The second quarter of 2005 showed a growth in revenues for the Telenor Group of 8.6% to NOK 16.5 billion compared to the second quarter of 2004. Profit before taxes and minority interests was NOK 3.3 billion.
Second quarter 2005
* prtn rftRvne % 73 96 66 88 11.2 Capital Adjusted expenditure wasNOK2,923million. forthepurchase of • 9,296 18.8 14.8 17.7 3.24 3.25 8,016 16.6 14.5 Inthesecondquarter of2005thenumber intheconsoli- ofsubscriptions 18.3 • 2.74 6,140 2.74 19.6 7.9 The EBITDAbefore otherincomeandexpenses wasNOK5,564million. 16.3 • 2,983 2.17 35.2 2.17 Telenor’s Netincomepershare forthe netincome wasNOK2,041million. 17.3 • 6,789 2,8592,9905,2845,527 733 494290515986 18.5 15.8 3,325 0.97 36.0 0.97 3) 17.0 8.6 34.037.433.736.534.5 2) 1) 1.19 33.5 1.19 Investments inbusinesses Capex Investments: 36.3 Net interest-bearing liabilities Net incomepershare shares excludingtreasury inNOK(diluted), Net incomepershare shares inNOK(basic),excludingtreasury 33.6 Net income Profit before taxesandminorityinterests Associated Operating profit/Revenues (%) Operating Adjusted operating profit/Revenues (%) Adjusted operating profit companies EBITDA/Revenues profit EBITDA EBITDA before otherincomeandexpenses/Revenues (%) EBITDA before otherincomeandexpenses Revenues –growth (%) (%) Revenues (NOK inmillions) TELENOR GROUPSECONDQUARTER 2005 KEY POINTSINTHEQUARTER* ) • KyivstarARPUimproved from lastquarter • Increased orstablemarket operations shares inallmobile subscriptiongrowth • Recordhighmobile • Revenue growth of9% Compared tothesecondquarter stated. of2004,ifnototherwise Consists including ofsubsidiaries ofsharesacquisition andbusinesses ofacquisition andparticipations, notorganized assep Capex isinvestmentsintangibleandintangibleassets. For ofEBITDAbefore otherincome andexpensesadjusted on reconciliation operating profit, seethetable“Reconciliations” international mobile operations. mobile international capital expenditure increased due tothestrong customer growth inthe telephony inPakistan formobile inthesecondquartera license of2004, during thequarter. operations retainedof 2005.Allmobile or increased theirmarketshares ofGrameenPhone, withtheexception tions, compared tothefirstquarter pared opera- tothe secondquarter of2004.ARPUincreased inallmobile constitutes subscriptions athree-foldgrowth increase inmobile com- The operations to24.8million. dated increased mobile by3.4million operations.strong inthe mobile growth andincreased competition reduced related marginwasprimarily tothelaunch inPakistan, Fixed, second quarter of2005wasNOK1.19. 2) 1) 3) ) 1) Inthesecondquarter of2005,inaccordance withtheauthority granted • Thesatellite ontheLondonStock companyInmarsatwaslisted Exchange • Telenor acquired andCybercity inDenmark Bredbandsbolaget inSweden • 16,542 15,226 31,812 29,471 60,701 16,542 15,22631,81229,471 6,414,000 of its own shares inthemarketforNOK329million. 6,414,000 ofitsown by theGeneral ofTelenor Meeting on20May2005,Telenor purchased NOK 1.7billion. is9.4%andasat30June themarketvaluelisting ofTelenor’s shares was on 22June 2005.Telenor’s interest after ownership the stock-exchange ed witheffectfrom July. inearlyJuly.interest-bearing liabilities beconsolidat- Thecompanieswill respectively, andDKK1.4 billion includingfor SEK6.0billion acquired 2,813 2,8225,1945,382 10,730 5,52910,64910,59721,367 5,564 2,923 4,0126,2835,483 12,745 2,041 1,709 3,7514,8405,677 2,041 10,736 10,746 20,957 5,630 5,698 0520 0520 2004 2004 2005 2004 2005 264 294314 4,043 5,809 n ure s afya Year 1sthalf-year 2nd quarter 17,814 21,973 19,195 arate companies. page17.
Telenor Group PAGE 1 2nd quarter 2005 Telenor Group PAGE 2 2nd quarter 2005 lmntos()n 2n 4)n 4n 3)nm (37) nm 14nm (903) 961.0% nm nm 75014.0% nm 2,725 14.2% (3,799) (49) 1944.1% (89) 38014.4% nm 1,41214.4% nm 22nm nm 1,42015.2% 51018.3% (139) (38) 6,789 11.2% (377) nm nm 734 15.1% 21816.3% preparedfor theyearandquarters of2004,whichwere according to 5,52718.8% 83121.1% 248 (7) 14nm 10.3% prin nm (120) nm 773 16.3% 2,02648.0% consequence ofthetransition toIFRS,certain ofTelenor’s accounting 5,28416.6% 274 19.6% 1,09550.1% nm Standards (IFRS)according toIAS34“InterimAs FinancialReporting”. a (712) (56) 38120.1% statements are prepared according 77713.2% toInternationalFinancialReporting nm 1nm As 2005,Telenor’s of1January unaudited interim consolidated financial 84446.7% 2,99019.6% (30) 50749.8% nm 43920.0% nm (117) 1,49828.0% 2,85917.3% 45516.0% 98135.0% nm 1) 3,22827.5% 497 37.0% Total 6,33832.9% (232) nm 1,11411.7% (74) Eliminations 18419.2% 40714.0% 741 28.1% operating (8) Other 20,95734.5% nm 46447.3% Broadcast 1,56827.2% (20) 3,26333.3% profit 25848.8% nm Fixed 69014.4% operations 24621.2% 79128.3% operations Other mobile 10,746 36.5% (6,256) 1,61427.4% 23015.9% 2,91231.2% 58035.3% GrameenPhone 29nm (218) 24534.8% 10,73633.7% 9.5% DiGi.Com 474 – Pannon nm 20613.8% 39229.4% 80527.3% – 1,63133.4% Kyivstar 233.1% 11nm 1,732Bangladesh 43.9% 5,69837.4% GSM Sonofon –Denmark nm Malaysia – 423 (3,070) Telenor 1,50431.6% 50921.1% 41129.3% 82427.0% – 5,63034.0% 1,31360.1% 68115.5% (NOK inmillions) 2,58161.2% (3,363) Ukraine (49) Mobil 83644.1% Hungary 10.0% nm 9.1% Operating profit 232 14.8% 19,256(6.1%) – 60,701 300.0% 5,346 2,09335.4% 59258.2% 11.4% 1,09760.7% 5,907 nm nm 95043.3% 40521.4% 101 Norway 4,404 7.5% 9,800 (4.9%) 9,324 1) 7.9% 1,54355.0% 2,791 66349.3% Total 2,641 5.7% 1,11239.1% (1,545) 31,81229,471 (130) 9,540 (7.2%) 56122.4% 404 2.4% 11,730 4,30536.7% Eliminations 41042.8% (1,754) 32.0% EBITDA Other 4,877 (2.5%) 4,753 1,00134.4% 1,401 59260.3% 2,845 Broadcast 8.6% 1,335 4.9% 5,009 4,783 4.7% 1,895 16,54215,226 2.2% 30958.4% operations Fixed 2,08336.2% 49943.0% 23819.4% 329.1% 2,913 operations Other mobile 55638.5% 91155.4% 2,501 5,758 GrameenPhone 55 2,542 2,06735.1% 3,94624.2% 33447.4% 2,413 5.3% DiGi.Com 30823.5% 4,21960.2% – 5,887 Pannon 2,18642.3% 3.7% 48432.3% – 6.8% Kyivstar 236 Bangladesh 1,08136.6% 1,89415.9% GSM 2,195 Sonofon 1,444 Malaysia – Telenor 1,80655.4% 1,225 2,806 3.2% 1,01832.1% 1,345 – – 1,06635.0% (NOK inmillions) 1,498 Ukraine Mobil 1,308 95821.2% Hungary 2,954 Denmark EBITDA 1,161 98167.5% – 52933.3% 1,643 3,049 705 Norway Total Eliminations revenues Other Broadcast Fixed operations operations Other mobile GrameenPhone DiGi.Com – Pannon GSM–Hungary – Kyivstar Bangladesh Sonofon –Denmark Malaysia – Telenor –Norway Mobil (NOK inmillions) Ukraine Revenues KEY FIGURESOPERATIONS Operating profit asapercentage ofrevenues. EBITDA asapercentage ofrevenues. ciples have beenchangedcompared have toTelenor'sciples financialstatements 05Margin 2005 Margin 2005 n ure s afya Year 1sthalf-year Year 2nd quarter 1sthalf-year 2nd quarter 1) 1) 04Margin 2004 Margin 2004 0520 rwh20 04Got 04Growth 2004 Growth 2004 2005 Growth 2004 2005 n ure s afya Year 1sthalf-year 2nd quarter 1) 1) report for2005discussions related tothefirstquarter of2005. restated tocomplywithIFRS.Reference ismadetoTelenor’s firstquarter Accounting figures andkeyfigures notbeen forperiodspriorto2004have The mainchangesare discussed inthefirstquarter report for2005. for thecomparable beenrestated periodsof2004have tocomplywithIFRS. Generally AcceptedNorwegian Accounting (NGAAP).Thefigures Principles 05Margin 2005 05Margin 2005 1) 1) 04Margin 2004 04Margin 2004 1) 1) 04Margin 2004 04Margin 2004 1) 1) SONOFON –DENMARK Theincrease incapital expenditure due toinvestmentsin wasprimarily • due tothe waspartially Thedecrease andamortization indepreciation • due Thedecrease toincreased inEBITDAmarginwasprimarily costs • revenues decreased Non-mobile due toreduced ofcustomer sale equipment. • revenues increased mobile Other due toincreased revenues of from sale • Interconnection revenues increased due totheincreased number of • 323 Revenues from subscriptionsandtraffic affected positively bya were • revenues increased Mobile by4.8%. • 324 973 343255537469 due ARPUdecreased toreduced primarily offsetbymore prices,partially 303 • Telenor Mobil’s 332 estimatedmarketshare attheendofsecond quarter • 308 Thenumber ofsubscriptionsincreased by52,000during thesecond • No. ofsubscriptions(inthousands) ARPU –monthly (NOK) 27.027.327.427.227.5 Capex Total 1,0661,0812,0672,0834,305 8051,6141,5683,228 Operating profit/ 824 revenues 725 EBITDA/Total 121 10 1 35.036.635.136.236.7 15 (%) revenues 455 1,513 (%) 1) 283 709 Operating Write-downs 179 profit 815 Depreciation andamortization 141 1,613 EBITDA 405 4,789 4,5949,492 2,370 2,455 780 453 1) 859 Total revenues revenues Non-mobile 2,9082,7755,6045,303 402 11,005 Total revenues Other mobile mobile 452 subscriptions revenues revenues company's Mobile Interconnection revenues 2,0031,9683,9303,8147,879 Subscription (NOK inmillions) and traffic TELENOR MOBIL–NORWAY MOBILE OPERATIONS stated. quarter of2005compared tothesecondquarter of2004,ifnototherwise The discussions beloware inrespect ofTelenor’s developmentinthesecond TELENOR’S OPERATIONS BTA308238561405681 3,370 1,448 Depreciation andamortization 2,095 7761,794 1,190 2,799 EBITDA 923 937 1,813 227288406447 770 1,081 1,034 1) Total revenues 1166 Non-mobile 496 Total revenues mobile 158161301258571 revenues Other 595 subscriptions mobile revenues company's Mobile Interconnection revenues 328280628420986 Subscription andtraffic revenues (NOK inmillions) fwihitra eeus3 8 5 2 53 12 55 8 35 Of whichinternal revenues 1 - 2 - 1 1,226 626 Telenor's netexcessvalues by Of whichamortization of 591 315 313 Of whichinternal revenues the UMTSnetworkandupgrading theGSMnetworktoEDGEfunctionality. increased forcertain useful estimated assetsfrom life 2005. January activities. associated andmarketing withsales capacity basis. onawholesale subscriptions. voiceandSMS. subscription, higher numberoffsetbyreduced ofsubscriptions,partially priceson working days inthesecondquarter of2005. withtheendoffirstquarter of2005. of 2005was56%,inline of2005. quarter 1) 1) 1) 1) 3,049 2,9545,8875,758 11,730 1,308 1,2252,5011,895 4,404 0520 0520 2004 2004 2005 2004 2005 0520 0520 2004 2004 2005 2004 2005 n ure s afya Year 1sthalf-year 2nd quarter n ure s afya Year 1sthalf-year 2nd quarter 230 275443514 1,062 328 355 681 544 1,190 2,687 2,4512,645 KYIVSTAR –UKRAINE Capital expenditure withthesecondquarter of2004andwas wasinline • Increased EBITDAwasdue toincreased revenues. Theincrease inEBITDA • Revenues measured inlocal currency increased byapproximately 11%, • ARPUmeasured inlocal currency due increased to by12%,primarily • Sonofon’s marketshare estimated was26%attheendofsecond • 227 Thenumber increased ofsubscriptions by18,000during thesecondquarter 3,786 • 242 3,786 140144168210388 235 of 2004. - mately 3%inthesecondquarter of2005compared tothesecondquarter 233 Krone appreciatedThe Norwegian against theDanishKrone byapproxi- 145 253 - (3,799) (139) No. ofsubscriptions(inthousands) (120) ARPU –monthly (NOK) Investments inbusinesses (117) Capex (20) EBITDA/Total 23.519.422.421.415.5 revenues (%) 2) 1) Operating loss Write-downs (Cont.) 10 ntosns ,3 360 6,252 3,610 9,335 35 35 8972,608 5661,654 919 - 35 - (100% inthousands) No. ofsubscriptions ARPU Investments in businesses 35.347.335.046.748.0 Capex - – 62 93 588985 5921,5431,0972,581 911 Total Operating profit/ monthly revenues 580 464981844 EBITDA/Total 2,026 55.460.355.060.761.2 (%) (NOK) revenues (%) 1) 4,151 Operating Write-downs 1,778 profit Depreciation andamortization 2,759 1,068 EBITDA 9392,7061,735 4,029 966 1,586 422 2715472868 1,616 1) 741 Total revenues Non-mobile 236 Total revenues mobile 30275343 Other revenues 428 122 subscriptions revenues company's Mobile mobile 703 1,9651,3132,961 Interconnection revenues 1,158 Subscription revenues (NOK inmillions) and traffic eeo' e xesvle y- - 3,075 - - 551 - 235 291 - 160 Telenor's netexcessvalues by Of whichwrite-downs of 134 Telenor's netexcessvalues by Of whichamortization of fwihitra eeus2 3 2 - 3 Telenor's Of whichamortization of - net excess 2 values Of whichinternal revenues 2324 454893 by ARPU hasbeenadjusted accordingly. The classification ofrevenues forthefirstquarter of2005hasbeenadjusted. transportation capacity. related tofurther improvement oftheGSMnetworkandinvestmentin capitalized expensedinthefourth quarter coststhatwere of2004. increased affected by35%.Thesecondquarter by of2004waspositively EBITDAmeasured inlocal activities. andmarketing sales currency margin wasdue toefficiencyimprovements andreduced costsrelated to operation andfromofcustomer sales equipment. revenues wasdueNon-mobile todecreased revenues from thefixedline revenuesan increase company’s inMobile Thedecrease subscriptions. in quarter of2004contributed revenues toadecrease and inOthermobile due ofCBBinthesecond totheincreaseprimarily inARPU.Theacquisition increase inaverage minutes (AMPU). persubscription quarter withtheendoffirstquarter of2005,inline of2005. prepaid subscriptions. due toincreasedof 2005,primarily andreduced gross sales churn for 2) 1) 1) ,4 9812,8061,8064,219 1,643 0520 0520 2004 2004 2005 2004 2005 0520 0520 2004 2004 2005 2004 2005 n ure s afya Year 1sthalf-year 2nd quarter n ure s afya Year 1sthalf-year 2nd quarter 331 128562253555 - 3,290 1,250 1,2031,275
Telenor Group PAGE 3 2nd quarter 2005 Telenor Group PAGE 4 2nd quarter 2005 ARPUmeasured inlocal currency withthesecondquarter of wasinline • Pannon GSM’s estimatedmarketshare attheendofsecondquarter • 173 168 2,770 243121352225 1,166 2,588 Thenumber ofcontract increased subscriptions by72,000 during the 160 • 2,824 170 of 2004. mately 4%inthesecondquarter of2005compared tothesecondquarter 162 Krone appreciatedThe Norwegian against theHungarian Forint byapproxi- No. ofsubscriptions(inthousands) ARPU –monthly (NOK) 13.815.914.016.013.2 Capex 2- 2 - 5561,0011,1122,093 21 484 Total Operating profit/ 365 revenues 206230407455777 EBITDA/Total 142 171 32.338.534.4 39.135.4 (%) revenues 64 170 (%) 1) Operating 90 72 5,542 Write-downs 2,674 profit Depreciation andamortization 93 39 2,743 EBITDA 1,361 1,3152,6712,6105,400 1,354 3,669 44 1,405 1) 1,744 Total revenues 1,783 revenues Non-mobile 872 Total revenues mobile revenues Other mobile 903 subscriptions revenues company's Mobile Interconnection 458443888866 Subscription andtraffic 1,731 revenues (NOK inmillions) PANNON GSM–HUNGARY Increased capital expenditure wasdue tonetworkinvestmentsrequired by • increased asaresult ofincreased andamortization Depreciation capital • due Thedecrease toadecrease inEBITDAmarginwasprimarily inprices • Measured inlocal currency revenues increased due by73%, to primarily • Compared tothefirstquarter of2005,ARPUmeasured inlocal currency • Kyivstar sustained itsestimatedmarketshare of48%from theprevious • Thesubscriptiongrowth ofprevious quarters continuedinthesecond • of2004. quarter approximately 3%inthesecondquarter of2005compared tothesecond Krone appreciated56.5%. TheNorwegian against theUkrainian by Hryvnia Telenor’s interest attheendofsecondquarter ownership of2005was eeo' e xesvle y8 8 15 7 358 178 6 175 3 89 85 4 Telenor's netexcessvalues by Of whichamortization of 2 2 Of whichinternal revenues prices. priceswasoffsetbydecrease inaverage andlower subscriptions contract 2004. Highincrease inusage (AMPU)due totheincreased share of withthepreviousof 2005was34%,inline quarter. by 256,000. second quarter of2004,thenumber ofcontract increased subscriptions quarter, total increased subscriptions by32,000.Compared while tothe the increase incustomer baseandtraffic volumes. due tothestrong growth thecompanyisexperiencing. components are expected thanoriginallyanticipated tobereplaced earlier expenditure quarters, intheintervening andthefact thatsomenetwork local currency increased by59%. asaresult ofthestrong customeractivities growth. EBITDAmeasured in and asignificant increase andmarketing incostsassociated withsales the increased offsetbypricereductions. number partially ofsubscriptions, customers usage (AMPU)thanexisting AMPUincreasedlower by22%. prices.Despiteaverage thefact thatnewcustomers onaverage a have ARPU compared tothesecondquarter of2004wasrelated tolower increased by11%due toanincrease inaverage prices.Thedecrease in quarter. subscriptions. an increase ofintotal 5.7million the secondquarter of2004,thecustomer basemore thandoubledwith Compared subscriptions. quarter of2005withanincrease of1.7million to 1) 1) 1,498 1,4442,9132,8455,907 0520 0520 2004 2004 2005 2004 2005 n ure s afya Year 1sthalf-year 2nd quarter 276 326592657 1,295 BTA499410950836 1,732 Depreciation andamortization EBITDA 799 1,9961,5883,365 1,067 170 271516 79141 2,794 1) 1,304 Total revenues 1,716 8172,0251,6233,430 Non-mobile 1,082 662 Total revenues 1518293565 Other mobile 924 subscriptions revenues revenues company's Mobile mobile Interconnection 143137280284571 Subscription andtraffic revenues revenues (NOK inmillions) Capital expenditure wasrelated toinvestmentsinthenetworkdue to • increased mainlyasaresult ofthe andamortization Depreciation • withthesecondquarter of2004.Measured TheEBITDAmarginwasinline • revenues measured Non-mobile inlocal currency decreased by40% • Revenues measured inlocal currency increased by30%.Revenues meas- • ARPUmeasured inlocal currency withthesecondquarter of wasin line • DiGi’s withtheprevious marketshare estimated 107 of22%wasinline quarter. • 110 3,239 Thenumber increased ofsubscriptions by304,000during 178162286265920 thesecond • 96 2,583 3,765 quarter of2004. 107 approximately 7%inthesecondquarter of2005compared tothesecond 99 Krone appreciated against2005. TheNorwegian theMalayanRinggitby Telenor's interest was61.0%attheendofsecondquarter ownership of No. ofsubscriptions(inthousands) ARPU –monthly (NOK) 21.219.220.020.121.1 Capex - 1 - Total Operating profit/ revenues 246184439381831 EBITDA/Total 43.042.843.344.143.9 (%) revenues (%) 1) Operating Write-downs profit DIGI.COM –MALAYSIA 21Julyannounced inHungary authorities Theregulatory reduction have • Capital expenditure increased due tonetworkrollout ofUMTSandEDGE. • decreased due tocertain andamortization Depreciation fixedassets • due Thedecrease toincreased inEBITDAmarginwasprimarily intercon- • Revenues measured inlocal currency increased by8%due toincreased • fwihitra eeus-1 2 3 2 1 1 - Of whichinternal revenues eeo' e xesvle y1 1 3 3 72 37 34 18 17 Telenor's netexcessvalues by Of whichamortization of increased usage, ahighersubscriber baseandimproved coverage. decrease forcertain useful inestimated assets. life in local currency, EBITDAincreased by31%due toincreased revenues. increased competition. due todecreased transit international trafficprimarily asaresult of market iswithintheoperators’ networks(on-nettraffic). own growth because traffic anincreased share ofthemobile intheMalayan offset bydecrease inprices.Interconnection lower revenues showed baseandincreasedto thehighersubscription usage (AMPU),partially ured inlocal currency from andtraffic subscription increased by50%due 2004. quarter of2004. compared totheend ofthesecond quarter of2005andby1.2million reduction beapproximately ininterconnection priceswill 10%. operators.of interconnection chargesforallmobile For Pannon the being increased. being fullydepreciated andtheestimatedusefulforcertain life assets EBITDAmeasured inlocalactivities. currency decreased by9%. and increased commissionsandcostsrelated andmarketing tosales chargesasaresult ofincreasednection traffic networks toothermobile number offsetbypricereduct ofsubscriptionsandhigherAMPU,partially 1) 1) ,6 9582,1951,8943,946 1,161 0520 0520 2004 2004 2005 2004 2005 n ure s afya Year 1sthalf-year 2nd quarter 253 226510455901 ions. TheBangladesh Telecommunication Commission Regulatory hasinthe • From 9June inBangladesh 2005,theauthorities introduced have anew • Increased capital expenditure coverage wasdue totheexpansionofmobile • increased asaresult ofincreased andamortization Depreciation capital • due Thedecrease and toincreased inEBITDAmarginwasprimarily sales • Revenues increased by53%measured inlocal currency due to primarily • ARPUdecreased by25%measured inlocal currency, due tothe primarily • 2,388 1,795 GrameenPhone’sof estimatedmarketshare attheendofsecondquarter • 3,704 104 113 Thestrong growth subscription withanincrease continued of776,000 • 75 357258853418 quarter of2004. 1,318 approximately 13%inthesecondquarter of2005compared tothesecond 106 Krone appreciated2005. TheNorwegian against theBangladeshi Taka by Telenor's interest was62.0%attheendofsecondquarter ownership of 69 (100% inthousands) No. ofsubscriptions 215 ARPU –monthly (NOK) 334309663592 Investments 34.848.837.049.850.1 1,313 85 Capex - - - 3 245258497507 Total 298 1,095 in 166 Operating profit/ revenues EBITDA/Total 51 47.458.449.358.260.1 businesses (%) 2,178 revenues Operating 1,012 89 Write-downs (%) 1,340 profit Depreciation andamortization 526 EBITDA 698520 2,064 1,330 999 703 2,154 23568 970 1) Total revenues 1,257 Non-mobile 500 Total revenues mobile 6101324 5 Other 659 revenues subscriptions revenues company's Mobile mobile Interconnection Subscription andtraffic 73 3920 2990 revenues (NOK inmillions) revenues GRAMEENPHONE –BANGLADESH Of which - internal revenues Telenor provisionsbeenmade. isofthe opinionthatnecessary have imacy andamount oftherequest forpaymenthasnotyetbeen clarified. feesonhandsetsaccordingrequirements.license tothelicense Thelegit- second quarter of2005requested thatGrameenPhone payroyalty and fee perunitofSIMcards onsale ofapproximately NOK90. growth.subscription networkcapacityto newareas andincreased mobile due tothestrong expenditure intheinterveningquarters. revenues. local currency, due EBITDAincreased toincreased by24%primarily customer growth compared tothesecondquarter of2004.Measured in withasignificantly costsasaresultacquisition ofthecompetition, higher the increased number ofsubscriptions. prices. customers, usage (AMPU)thanexisting anddecreaselower inaverage strong customer growth, thefact thatnewcustomers onaverage have 2005 was 62%,anincreased from 61%attheendoffirstquarter of2005. subscriptions. increase of1.9million quarter of2004,thenumber ofsubscriptionsmore thandoubledwithan subscriptions during thesecondquarter of2005.Compared tothesecond 1) 0520 0520 2004 2004 2005 2004 2005 n ure s afya Year 1sthalf-year 2nd quarter 0 5291,3451,0182,186 705 Investments: EBITDA ae 8)1,8251,0571,8292,026 (87) (849) 24 (78) (76) (13) (903) - (inthousands) No. ofsubscriptions (28) (89) (379) Investments (712) (43) 30 (13) (377) Capex (74) - (56) (18) 541 (232) in - - (218) 75 (725) (78) (232) 91 (49) (61) businesses 18 1) (13) Telenor Sweden Mobile - (130) (28) ProMonte GSM–Montenegro (305) Telenor Pakistan (36) (13) 115 Of which: Operating loss (18) (172) - Write-downs 200 Depreciation andamortization Total EBITDA 60 - Telenor Sweden Mobile ProMonte GSM–Montenegro Telenor Pakistan 227 - 48- 1) 49 - 55128101223 Total revenues 65 123 Telenor ProMonte GSM–Montenegro Mobile Telenor Revenues Sweden (NOK inmillions) Pakistan • Losses were reduced due Losseswere todecrease primarily in traffic costsrelated to • Revenues increased compared tothesecondquarter of2004,primarily • Telenor Sweden Mobile ProMonte GSM'sestimatedmarketshare attheendofsecond • Thenumber ofsubscriptions attheendofsecondquarter of2005 • ProMonte GSM capital Negative expenditure inthesecondquarter of2005wasdue toa • beinginastart-up ARPUislowdue phase. to thecompanystill • Withanestimated marketshare of7%attheendsecondquarter 279 • Telenor Pakistan experienced astrong customer growth andhad836,000 - 105 • Telenor Pakistan 92 303 second quarter of2004. 99 Krone inthesecondquarteragainst theSwedish of2005compared tothe Krone appreciatedfirst quarter byapproximately of2005.TheNorwegian 4% currency ofProMonte GSM,inthesecondquarter of2005compared tothe 836- Rupee andappreciated byapproximately 3%against theEuro, thefunctional Krone depreciatedNorwegian byapproximately 3%against thePakistani 12Augustuntil 2004,whenTelenor acquired theremaining shares. The second quarter of2004.ProMonte GSMwasanassociated companyup Telenor Theoperation inPakistan Sweden. Mobile inthe wasestablished operations includeOther mobile Telenor Pakistan, ProMonte GSMand Telenor Sweden Mobile ProMonte GSM Telenor Pakistan OTHER MOBILEOPERATIONS eeo' e xesvle y2 - 0 32 - 40 - 20 Telenor's netexcessvalues by Of whichamortization of Of which 4021683588 internal revenues and marketing costs. and marketing the MVNOagreement, increased volume onroaming anddecreased sales due toincreased roaming revenues from visitorstoSweden. of 2005. quarter of2005was58%compared to57%at theendoffirstquarter increased by24,000 followingthestart ofthetourist season. operators. ofothermobile withthepaymentobligations them inline adjusted have authorities Telenor Pakistan’s tobring paymentobligations reduced thenetpresent value offuture payments.ThePakistani license telephony, formobile forthelicense change inthepaymentprofile which costsandrelatedacquisition tothestart-up. andcustomer theresultDecreased ofhighsales EBITDA was primarily of 2005,Telenor Pakistan operator wasthethird largestmobile inPakistan. subscriptions attheendofsecondquarter of2005. 1) 1) 0520 0520 2004 2004 2005 2004 2005 n ure s afya Year 1sthalf-year 2nd quarter 102 7 159 15 116 55404101423 236
Telenor Group PAGE 5 2nd quarter 2005 Telenor Group PAGE 6 2nd quarter 2005 netet nbsnse 1 4 1 2 1 670 503315840 44 1,473 1 1 No. ofPSTN subscriptions Investments inbusinesses 20.017.819.117.317.5 Capex Total Operating profit/ revenues EBITDA/Total 2,970 3,2376,330 1,5321,606 787 1,6291,5383,077 35.136.334.836.1 (%) 874 revenues (%) 2) 1) Operating Write-downs profit Depreciation andamortization EBITDA 1,3491,2402,6062,4114,846 742 400386 842 243267475514 1,656 1) 1,022 Total revenues 508417969843 3,0183,187 5,9246,499 1,753 Wholesale 12,699 Total revenues Other retail Data revenues 3,738 4,3008,268 1,8672,117 revenues ADSL/Internet services Telephony Revenues (PSTN/ISDN) (NOK inmillions) 556385937763 1,791 FIXED –NORWAY Bredbandsbolaget beconsolidated andCybercity intheFixed will • * Investments 16.315.115.214.414.2 110 4496 Capex 105 Total in (118) Operating profit/ revenues EBITDA/Total (53) businesses 1,5041,6312,9123,2636,338 2,725 734 1,4201,412 31.633.431.233.332.9 (%) 773 revenues (60) (%) 2) (24) 1) (32) Operating 374 430766856 1,654 Write-downs profit 4,3674,4278,5308,910 Depreciation andamortization 17,545 EBITDA 1) Total revenues Eliminations Other countries* Sweden Norway Revenues (NOK inmillions) FIXED lnsi huad) ,3 158 1,449 1,548 415235326 1,335 Thenumber ofPSTN/ISDNsubscriptions decreased by55,000inthesecond • 1,1391,2191,182 Thenumber andbusiness ofADSLresidential increased subscriptions by • (in No. ofADSLsubscriptions thousands) (lines inthousands) No. ofISDNsubscriptions (in thousands) ) fwihitra eeus52 5 93 8 1,823 889 983 457 522 Of whichinternal revenues eeo' e xesvle y- (1 2 2 - - (31) - - - - Telenor's netexcessvalues by - 1,842 Of whichwrite-downs of 892 Telenor's netexcessvalues by Of whichamortization of 985 454 522 Of whichinternal revenues (22) 7 - - Other countries include operations and Slovakia. intheCzechRepublic (31) 3 - - - Telenor's netexcessvalues by 2 Of whichwrite-downs of Telenor's netexcessvalues by Of whichamortization of operations witheffectfrom July2005. quarter of2005,a reduction of183,000from thesecond quarter of2004. withtheendofpreviousin line quarter. market share forADSLwas60%attheendof thesecondquarter of2005, compared totheendofsecond quarter of2004.Telenor’s estimated 30,000 inthesecondquarter of2005to415,000,anincrease of180,000 2) 2) 1) 1) ) 1) 1) 4,367 4,4278,5308,910 17,545 4,753 4,8779,3249,800 19,256 0520 0520 2004 2004 2005 2004 2005 2004 2004 2005 2004 2005 n ure s afya Year 1sthalf-year 2nd quarter n ure s afya Year 1sthalf-year 2nd quarter 5 8191,3631,6993,251 658 729 897 1,512 1,851 3,573 8971,5121,851 729 44 8887 175 2)- 40 2 - (20) 2)- 2 - (22) FIXED –SWEDEN Increased capital expenditure wasrelated toimproving processes and • due tolower wasprimarily Thedecrease andamortization indepreciation • gross marginasa due Thedecrease toalower inEBITDAwasprimarily • related revenues primarily Increased toincreased of were wholesale sales • Otherrevenues increased toother due ofservices toincreased sales • Thedecrease inrevenues from data wasdue topricereductions services • Revenues from ADSL/Internet increased due toincreased revenues from • netet nbsnse 9 8 93 Capital expenditure related inthesecondquarter of2005wasprimarily to • 87 72 8887 48 - related Thedecrease inEBITDA wasprimarily toareduced279 gross margin • Revenues as aresult decreased, ofreduced primarily revenues from data 9 • (289) (105) 9 - 21 (183) Inthesecondquarter of2005again ondisposalofoperations ofNOK46 • (41) 24(56) Investments inbusinesses (90) (27) Capex 1,557 807 2) 709 1) 404 Operating loss 374 430766856 Write-downs 1,654 342 Depreciation andamortization 3226574997 EBITDA Total Internal revenues External revenues (NOK inmillions) revenues Revenues from Telephony (PSTN/ISDN) decreased asaresult ofadecrease • Adjusted ofOperating forthesale toEDBBusiness Services Partner asof • At theendofsecondquarter, Telenor’s marketshare estimated measured • eeo' e xesvle y- - (24) 5 - - - 3 - - - Telenor's netexcessvalues by 2 Of whichwrite-downs of Telenor's netexcessvalues by Of whichamortization of expansion ofbroadband EDB Business Partner. capital expenditure ofOperating inrecent to yearsandthesale Services for costaccruals. affectedquarter positively byanadjustment of the estimate of2005were towards margins.Thefinancialresults products inthesecond withlower result ofthedecrease inrevenues andashiftoftheproduct portfolio interconnection. operator offsetbyadecrease inrevenues access,partially from national trafficinternational volumes, increased revenues and from lines leased Operating toEDBBusiness Services Partner asof1May2004. operations withinTelenor, offsetby theeffectfromof partially thesale and ashiftintheproduct portfolio. and Internet subscriptions. revenues from offsetbylower InternetADSL subscriptions,partially traffic asaresultsubscriptions andconnections ofthegrowth inthenumber of related tothedecrease innumber ofsubscriptions. Thereductionnetwork subscriptions. intraffic volumes wasprimarily expansion oftheDSL infrastructure. related customer. toanewDSL wholesale costs asinstallation towards gross products margins,aswell withlower as aresult ofthedecrease inrevenues andashiftintheproduct portfolio dueservices topricereductions and ashiftintheproduct portfolio. basisundertakenwholesale inprevious periods. recurring related revenues ofdata tosales ona ofNOK31million services thesecondquarter of2004included wasrecognized, non- while million transit transition tovoiceoverIPwithotherfixednetworkoperators, andthe number decreased ofsubscriptions asaresult ofthetransition toADSL,the in thenumber andreduced ofPSTN/ISDNsubscriptions traffic volumes. The spondingly adjusted revenues decreased by2.5%. increased by2.5percentage points.For thefirsthalfyear, thecorre- decreased by0.8percentage pointsandtheoperating profit margin ofOperatingthe sale toEDBBusiness Services Partner, theEBITDAmargin increase inADSL/Internet revenues. revenues Adjusted and wholesale for Telephony offsetbyan wasonlypartially (PSTN/ISDN)andData services 1 May2004,revenues decreased by0.5%.Thedecrease inrevenues from in traffic minutes withtheendoffirstquarter of2005. was67%,inline ion to wholesale, as well asareduction inthetotal aswell ion towholesale, 2) 1) 0520 0520 2004 2004 2005 2004 2005 n ure s afya Year 1sthalf-year 2nd quarter 3 65127126262 63 - 36 market forfixed EBITDA • The Swedish Riksdag hasdecidedtocommencetheregional of shut TheSwedish down • Canal Digital andTV2hasacquired therightsfordistribution ofNorwegian • Capital expenditure ofupgrades consistsprimarily ofthecable TVnetwork • decreased due tofullydepreciated andamortization Depreciation DTH • due Increased toincreased EBITDAwasprimarily revenues andreduced • Theincrease inrevenues due tothegrowth wasprimarily inthenumber of 824 • BROADCAST –DISTRIBUTION 503544 782 853 1,212 619611624 1,161 1,205 Thenumber ofDTHpay-TVsubscribers increased by71,000from theend • 9670 143 93 880 (in No. ofCable TVInternet access antenna networks(inthousands) thousands) No. ofhouseholdsinsmall (in No. ofCable TVsubscribers thousands) (in thousands) No. ofDTHpay-TVsubscribers 39 Investments 19.616.318.314.414.0 10 Capex - Total 9(25) in Operating profit/ 94213181409 revenues 1,498 107 EBITDA/Total 179115322189302 (12) 29.329.428.328.128.0 741 businesses (%) revenues 791 (%) 2) 61 17 392 1) 274 218510380750 Other/Eliminations 411 13(13) Transmission 175161349314688 Distribution (6) 749 242218455410 (635) Of which: (310) Operating Write-downs (259) profit 85109169213461 Depreciation andamortization (148) Total EBITDA (129) Other/Eliminations Transmission 298310595613 Distribution 1,211 1,1471,0642,2862,1254,309 1) Total revenues Eliminations Other Transmission Distribution Revenues (NOK inmillions) BROADCAST fwihitra eeus3 3 6 6 135 68 63 33 35 Of whichinternal revenues eeo' e xesvle y- - 25 - - - - Telenor's netexcessvalues by Of whichwrite-downs of Telenor's Of whichamortization of net excess values 1417283163 by logue TV signal. Alternative ways of TV distribution will becable,logue TVsignal.Alternative ways ofTVdistribution will DTHorDTT. ter of2005.Consequently losetheana- 200,000-250,000households will terrestrialthe Swedish analogue network forTVdistribution inthethird quar- cup andthewoman’s footballleague. finals,thenational firstdivision,and2006-2010 fornational Norwegian premier league andthe the period2006-2009forNorwegian football onTV, Theserightsare Internet, valid for broadband andmobile. in Norway. decoders andfullydepreciated fixedassetsinthecable TVoperation. decoders previously capitalised were out andleased tothecustomers. result ofnewcustomers receiving decodersforalock-in period,while increased customer costsforDTHpay-TVsubscribers asa acquisition purchases inBroadcast. ofinternal services offsetby Thiswaspartially Krone andtheDanishKrone.against theSwedish Kroner subscribers offsetbyeffectoftheappreciationNorwegian 15,000 to50,000attheendofsecondquarter of2005. period, andthenumber ofcable TVInternet accessesincreased by The number ofCable TVsubscribers increased by8,000during thesame of thesecondquarter of2004totheend thesecondquarter of2005. 2) 1) 1) 1,401 1,335 2,791 2,6415,346 1,401 1,335 0520 0520 2004 2004 2005 2004 2005 n ure s afya Year 1sthalf-year 2nd quarter 133 174 277 361 704 4 - 4 - 44 Investments: EBITDA lmntos(2 16 11 20 (361) (200) (141) 96227 132 (106) 174 (72) 125245241462901 5521,1851,0812,154 603 6161,1811,2172,385 Eliminations 592 Other Group Corporate functionsand activities Venture 1,2851,0442,5162,0914,287 Satellite EDB Services Revenues Business (NOK inmillions) Partner OTHER UNITS Thedecrease inEBITDAcompared tothesecond quarter of2004was • 1,329 193241318329697 463 97 270 Revenues increased by23%compared (21) tothesecond quarter of2004, 441 • EDB BUSINESSPARTNER (4) 263 (809) 2(61) (363) (7) Investments inbusinesses 5(13) (212) Capex (6) (182) (10) (120) 96 1,114 2) 690 194 1) (417) 474 (38) Other/eliminations 26363091 133 (170) 130 Group activities 14 509 248 40 Corporate functionsand (40) 15 (2) Venture 232 (30) 24(13) 736 80 396 161485 (75) Satellite (1) EDB (34) (10) Of which: Services Business Operating profit (loss) Write-downs Partner Depreciation andamortization Total EBITDA 90103158228409 Other/eliminations Group activities Corporate functionsand Venture Satellite 978 187456364594 EDB Services Business 1) Partner Total revenues Thedecrease inrevenues revenues andEBITDAwasrelated from tolower • BROADCAST –OTHER asaresult ofinvestmentsin Increased andamortization depreciation • Investmentsinasatellite inAugust costsfor resulted 2004have inlower • Reduced revenues inTransmission satellite revenues due tolower were as • BROADCAST –TRANSMISSION eeo' e xesvle y- - 3 2 - - - Telenor's netexcessvalues by Of whichwrite-downs of Telenor's Of whichamortization of net excess values 248 by 2,929 1,444 1,591 710 803 Of whichinternal revenues related to a sales gain of NOK 301 million inthesecond quarterrelated of2004. gain ofNOK301million toasales ofactivity.of ahighlevel IBM andCapgemini. Revenues asaresult inSolutions increased primarily of partsTelenor’s from astheacquisitions ITOperating aswell Services, enteredwere intoduring thecourse of2004,which comprisethepurchase growth inITOperations related wasprimarily tostrategic contracts which with thehighestgrowth beingrelated toITOperations andSolutions. The sales ofinternalsales services. with effectfrom 2005. 1January the increase forcertain useful intheestimated fixedassetsinNorkring life satellite capacity inAugust due depreciation to 2004wasoffsetbylower EBITDA andmargin. satelliteleasing capacity themainreason andwere fortheincreased offsetbyincreased revenuespartially from terrestrial broadcasting. a result ofthetransition from analogue todigital distribution.Thiswas 2) 1) 1) 2,542 2,413 5,009 4,783 9,540 2,542 2,4135,009 0520 0520 2004 2004 2005 2004 2005 n ure s afya Year 1sthalf-year 2nd quarter 262 260512492975 - 1 - 4 - 1 43
Telenor Group PAGE 7 2nd quarter 2005 Telenor Group PAGE 8 2nd quarter 2005 Inthesecondquarter of2005,Telenor madeacapital contributionofNOK • decreased due beingsoldand tobuildings andamortisation Depreciation • Thedecrease inEBITDAlosswasrelated toexpensesforworkforce reduc- • Increased revenues related were toincreased ofgroup sales services. • CORPORATE FUNCTIONSANDGROUPACTIVITIES due revenues totheeffectsfrom and primarily acquisition were Lower • VENTURE Thedecrease inrevenues due tothe wasprimarily inSatellite Services • SATELLITE SERVICES Inthesecondquarter of2005,BanqIT Business Applications ABwas • increased asaresult ofashiftfrom andamortization Depreciation oper- • debt. Thisisreported asinvestmentinbusinesses. totheassociated companyOneGmbHthrough158 million conversionof the increase forcertain useful intheestimated fixed assets. life back ofsoldproperties. operating andmaintenance expensesintheproperty operation andlease IT operating environments. offsetbyincreased Thiseffectwas partially inthesecondquartertions of2004due toTelenor Group mergingseveral ofOpplysningenOnline. withtheestablishment in connection the secondquarter of2005,operations acquired were forNOK34million developmentinprofitspositive andmarketshare inOpplysningenAS.In inOpplysningenAS.There wasa bygain ondisposalofactivities offset due ofOpplysningenOnline, totheestablishment 2005 wasprimarily disposal ofoperations in2004.Theoperating lossinthesecondquarter of volumes andmarginsintheInmarsatsegment. ofoperations.acquisition Thereduced operating profit wasdue toreduced offsetbytheeffectsof pricesintheInmarsatsegment,partially and sales Krone against theUSDollar,strengthening oftheNorwegian volumes lower andhasbeenincorporatedacquired forNOK52million under Solutions. intervening quarters. investments,andincreased capital toown leases ating expenditure inthe Total depreciation te oieoeain 9 7 2 32 3,173 7911,3571,637 2 652 117149244315605 301 205 72 689 130 81 2 351 410 154 308 49 62 3,531 49 173 4 Broadcast 247 Fixed 83 152 operations Other mobile (3) 214196438392779 GrameenPhone –Bangladesh 282 3,129 DiGi.Com 1 Pannon GSM–Hungary 2 2 111140222210340 – Kyivstar –Ukraine 14,168 Sonofon 20 5,219 Malaysia (31) Telenor 28 5,452 – 1) - 2,708 174781 192331358 Mobil - 1 Denmark 2,771 120 and write-downs amortization – - Total depreciation, 20 Total write-downs Norway intangible Write-downs ofother 2,707 5,4555,215 2,751 10,637 Write-downs ofgoodwill assets other intangibleassets Write-downs oftangibleand and amortization intangible assets tangible assets Depreciation of (NOK inmillions) andwrite-downs amortization Depreciation, OTHER PROFITANDLOSSITEMSFORTHEGROUP ProMonte GSMwasconsolidated witheffectfrom 12August 2004,and • 207 41 7 77107155214399 123 57 11 1725334699 63 255 Theincrease fixedassetsinKyivstar oftangible indepreciation was 3 • 605 123 72 51369360 136 730 1,5001,3282,900 other 745 13 307 152 282 30 Total of amortization intangible Eliminations 284 65 1 assets (6) 156 Other 39 154 Broadcast 112 85 -(21) 7 Fixed operations 124 7,737 Other 82 7861483 52 (1) GrameenPhone –Bangladesh 3,887 DiGi.Com –Malaysia mobile 56 3,955 Pannon GSM–Hungary (2) 1,977 217216459335850 Kyivstar –Ukraine operations 2,006 Sonofon Telenor –Norway Mobil – 2) 209224419432838 Denmark of tangible assets Total depreciation Eliminations Other operations Amortization ofother Specification of depreciation oftangible assets ofdepreciation Specification Specification of amortization ofotherintangible assets ofamortization Specification second quarter of2004. 15 March 2005, whichgenerated increased compared depreciation tothe Telenor Pakistan on networkforcommercial services openeditsmobile quarters. by changesinexchangerates intheprevious andtheinvestment levels Fixed andBroadcast. Ingeneral, isaffected depreciationandamortization depreciation asaresult offullydepreciated fixedassets,inparticular offsetbydecreasedthe companyisexperiencing.Thiswas partially due thanoriginallyanticipated to bereplaced tothestrong earlier growth related tothefact thatsomenetworkcomponentsare expected primarily 1) 2) 2,006 1,977 3,955 3,887 7,737 2,006 1,9773,9553,887 0520 0520 2004 2004 2005 2004 2005 n ure s afya Year 1sthalf-year 2nd quarter 4 730 1,5001,3282,900 745 Theactual tax effective rate for2005maydeviate from the estimatedrate. • corporate ThenominalNorwegian incometax (“CIT”)rate is28%.The • Taxes Inthesecondquarter of2005Telenor realized gainsof shares, onsale • Changeinfair value related offinancialinstruments wasprimarily to • Netforeign currency gain due inthesecondquarter of2005wasprimarily • (1,199) (636) 1,521 (1,582) (605) (823) 1,974 average due Decreased interest tolower financialexpenseswasprimarily - (324) 123 • (737) (314) 6717 (418) (297) 484 (11) Increased financialincomecompared tothesecondquarter of2004was 2,630 (383) (28) • 2,673 - (1,561) (87) Net interest (836) expenses Gross interest expenses (717) (37) (39) (420) items Net financial 152 write-downs (373) Net gains(losses)and (8) 138114215219496 financial instruments value of Change infair 177 Net forreign currency gain(loss) Financial expenses Financial (NOK inmillions) income itemsFinancial Telenor's interest direct andindirect inDTAC ownership was inThailand • Telenor's interest inVimpelCom ownership inRussia was29.9%attheend (101) • (62) (30) 1,055 (13) 568 733 494290515986 (14) 760 39 32 1) associated 294 Net resultfrom companies ownership 505 Gains ondisposalof net excessvalues interests Amortization ofTelenor's Net incomeafter taxes Telenors of share (NOK inmillions) Associated companies consolidated assubsidiaries. 2004 andProMonte 12August GSMuntil 2004.Thereafter thesecompaniesare The tableincludes Telenor’s 12February share ofnetincomeinSonofonuntil loss statement contains“Netresult onlytheline from associated companies”. preparation oftheconsolidated financialstatements. Theconsolidated profit and The figures arebasedonTelenor’s partially withthe estimatesinconnection recording deferred taxes onretained earnings incertain companies. due totaxes related tocompaniesoutside Norway, including theeffectof taxeffective rate nominalCITrate ishigherthantheNorwegian primarily to be30%ofprofit before taxes andminority interests. Theestimated tax rateeffective fortheTelenor Group forthefiscal year 2005 isestimated ofTelenor’s sale primarily shares inEutelsat. therequirements thatdonotfulfil forhedgeaccounting. liabilities rateinterest derivatives used for economichedgeofinterest-bearing as of30June 2005. before taxes hasbeenrecorded asatemporarymillion reduction ofequity forhedgeaccounting, andforthispartNOK161 in thishedgequalify ofBredbandsbolaget.acquisition Foreign currency forward contract used used intheeconomichedgeof ofNOK77million options currency to gains asagain on debt on insubsidiaries aswell outside Norway decrease. under constructionandotherfinancialexpensesalsocontributed tothe rates Increased onthedebt capitalization portfolio. ofinterest onassets ments inthesecondquarter of2005. individendsfrom otherfinancialinvest- due toNOK27million primarily of May2005wasapproximately 8.18million. Thenumber inDTAC of subscriptions 2005 wasNOK3.8billion. attheend share ofthecompanybasedonquoted share price asat30June 40.3% attheendofsecondquarter of2005.The value ofTelenor’s subscriptions attheendofsecondquarter of2005. According totelecom analysts,VimpelCom hadapproximately 35million based onthequoted share priceasat30June 2005wasNOK13.7billion. of thesecondquarter of2005.Thevalue ofTelenor’s share ofthecompany 1) 0520 0520 2004 2004 2005 2004 2005 2004 2004 2005 2004 2005 n ure s afya Year 1sthalf-year 2nd quarter n ure s afya Year 1sthalf-year 2nd quarter The Board ofDirectors ofTelenor ASA Oslo, 21July2005 and “RiskFactors” atwww.telenor.com/ir/). (available headings “Cautionary Statement Regarding Forward-Looking Statements” filed withtheSecurities andExchangeCommissionintheUSAunder the Telenor's activitiesdescribedinTelenor's 2004 Annual ReportonForm 20-F implied insuch statements. Thesefactors include theriskfactors relating to and developments deviatingsubstantially from whathasbeenexpressed or inherent risksanduncertainties, andmany factors can leadtoactual profits the group's expectations.Allstatements regarding thefuture are subject to section “Outlook for2005”contains forward-looking statements regarding initiatives, profit figures, outlook, strategies andobjectives. Inparticular, the contains statements regarding thefuture inconnectionwithTelenor's growth The accounts submitted withthereport notbeenaudited. have Thisreport Telenor expectsthatprofits, adjusted forspecialitems, overall grow in will • Acontinuously increasing share ofTelenor’s revenues andresults come • Highcapital expenditure isexpected for2005,inwhichcapital expenditure • InBroadcast expectEBITDAtoimprove in2005 andotherunits, we • Cost reductions beimplemented. asassumed, inparticular withinFixed, will • InFixed–Norway, revenues andEBITDAisexpected todecrease. The • A continuedhighgrowth inrevenues andEBITDAisexpected forthetotal • Telenor maintains itsoutlook for2005aspresented inTelenor’s report for • OUTLOOK FOR2005 Telenor hadanetincomeinaccordance withGeneral Accepted • US GAAP inthequarter increased byNOK1.9billion Netinterest-bearing liabilities • Increased current due assets.The toincreased primarily liquid assetswere • increased inthequarter Gross due interest-bearing totheissue liabilities • Total compared assetsasof30June to 2005increased byNOK3.3billion • Balance sheetandcashflow 2005 compared to2004. including mightalsoinfluence theresults. regulatoryconditions, extent influencethereported Krone. figuresPolitical inNorwegian risk, from operations outside Norway. Currency toanincreasing will fluctuations 2004 levels. in proportiontorevenues exceed isexpectedwithorslightly tobeinline compared to2004. decreased revenues fromoffset PSTN/ISDN. expected increased revenues isnotexpected tofully from wholesale, The related expected increased revenue to from ADSL,inaddition strong growth inthenumber isexpected ofADSLsubscriptions tocontinue. operations in2005. mobile the firstquarter of2005. with IFRSofNOK2,041million. in thesecondquarter of2005compared tonetincomeinaccordance Accounting intheUnited Principles States (USGAAP)ofNOK1,904million General Meeting. oftheAnnual atthe time be reduced NOK0.4billion byanadditional Norway’s interest remains ownership unchanged, shareholders equity will market inthesecondquarter of2005, insuch awaythattheKingdomof correspondingNorway toTelenor’s of repurchase shares inthe ofown shareholders in2006approves toredeem bytheKingdom shares owned by theKingdomofNorway. IftheAnnual General ofTelenor’s Meeting the Annual General approval Meeting oftheredemption ofshares owned asaresult increased of inthesecondquarter byNOK1.2billion liabilities shareholders wasreduced equity In addition, andnetinterest-bearing 2005, Telenor purchasedshares inthemarketforNOK0.3billion. itsown was paidinthesecondquarter of2005.During thesecondquarter of Telenor ofwhichNOK2.5billion declared dividendsofNOK2.6billion, asof30June 2005.TheAnnual Generalto NOK17.8billion of Meeting ofBredbandsbolagetof theacquisitions andCybercity inJuly2005. ofthepay assetsshouldbeseeninlight ofliquid relatively highlevel asbondissuesBredbandsbolaget inKyivstar. andCybercity aswell of tofund theacquisitions of newinterest-bearing liabilities due31 March toissue 2005,primarily ofinterest-bearing liabilities. ment
Telenor Group PAGE 9 2nd quarter 2005 Telenor Group PAGE 10 2nd quarter 2005 oa qiyadmnrt neet 450 576 400 43,639 44,040 45,796 44,510 5,639 4,560 Provisions 3,529 Other provisions (1,320) Deferred taxliabilities Pension obligations 1,569 (655) Total interests equityandminority 1,521 Minority interests 3.22 3.22 Shareholders equity 1,904 (547) 1,974 Total assets Total currentassets 2.58 Liquid assets 2.58 Other current assets 3.24 3.25 123 (363) 410 Accounts receivable 9,296 (557) 2.04 10,637 Total fixedassets 2.04 Other financialassets 2.74 2.74 (287) (297) 9,970 Associated companies (149) 8,016 Tangible assets (288) 5,215 Intangible assets 0.89 0.89 Goodwill 2.17 (28) 5,020 2.17 (87) Deferred taxassets 6,140 1,709 3,7514,8405,677 2,041 5,455 (NOK inmillions) (308) 16,050 1.11 1.11 Telenor Group 5,098 0.97 0.97 2,983 (169) 7,582 2,707 (164) BALANCE SHEET 733 494290515986 2,506 1.19 3,325 1.19 (66) 8,351 2,751 (186) Net incomepershare shares excludingtreasury inNOK(diluted), 6,789 2,8592,9905,2845,527 Net incomepershare inNOK(basic),excludingtreasuryshares 2,562 Net income US GAAP 3,957 2,072 4,2985,4956,997 2,328 Net incomepershare shares excludingtreasury inNOK(diluted), Net incomepershare shares inNOK(basic),excludingtreasury 4,355 4,2473,3988,0226,560 13,871 Net Minority interests Profit Taxes income Profit interests before taxesandminority Net financialitems before Associated Operating Write-downs Depreciation andamortization minority Other (income)andexpenses companies profit Other Salaries andpersonnelcosts interests Own workcapitalized Costs ofmaterials andtraffic charges operating Revenues exceptnetincomepershare) (NOK inmillions Telenor Group expenses PROFIT ANDLOSSSTATEMENT oa qiyadlaiiis1041 713 505 91,561 95,015 97,123 573 100,441 706 572 27,80023,80822,62721,251 556 16,06015,22714,28113,454 7,2693,6814,6023,991 22,35921,49222,83720,602 Shareholders equity USGAAP Total equityandliabilities Total Short-term Accounts payable Short-term short-term non-interest-bearing Total long-term liabilities Long-term non-interest-bearing liabilities liabilities interest-bearing Long-term liabilities interest-bearing liabilities liabilities 16,542 15,226 31,812 29,471 60,701 16,542 15,22631,81229,471 0520 0520 2004 2004 2005 2004 2005 97 91 182 251 (2,299) (2,521) (1,842) (911) (997) 01()4 3,531 20 1 (3) n ure s afya Year 1sthalf-year 2nd quarter 00.053.320 00.0431.12.2004 30.06.2004 31.03.2005 30.06.2005 100,441 97,12395,01591,561 24,652 21,31518,69018,215 22,915 22,06423,54321,175 75,78973,346 75,80876,325 39,880 41,50739,96439,693 10,900 8,1875,4655,398 39,292 38,95237,31137,543 10,229 10,80910,99211,076 13,378 16,20613,355 12,816 42,670 43,930 42,41042,430 5,216 5,4554,8055,496 2,050 2,132 1,789 2,292 2,050 2,132 2,302 2,4582,1312,313 4,630 4,2894,0763,946 7,229 7,0506,1896,713 6,078 7,0366,104 6,523 3,505 2,7962,4291,250 7,832 6,9806,9166,602 2,115 2,8932,4713,520 4,471 4,900 3,744 3,806 4,471 4,900 864 865885891 ettdacrigt FS 931 72 ,7 - 760 ,2 41,070 29 3,420 (1,842) 1 - 37,650 2 4,298 - 142 44,510 1 (1,842) 547 27 4,630 - - 9,071 - 3,751 49,086 39,880 (2,764) - (13) (732) 688 (161) 142 4,796 (379) - - (1,145) (169) - - - 29,311 1,336 295 - 13,932 44,290 - (8) -453101554 (2,020) 78 -(2,595) - ownership 3,751 - - - Business combinations andincreased - (1,145) 1,561 (5) 461 (13) Translation 393 3 - to IFRS – Restated according (161) (371) - 3 - 2004 Balance asof1January -(2,595) 16,527 (NOK inmillions) (1,842) interests 25,532 - 6,653 163 - 6,997 8 (540) 44,100 - differences (5) 1,336 43,639 - 24 (2,020) - 1,558 142 75 - 901 3,954 1,320 3,946 - - - in - - 453 - - 27,350 Balance asof30June2005 - - 62 (2,137) - Transactions withshareholders insubsidiaries 40,146 5,677 - 39,693 5,752 and share optionstoemployees - (344) 622 - Sale ofshares, share issue, 163 - 933 subsidiaries - 622 - - Share buyback (373) (605) - (13) 622 (605) Dividends - (161) (605) - (371) and expensesfor theperiod - (419) Total recognizedincome 163 - Profit fortheperiod -(1,764) 12,776 1,336 (208) 41,070 - 12,984 inequity Net income(loss) recognizeddirectly - - 5,677 - - or transferred from equity 5,677 62 75 Tax onitems taken directly to 303 625 16 - 3,420 (36) – Transferred - toprofit orlossfortheperiod (237) 661 680 – Valuation gains(losses)taken toequity -(1,764) - Cash flowhedges: (2,020) - - – Transferred toprofit orlossonsale (605) - (540) 37,650 27,350 – Valuation gains(losses)taken toequity 27,350 59 - - Available-for-sale investments: - Translation - - - Adjusted 2005 equityasof1January - (540) - Total changesinaccounting policy(IAS39) - Balance asof31December2004 - Transactions withshareholders insubsidiaries and share optionstoemployees differences 9,071 Sale ofshares, share issue, 680 Share buyback 62 Dividends (1,187) expense for theperiod (732) Total recognizedincomeand - Profit fortheyear2004 (419) inequity Net income(loss) recognizeddirectly - or transferred from equity 29,311 Tax onitems taken directly to Equity adjustmentsinassociated companies (768) ownership Business combinations andincreased Translation - toIFRS – Restated according (768) 2004 Balance asof1January (NOK inmillions) interests differences in CONSOLIDATED STATEMENT OFCHANGESINEQUITY - 618 - subsidiaries 618 - 618 n hr pin oepoes 3 - 3 - 32 (1,869) (100) - - 5,495 44,040 (100) 6,671 655 32 (1,869) 4,076 756 (1,764) - - 39,964 4,840 - 1,176 - 5,915 453 - - 101 - - 453 (1,764) 13,911 4,840 1,075 - - (1,865) 4,840 - 9 - 453 27,465 - 622 (1,869) 23 - - - - - Balance asof30June2004 (1,764) Transactions withshareholders in subsidiaries 622 and share options toemployees Sale ofshares, share issue, Dividends - Share buyback - and expensesfor theperiod Total recognizedincome Profit fortheperiod inequity Net incomerecognizeddirectly oa adOhr eand rnlto Mnrt Total Minority translation Retained Other Total paid Total Minority translation Retained Other Total paid aia eevserig ifrne Ttlitrssequity Total interests earnings reserves capital differences equity Total interests earnings reserves capital differences Attributable to equity holders of the parent company oftheparent toequityholders Attributable company oftheparent toequityholders Attributable Cumulative Cumulative
Telenor Group PAGE 11 2nd quarter 2005 Telenor Group PAGE 12 2nd quarter 2005 hr u ak(2)(9)(5)(,1)(2,020) (193) (1,115) (2,563) 33 5,081 (8,255) (657) (1) 7,644 (2,478) (1,764) (5,331) 5,166 22 (495) 7,644 5,460 (268) (209) (1,691) 1,112 (567) 10,541 866 (6,281) 5,081 (328) (3,411) 24 (2,460) 37 (13,031) 478 (1) (4,441) 5,166 (4,710) (986) (4,311) (536) 2,671 8,577 3,751 (1,691) (5,994) 15 451 741 130 10,541 (184) (109) (2,546) 18,991 (515) (3,828) (2,460) 7,870 3,129 4 267 (38) 2 267 (286) 8,810 2,735 57 (3,307) (733) (3,161) 1,078 (11,613) (290) 136 14,168 (2,269) 9,725 (2,381) (106) 682 83 (2,967) (4,891) (290) 52 29 Cash andcashequivalents attheendofperiod 9,296 5,219 Cash andcashequivalents at thebeginningofperiod (449) 42 3,421 Net changeincashandequivalents 4,375 (584) (5,538) Effect oncashandequivalents ofchangesinforeign exchangerates (494) 8,016 310 (162) 5,452 Net cashflow from financingactivities 4,518 (3,340) Dividends paidtoTelenor's shareholders 23 (349) Dividends paidtominorityinterests 6,140 Share buyback 2,708 (6) Issuance ofshares andrepayment ofequity (3,267) Proceeds from andpaymentsofinterest-bearing liabilities (118) (127) 2,983 2,771 Net cashflow from investmentactivities Proceeds from saleofandpaymentsforotherinvestments (187) and businesses,netofcashtransferred 3,325 Proceeds from saleoftangibleandintangibleassets companies, netofcashreceived Payments onpurchase ofsubsidiariesandassociated Payments onpurchase oftangibleandintangibleassets Net cashflow from operating activities Change inotheraccruals Currency (gains)lossesnotrelated tooperating activities Difference betweenexpensedandpaidpensions Associated companies Depreciation, amortization andwrite-downs value offinancialitems change infair Net (gains)losses,includingwrite-downs and Taxes paid Profit before taxesandminorityinterests (NOK inmillions) Telenor group CASH FLOWSTATEMENT 0520 0520 2004 2004 2005 2004 2005 23 44 44 52 (1,516) (572) (434) (404) (203) n ure s afya Year 1sthalf-year 2nd quarter THE OPERATIONS SECOND QUARTER
Profit (loss) before taxes Operating Associated Net financial and minority Total revenues of which external EBITDA profit (loss) companies items interests (NOK in millions) 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 Telenor Mobil – Norway 3,049 2,954 2,736 2,639 1,066 1,081 824 805 8 1 17 24 849 830 Sonofon – Denmark 1,308 1,225 1,273 1,217 308 238 (20) (117) - - (39) (45) (59) (162) Kyivstar – Ukraine 1,643 981 1,641 981 911 592 580 464 - - 62 (34) 642 430 Pannon GSM – Hungary 1,498 1,444 1,496 1,442 484 556 206 230 - - 20 4 226 234 DiGi.Com – Malaysia 1,161 958 1,161 957 499 410 246 184 - - (8) (31) 238 153 GrameenPhone – Bangladesh 705 529 705 529 334 309 245 258 - - (9) (4) 236 254 Other mobile operations 236 55 196 34 (130) (49) (232) (56) 430 223 4 (4) 202 163 Fixed 4,753 4,877 4,231 4,420 1,504 1,631 773 734 14 23 (105) (121) 682 636 Broadcast 1,401 1,335 1,366 1,302 411 392 274 218 35 6 (35) (128) 274 96 Other operations 2,542 2,413 1,739 1,703 232 509 (30) 248 6 32 145 - 121 280 Eliminations (1,754) (1,545) (2) 2 11 29 (7) 22 1 5 (80) 42 (86) 69 Total 16,542 15,226 16,542 15,226 5,630 5,698 2,859 2,990 494 290 (28) (297) 3,325 2,983
THE OPERATIONS FIRST HALF-YEAR
Profit (loss) before taxes Operating Associated Net financial and minority Total revenues of which external EBITDA profit (loss) companies items interests (NOK in millions) 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 Telenor Mobil – Norway 5,887 5,758 5,296 5,132 2,067 2,083 1,614 1,568 9 2 35 36 1,658 1,606 Sonofon – Denmark 2,501 1,895 2,446 1,883 561 405 (120) (139) - - (81) (70) (201) (209) Kyivstar – Ukraine 2,806 1,806 2,803 1,806 1,543 1,097 981 844 - - (33) (69) 948 775 Pannon GSM – Hungary 2,913 2,845 2,909 2,842 1,001 1,112 407 455 - - 39 1 446 456 DiGi.Com – Malaysia 2,195 1,894 2,194 1,892 950 836 439 381 - - (36) (59) 403 322 GrameenPhone – Bangladesh 1,345 1,018 1,345 1,018 663 592 497 507 - - (16) 1 481 508 Other mobile operations 404 101 336 66 (218) (74) (377) (89) 689 447 18 (11) 330 347 Fixed 9,324 9,800 8,341 8,911 2,912 3,263 1,420 1,412 24 41 (213) (292) 1,231 1,161 Broadcast 2,791 2,641 2,728 2,573 791 741 510 380 47 24 268 (266) 825 138 Other operations 5,009 4,783 3,418 3,339 474 690 (38) 194 (37) (1) 264 2,907 189 3,100 Eliminations (3,363) (3,070) (4) 9 (8) 1 (49) 14 1 2 (122) (204) (170) (188) Total 31,812 29,471 31,812 29,471 10,736 10,746 5,284 5,527 733 515 123 1,974 6,140 8,016
Telenor Group PAGE 13 2nd quarter 2005 Telenor Group PAGE 14 2nd quarter 2005
ANALYTICAL INFORMATION
2003 2004 2005 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Revenues (NOK in millions) ---- 14,245 15,226 15,608 15,622 15,270 16,542 EBITDA (NOK in millions) ---- 5,048 5,698 5,654 4,556 5,106 5,630 Operating profit (loss) (NOK in millions) ---- 2,537 2,990 2,895 (1,633) 2,425 2,859 Profit (loss) before taxes and minority interests (NOK in millions) ---- 5,033 2,983 2,988 (1,708) 2,815 3,325 Equity ratio including minority interests (%) ----46.8 46.3 48.8 47.7 47.2 44.3 Net interest-bearing liabilities (NOK in millions) 26,139 25,317 21,584 17,817 19,297 21,973 20,596 19,195 15,933 17,814 Net interest-bearing liabilities/EBITDA excluding gains and losses last 12 months 1.8 1.6 1.3 1.0 1.0 1.1 1.0 0.9 0.8 0.9 Capex (NOK in millions) 1,230 1,314 1,460 2,450 1,471 4,012 3,140 4,122 3,360 2,923 Investments in businesses (NOK in millions) 23 268 9 263 3,749 294 644 1,122 50 264 No. of man-years 21,200 21,150 20,300 19,450 20,600 20,200 20,700 20,900 21,900 22,400 – of which outside Norway 8,700 8,700 8,100 7,450 8,650 8,750 9,450 9,500 10,600 11,100
MOBILE *) Telenor Mobil – Norway No. of mobile subscriptions (NMT + GSM) (in thousands) 2,342 2,330 2,364 2,364 2,378 2,451 2,562 2,645 2,635 2,687 No. of GSM subscriptions (in thousands) 2,294 2,285 2,324 2,327 2,346 2,422 2,536 2,623 2,635 2,687 – of which prepaid (in thousands) 1,093 1,091 1,120 1,099 1,091 1,118 1,178 1,228 1,218 1,267 Average traffic minutes per subscription per month (AMPU) in the quarter 168 179 182 176 179 187 187 182 175 191 Average revenue per subscription per month (ARPU) in the quarter 317 330 335 310 315 332 328 318 297 308 – of which contract 459 476 489 452 464 491 499 491 453 465 – of which prepaid 158 166 167 155 147 146 129 119 117 129 No. of SMS/MMS and content messages (in millions) 566 594 619 630 611 656 726 792 818 838 Sonofon – Denmark No. of mobile subscriptions (in thousands) ----987 1,203 1,253 1,275 1,232 1,250 – of which prepaid (in thousands) ----250 451 485 462 413 420 Average traffic minutes per subscription per month (AMPU) in the quarter ----147 157 139 151 153 182 Average revenue per subscription per month (ARPU) in the quarter ----250 233 219 207 229 253 – of which contract ----287 291 281 267 284 306 – of which prepaid ----135 111 120 111 126 146 No. of SMS/MMS and content messages (in millions) ----479 545 588 687 722 716 Telenor Mobile Sweden No. of mobile subscriptions (in thousands) 52 59 65 81 84 92 96 105 107 99 – of which prepaid (in thousands) 26 23 28 44 48 55 56 57 56 51 Average traffic minutes per subscription per month (AMPU) in the quarter 28 38 49 69 73 96 104 108 113 141 Average revenue per subscription per month (ARPU) in the quarter 120 155 172 175 169 181 182 169 164 167 – of which contract 195 239 252 248 252 262 265 241 215 216 – of which prepaid 45 49 56 103 106 122 125 117 121 121 Kyivstar – Ukraine No. of mobile subscriptions (100% in thousands) 2,012 2,205 2,512 3,037 3,221 3,610 4,856 6,252 7,662 9,335 – of which prepaid (100% in thousands) 1,614 1,768 2,037 2,503 2,675 3,031 4,211 5,532 6,892 8,500 Average traffic minutes per subscription per month (AMPU) in the quarter 42 51 57 72 68 74 95 95 91 90 Average revenue per subscription per month (ARPU) in the quarter 77 87 98 93 84 93 95 68 53 62 – of which contract 168 176 203 200 191 213 223 184 165 187 – of which prepaid 55 65 73 70 62 69 72 52 40 49 Pannon GSM – Hungary No. of mobile subscriptions (in thousands) 2,514 2,514 2,564 2,618 2,596 2,588 2,595 2,770 2,792 2,824 – of which prepaid (in thousands) 1,989 1,981 2,019 2,023 1,977 1,935 1,886 1,991 1,955 1,915 Average traffic minutes per subscription per month (AMPU) in the quarter 104 110 113 116 111 121 127 131 125 143 Average revenue per subscription per month (ARPU) in the quarter 151 161 165 170 165 170 184 171 157 162 2003 2004 2005 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 – of which contract 388 414 416 412 399 389 400 356 327 316 – of which prepaid 86 92 97 99 92 96 103 96 84 89 DiGi.Com – Malaysia No. of mobile subscriptions (100% in thousands) 1,802 1,944 2,053 2,205 2,413 2,583 2,804 3,239 3,461 3,765 – of which prepaid (100% in thousands) 1,709 1,850 1,953 2,101 2,301 2,453 2,653 3,067 3,259 3,525 Average traffic minutes per subscription per month (AMPU) in the quarter 174 173 177 175 167 164 170 165 163 170 Average revenue per subscription per month (ARPU) in the quarter 121 110 115 115 113 107 110 98 92 99 – of which contract 294 309 326 318 312 312 297 238 233 216 – of which prepaid 111 99 105 105 104 97 100 90 84 93 GrameenPhone – Bangladesh No. of mobile subscriptions (100% in thousands) 835 928 1,047 1,141 1,520 1,795 2,024 2,388 2,928 3,704 – of which prepaid (100% in thousands) 631 725 820 899 1,258 1,501 1,730 2,092 2,625 3,375 Average traffic minutes per subscription per month (AMPU) in the quarter 221 225 233 230 239 246 249 241 237 223 Average revenue per subscription per month (ARPU) in the quarter 133 132 141 128 120 106 103 87 81 69 – of which contract 274 282 332 319 331 287 302 257 288 284 – of which prepaid 86 87 88 76 71 69 67 60 54 47 Telenor Pakistan No. of mobile subscriptions (in thousands) ------344 836 ProMonte GSM – Montenegro No. of mobile subscriptions (in thousands) ------340 279 279 303 – of which prepaid (in thousands) ------297 234 235 263 Average traffic minutes per subscription per month (AMPU) in the quarter ------113 87 91 105 Average revenue per subscription per month (ARPU) in the quarter ------139 107 115 129 – of which contract ------309 284 288 338 – of which prepaid ------111 79 82 97 Associated companies No. of mobile subscriptions (100% in thousands) 17,158 15,105 17,035 19,478 21,028 24,594 28,662 33,763 38,645 42,328
FIXED – Norway Retail market No. of PSTN subscriptions (in thousands) 1,449 1,427 1,381 1,308 1,248 1,219 1,196 1,182 1,165 1,139 No. of ISDN subscriptions (lines in thousands) 1,816 1,800 1,755 1,682 1,600 1,548 1,498 1,449 1,394 1,335 PSTN/ISDN generated traffic (mill. minutes) 4,268 3,876 3,454 3,787 3,725 3,279 2,851 3,171 2,848 2,644 Market share of PSTN/ISDN generated traffic (%) 68 68 68 68 67 68 67 67 67 67 No. of Online subscriptions residential market (in thousands) 315 304 301 294 286 276 263 241 215 197 No. of ADSL subscriptions residential market (in thousands) 114 124 139 163 191 214 245 286 339 364 No. of ADSL subscriptions business market Norway (in thousands) 7 10 11 14 17 21 25 40 46 51 Wholesale market No. of PSTN subscriptions (in thousands) 11 12 42 104 151 170 180 188 192 200 No. of ISDN subscriptions (lines in thousands) 14 17 52 126 188 215 234 250 256 259 No. of ADSL subscriptions (in thousands) 21 31 41 56 76 86 90 91 77 87 No. of LLUB (in thousands) 53 59 68 80 96 108 123 145 172 192
BROADCAST No. of television subscribers in the Nordic region – DTH pay-TV subscribers (in thousands) 713 708 726 763 778 782 800 824 851 853 – Cable TV subscribers (in thousands) 575 590 594 604 605 611 614 624 616 619 – Households in small antenna TV-networks (in thousands) 1,130 1,049 1,100 1,098 1,132 1,161 1,190 1,212 1,197 1,205 – Cable TV Internet access (in thousands) 24 26 28 31 34 35 38 44 48 50
*) ARPU for 2003 has not been restated to comply with IFRS.
Telenor Group PAGE 15 2nd quarter 2005 Telenor Group PAGE 16 2nd quarter 2005 oa rt-on 0 ()4 3,531 41 4 3 2 (32) 21 (3) - 15 (9) - - 1 1 - (3) - 2 20 28 (9) 10 - - - 2 (3) 1 410 28 - 16 116 2 24 898 - (149) - 12 11 105 21 188 - (87) 1 - 3 75 - 1 - - 2 2 24 - (169) - - 3 - (1) 3 ofassociated companies Gains ondisposal 3,290 1 - - Total 11 103 write-downs (66) Corporate 163 functionsandGroup activities - (4) Other businessunits 1 - 74 Broadcast Fixed 5 3 - - 144 Other 22 GrameenPhone - - DiGi.Com - 29 5 Pannon GSM–Hungary 5 52733 4 Sonofon 527 7 Telenor –Norway Mobil mobile Write-downs 99 – - 40 (NOK inmillions) – 1 - 1 - 12 – - 562 operations 61 Bangladesh 26 Total other(income)andexpenses 562 Malaysia - 1 Total andloss contracts reductions workforce 6 - Eliminations Denmark 3 Corporate functionsandGroup activities 79 Other businessunits 32 366 EDB Broadcast - 12 Fixed Other 59 151 Pannon GSM–Hungary - Business Sonofon –Denmark Telenor –Norway Mobil 1 - - 8 Expenses andloss contracts reductions for workforce 57 358 mobile Total offixedassetsandoperations losses ondisposal Partner Eliminations -300303 Corporate -300 Other businessunits 120 Broadcast operations Fixed 28232431 Other functions GrameenPhone Pannon GSM–Hungary Sonofon –Denmark Telenor –Norway Mobil offixedassetsandoperations Losses ondisposal mobile and – Total offixedassetsandoperations gainsondisposal Corporate functionsandGroup activities Other businessunits EDB Group operations Broadcast Bangladesh Fixed Pannon GSM–Hungary offixedassetsandoperations Gains ondisposal Business activities (NOK inmillions) SPECIAL ITEMS Partner e gis n rt-on iaca tm 6)(7 44 260 (2,673) (2,630) (484) (17) (67) Net (gains)andwrite-downs items financial 0520 0520 2004 2004 2005 2004 2005 2004 2004 2005 2004 2005 50 - 53 - 10 1 1 - - (1) - (1) 2)- 40 4 - 4 - 44 2 - (20) 9 24164286 - 1 - 15 - 1 - (15) - 1 - 2 - 2 25 1 - 1 - (1) n ure s afya Year 1sthalf-year 2nd quarter n ure s afya Year 1sthalf-year 2nd quarter te icm)adepne 6)(6)(7 19 410 (149) (32) 410 (87) 10,532 (9) (149) 9,296 (2,673) 410 (169) 5,232 8,016 (2,630) (87) (3) (149) (66) 1,521 5,563 (484) 6,140 (169) 21,367 1,974 (87) 10,637 2,789 (9) (1,320) (17) 2,983 10,597 (66) 5,215 123 (655) 3,209 (169) (3) 6,789 2,8592,9905,2845,527 3,325 10,649 (67) 5,455 9,296 (297) (547) (66) 2,8132,822 5,1945,382 5,529 10,730 2,707 8,016 (28) (363) 5,564 Adjusted profit interests before taxesandminority 2,751 6,140 Other (income)andexpenses (287) Write-downs 733 494290515986 (Gains) lossesondisposalofassociated companies Net (gains)lossesandwrite-downs financialitems 2,983 Profit interests before taxesandminority Adjusted 3,325 Other (income)andexpenses 1,709 3,7514,8405,677 2,041 Write-downs Operating operating EBITDA before otherincomeandexpenses Other (income)andexpenses profit EBITDA profit EBITDA Write-downs 2,072 4,2985,4956,997 2,328 Depreciation andamortization Associated Net financialitems Profit interests before taxesandminority Taxes Profit companies Minority interests Net (NOK inmillions) before income RECONCILIATIONS minority interests 5,630 5,698 10,736 10,746 20,957 5,630 5,698 10,736 10,746 20,957 0520 0520 2004 2004 2005 2004 2005 97 91 182 251 (2,299) (2,521) (1,842) (911) (997) 01()4 3,531 20 1 (3) 4 3,531 20 1 (3) 4 3,531 20 1 (3) n ure s afya Year 1sthalf-year 2nd quarter
Telenor Group PAGE 17 2nd quarter 2005 Telenor Group PAGE 18 2nd quarter 2005 relevant period. subscriptions, dividedbytheaverage number ofsubscriptions forthe ARPU iscalculated revenues from basedonmobile thecompany'sown Average revenue persubscription month(ARPU) roaming, roaming,providers national service andMVNOsare notincluded. roaming. Outgoing andincomingminutes while tions related toinbound This includes zero rated minutes andoutgoing minutes subscrip- from own outgoing andincomingrated minutes from thecompany’s subscriptions. own Traffic minutes persubscriptionmonthare calculated basedontotal Average traffic minutes persubscriptionmonth(AMPU) vendingmachinesandmeter(M2M), forexample, readings. are excluded. Telemetric isdefinedasmachine-to-machineSIM-cards only SIM-cards are included, but SIM-cards used fortelemetric applications SIM-cards vendingmachinesand meter (M2M),forexample, readings. Data applications are excluded. Telemetric isdefinedasmachine-to-machine Data onlySIM-cards are included, but SIM-cards used fortelemetric providerService andMVNOsubscriptionsare notincluded. months. incoming traffic oriftheSIM-card hasbeen reloaded during thelastthree Prepaid subscriptionsare counted ifthere asactive hasbeenoutgoing or Contract are subscriptions counted isterminated. thesubscription until Subscriptions Key Figures not directly operations. related tomobile – consistofrevenues from customer equipment andbusinesses thatare revenuesNon-mobile Virtual Network Operators). providers and MVNOs(Mobile service – consistofinbound roaming,roaming national andrevenues related to revenuesOther mobile related provider toservice subscriptionsare notincluded. – consistofrevenues from incomingtraffic. Revenues from incomingtraffic Interconnection revenues subscriptions. own enues. Subscriptionandtraffic includes onlyrevenues from thecompany’s non-voicetraffic,airtime, rev- outbound service roaming andothermobile fees,revenues andconnection – consistofsubscription from voiceoutgoing Subscription andtraffic Revenues MOBILE OPERATIONS DEFINITIONS directly related toDistribution andTransmission services. – consistofrevenues fromaccesssystems conditional andrevenue not Other andrevenuewest from terrestrial radio andTVtransmission inNorway – consistofrevenues from satellitefrom services satellite1-degree position Transmission and DTT(Digital terrestrial TV)Pay-TV subscribers. DTH (direct tohome),cable TVsubscribers, households inSMATV networks – consistofrevenues from Pay-TV subscribers households andbasictier on Distribution Revenues BROADCAST provider andservice revenues.wholesale interconnect, andinternational national transit traffic, andother lines leased providers toservice oftelephony (PSTN/ISDN)andADSL, – consistofsale Wholesale revenues andotherretail products. managedservices lines, – consistofleased Other revenues – consistofNordicom, Frame relay andIP-VPN. Data services Internet traffic (810/815). – consistofsubscriptionfeeforADSLandInternet andtraffic chargesfor ADSL/Internet network, toothercountries, value other)andIP. addedservices, fee,traffic– consistofsubscriptionandconnection (fixed-fixed,tomobile Telephony (PSTN/ISDN) Revenues FIXED –NORWAY providersservice andMVNOsare notincluded. and incomingmessagesrelated toinbound roaming, national related toSMS,MMSandcontent domestically andwhenroaming. Outgoing the company’s subscriptions.Included are rated own andfree messages The number ofmessagesisbasedonoutgoing andincomingmessagesfrom SMS/MMS andcontent messages subscriptions. customer equipment andincomingtraffic related provider toservice inbound roaming,providers,of national service MVNOs,sale traffic” and“Interconnection revenues” anddonotinclude revenues from revenues company'ssubscriptions”consistof“Subscriptionand ”Mobile a nIR dutet 9 54 6 58 540 129 (216) 548 71 (231) (66) (342) 568 (254) 32 (93) 63 2382,099 (329) 574 (256) (76) 319 (47) (49) 10 (166) 4131,292 (317) (55) 226218202182150 595 (267) 1,282 (594) (32) 5,677 (139) (57) (306) 6 (19) (8) 1,048 (846) 284 (20) (935) - (296) (46) 801 13 37,650 41,37539,96441,48639,693 (5) 1,683 (20) - (935) 299 (16) 786 622 -622 63 accounted forFinancialInstruments according toNGAAP. (13) 556 andMeasurement”IAS 39“FinancialInstruments: Recognition 2005.Uptoandincluding asof1January wasimplemented 31Decemb 1,709 - (5) (6) equityfor the Telenor ofshareholders’ Reconciliation Group 2005duetotheimplementation from 31December2004to1January - (9) 330 Year 5,358 (12) 53 3,131 Shareholders 939 343 - Total (5) (21) (935) Minority - (252) Fourth Dividends equity 51534 (11) Tax onIFRSadjustments 4 234 adjustments Adjusted gainsandtranslation differences Third Associated companies interests (4) 1,399 – Sale ofsoftware - 37,23740,08340,13041,24837,594 Share-based (10) (6) 20 247 Obligations Asset Retirement (7) Second IFRS Pensions 1,410 2231551 11 Business Write-down 92793958 268 First 245 Depreciation andamortization –other compensation 2,801 negative Amortization ofgoodwill, goodwill 13 Shareholders Combinations (NOK inmillions) Equity of 213 equity Net income(loss) –IFRS Total adjustments Minority interests – Tax onIFRSadjustments goodwill Adjusted Associated NGAAP Sale Share-based compensation Obligations Asset Retirement gains Pensions companies Write-down ofgoodwill of Depreciation andamortization –other negative Amortization ofgoodwill, goodwill Net income(loss) –NGAAP (NOK inmillions) Profit andloss 2004 software Accounting basedonmanagement’s Principles(NGAAP)andIFRSprinciples Generally according Accepted toNorwegian principles accounting Telenor Telenor’s hasmadeanevaluation ofthedifferences between including comparable figures for2004. Telenor provide unaudited will inaccordance financialinformation withIFRS the comparative periodfor2004.Startinginthefirstquarter of2005, include statements befortheyearending31December2005andwill will alsoberequiredcompanies will tofollowIFRS.Telenor’s firstIFRSfinancial Due totheEuropean listed EconomicArea (EEA)agreement, Norwegian dance Standards” with“InternationalFinancialReporting (IFRS) by2005. nies withintheEUprepare theirconsolidated financialstatements inaccor- oftheEuropeanRegulations Union(EU)require compa- listed thatpublicly REPORTING STANDARDS (IFRS) IMPLEMENTATION OFINTERNATIONAL FINANCIAL * 2005 equity1January Shareholders’ Total adjustments Minority’s share Tax onthechanges Shares at available-for-sale estimated value* fair – derivatives notqualifyingashedges – cashflowhedges Derivative value instrumentsat fair equity31December2004 Shareholders’ (NOK inmillions) ) 2005 due aboutasof1January 2005. tonew information conditions present compared totheequity reconciliation fairEstimated isincreased value byNOK295 million ofshares available-for-sale ) 10.043.320 00.043.920 31.12.2004 30.09.2004 30.06.2004 31.03.2004 01.01.2004 income andequity are provided inTelenor’s firstquarter report for2005. ments according toIFRSandComments tothevarious effectsonnet whenpreparingchanges inaccountingprinciples Telenor’s financialstate- according toNGAAPare found intheannual report for2004.Themain IFRSasfrom principles 2004.Theaccounting 1January of implementing The tablesbelowshowtheestimatedeffectsonnetincomeandequity the yearended31December2005. not audited. Audited figures bereported will inthefinancialstatements for in revisions orotherdifferencesbelow. thanthoseidentified Thefigures are Consequently, changesinthecompany’s understanding ofIFRSmayresult could affectthefinalIFRSfigures for2004andtheinterim figures for2005. pronouncements andinterpretations maybeissued during 2005,which around theinterpretation ofIFRS.Accordingly, andimplementation new current understanding ofthesestandards. There isinherent uncertainty ure ure ure ure 2004 quarter quarter quarter quarter 185 181 177 174 (1,730) (1,754) (1,777) (1,801) (1,825) 1,776 1,776 - 2,602 24 2395 ed inTelenor’s firstquarter report for er 2004,Telenor of IAS39. 40,146 39,693 (289) 753 453 (16) 13 (8)
Telenor Group PAGE 19 2nd quarter 2005
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L I M 241 450 e-mail: [email protected] Investor Relations: Investor +47 67 89 24 70 Tel: Second quarter of 2005 Second quarter ASA by Telenor Published Norway N-1331 Fornebu, +47 67 89 00 00 Tel: