has delivered well on the capital market 2022 strategic ambitions. However, we did fall short of achieving the accumulated free cash flow ambition set to NOK 12 billion to Telenor Group. This is primarily due to FX effects and macro conditions. In addition, there are -- or there was a NOK 1.7 billion settlement with the regulator in Bangladesh. And we have also had disputes on tax in Telenor Pakistan.

Looking at Asia, we have fundamentally reshaped the portfolio from having operational control, with the risk that comes related to that to now having one controlled company and 2 associated companies, which has taken down the risk exposure to Telenor Asia significantly. Across these large markets, we serve around 200 million customers, which is approximately 95% of the customer base of Telenor. On a 100% basis, the total revenue of our assets in Asia generated NOK 113 billion in revenue over the last 12 months. So the portfolio value currently stands at NOK 90 billion, up from NOK 79 billion before the mergers.

So our total shareholder return ownership adjusted grew by 27% in that same 3-year time frame. So we have unlocked synergies. We have strengthened balance sheet and positioned our assets for sustainable value creation and higher dividend capacity going forward. From a regional perspective, Asia has a robust long-term growth potential. This is driven by advanced connectivity and digital infrastructure and services that our companies provide to these markets.

And our strategy is to be an active owner and develop our portfolio of companies with the perspective of long-term value creation. On this slide, we highlight 3 areas that strengthen our growth prospects in the region. First, across our 3 markets, the middle class is expected with a higher disposable income. This part of the population is expected to grow to almost 100 million people in the coming period. So that increases this share of the population from 28% to 34%.

Second, in Grameenphone, 40% of the customer base are not on data yet. This represents a ready and untapped potential for future growth. So for example, the country's young youth-based population, they need data for education, for entertainment, for financial services and social connections going forward, and they do so at increasingly speed.

And then lastly, in the mature markets, Thailand and Malaysia, their digital economies are expected to continue to grow. Southeast Asia is estimated to reach USD 1 trillion. I have to read it right, USD 1 trillion in gross merchandise value by 2030. So this figure represents the total value of goods and services sold online, and it really showcase the region's accelerating shift into a digital commerce environment and the significant opportunity that telco players have acting as a backbone for this growth.

So let me now take you through the assets in detail, focusing on growth levers and how we drive efficiency and our ownership priorities. Starting in Bangladesh. Grameenphone is strategically important asset within the portfolio, and it has demonstrated a solid execution and paying steadily dividends over the past years in a challenging macroeconomic environment. Growth will come from the ongoing shift from voice to data. And to capture this, Grameenphone will simplify and monetize a data-centric product portfolio, enabled by improvements in the overall data network experience.

The shift is ongoing, and we see positive signs in the market responding to our drive for a simplified data product and protecting ARPU in the market. We are also positive to a potential low-band spectrum, and we will carefully evaluate other needed spectrum renewals with capital discipline and long-term evaluation in mind. The transformation in GP includes the use of AI to drive growth and a shift to a cloud-based technology and continued organizational changes.

So Grameenphone has, for example, started now this -- or in '24, a full transfer of their [ 8 14 ] IT systems into a cloud-native setup, simplifying IT and driving a better customer experience based on the better sort of less IT incidents, better processes and closer to customer, higher innovation speed.

And in Grameenphone, besides driving performance and steady dividends, we will ensure that GP continues to focus on sustainability, on governance, on compliance and responsible business practices also in the future. Let me spend a couple of words on how Grameenphone will use AI to create value across 3 pillars. First, AI for growth. In a pilot with Meta, we saw revenue growth in the high double digit with sales of a chatbot offering, which is personalized -- which is creating personalized offerings on myGP app.

Torbjorn mentioned this in the OE earlier today. These are really promising results. Over 20 million or close to 25% of the customer base in GP, they are daily users on the myGP app, and they use it to stream content to get news updates and to play games, et cetera. So Grameenphone, they continue to digitalize the distribution and touch points with the aim to growing subscribers on myGP app by double digits over the coming 5-year period.

Second, AI for efficiency. AI is embedded in operation. It's primarily to drive network and energy optimization. With the AI technology, the team can now forecast, predict and optimize energy consumption at the base stations and Grameenphone are targeting a NOK 1 billion OpEx savings over the coming 5 years by the use of machine learning and AI technology in their operations.

And finally, AI for people, which we call AI&I. This is about embedding AI into everybody's life in operation, so we can secure that they're maximizing their productivity in daily work. Baseline AI modules are mandatory for all from field force to CXOs. They are supplemented by classroom learnings for targeted groups, and we have deep dive certification courses for AI champions and domain experts. As Benedicte mentioned earlier today, AI&I will now be used as the umbrella for AI competence building across the Telenor Group.

Then I move to the associated companies. Firstly, these mergers represents the largest mergers across the region ever executed in our industry. There are many examples of how these type of mergers can fail. There are many reasons for that. However, we are very pleased to see how these 2 mega mergers have successfully executed in the first 3-plus years now. So let me start with Thailand. The successful execution of the integration plan and synergy realization from network and organizational development has really resulted in a strong financial performance with 3 consecutive quarters of profits behind us now.

So this includes a reduced CapEx to sales significantly. The company has improved the EBITDA by THB 7.5 billion, implying a margin expansion of 15 percentage points since amalgamation. They report an EBITDA margin of more than 65% now. At the same time, they reduced leverage and improved interest rates and interest costs. True have reduced more than 35% of the headcount since amalgamation by the end of Q3 2025, significantly ahead of the plan set forth.

In total, and as a result of this, market capitalization of True has increased by 37% since amalgamation. True now has the most comprehensive spectrum portfolio across low, mid and high bands in the country, and it's leading in offering connectivity in Thailand. You might saw it a few days back, True has declared an interim dividend for Q3 '25 of 125% of its net profits, and we expect the final dividend to be declared for Q4 '25 at the AGM next year.

In addition, the Board have suggested its intention to propose to pay no less than 50% of net profits on a semiannual dividend payout going forward. So True has consistently outperformed its integration targets and delivered improvements ahead of schedule. And Nakul, True CFO, is having a breakout session later today. He will explain more on the journey that they are on.

So while some macro risks slower-than-expected tourism, for example, persist. We strongly believe in the resilience and the growth focus of this company. It's transformation. It's transforming its operation. It's a 2-player market, and it gives us strong belief that this will be value creating for Telenor going forward. Moving to Malaysia. CelcomDigi has a leading position in terms of both subscriber and revenue market share. We also see very solid execution of the integration of the 2 companies CelcomDigi has concluded a full network integration with a modernization of all 14,000 sites, providing a better customer experience for consumers and enterprises. In a very competitive market, the company has maintained a very strong focus on financial discipline, and they have delivered consistent value to Telenor paying NOK 3.5 billion in dividends for the past 3 years. So in the next phase of transformation, CelcomDigi will accelerate momentum in mobile and convergent growth with an even stronger focus on operational efficiency. As Torbjorn pointed to, in Q3, we continue to see short-term challenges from an unprecedented 5G approach in the country. DNB or the Digital Nasional Berhad is a government-owned special purpose vehicle established to operate a single national 5G network.

However, after the establishment of this DNB, the regulator decided to launch a second 5G license, which was awarded to the smallest operator in the country. So in our Q3 presentation, we highlighted that DNB has described its distressed financial situation in its financial report. So DNB's shareholders are working closely with the government to improve its financial and operational position, and there are constructive discussions with the government, particularly focused on securing competitive 5G spectrum to help improve DNB's financial and operational position. So short term, it is therefore key for Telenor as an active owner to work with partners to support CelcomDigi in strengthening DNB and by that, the competitiveness and profitability of CelcomDigi's 5G offerings to the market. So a few words on what we mean with this term active ownership. Basically, we influence and secure priorities through strategic governance, talent deployment and operational excellence across our associated companies. Under the active ownership model with equal representation in Board and Board committees in the associated companies.

Our companies are driven to focus on performance to deliver shareholder value. We ensure good strategy by deploying right talents and capabilities in key positions. As an example, 56% of top management in our associated companies, have come from Telenor. So to summarize, the Asia portfolio today has been restructured well and derisked with a smaller direct Asia exposure to Telenor shareholders compared to before when we had full control of a larger number of assets. Our associated companies have increased market value, and they're well placed for a stronger free cash flow and dividend capacity for the long term. Despite some short-term challenges, conditions are in place for a strengthened free cash flow and dividend capacity. The headwinds to the free cash flow is that we expect in '26 and '27 can be summarized in a few bullets.

So first, the macroeconomic recovery in Bangladesh is taking somewhat longer than anticipated. So it may slow the overall market momentum in the country. Secondly, with the mounting transition from voice to data, we will further improve the data network capacity and the coverage of data network to ensure that Grameenphone's position within data is competitive going forward. This will add some CapEx on top in the short to medium term. In addition, a potential low-band spectrum and up to 4 license renewals in the second half of 2026 may imply a short-term step-up in spectrum payments since the majority of the spectrum bands up for renewal was paid a number of years ago. So you can look at the Investor Relations spectrum resource page for details regarding this.

Then third, the ongoing restructuring of DNB in Malaysia could create transitional challenges for CelcomDigi And finally, we hope to conclude the transaction in Telenor Pakistan in the next months. This will reduce the overall Asia cash flow from 2026 and onwards. So for reference, Telenor Pakistan is expected to give approximately NOK 500 million in 2025. So to wrap up, our long-standing presence in Asia uniquely positions us to be an active owner on driving our companies to drive -- to create value for long term. We are confident that the assets will transform and be future fit in terms of organization, in terms of customer experience, in terms of transformed IT and networks and the use of modern technology and AI.

And while we operate with the perspective of developing the value of our assets and create long-term value, I will repeat what Benedicte said earlier and what you will hear Torbjorn state that we do look for simplification options and structural opportunities for these assets that create value to Telenor in the medium to long term.

So with that, Torbjorn, over to you.

Thank you, Jon Revhaug. Yes, the mic is on. Before we get to the financial section, I will say a few words about our 2 smaller, but still important business areas, infrastructure and AMP. And I think AMP is a very appropriate name having seen the Head of AMP play electric guitar in front of 3,000 employees last week and did a wonderful job. So we were all amped up. Now infrastructure manages our Nordic towers, our sovereign data center as well as the AI factory initiative. AMP overseas smaller businesses at various life cycles and some of them, we will be looking to grow, perhaps integrate them to the core, whereas others, we will look to exit.

Now looking at the period behind us. And broadly speaking, we think we have met the ambitions set out for these business areas at the last CMD in 2022. If we start with the infrastructure area, we significantly improved the operational and financial performance of the tower business. Aside from the sale of 30% of Telenor fiber in Norway to KKR, we have not -- underline, not been pressing ahead with divestments in the infrastructure area due to one, changes in the macro and geopolitical landscape that Benedicte showed with increased focus on ownership and security of infrastructure.

And we also see that there is heightened caution amongst operators on the risk-benefit analysis of infra divestments, having been surprised by price adjustment clauses and the like. Now as I've said in the past that many of the investor meetings we've had throughout this year, we prefer to see [ infra stake ] divestments as an optionality we would like to preserve should the need arise. This is not something we are exploring actively. In AMP, we said we would monetize noncore assets focus on IoT and security and enter into partnerships. We have done all of that.

We have secured more than NOK 6 billion in proceeds from exits, including Allente, which has now received regulatory clearance and should close this month. Cyber defense has been established, and Connexion has continued focus on Nordic collaboration to serve our B2B customers with IoT-related services. Now the starting point for the infrastructure business area was to address our own needs for a sovereign, secure and sustainable infrastructure and to optimize the performance while increasing asset utilization and returns by sharing this with external customers. In Towers, Telenor has the largest site portfolio in the Nordics we have overdelivered on the profitability increase forecasted for the tower business at our previous CMD.

We will continue to drive operational excellence whilst retaining optionality to explore strategic partnerships in the future. In addition, we have a dedicated AI infrastructure with the first sovereign AI factory in Norway already being commercially operational. This niche position will be scaled with demand and any future investments will, of course, depend on demand as well as a good return on capital employed profile. And the same applies with our data center JV Skygard, which is also exploring inorganic growth opportunities.

Telenor controls the largest tower portfolio in the Nordics. We have a clear #1 position in the Norwegian market. And if you include the JV side, a shared #1 position in Sweden and Denmark. Rising external revenues and efficiency gains have been the main drivers of profitability increases since 2022. Now we will continue driving return on these assets through continued streamlining of the operations. As seen -- I think you need to flip a slide, thank you. As seen on the left here, as legacy fixed technology essentially copper has been decommissioned, there are thousands of towers nonmobile sites that are no longer needed. These costs will be removed from the cost base over time. And as shown in the graph in the middle, Towers has delivered a significant uplift in profitability over the years. Now we will continue to streamline the operations. We will continue to automate processes and invest in renewal and resilience, ensuring these strategic assets remain secure and ready for monetization should we choose to do so in the future.

Then moving to our business area, AMP. Here, we develop businesses that are close to core or if relevant, we divest them to stronger and more natural owners. We have defined 2 areas where we look to build a broader position, namely in IoT as well as security. Now transformation is also a key prominent focus in AMP where we seek to revitalize key businesses and make selected investments supporting our core business. Key to this is to leverage the know-how outside the boundaries of Telenor also with the use of partnerships to learn, adapt and to share risk. When owners may be better suited to develop an asset, we will exit as we've done with Telenor Satellite, Working Group 2 and most recently, Allente. So in sum, in AMP, we have a focused growth approach and a strict portfolio management. The majority of AMP's customers are targeting B2B customers. As mentioned, a key focus for AMP is to build leading Nordic B2B service positions in IoT and the cybersecurity area.

Now let me share a few words on some of these key assets. So if you start from the upper left on the slide, Telenor Connexion is the largest single contributor to AMP's EBITDA and free cash flow. Connexion is the fifth largest operator in IoT in Europe and #10 globally with managed IoT connectivity, serving international customers in over 200 countries. If you look on the right-hand side of this slide, we have KNL in Finland, which offer mission-critical services for defense. KNL provides proprietary and ultra-secure tactical defense communication solutions across long distances. This is a small but rapidly expanding niche with high barriers to entry. Now this company recently signed a contract with both the Finnish and the Swedish defense forces and is a very scalable business with software-like margins. Now in a period with increased focus on defense cooperation, we believe it is very, very helpful to have dialogues with defense procurement officials in all of the Nordic countries.

Finally, we have Telenor Cyberdefense, which was carved out from Telenor Norway last year, providing managed security and surveillance for business customers. All in all, while not our largest business areas, infrastructure and AMP remains key for us to ensure a resilient and innovative development of the group going forward. So now let's get to the financial review and ambitions. Now at my first quarterly presentation in February, I highlighted 3 priorities that was important to us. One was delivering on our promises for 2025, two, was our strong commitment to shareholder returns; and three, was to manage capital for long-term value creation. I'm pleased to report we're tracking well across all 3 parameters. And the latter two shareholder remuneration return focus are two extremely important fundamentals as we move forward.

While reported service revenue growth have declined over time due to structural changes in the portfolio, our current businesses have been growing nearly 3% per annum. This has been driven by an effective commercial strategy in the Nordics, a successful transition of copper to fiber in Norway and a move towards a more resilient position in Asia with notably lower risk. Since 2020, we have seen steady growth in both service revenues and EBITDA. Now as you can see from the first and second charts on the left behind me, Service revenues and EBITDA growth averaged more than 3% in the period, driven by the Nordics. The third chart shows group free cash flow, which is on track towards our -- around NOK 13 billion 2025 outlook. It is clear our Nordics business area is now our main cash flow engine as a result of the successful commercial and operational execution Sigvart touched on, combined with a tapering CapEx profile. As Sigvart said, free cash flow from the Nordics have more than doubled since 2022. And Nordics is also the key driver on return on capital employed, growing from 7% to 11% over the last years despite the large investments we made. You can see that the chart on the right.

As you can see, we've had an average ROCE at the group level of 12.3% since 2020. Note that in this number, there are some special accounting effects relating to True and CelcomDigi that have affected this group metric over time. Now as we said at our Q3 presentation, we have a group ROCE of 13.8% if you exclude our associated company, which at present doesn't contribute much on the numerator, but a lot on the denominator. And this further highlights the potential to also improve ROCE over time with growth in the results from our associated companies. All business areas contributed positively to free cash flow in 2024 and 2025, led by the Nordics. The chart behind me shows free cash flows by business area on a gross basis with corporate function, interest cost and parent company taxes in the gray area below the X-axis. The red dotted line shows the net free cash flow level.

As mentioned, this year, we expect that free cash flow before M&A will come in at around NOK 13 billion. In Q3, we generated NOK 4.2 billion in free cash flow, which was up 50% year-over-year. Note that in Q4, we will receive close to NOK 0.6 billion in dividends from True post withholding tax. So thank you, Nakul. And a final catch-up dividend payment from Allente of around NOK 0.3 billion. And we also expect positive working capital inflow. We have a return mindset at Telenor with a key focus on how to expand ROCE. Now as mentioned, our focus reaches across all levers from top line growth to OpEx and CapEx efficiencies and to capital allocation-related levers. So first, let's cover the internal perspective on capital allocation.

We have invested a lot over the years. Investment and reinvestment will always continue in telecoms, but CapEx has started to taper. And all investments we make will leverage on our existing strategic assets and be driven by incremental return perspectives. On the inorganic side, we will always be looking for value-accretive acquisitions, value-driven partnerships as well as value-creating divestment opportunities, resulting in portfolio simplification of the Telenor Group over time. Next, let's turn to how we think about capital management by business area. In the Nordics, we're gradually shifting capital from network build-out to more service innovation and IT transformation, driving sustainable growth and higher returns.

The key aim is here to leverage our existing world-class infrastructure by creating great services for our customers and by transitioning into a cloud-native stack and deploying AI, as we talked about earlier. We also see opportunities for value-accretive transactions in the region and have been very clear publicly on our view on the merits of in-market consolidation from 4 to 3 players. In Asia, our organic value creation focus is to drive long-term cash flows and dividends in cooperation with partners. We're channeling capital prudently towards network development, IT transformation and AI initiatives as well as ensuring we have access to just the right amount and type of spectrum. As Jon Omund talked about, Grameenphone has had subdued CapEx below 9% of sales over the past year. But given the increasing data demand from its customers, we will need to dial up this a little bit to ensure a competitive data position in the market.

Our telco assets in Asia are mostly financial, and we will manage them for long-term value maximization, cash flows and dividends. At the same time, we have been clear that we will look to create further value by simplifying our portfolio to become more of a Nordic-centric company over the medium to long term. As I've just talked about, we will also have a very prudent and active capital allocation relating to infrastructure and AMP. Then turning to the external perspective on capital allocation. We are very proud of our 15-year track record of consistent growth in dividends, complemented by buybacks and special dividends when appropriate. Our commitment to our shareholders is clear. We remain focused on delivering strong, predictable cash returns and upholding our dividend policy, despite a certain decline in our asset base over time as we have simplified the group.

So we remain strongly committed to ensuring appropriately supported and growing cash returns to our shareholders over time. Telenor is in a solid financial position with long-term funding and a well-diversified financing that provides stability, predictability and flexibility. We have a split rating from the rating agencies with A- from S&P and Baa1 from Moody's, both with a stable outlook. As such, Telenor has very good access to the debt capital markets. Our bond portfolio is well balanced, and we have an average maturity of 4.8 years, which helped reduce refinancing risk. To maintain financial flexibility and reduce liquidity risk, we also have a EUR 1.8 billion multicurrency [ RCF ] in place. About 63% of our debt is fixed with an average interest rate of around 2.6%, and our overall interest rate is currently 2.7%. Over the past few years, our leverage ratio has moved within the target range of 1.8 to 2.3x, averaging towards the top end of the range.

Occasionally, we've seen it tick above, mainly due to currency fluctuations as well as the timing of our biannual dividend payouts to shareholders. We remain committed to our target leverage range. That said, we do expect some quarter-to-quarter variation depending on market dynamics and timing of dividend payouts. What is important to us is that we see a clear path back inside the range if we happen to be on the outside. So overall, we are in a strong and stable financial position, well funded, well diversified and with the flexibility to navigate changing conditions, supported by the growing high-quality cash flows from the Nordics. Looking ahead, our free cash flow ambitions relate only to the operating companies, excluding associates like CelcomDigi and True. As illustrated by the dotted element of the 2025 column on this chart, we expect NOK 2.5 billion from associates this year, including Allente.

We see solid medium- to long-term dividend potential from our associates as their results improve, as illustrated by the arrow in this chart. As you know, CelcomDigi are -- CelcomDigi and True are large separately listed companies. And while we exert significant influence through the respective boards, these are nevertheless noncontrolled entities. And as such, we find it prudent to exclude dividends from these companies from our stated [ FCF ] ambitions. We do, however, expect that the 2-player industry structure in Thailand, along with an ambitious transformation will be supportive for the future results of True, which just announced its inaugural dividend. In Malaysia, CelcomDigi has paid consistent dividends.

However, in Q3, we highlighted some of the potential risks related to the evolving 5G landscape in Malaysia and challenges related to the financial situation in CelcomDigi's associated 5G network company. Nevertheless, we expect transformation and progress on key pain points to underpin and unlock substantial mid- to long-term dividend potential from these assets. So looking at 2026 in the indicative chart here, while free cash flow builds on firm momentum into -- from the Nordics into '26, -- it is balanced against important investments and short-term structural effects such as the expected divestments of Pakistan and Allente. While we will provide our full '26 outlook in connection with our Q4 results early next year, we do already foresee a mid-single-digit EBITDA growth in the Nordics in '26. Note that incremental spectrum payments are excluded from our ambitions.

As per long-standing Telenor policy, we do not comment on future spectrum spend. The reason for this is to avoid front-running our bidding strategy, which I'm sure many authorities would love to hear and generally high uncertainty in Asia within this area. While we are strongly committed to covering our dividends over time, in '26, this could potentially, and I only underline the word potentially be qualified by uncertain external and structural factors, such as the dividends from noncontrolling entities and the spectrum auctions as well as mentioned exits. For the mid- to long term, we see quite a few structural performance drivers for free cash flows for our controlled businesses. This goes especially for the Nordics, led by the service-led upselling and tapering OpEx. CapEx intensity in the Nordics should, as mentioned, also continue to fade as the network heavy lifts are gradually completed.

In Bangladesh, additional 4G investments will be balanced by macro recovery, leading to cash flow uplift in the country. Tax payments in the Nordics will increase from '28 and the national roaming agreement we have with Lyse will taper off as they build out their own network. Overall, we expect substantial improvements in group free cash flow, excluding associates over the medium to long term. And on top of this, dividends from associates are expected to contribute meaningfully. So for the mid- to long term, more specifically, we have the following ambitions. If we start with the Nordics. In the Nordics, we're aiming for an organic service revenue growth in the low single-digit range through both '28 and 2030. Organic EBITDA growth in the low to mid-single-digit range, supported by the declining OpEx of between 0% to minus 2% annually and the resultant operating leverage.

We expect CapEx to sales to taper towards below 13% by '28 with a further decline to 11% to 12% by 2030. And when we give a long-term outlook today, this is based on the current industrial visibility that we have. With access rollouts in fiber and 5G heading towards the finish line, we do believe CapEx will taper, and we will take a prudent approach as we -- when we talked about new technologies. In case there would be attractive investment projects within areas we are unaware of today, of course, this outlook may change. But this, of course, is -- would be subject to the same strict return parameters that we've talked extensively about. So these are the best estimates we have today. At the group level, free cash flow, excluding associates, is expected to be around NOK 12 billion to NOK 13 billion for 2028, further reaching NOK 14 billion to NOK 15 billion by 2030. Dividends from associates would, as mentioned, come on top of this cash flow.

Return on capital employed is projected to grow from 8.6% today to exceed 11% by '28 and rise above 12% by 2030, reinforcing our focus on value creation. On a side note, this ROCE figure does include our associated companies. And as mentioned earlier, ROCE, excluding associates, were more than 5 percentage points higher as per the third quarter this year. So all in all, these ambitions underline our long-term strategy, steady growth, operational excellence, return-focused investments with an expanding return on capital as a result.

So with that, I'd like to hand over to Benedicte for her concluding remarks.

Benedicte.

Thank you, Torbjorn, and thank you all for a good session. I'll be quick at I know we are heading a bit up against the time. To sum up our financial ambitions, we are quite ambitious about our value creation potential for shareholders over the next 3 to 5 years. The commitment to our financial policy, including dividends and a strong balance sheet remain strong. And in addition, we have a firm commitment to dividend coverage over time. When I joined Telenor a year ago, I came to a high-performing organization that was well underway to deliver on the ambitions we set 3 years ago.

Now 12 months later, we are here reporting back on good progress and good results. I hope that we've been brought to life our evolved strategy to drive value creation for our shareholders over the next few years, starting with our customers, which ultimately drives company value to our shareholders as illustrated on this slide. I personally feel a great enthusiasm about this strategy and perhaps even more importantly, I'm so encouraged by about what I see around in the organization. I see a Telenor group leadership that is even more united and focused on strategy and execution. I see strong leadership teams in each and every business unit, and I see that they are better equipped to empower and enable their teams to deliver. And I also see that we are all passionate about doing so. The simplification and tech and AI-driven transformation that we talk about here in the PowerPoint format, is being implemented as we speak and accelerated across the organization. And this gives me great confidence that many positive results are yet to be seen for Telenor.

Finally, I'm confident that our evolved strategy will drive return on capital, free cash flows and dividends as well as shareholder value overall. So thank you all, and we look forward to your questions.

Well, thank you, Benedicte. And then we're ready for the second Q&A round of the day. And I will invite our colleagues back down here with us. So Torbjorn, the Group CFO; and Jon Omund, Head of Asia, back up here to -- for the Q&A. And again, please limit yourself to one question, and we might have a chance to get back for your second one later. And we'll start today with the room. But before that, operator, are you there?

Yes. Thank you.

[Operator Instructions]

Okay. Then while the queue is forming online, again, we will start here in the room. And please wait for the microphone before you go. I think the first question will be then from Andrew Lee there. Thank you.

The question was on the Asia portfolio simplification. That's something that I know you guys have been thinking about for some time and have always said it's not easy. It's not a simple thing to do. And it remains a kind of medium- to long-term plans. So the question is kind of has the setup changed do you think that will make it easier for you to kind of exit some of the Asian assets or simplify your portfolio over the next couple of years? And what has changed that gives you the confidence that you can actually achieve this?

You want to go? Or you...

I think Jon Omund is eager to answer.

Thank you. Good question. So when we say we have simplified, we have moved from a number of assets where we have operational control and also the responsibilities that comes with it to now associate the companies for the largest entities where we basically owned shares in a listed company in the market. So that is a very different situation related to potential changes of ownership if you put it that way. So from that perspective, it is restructured and simplified with respect to how we move forward.

And I also think it's worth mentioning that the value creation is also more visible with all our assets being listed. And as we said in the presentation, if there are sensible things to do that would increase the value of these assets, we will certainly have a very close look at it.

Okay. Good. I think the next question is from Nick Lyall, Nick? We're running with a microphone.

Nick Lyall from Berenberg. Just on Andrew's point as well in Asia. Could you come back to how you actually decide on the value of the assets? You've clearly mentioned the dividend growth but return on capital are negative. You could be an unlevered Nordic operation instead. So how are you actually assessing when is the right time to look at the Asian assets and why?

If you remember one of the first slides Jon Omund had the listed -- the value of our shares that are listed have increased by around NOK 11 billion to 27% but close NOK 90 billion, right? So at least there is a visibility of the increased value of the assets. And that's the main data that we use when we value our assets. I guess there is no better measure for a listed share, right?

If I could just tag on real quick. I mean what we have said is that we want to be active owners. And within that also means looking at structural opportunities. And that means that we will look at structural opportunities that we feel are value-enhancing to Telenor. Aside from that, we have said also that these type of structural deals take a lot of time. The mergers in Asia took 3 to 4 years to complete. So that is why we will continue to work to drive value as an active owner and then look at structural opportunities. And then be more than happy to come back and share news with the market as and when we have something to report.

Okay. I think the next question is from Andre from UBS.

So I have a question on free cash flow. This time around, you're not guiding for free cash flow, including associates. I was wondering why the decision? And then if you can give maybe -- or is that an indication of something in terms of how core these assets are here is just not enough visibility for you to put the numbers out there and then associated with free cash flow, if you can just give us maybe a bit of color below the EBITDA and CAPEX numbers because obviously, you've mentioned, for example, the Bangladesh spectrum auction, some of the stuff around the 5G JV in Malaysia, et cetera.

But of the more regular items, what it could be the reason that guidance could be maybe -- it might seem slightly conservative given the guidance on EBITDA and CapEx?

So we have made a decision to only guide for our control companies. As mentioned in the presentation, the 2 associated companies in Asia are separately listed companies that we do not control. And of course, they, of course, need to give their own guidance. The forecasting of cash flows in the previous period was also for a period when there was mergers that has some clear financial ambitions to come out, but it is impossible for me or us to predict the dividends. So for example, True has announced now at the interim dividend of 125% of profit, we have no control as to what percentage of future profits they will guide.

So hence, we think it is prudent for us to only guide on the parameters we control, where we have a real influence on the outcome. Now as far as things below CapEx, as you know, we tend not to go into specific entities. We've said we will dial up CapEx a little bit on -- in Grameenphone due to the voice to data transition. And then it remains to be seen what the resolution is with respect to the 5G JV in Malaysia, but that is, of course, something that you Jon Omund and his team are following up very closely.

Okay. Thank you. I think your next question comes from Jorgen at Pareto at the fourth row. Yes.

Thank you so much for the presentation and for taking my question. So my question would be when you keep leverage guidance and also intend to increase dividends over time. while also stating that divestments in Asia are a bit -- you can't say for sure when it's going to be. How would you -- if there would be consolidation opportunities in the NORDICS? How would you finance that? Would you reassess your leverage targets? Or are you looking at share payments? Or any comments would be helpful.

Yes, I think you're going into areas that becomes quite into the hypothetical, what to do if we divest how to fund if we buy -- there also, of course, all important considerations that we would look at in those hypothetical scenarios. And what we are clear on is that we are -- we have to maintain a strong balance sheet. So that, of course, provides some constraining parameters. But how we finance, how we structure any potential deals is something we will look at on a case-by-case basis and come back to if and when we have something to say. So I'd rather not speculate on the various permutations there.

Okay. And then we have Christoffer Bjornsen.

It's Christoffer from DNB Carnegie. On the CapEx outlook, you're kind of guiding for a material step down in the longer term. So before -- like when we exit '28, can you just give some thoughts on where we would be on like the upgrade of all the networks in the Nordics to stand-alone on 5G, where you'll be on fiber penetration. And then finally, any remaining work that needs to be done on swapping out Chinese equipment, both in the wireless and the fixed networks. And in particular, on the stand-alone 5G, if that thing kind of included in the CapEx towards '28 to have fully transition to stand-alone by '28. That would be helpful. So 3 bullets there.

When it comes to the stand-alone network, I think I showed it also on one of my slides. We have between 90% and 99% coverage we have 5G coverage also up in 80 plus across the Nordics. And we are now in our final phase of 5G stand-alone making that available and anticipate that to be operational or possible to put into customer transactions in the coming year. So kind of getting there as we speak. And that's also the reason why the CapEx is tapering over time when we've kind of reached the peak of our 5G investments, and we see that we can, that our CapEx to sales will be reduced somewhat. And remember, we come from a level of 19% CapEx to sales back in 2022. And now we are guiding on around 14% this year and then going further down in the years to come.

And you also asked about the Chinese vendor situation in Finland, right? Which has been somewhat in the news. And there is an ongoing discussion in Finland. And the question is whether RAN equipment will be defined as critical infrastructure or not. We do not see there is a big change. We follow it very, very closely, of course. But we don't anticipate there to be a big change and big impact on Telenor short term and there is also an anticipation in Finland that if the regulator or the authorities decide mandatory swap out of Chinese equipment that there also will be some financing from the Finnish authorities if that happens.

Chris, we have not quantify that in the Nordics as such. But you're welcome to participate on the breakout session on Nordic fixed markets related to that.

Details on all the countries in the breakout session, actually.

We need to move on in the Q&A. Thank you for that question. And we think we'll go to Daniel Landberg of Handelsbanken seated next to [ Christopher ] there in one row further down.

Yes. Thank you, Frank. And I have a tech question, surprise, surprise. And that would be on the 5G stand-alone that you mentioned, you will be deploying here in '26 time frame? Is it for the full of Nordic or mainly in Norway? And also, if you can talk about the opportunities you see to monetize this, i.e., dynamic network slicing or whatever or what you've learned so far, what you've seen from Elisa, for example, in Finland or Reliance Jio in India.

We anticipate to have 5G stand-alone available in all the 4 Nordic countries.

During 2026.

S During -- thank you.

Can you say anything about monetization and what you expect to see from this in terms of growth if you can have.

We haven't elaborated in any detail on that. But it's within -- it's in our financial ambition.

Next question is from Felix from Nordea.

It's on Malaysia. So is there anything that you can do yourself to offset some of the adverse impact from the suboptimal 5G network situation and DNB's difficulties? And as a follow-up, does the prevailing structurally challenged 5G network situation impact your desire to stay in the market?

Yes. Thanks. So what we are doing is from Telenor side is to work with partners in Malaysia, both our partner in the ownership of CelcomDigi, but also broader to guide and be part of the discussions to restructure and find solutions for DNB medium to long term going forward. And we believe we have adequate and good competence related to what is needed to be done up and beyond the spectrum discussions that are ongoing with the government. So that we are engaging on a quite active basis.

And the sort of impact on your desire to stay in the market against that backdrop?

For now, we are focused on creating solutions to the situation and the structural changes, we will take as and if they come.

And the next question comes from [ Stan from ABG. ]

[indiscernible] One on OpEx growth in the Nordics. You guide for 0 to minus 2% annual OpEx growth in the Nordics. Over the last couple of years, much of your EBITDA growth has come from price increases or giving more for more, as you say. If that is difficult to maintain that kind of price increase momentum, do you think there is potential to do more on costs so that cost can contribute a larger part of that EBITDA growth that you're guiding for?

You're absolutely right. A lot of the performance has come from a successful commercial strategy driving the top line, but I probably have a slightly different perspective on the cost side. We've had a very ambitious agenda on the cost side also historically. And I think the -- as I like to put it a bit [indiscernible], the combination of top line growth continued with lowering OpEx and falling CapEx is, of course, a strong contributor to the overall cash flows.

So -- and this effort will definitely continue also through the, call it, the time horizon that we highlighted on the stage there. And as we said, 0% to minus 2% in the period up to 28%, and that will continue beyond '28. And I think it's important to keep in mind that when we're talking about 0% to minus 2%, that is a net decline in total OpEx. That means that not only have we absorbed the inflationary pressures, but we've also managed down the cost base. So -- and of course, the more and more sort of low-hanging fruit to take off, the harder it gets. But given our transformation muscle, we're confident that we will deliver on this trajectory going forward, and this will be equally important in the future as it has been in the past.

Okay. With that, I think we'll need to come back to any potential further questions from the room and give the participants online, a chance to ask their questions. Operator, are you there?

Yes. Our first question will come from Ajay Soni JPMorgan.

Just around the dividend. So last few years, these have grown around about 1%. I think if you look at your free cash flow growth ex associates, that's guided to mid-single digits. I think when you add on the associate dividends on top of that, I think free cash flow is growing mid- to high single digits. So can your dividends grow in line with this free cash flow growth that you kind of guided to today? And then just one quick question on the 2026 free cash flow, just to confirm, did you say that these may not cover the dividends for 2026? I just maybe missed that.

So let's -- the brief answer to your first question on dividend growth going forward. This is, of course, a matter that our Board will consider when we come to look at dividend declaration. So I'm not going to stand here and give any guidance or manage expectations on the future dividends other than to say that we are strongly committed to it.

As far as the '26 is concerned, we've said that there are some things that could potentially impact the coverage in '26. And I think we've been highlighted enough through the presentation about what they are, including dialing up investments, some of the structural things going away as well as some of the headwinds in Asia. But for us, we have, as we like to say, in Norway, quite low shoulders on this because our dividends are very covered -- very strongly supported by strong growing Nordic cash flows. So to the extent you have minor bumps in the road, that it doesn't give us a rise for concern also from a leverage perspective.

Okay. Next question.

The next question is from [indiscernible].

So if I think about Telenor Capital Markets back really pretty much all the way back to 2004. CapEx to sales has practically always been guided down, right? I think the highlight was the CTO standing up and saying, Asian CapEx can be below 10%. What is structurally different this time? I think you mentioned one thing in your presentation, which is the softwarization of the equipment and that this means some of the costs will move from CapEx into OpEx. But then you essentially guide for continued OpEx declines on a net basis, as you highlighted just now. So I'm just wondering how this all fits together. It really does sound like an extremely ambitious goal compared to what has been delivered in the past on CapEx. And if it is really the software bit, then I don't quite understand the OpEx guidance. Could you just elaborate on that a little bit?

I can do the CapEx to sales bit. Thank you for stating that it's ambitious. I think we feel that we have to get up early every day in order to deliver on our ambitions. But we're very confident that from what we now know about where we are on the 5G development, what rest capacity we have can deliver on that equipment and our 5G stand-alone rollout and our -- I was supposed to say, fortification, but our building further resilience, we are pretty confident that the levels that we are now guiding you should be achievable and a prudent and good quality development of the CapEx levels of Telenor going forward. And you also add something on the OpEx side, right?

Maybe just also to cover, as we made clear in the presentation, we do believe that there is a long runway of features that can be introduced based on the 5G infrastructure we have today. And as we commented, we applaud the innovation discussions, but we are going to take a very prudent approach to this. And we anticipate, based on what we understand that a lot of this will be software related. Then I would like to add that we do have also now things such as the more focus on centralized procurement, the procurement cooperation with Vodafone, which, of course, are important contributors to lowering the cost of equipment going forward.

Okay. So the heavy lifting has essentially been done. We'll take the next question from the line, please.

There are no further questions.

Okay. Then we have a question registered from Jeremy from New Street where you seated over here in the front row, second row.

Sorry. Yes, just a clarification on the Asian dividends. I think you said you had no control over those dividends going forward. Can you just clarify on that? I mean presumably you have some influence through your Board on that. But is there any risk that those are withheld to try and force yourselves out of those markets? I mean, Malaysia being an example with Axiata, who I think at some point might wish to reconsolidate.

And then on the dividends, if those -- you've suggested that they should be covered but might not be covered in 2026. And then beyond that, if spectrum in Bangladesh is high as some news reports have said that those -- that the government is looking for significant funds from those. Could that be the case for more than one year? And would you continue to support the dividends through your balance sheet if that was the case?

The first, the level of control. Of course -- I mean, we are active owners. We have around 30% ownership of these I'm sorry for calling it noncontrolled assets. But as a matter of fact, they are -- we are on committees, on board, and we supply with competence and people and technology. So I mean, yes, we do influence and we have an active ownership approach to these assets. However, the -- because they're listed, they have boards with also partner representatives and independent representatives. We are not in that position alone.

And they are also -- they are listed with stock exchange obligations, which means that if we guide or try to guide on those companies, we will be violating either stock exchange valuations or to the extent that we're insiders. So it's just a matter of complication. And to make it smooth and transparent and predictable and where we actually have a true line of sight, that's why we have decided to do it this way. It's as simple as that. But that doesn't exclude the fact that we are expecting meaningful dividends from these companies, and we are positive about the outlook for the companies as such.

I think just to add, it's -- these are very much aligned with our partners in those 2 entities. Just a quick comment on the spectrum side. We have, I would claim the best spectrum team on the street, humbly said. And when I -- the reason why I'm highlighting it is we are not known to buy spectrum, excessive amounts of spectrum or paying more than we have to. So clearly, our spectrum resources will be heavily engaged in terms of looking at spectrum renewals, including how much we need of the various spectrum bands.

As we made clear, this might prove some short-term headwinds on cash flow. But again, we do anticipate that Bangladesh after a period slump due to the political uncertainty will recover as a result of the election scheduled for February next year, I believe. So combined with that, that does not give us -- give rise to concern that this is something that's going to hamper us in the long-term picture.

Well, thank you, Torbjorn, for that. I think that really concludes our Q&A session. And now it's time for a break. So for investors and analysts, you have signed up for lunch at the sixth floor in the Norway lounge, which will take place from now until 12:30. So please get moving, and we'll see you up there. And after that, there will be breakout sessions on the fourth floor, fourth floor for the breakouts from 12:30.

Thank you very much for all coming, and we'll see you for lunch and breakouts. Thank you.

Good morning, and welcome to Telenor's Q3 results call. I'm Frank Maao, Head of Investor Relations here at Telenor. And presenting today are our CEO, Benedicte Schilbred Fasmer here; and our CFO, Torbjorn Wist. Before we get started, just a few quick notes. So unless we say otherwise, all growth rates are organic and made on a constant currency basis. And when we mention EBITDA, we are referring to adjusted EBITDA. [Operator Instructions]

And with that, I'll hand it over to Benedicte.

Thank you, Frank, and good morning, everyone. This quarter, we've seen a challenging external environment. Hybrid warfare, extreme weather and a high level of cyber threats have all impacted power and communications. And these events are a reminder of how crucial robust digital infrastructure is. And at the same time, they give us opportunities to help customers build resilience, thanks to our strong network and technology foundation.

Today, we are reporting another solid quarter, mainly driven by strong results in the Nordics. Our commercial strategy and ongoing transformation efforts continue to pay off with EBITDA in the Nordics up 8% and 50,000 new mobile customers added.

In Asia, however, we do see a bit of a more mixed picture. On one hand, we grew service revenues and EBITDA by 4% with positive contributions from both Pakistan and Grameenphone in Bangladesh. On the other hand, we continue to expect challenges in the region, as Torbjorn will get back to, including the macro economy and headwinds tied to the cost of supporting data growth, including spectrum.

Thanks to the dedication of our employees across the group, we have delivered an EBITDA growth of 5.4% and a free cash flow before M&A of NOK 4.2 billion this quarter. And this represents a 50% year-on-year increase due to higher EBITDA, prudent CapEx and supportive working capital management.

And with 3 quarters now behind us, we are reaffirming our expected performance for 2025, and we are tightening our guidance ranges. So let me walk you through the key developments in the Nordics and Asia before Torbjorn takes you through the financials in more detail.

The Nordics continued to deliver strong results with momentum across all business units. Organic service revenues in the Nordics rose 2.1% as OpEx declined by the same percentage year-over-year, driving the 8% increase in EBITDA. Breaking it down, gross profit improved, supported by upselling, pricing, product mix and increased wholesale revenues.

Ongoing transformation programs helped lower OpEx even though we spent more on sales, marketing and business resilience. And again, Norway remained our top performer with 2.3% service revenue growth and 9.2% EBITDA growth. And that was also supported by the national roaming agreement announced last year.

In Sweden, top line growth was flat due to our fixed transformation initiative, but EBITDA grew 7.5%, thanks to improved gross margins and OpEx efficiencies, especially in customer service. We made good progress in the mass market mobile segment, increasing both ARPU and our customer base, though the enterprise segment in Sweden remained very challenging.

In Finland, DNA grew service revenues by 2% year-over-year. This was supported by net additions of 28,000 mobile customers and 3,000 fixed customers during the quarter. For this quarter, DNA grew EBITDA by 5% and quite a bit more on an underlying basis. Denmark delivered 5% growth, powered by strong mobile and fixed wireless access. EBITDA was up 4% despite strategic channel shifts and a huge transformation effort. Overall, the Nordics delivered a strong performance.

In Asia, we continue to make operational progress despite a tough external backdrop. Grameenphone delivered growth in both service revenues and EBITDA, though the upswing was softer than hoped. The macro context is still fragile and data price competition is intense. During my recent trip there, I could genuinely feel a sense of optimism building up among the people as the election approaches early next year.

Telenor Pakistan delivered 17% year-over-year EBITDA growth, which is actually great to see. Nevertheless, a key milestone for us was the competition authority approval for the sale to PTCL. We are now awaiting the last approvals and aiming to close the transaction during the next few months.

In Malaysia, we recognized NOK 0.5 billion adjustment to our share of CelcomDigi's second quarter results. This was due to the financial profile of its associated 5G network company, DNB. And Torbjorn will cover that in more detail.

In Thailand, True continued to improve profitability and reduce leverage in Q2.

Next week, a first ever interim dividend is expected to be proposed with payment in Q4. On October 1, we announced a strategic procurement partnership with Vodafone. And this collaboration brings together the scale and expertise of 2 global leaders serving over 550 million customers across 23 markets. And by combining the strength of our 2 organizations and an annual spend of altogether NOK 300 billion, we can unlock significant value within sourcing.

As we gradually phase this in towards the latter part of this decade, we expect this partnership to provide meaningful value creation. And for Telenor, this translates into enhanced competitiveness and improved cost efficiency. It also strengthens our attractiveness to suppliers and partners while bolstering supply chain resilience. A very critical capability in today's evolving geopolitical and technological environment.

The partnership is also grounded in a shared sustainability commitment, reinforcing our leadership in responsible sourcing and business practices. Ultimately, this partnership is about creating long-term value for both our customers and shareholders.

And with that, I'll hand you over to Torbjorn for more on the financials. Here you go, Torbjorn.

Thank you, Benedicte, and good morning, everyone. Let's dive straight into the Q3 financial highlights. Group service revenues in the quarter reached NOK 16.3 billion, which is up 2.7% year-on-year. The adjusted EBITDA was NOK 9.5 billion, up 5.4%, mainly driven by the strong 8% EBITDA growth in the Nordics.

In Q3, adjusted EPS was NOK 1.85, down 3% from last year, mainly due to the NOK 0.5 billion accounting adjustment for CelcomDigi that Benedicte mentioned in her remarks. Without this adjustment, the EPS growth would have been 18%. Now we generated a solid free cash flow before M&A of NOK 4.2 billion during the quarter, which is up 50% year-on-year on the back of our EBITDA growth and slightly reduced CapEx.

The group CapEx to sales ratio was 13.3%, 0.7 percentage points lower than in the same period last year. The leverage ratio ended up at 2.3x within our target range, and this was supported by both the free cash flow profile as well as slightly favorable end-of-quarter currency movements as the Norwegian kroner strengthened against pretty much all our currencies.

As previously stated, driving return on capital employed over time remains a top priority for us. Return on capital employed came in at 8.6% for the last 12 months, up 0.6 percentage points from last year. If you exclude all our noncontrolled companies, the group return on capital employed would have been close to 14%.

Let's zoom in then on the top line. The group service revenue growth of 2.7% year-on-year remained constrained by weak macroeconomic conditions in Bangladesh. The Nordics were the main contributor to group growth with service revenues up 2.1%. If you exclude the NOK 56 million adjustment to the first half service revenues in DNA, underlying growth for the Nordics would have been 2.6%. Nordic Mobile service revenue growth of 3.2% was mainly driven by Norway, Denmark as well as DNA in Finland.

Pakistan continued its strong momentum and Grameenphone contributed positively for the first time since the second quarter of 2024. If we turn to OpEx, Telenor Nordics delivered a solid reduction in OpEx in the third quarter, declining 2.1% year-over-year, driven by lower personnel costs and a successful transformation activities with Sweden standing out as a key contributor.

FTEs across the region were reduced by 3%. Denmark saw higher OpEx largely attributed to the higher commissions in recent quarters as well as higher costs linked to its ongoing and important IT transformation effort, while Finland benefited from lower personnel costs and positive effects from a minor reclassification.

Overall, the rise in sales and marketing expenses was driven by amortization of subscriber costs. For the Nordics, this resulted in a 5% year-over-year increase in sales and marketing spend. OpEx in Asia rose 3.7% year-on-year, mainly due to higher O&M costs as well as personnel costs in Grameenphone as well as Telenor Pakistan. Amp recorded a 21% increase in OpEx, reflecting growth initiatives as well as the transfer of 2 businesses from Telenor Norway, as we mentioned in Q2.

Overall, there was a modest uptick of 1.3% in group OpEx in the third quarter, underscoring our progress of transformation activities, cost discipline. Then turning to EBITDA. EBITDA for the group was up 5.4% in Q3. Asia contributed positively, partly offset by group effects similar to the ones we have discussed before. But the main driver this quarter was the performance in the Nordics. And in this business area, EBITDA grew 8% in Q3.

And as you can see on the right-hand side of the slide, Telenor Norway was the cornerstone this quarter. The performance in Norway was driven by service revenue growth as well as wholesale revenues, mainly from the national roaming agreement highlighted during our Q2 presentation. On a side note, we still forecast the full year revenues from this contract to be more than NOK 0.5 billion for 2025 as a whole. Together, these factors paved way for a 9.2% year-on-year growth for Norway.

Now DNA also had a reported EBITDA increase of 5% despite booking of catch-up items, and this was driven by strong gross profit. Sweden reported an EBITDA growth of 7.5%, supported by growing gross profit and a solid OpEx decline.

So with that, let me move to Asia. Our 2 consolidated companies in Asia delivered service revenues of NOK 4.3 billion and EBITDA of NOK 2.5 billion, representing organic growth of more than 4% for both metrics. This was mainly driven by Telenor Pakistan's continued high EBITDA growth, supported by ARPU uplift and lower energy costs. Grameenphone returned to growth in both top line and EBITDA, which is good to see, though the upswing was softer than hoped despite the easier comparables due to the impact of the regime change we saw in Bangladesh in Q3 last year.

As you know, the market is gradually transitioning from voice to data, which is challenging as competition in data is quite intense. Grameenphone has had subdued 4G investments with CapEx to sales of 9% over the past 4 quarters due to the macro situation. But given the data demand from our customers, we will eventually need to dial this up a bit again to accommodate for expanded data coverage.

Among our associates, True reported 2.6% year-on-year EBITDA growth for its second quarter and continued its deleveraging profile. The company nudged down its full year outlook following a network outage as well as some of the macro headwinds. True has stated plans to propose an interim dividend in conjunction with its Q3 reporting, which is due already next week.

In the quarter, we received NOK 350 million in dividends from CelcomDigi as the company increased its dividend per share while also reporting 5G traffic costs. Taken together, Asia's profitability improved during Q3 despite the relatively challenging external backdrop. However, we do see some short to midterm risks and headwinds in Asia. Among the risks we see, we have touched on in the past, I would like to highlight 3 that will affect us.

First, in Malaysia, the 5G landscape remains challenging. CelcomDigi's associated company, originally a 5G network for all telcos, is undergoing the final stages of privatization. Its recently reported financials suggest a lack of sustainable long-term financial situation in this associated company. We're working with partners to support restructuring with the aim of helping CelcomDigi ensure a competitive 5G company setup. However, the outcome of this process remains to be seen.

The financial profile of the 5G NetCo is also the backdrop for the NOK 530 million adjustment to our share of results from CelcomDigi this quarter, as mentioned earlier. This quarter, we have only 1 year left until a major chunk of our spectrum in Bangladesh needs to be removed. This will entail a step-up in spectrum payments for up to 4 renewed licenses as these spectrum licenses were paid 4 years ago.

As always, our spectrum resources web page on telenor.com gives you full details on our spectrum portfolio. In addition, spectrum pricing in the country has historically been 2x the global median despite a much lower GDP per capita in the country, as you can see in the graph in the middle of the page.

We're hoping -- finally, competition authority clearance was recently granted to PTCL for the takeover of Telenor Pakistan. Very pleased to see that. We're hoping for a smooth process from here onwards and look forward to closing the transaction soon. Given the recent strong performance, we expect Telenor Pakistan to contribute around NOK 0.5 billion in free cash flow for '25. And note, of course, that this contribution will end once this sale is complete.

Then moving back up to the group level, and let's look at the P&L, cash flows and leverage. There are 3 items in the P&L this quarter that I would like to highlight. First, we have the adjustment we've made related to CelcomDigi mentioned earlier. This reduces our share of net income from associated companies.

Second, we booked a NOK 269 million reversal of impairment of our shares in True. Note that as we said in Q2, all of our shares in True are now directly owned. Finally, on income tax, we booked a NOK 312 million provision for withholding tax on retained earnings in associated companies. This is the main reason why the effective tax rate increased to 33% from 26% in Q3 last year.

All in all, we generated net income to equity holders of NOK 3 billion in Q3 and an adjusted EPS of NOK 1.85 per share. Moving to free cash flows. The free cash flow in Q3 was driven by the strong operational performance in the Nordics. We paid almost NOK 1 billion in income taxes, of which 70% is in Grameenphone. As we have discussed before, we have seasonally lower interest payments in Q1 and Q3. And as usual, spectrum payments are very small in Q3. Net working capital contributed negatively by NOK 0.3 billion, mainly due to high activity in Norway and increased receivables.

CapEx paid amounted to NOK 2.6 billion, in line with the quarter's CapEx booked. Other lease payments amounted to a total of NOK 1 billion, a figure slightly below the indicated average for the year. As Grameenphone and Telenor Fiber streamed up interim dividends, we also paid out a total of NOK 600 million to noncontrolling shareholders.

On a side note, around NOK 0.1 billion of the Q3 Grameenphone NCI was staggered and is due for payment in Q4. Altogether, this led to the free cash flow coming in at NOK 4.2 billion, a solid 50% increase year-on-year.

Then moving to the debt side. Net interest-bearing debt, excluding license obligations, ended the quarter at NOK 85 billion, which is down NOK 5.2 billion quarter-on-quarter, benefiting from a NOK 1.1 billion FX gain as the kroner strengthened against all our key debt currencies.

At the end of the quarter, leverage stood at 2.3x, within our 1.8x to 2.3x target range. We maintain a resilient balance sheet and prudent maturity profile, and our dividend policy ensures predictable shareholder remuneration. Then let's move to our outlook update.

Heading into Q4 and our upcoming Capital Markets Day on November 11, our full year '25 outlook pillars remain unchanged. We're tightening the ranges based on our solid year-to-date execution and our visibility for the year. For the Nordics, we see 2% to 3% service revenue growth, 8% to 9% EBITDA growth and CapEx to sales is confirmed around 14%.

As we stated in Q2, on the decimal side, the CapEx number is more likely than not going to be somewhat on the north side of 14%, considering the investments we announced earlier this year with regards to resilience and fiber in Finland.

For the group, outlook for adjusted EBITDA growth is tightened to 5% to 6% from mid-single digit previously. We maintain our view of around NOK 13 billion free cash flow before M&A. We believe that the contribution from Asia will probably be a bit less than 1/3. All in all, the updated outlook reaffirm our overall traction for the full year.

And with this, Benedicte, I believe it is time to wrap it all up.

Thank you so much, Torbjorn. And to sum up, in the third quarter, we delivered consistent execution, strong performance in the Nordics, improving profitability in Asia and a robust cash flow. We also highlighted some expected headwinds in Asia. We are focused on customer experience, service reliability and security with transformation being key for both efficiency and future growth for us.

Our financial principles emphasize return on capital, balance sheet strength and a predictable dividend trajectory. We achieved these results, thanks to the ongoing commitment and relentless drive of our great people across Telenor. The updated '25 outlook reaffirms our overall traction, and we are tightening the ranges and maintaining the free cash flow outlook.

One final note. We are excited to remind you about our upcoming Capital Markets Day on the 11th of November. We look forward to welcoming you here at our Fornebu office. And please do not forget to register your attendance, whether you'll be just joining us in person or virtually.

So with that, thank you all for your attention and continued support. We are now ready to take your questions.

Thank you, Benedicte. And as a request to the analysts, we would appreciate if you would keep your question to forward-looking topics on 2025 only as the prospect for future periods will be covered at our CMD in less than 2 weeks. [Operator Instructions]

So operator, please go ahead.

[Operator Instructions]

Our first question will come from Owen McGiveron, Bank of America.

So you flagged higher spending on sales and marketing for Q4 in the Nordics. This is a similar commentary to your competitors. I guess what I'm trying to understand is, is this comment in line with seasonally higher spending in Q4? Or do you think that this year is going to be particularly competitive? And where in the Nordics do you think you'll have to deploy this additional spending?

Thank you for your question. I think -- we have intensified our sales and marketing efforts. And I think that also adds to the quality of the OpEx as we can sustain a solid OpEx reduction while still putting more on the throttle on the marketing spend. And we see also that, that has given us good results. To what extent we intensify or not going forward, I think we will have to come back to. But we see that it's given us quite good results this quarter.

Our next question comes from Ondrej Cabejšek from UBS.

I wanted to focus on some of the Asia challenges that you flagged in your presentation and how you plan to approach them. I guess, are there any mitigating factors that you already have in mind? Are there some industry initiatives, for example, that you are taking with respect to like the 5G JV or the spectrum auction that you flag as unusually high in Bangladesh? And do you think that this could, for example, rationalize the markets that you're seeing the headwinds in to kind of promote higher growth to offset some of these headwinds?

Yes, please Torbjorn.

In Malaysia, if we start with that, we are actively working together with our partners or co-shareholders in the company as well as the other parties that are invested in the 5G NetCo because obviously, this is a situation that is affecting everyone, and we want to make sure that we have a well-functioning 5G company.

So these are efforts that are done at multiple levels through the channels where we have influence. But you can be assured that there is a lot of focus on this on the ground in Malaysia as well as with people in Telenor Asia to help resolve the situation.

In Bangladesh, clearly, there is a voice to data transition going on, ensuring that we can compete effectively in that is important. And I think what we have been very good at doing in an environment, which has at times been challenging is to ensure that we can throttle and de-throttle also on the investment side to be in line with expected recovery in the market. And of course, we assume that this is a market that will improve post election, but that is obviously something we're watching keenly, and we will gas up or slow down depending on the situation.

If I may follow up on the spectrum, you expect to be like not influenced by this election, I guess? Or is this something that you're flagging as potentially signaling a new approach to the sector in both spectrum auctions, but then also we've seen in the past that sometimes the regulators in Bangladesh specifically try to basically, I guess, extract a lot of value from the telecoms industry overall.

Yes. No, I would delink the 2. When I talk about the election, there is an expectation that the market will recover. And I think we touched on this in Q2 that we expected earlier this year a recovery in Bangladesh in the second half of this year, but we don't see that -- we see that now more as a '26 event because the election is slated to take place in February of '26. So that, of course, is an important milestone for the country.

With respect to the spectrum portfolio, we always take a prudent approach, and we obviously need to make sure that it makes sense. And we don't sort of talk too loudly about it, but we will, of course, consider our position when it comes to new spectrum, whether it be the renewal of the 4 licenses we're talking about or the low-band spectrum auction, which is expected at some point.

Our next question comes from Christoffer Bjørnsen with DNB Carnegie.

So I just wanted to touch upon on the GlobalConnect transaction that you're now working on. So I appreciate you don't want to spill the juice before the Capital Markets Day. But given that that's already announced, it would be really helpful to kind of hear your high-level thinking around whether that investment is kind of incremental to your current fiber investment plans in Norway or if that's kind of an alternative to the plans you already have in Norway? It just seems like the investments in Norway are kind of slowing down in the fiber space. So just trying to understand your thinking around that, I guess.

When we hopefully get the approval, I mean, this is subject to authority approval. So we have to have that little caveat. We will increase our market share by around 7 percentage points. And we do see that our ability and our strength in the fiber market is important for us to be able to deliver connectivity in the different ways and forms that the customers actually want.

And the reason for doing this by way of an acquisition is twofold. I mean, one is that it's a step-up in market share that kind of gives us a much stronger position in the market. And the second thing is, as you allude to, there is around 50% overbuild in the market that we see, and we have done very careful considerations around those elements as well, but we believe that this will give us very interesting synergies as well as a good market position towards the customers. So it should be good for our shareholders, I guess, that's the summary.

That's great. And just as my follow-up really quickly. Maybe you already mentioned it, I was a bit late on to the call. Just on DNA and that accounting adjustment. Could you just unpack a bit what actually happened there and how we should think about that, that would be helpful.

Which -- unpacked what in DNA.

Fantastic. I can do it.

The accounting [indiscernible], yes, please.

Yes, very quickly in -- as we've touched on in previous presentations, in Finland, there has been widespread use of vouchers as an incentive to get people to lock into new subscriptions. Historically, these were taken as OpEx and then amortized on the OpEx over 5 years. But having considered that, we've taken that -- moving that now into a revenue effect, which is taken over 1 year rather than spreading the cost of each voucher over 5 years. So that pulls down the revenue by NOK 56 million in DNA.

And just to add a little bit to the effects, Christoffer. On a group level, the EBITDA effect was a negative of around 0.8 percentage points. On the Nordic level, minus 1.1%. And on DNA, it was as much as 5.5%.

So not really any changes in the competitive dynamics of Finland.

This was an accounting adjustment.

This is just accounting adjustment.

Our next question comes from Ajay Soni with JPMorgan.

Mine just around the Swedish cost base. So you called this out in your remarks as being one of the key drivers behind your lower Nordic OpEx. I just wanted to dig into 2 areas. So firstly, around -- I know you're going through a fixed transition. But do you see -- have you seen any material change in your fiber wholesale costs? And then you also called out your customer service cost benefits. So what have you done here? And could this be rolled out into other Nordic regions?

Would you like to take this one?

Yes, there were a few questions there. Yes, if we start with some of the sort of cost initiatives, there has been a very strong and focused effort to ensure that one cleans up the fixed portfolio a little bit, which is why you're seeing that service revenues is pretty flat due to that fixed is weighing down, but that is a very conscious choice. If you look at the gross profit and you look at the O&M development in the company as well as cost within customer service, those are, thanks to strong OE initiatives that have been running for a long time.

I think in terms of whether this is something that we redeployed in other markets, let's postpone some juice until we come to the CMD in a couple of weeks. But I can, of course, say that we always look at ways to replicate things across markets. So let's just leave it at that for now.

Our next question comes from Andrew Lee from Goldman Sachs.

I just had a question around your data costs in Asia, which appears to be the key reason for the kind of negative surprise today. So it looks like it's a bit of an incremental negative from your perspective as well in terms of what you are anticipating. So I wonder if you could just talk through what the obstacles to your visibility in terms of your cost base in Asia, particularly around data and I think particularly around Malaysia and Bangladesh?

And then how confident are you in your visibility now in your cost outlook for Asia, certainly for the rest of 2025 and 2026. If you could just give us a bit more of an understanding around what's going on and what's kind of precluding your ability to really have the visibility on that cost base, that would be helpful.

Should I start with Bangladesh and then you can cover CelcomDigi. I actually visited Bangladesh just a couple of weeks ago. And you're right. What we do see in the market is that there is a transition from voice to data, and that segment is highly competitive. But we also realize or very realistic that the number of actual phones and mobile that will have 5G capacity of data -- 4G or 5G capacity that will support this demand is quite limited. So what we're doing is we're doing software upgrades, both in 4G and some 5G in densely populated area.

And we do it in a software upgrade manner, if I could call it that, to the extent possible. So it's a very careful development. But we do see that there is a transition from voice to data that is going quite rapidly as of now. And this is just the positioning in the market, answering that change. Would you like to cover the CelcomDigi situation?

Sure. And just to add on to Bangladesh. Of course, the voice to data transition is happening. And of course, we want to make sure that we can get our fair share, of course, making sure that this gives us a good return on investment. And as we have said, there is spectrum renewal and some investments that will be required. But we always measure this in a prudent manner with a focus on return on capital employed.

With Malaysia, a slightly different situation because here, as more and more people use 5G, of course, the cost associated with that 5G traffic is increasing. And of course, a concern here is that if you have a 5G NetCo, which at present is not in a good financial situation, that could result in increasing costs being transferred to the ServCos, if you can call it, call the MNOs. So this is something that is driving an extreme focus on making -- with our stakeholders there and partners to ensure that we have a strong, financially viable 5G NetCo following the changes that has been made to the 5G structure where the new company was awarded a license to build a network and was given some of the frequency or the spectrum from our 5G NetCo. So it is a complicated situation, but very much a key focus on the ground.

And do you think you've got a high degree of visibility on that cost outlook now over the next, say, 12 months?

Yes. I'm not going to guide today for anything beyond '25, as you would appreciate. So of course, this is a key challenge that one looks at addressing going forward, and we will come back to that at later points.

Andrew, I just wanted to remind you that the MergCos, as we call them, I mean, True and CelcomDigi and Grameenphone are all listed companies in their respective countries. So there is some limitations as to what we can do give of forward-looking statements.

Our next question comes from Keval Khiroya, Deutsche Bank.

So one of your competitors flagged a tougher competitive backdrop in Finland during Q3, whilst another has also talked about wanting to stem some of the market share loss in Finland and Norway. Do you feel Finland was more competitive in Q3? And have you noticed any changes across your Nordic markets in Q4 from a competition perspective?

Yes. I mean that's a short answer, but I'll elaborate a little bit too. We did see -- we also saw an increased competitive -- or a more competitive situation in Finland in Q3, which was highlighted by our competitors when they published their results quite recently. And we believe it will continue to be quite tough in Finland. However, the intensity was more on the low-cost side on the mobile -- in the mobile market. And as I mentioned earlier on, we managed to increase our subscriber base with 28,000 customers on the mobile side. And I think it was 3,000 fixed or something like that. Yes. So -- but we expect it to continue to be tough.

And just by way of follow-up, have you noticed any changes in Norway during Q4? I think one of your other competitors flagged them wanting to rebound in Norway as well.

We've -- it's been actually quite -- I was about to say flattish, but not a significant change. We saw that the churn also has been a little bit up, but also leveling off. So no major changes in this quarter to mention. No.

Short version is that Norway and Sweden are in sort of neutral to somewhat positive territory, whereas Finland and Denmark have a higher degree of competitive intensity, as we have touched on in the past.

Our next question comes from Fredrik Lithell, Handelsbanken.

I thought maybe we could spend some time on the Swedish market and what you feel you can do to improve your situation and get growth going again. It is -- we have seen a little bit of higher competitive pressure, I think. So it would be interesting to hear your description, a little bit more color on the Swedish market.

As I mentioned, I mean, we are -- if we take mobile first, there is, of course, an intense competition as always. But we are quite pleased with the growth we have in the B2C market. We are cleaning up our fixed portfolio somewhat. And if you look at that, and I think Torbjorn mentioned it as well that there is a little decline in the subs base on fixed. But if you look at the underlying fiber development, it's actually quite positive. And the gross margin is developing well. But what we also mentioned earlier is that the SME market or the corporate market is quite competitive still, quite challenging.

I guess it's worth pointing out that as we see in other markets, calling the -- on the B2B side, there tends to be different developments. I think we see that SME, you can perform strongly because it's closer to the offerings that we do to the B2C side. So we do see some modest growth there as well in Sweden.

[Operator Instructions]

Our next question comes from Ulrich Rathe, Bernstein.

I'm afraid, I have a video limitation here, apologies for that. So my question would be about expected proceeds from the Pakistan transaction. Are there any clauses in the agreement that would be related to ongoing operational performance of the asset? And would that potentially change the expected proceeds? That would be my main question.

I don't think there are any clauses on the performance side. And we've been managing the last 22, 23 months, very carefully the CapEx spend and also the OpEx spend and so on and so forth just to keep the business secured and float with a good quality, but not spending more than we have to in the situation of the sale. When we receive the proceeds from the sale, that would mainly go to diminish debt, right, Torbjorn. And of course, we have seen over the last 12 months that the tax authorities have been quite active, collecting tax claims.

If you remember back in -- early in the year, we had to pay NOK 250 million extra in a disputed tax claim. So there is always risks tied to this, but I don't think there is any contractual obligations on that.

The only thing I'd like to clarify is that under the licenses we have there, there are rollout requirements. And of course, since -- it's now been a protracted period since the deal was announced. It's now, what, 22, 23 months. And obviously, in the CapEx releases that we have done, it has always been focused on ensuring that we are in line with the CapEx commit and license obligations so that, that does not become a hurdle to the closing of the transaction.

So that, of course, is key. We generally don't tend to -- this is a modest proceeds situation. But I guess to remind everyone, we also have to pay for GlobalConnect once that deal is approved.

Yes. And then in '25, we expect Pakistan to contribute around NOK 0.5 billion in free cash flow. So that will also fall away when the transaction is executed.

Our next question comes from Siyi He at Citi.

I just have a follow-up question on the comments on Bangladesh. I think, Torbjorn, in your comments, you mentioned that you see the CapEx investments in Bangladesh is a bit -- you underspend a little bit over the last 12 months. But it seems when you look at CapEx to sales, it has stayed at 12%, similar to previous quarters. Just wondering if you can comment on the underspending, whether this is the comment against the competitors? And also, I want to ask if there has been any discussions with regulator on potential spectrum payment installments with the upcoming auction renewal?

Yes. The CapEx to sales in Bangladesh has been running at a bit south of that. So I think if you look at the country as a whole, during the macroeconomic and political situation it's been in, that has constrained investments into the country, not just from incumbent players, but also by other actors and other industries.

And of course, we have been releasing CapEx in a very prudent manner in the country given this challenging situation to ensure that we get an appropriate return on the investments that we make. So we will not sort of guide specifically on what we'll be doing going forward other than the comments already made that there will be spectrum-related installments once spectrum is renewed. We will, of course, look at that in a prudent manner. And our discussions with regulators and stuff, that's not something that we talk about externally. But needless to say, we talk to regulators all the time as part of our normal course of business.

This concludes the Q&A. Thank you for your participation, and you may now disconnect.

Thank you very much.

Thank you.