Telenor Pakistan Lars Christian Iuel, CEO
Pakistan – Country overview
Population
. Population of 178 million
. 43% of the population below the age of 15 years Macro outlook . Sizeable market for consumer orientated businesses
. Real GDP growth 2012 at 4%
. Inflation rate stabilizing Regulation . Political and economic stability growing fragile
. Energy & power shortages
. Common industry approach towards the regulator on 3G
. Security situation forcing tougher regulation on the industry
1 Pakistan telecom market overview
Mobile penetration (%) 133 138 127 Mobile subscribers (m) 118 108 108 12 Warid 13 Zong 70% 71% 73% 67 66% 21 Ufone 56% Telenor 42% 38 28 Mobilink 22 24% 8 14% 5% 34
2004 2005 2006 2007 2011 2012e 2013e 2014e 2015e 2011
Customer retention becoming top priority as market matures
Higher focus on non-voice including financial services and mobile Internet
Opex pressure largely due to country-specific costs
Telenor Pakistan aims to continue to outperform competition
Telenor Pakistan revenue development
Increase VAS contribution
% of total revenue • Increase revenue per activity
3% • Develop a content ecosystem 4% 7% 7% 10% 8% 9%
11% Mobile Internet • Build mobile Internet ecosystem • Access – Build the base 85% 81% 74% • Device • Content
Financial services 2011 2012e 2015e • Launch new products & segments FS * VAS • Grow mobile accounts Others Voice • Grow ARPU • Enhance agent footprint
* Financial services, excluding Tameer Bank
2 Opex and capex evolution to be impacted by network modernisation
Network modernisation Development in opex and capex started – targeting completion Capex/sales (%) by end of 2013 76 Opex/sales (%)
Ebitda margin (%) • Making the network 3G and LTE 53 52 ready 48 45 • Reducing energy footprint 37 • Catering for equipment reaching 31 30 end-of-life 24 18 • Driving further cost efficiency in 13 11 investment and operations 2008 2009 2010 2011
Future growth opportunities
1 2 3 Mobile Internet Industrialisation Financial services
3 1 The mobile Internet opportunity
Mobile Internet users (m) and Telenor I-Champ – providing Internet penetration (%)* training to young people
8.5
6.5
4.9
3.4 27% 1.9 22% 17% 13% 8%
2011 2012e 2013e 2014e 2015e
*) % of own subscriber base
1 Mobile Internet - Build an ecosystem
Targeting mobile Internet market share 5% higher than the GSM market share by 2015
Access
• Market development programs • Creative pricing – lowering the entry barrier
Device
• Conversion of feature phones to smart phones • Conversion of non-internet to internet capable phones
Content
• Actively facilitate the eco system • Content aggregators on WAP portal • Competitions to develop content – “Apportunity”
4 2 Benefitting from Telenor Group industrialisation
Asia billing Distribution 2.0
Future operating models Centralised sourcing
3 EasyPaisa – Idea evolution
51% Attractive market potential identified in 2010
• 30 million bills per month Telenor acquired • Transfer money majority interest in • Domestically USD 7 bn per year TAMEER Bank to launch EasyPaisa • Internationally USD 9 bn per year as a Joint Venture Agent • Only 12% population has access to agreement formal financial services
Reliability in fund transfers
Convenience – Real time transactions
Empowering the customer
5 3 EasyPaisa – A successful venture
Basic financial services • Average transactions ~ 160,000 per day and growing
• Total 60 m transactions worth PKR 140 bn to date
Easypaisa shops > Over-the-counter or 18,000 and growing mobile phone based services for everyone!
Targeting the under-banked and the un-banked
Telenor Pakistan – ahead of 2013 targets
Targets for 2013 announced at CMD 2010:
10% revenue growth Y-o-Y
Operating cash flow 10% revenue growth YoY Capex/sales ratio <12% margin >25%
Revenue growth Operating cash flow margin Capex/sales ratio
18% 16% 18% 26% 27% 16% 13% 16% 11%
2010 2011 2012e 2010 2011 2012e 2010 2011 2012e
6 Raising the bar with ambitious targets for 2015
Increase revenue market share
Revenue growth CAGR >10%
Opex/sales < 36%
Operating cash flow margin > 40%
Operating cash flow defined as EBITDA before other items less capex, excl. spectrum fees.
Summary
• Strengthening number 2 position
• Taking leading positions in financial services and mobile Internet
• Focusing on operational excellence – sweating our assets
• “Karo Mumkin” our philosophy
7 Telenor Pakistan Lars Christian Iuel, CEO
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