Telenor ASA ADR TELNY
Q1 2011 Earnings Call Transcript

Operator: Welcome to Telenor's First Quarter Conference Call.

Scott Engebrigtsen - Communication Manager: Good morning, ladies and gentlemen, and welcome to the presentation of Telenor's results for the first quarter of 2011, whether you are present here, at our headquarters, listening in on the phone or watching this via webcast or on the mobile video.

I'm Scott Engebrigtsen, and I have the pleasure of taking you through the presentation this morning. We hope that everyone has the material that we have made available for you; that is, our press releases; the quarterly report, and a copy of the presentation to be used here in the minutes. You can also find the material on our website at telenor.com.

You can watch this presentation live or in recording on either the Internet or on a mobile phone, and during the live transmission, you can also send in your written questions via the Internet, and you can find the instructions on these alternatives from our website.

As usual, we will have a Q&A session directly after the presentations here and we will start off with the audience present here at Fornebu, then we will continue with the ones participating on the phone and finally you will have the opportunity to do individual interviews.

To present the figures today we have our CEO, Jon Fredrik Baksaas and our CFO, Richard O. First, I leave the floor to Mr. Baksaas.

Jon Fredrik Baksaas - President and CEO: Thank you, Scott, and good morning to all of you. Snow has left this country, spring is coming.

Here are the figures for the first quarter of the Telenor Group. We have started this year by confirming a very good momentum that we had in the second half of last year. There is an organic growth factor of 7% for the Group in this quarter and this stands in line with what we had both for third and fourth quarter last year. This growth is primarily driven by the Asian operations, but I will come back to this later.

The consolidated operations in the Telenor Group added as much as 9 million subscribers this quarter and this is almost sort of figure of standards way back. This has been driven of course by 5 million new subscribers in India alone, but also in Bangladesh, Thailand and Pakistan, we have been able to connect many new subscribers this quarter.

Combined with this we have generated a cash flow of solid NOK5 billion, and this happens in parallel with greenfield investments in India, as well as the ongoing network modernizations and network swaps that are ongoing, in particular in Scandinavian countries, but also in Central and Eastern Europe.

To do this in combination, we consider this as a strong feature that we can generate healthy cash flows, despite the initiatives both in India as well as on the (network) side. This requires a bit more than averagely previous quarters.

Based on the results that we bring forward for this quarter, we maintain our financial guidance for 2011 and both me and Richard will come back to that a bit later.

If you then move on to the different regions of the Telenor Group, I'll stop in Scandinavia, there is unstable mobile voice usage in the countries throughout this quarter. This question has been raised in the industry after KPN released their figures. At the same time, as the voice revenue – the voice usage is just standing pretty stable, the data growth continued. We have the same momentum on growth for data in this quarter as we've had before in the mobile networks.