Telenor's Global Impact
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Telenor’s Global Impact A Quantification of Telenor’s Impact on the Economy and Society Final KPMG Report December 2016 Document Classification - KPMG Public Important notice This document has been prepared by KPMG United Kingdom Plc (“KPMG”) solely for Telenor ASA (“Telenor” or “Addressee”) in accordance with terms of engagement agreed between Telenor and KPMG. KPMG’s work for the Addressee was performed to meet specific terms of reference agreed between the Addressee and KPMG and that there were particular features determined for the purposes of the engagement. The document should not be regarded as suitable to be used or relied on by any other person or any other purpose. The document is issued to all parties on the basis that it is for information only. This document is not suitable to be relied on by any party wishing to acquire rights against KPMG (other than Telenor) for any purpose or in any context. Any party other than Telenor that obtains access to this document or a copy and chooses to rely on this document (or any part of it) does so at its own risk. To the fullest extent permitted by law, KPMG does not accept or assume any responsibility to any readers other than Telenor in respect of its work for Telenor, this document, or any judgements, conclusions, opinions, findings or recommendations that KPMG may have formed or made. KPMG does not assume any responsibility and will not accept any liability in respect of this document to any party other than Telenor. KPMG does not provide any assurance on the appropriateness or accuracy of sources of information relied upon and KPMG does not accept any responsibility for the underlying data used in this document. No review of this document for factual accuracy has been undertaken. The opinions and conclusions expressed in this document are those of KPMG and do not necessarily align with those of Telenor. Document Classification - KPMG Public © 2016 KPMG United Kingdom Plc, a UK public limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Contents Letter from Telenor Group’s President and CEO 5 1 Overview of Telenor’s socio-economic impact in its 13 markets in 2015 6 2 Introduction 8 2.1 Telenor and its role in the global telecommunications market 8 2.2 About the study 10 3 Driving macro-economic growth 12 3.1 Introduction 12 3.2 The contribution of Telenor to GVA 13 3.3 The employment impact of Telenor 16 3.4 Capital investment 20 3.5 Telenor’s role in contributing to public finances 25 4 Enabling the wider economy 29 4.1 Introduction 29 4.2 The socio-economic effects of Telenor’s impact on digital inclusion 30 4.3 Telenor’s impact on financial inclusion 38 4.4 Telenor’s contribution to boosting entrepreneurship and innovation 43 4.5 Telenor’s role in supporting improved gender equality 46 5 Sustainability in the supply chain 53 5.1 The positive socio-economic impacts associated with sustainable sourcing 53 5.2 Telenor’s Supply Chain Sustainability policy 56 5.3 The impact of Telenor’s Supply Chain Sustainability policy 57 6 Telenor’s contribution in crisis situations 62 Document Classification - KPMG Public 3 © 2016 KPMG United Kingdom Plc, a UK public limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. 6.1 The importance of communication infrastructure during emergencies 62 6.2 Examples of Telenor’s response in times of crisis 62 TELENOR IN BANGLADESH 67 TELENOR BULGARIA 76 TELENOR in DENMARK 82 TELENOR in HUNGARY 88 TELENOR INDIA 97 TELENOR IN MALAYSIA 103 TELENOR MONTENEGRO 111 TELENOR MYANMAR 117 TELENOR in NORWAY 124 TELENOR PAKISTAN 131 TELENOR SERBIA 139 TELENOR in SWEDEN 147 TELENOR IN THAILAND 153 Appendix 1 161 Document Classification - KPMG Public 4 © 2016 KPMG United Kingdom Plc, a UK public limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Letter from Telenor Group’s President and CEO Dear reader The telecoms industry is racing into a new digital era, where technology will play an even more important role in empowering people’s lives, fuelling economic growth and shaping global business. In this complex landscape, it is imperative that governments, businesses like Telenor’s, and organisations work together to find common standards and frameworks that stimulate growth and create shared value. With more than 160 years of experience, making an impact on society has always been part of Telenor’s DNA. From building connectivity in a sparsely populated and geographically challenging home market in Norway, to making our first investments abroad in Europe and later in Asia, Telenor’s business is to connect people, enable business and empower societies. Access to communication and internet services creates extraordinary possibilities for all of us, no matter where we live, no matter our background. It renders information available and provides a voice for more people. It reduces inequalities. However, continued digitisation will also impact every market, every business and every society. It is already shaking up existing business models, globalising sectors and opening opportunities for the many. Digitisation will challenge many jobs, but also create new ones. These innovations will have a direct impact in local societies, and Telenor is committed to continue making investments that help unleash this potential. This report outlines and quantifies how we have contributed to the societies we serve; from the arctic ice of Svalbard to the tropical forests of Borneo; from the coast of Montenegro to the mountains of Pakistan. Telenor does so not to reminiscence about the past, but to stake out a path for the impact we and our industry can make in an increasingly digital future. You will see that Telenor’s contribution to society consists of numerous things: from direct contributions in terms of taxes and fees, employment, sustainable business practices, new business creation to increased efficiency of companies and society at large. We don’t make this impact alone; we depend on ambitious and long-term thinking governments, as well as innovative partners and ecosystems to propel societies and people we serve in the right direction. This report aims to contribute to a constructive dialogue on how we, together, can continue realising the value and the opportunity of our digital future. Sigve Brekke President and CEO Telenor Group Document Classification - KPMG Public 5 © 2016 KPMG United Kingdom Plc, a UK public limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. 1 Overview of Telenor’s socio-economic impact in its 13 markets in 2015 GROSS VALUE ADDED (GVA) $ $20.3 billion in direct, indirect and induced GVA in 2015. EMPLOYMENT 1.2 million employees comprising direct, indirect and induced employees in 2015. INVESTMENT $3.2 billion of total investment in 2015, including $3.1 billion of capital expenditure. FISCAL CONTRIBUTIONS $11.7 billion comprising contributions directly, through the supply chain and induced activity, and through employees in 2015. DIGITAL INCLUSION $8.0 billion estimated net GDP contribution through greater digital access (2G and the shift to 3G and 4G) between 2014 and 2015. Document Classification - KPMG Public 6 © 2016 KPMG United Kingdom Plc, a UK public limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. FINANCIAL INCLUSION 11.8 million subscribers accessed financial transactions via mobile in 2015. $27.6 billion in financial transactions in 2015 using Telenor’s network, including $1.1 billion in transactions using Telenor’s mobile money services as well as $7.8 billion in Over the Counter financial transactions using Telenor’s financial services including Easypaisa. GENDER 13,000 female employees directly employed by Telenor in 2015 (approximately 36% Telenor direct employees). $3.1 billion of the estimated $8.0 billion net GDP contribution across all subscribers between 2014 and 2015 from greater digital access attributed specifically to female subscribers. SUPPLY CHAIN SUSTAINABILITY 2.1 million employees benefitting from working for companies with high standards of labour rights and working conditions, following Telenor’s supply chain sustainability policy in 2015. Document Classification - KPMG Public 7 © 2016 KPMG United Kingdom Plc, a UK public limited company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. 2 Introduction 2.1 Telenor and its role in the global telecommunications market Telenor is one of the largest 500 companies globally by market value1. It was founded in Norway in 1855 when the first Norwegian telegraph line was opened by the Norwegian Telegraph Administration (Telegrafverket)2. It is now an international provider of tele, data and media communication services, operating mobile services in 13 markets across the Nordics, Central and Eastern Europe and Asia and fixed telecommunication services in Norway. 3 Telenor’s international expansion of operations has happened relatively recently in its history. For example, Telenor: — launched operations in Bangladesh in 1997; — launched operations in Thailand and Denmark in 2000; — became the majority owner in Malaysia’s Digi in 2001; — purchased an initial licence in Pakistan in 2004; — launched in Sweden and Serbia in 2006; — acquired the second largest mobile operator in Bulgaria, GLOBUL, in 2013; and — signed an agreement with the Union Government of Myanmar for a nationwide telecommunications licence in 2014. As of end 2015, Telenor had nearly 203 million connections with over 185 million unique subscribers across its 13 markets, approximately 4% of all global mobile telecoms subscribers.