The financial statements are adjusted compared to the

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Unformatted text preview: from continuing operations was 11.6% in 2011, in line with the expectation. The financial statements are adjusted compared to the preliminary and unaudited 2011 results reported by Telenor Group on 8 February 2012. The adjustment relates to Telenor Group’s share of significant transactions and events of NOK 779 million in VimpelCom Ltd. which arises from change in amortization method of excess values of Wind Telecom acquisition and impairment losses of VimpelCom Ltd.’s operations in Vietnam and Cambodia. This is done according to the financial information for the fourth quarter of 2011 released by VimpelCom Ltd. on 13 March 2012. In accordance with section 3-3a of the Norwegian Accounting Act, the Board confirms that the prerequisites for the going concern assumption exist and that the financial statements have been prepared based on the going concern principle. TELENOr GrOup OpEr ATIONS Telenor Group’s main operations are concentrated in three geographic regions: The Nordics, Central and Eastern Europe, and Asia. Telenor Group has mobile operations in 11 markets in these regions, as well as an economic stake of 31.7% in VimpelCom Ltd., which operates in 19 markets. Telenor’s operations in Norway, Sweden and Denmark also offer fixed telecommunication services. In addition to the mobile and fixed operations, the Group’s core business includes Telenor Broadcast, which has a leading position in the Nordic market for TV services and satellite broadcasting. /page 06/ telenor annual report 2011 report from the board of directors 2011 Please note that all comments below are based on the development in local currency for 2011 compared to 2010 unless otherwise stated. Nordic region Telenor’s number of mobile subscriptions in the region increased by 228,000, reaching 7.4 million by the end of 2011. The growth was primarily driven by strong demand for mobile data. Norway The introduction of flat fee subscriptions in the Norwegian mobile market in late 2010 and the continuous asymmetric termination rates led to price pressure and established a significantly lower price level in the market. As a response to the new price level, Telenor introduced competitive offerings and launched a new portfolio of bundled mobile subscriptions with monthly flat fees in April 2011. In late 2011, Telenor introduced a campaign that offered three months of usage for the price of one month with the aim to speed up the migration to the bundled price plans and increase the number of active data users. At the end of 2011, around 50% of Telenor’s customers were smartphone users. Total revenues decreased by 5%. Mobile revenues declined by 5%, mainly caused by a 6% reduction in ARPU and sale of the retail chain Telehuset in April 2011. The decline in ARPU is mainly related to reduction in interconnect rates and roaming charges. Voice usage remained stable, while price reductions were offset by increased data usage. Fixed revenues declined by 4% in 2011, in line with previous trends. EBITDA margin before other income and expenses decreased by 1 percentage point from 39% in 2010 to 38% in 2011 as the decline in revenues was not offset by cost reductions. The increase in capital expenditure was mainly related to the mobile network modernisation that was completed in October 2011. Sweden During 2011, competition in the Swedish mobile market was focused on mobile broadband and bundled subscriptions, as well as smartphone offers. At the end of 2011, around 50% of Telenor’s customers were smartphone users. Telenor experienced a 3% revenue growth in local currency, up to NOK 10.1 billion. Revenues from the mobile operation increased by 7%. The growth was driven by higher demand for mobile data, a larger subscriber base and growth in handset revenue. In October, Telenor abolished handset subsidies in the consumer market and starting selling handsets by instalments instead. Continued reduction in the number of telephony and broadband subscriptions resulted in 8% decline in fixed revenues. The EBITDA margin before other income and expenses improved by 1 percentage point, bringing it to 25%, due to revenue growth and cost efficiency activities. Capital expenditure increased as a result of acquiring spectrum in the 800 MHz and 1800 MHz bands, both of which will be used for 4G deployments. In Sweden, Telenor and Tele2 have a network and spectrum sharing agreement for 2G and 4G through the infrastructure joint venture Net4Mobility. For 3G, Telenor has a network sharing agreement with the operator 3 (Hi3G Access) through the joint venture 3GIS. Denmark In 2011, the fierce competition in the mobile market continued, in particular on all-inclusive offers from no-frill operators. The general price level has been significantly lowered, further deteriorating profits in the Danish mobile market. At the end of 2011, around 40% of Telenor’s customers were smartphone users. Total revenues in local currency decreased by 1%, to NOK 7.0 billion. Revenues from the mobile operation i...
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This document was uploaded on 03/21/2014.

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