Telenor Earnings: Service Revenue Up 6% and EBITDA Increases 7%; Maintain Fair Value Estimate

Narrow-moat Telenor reported service revenue of NOK 15.8 billion in the first quarter, which represents a 5.6% organic increase year over year. The increase in service revenue was driven by mobile service revenue growth in the Nordics, thanks to average revenue per user increases in all markets except Denmark. In Denmark, the improvement came from an increase in the subscriber base. We continue to believe Telenor can gradually increase prices without losing significant market share, especially in Norway, where it is the incumbent with a very high market share. In Asia, organic service revenue increased by 6%, primarily attributed to positive development in data usage and an increase in data users in Grameenphone. EBITDA was NOK 8.5 billion or a 43.7% margin, up 6.9% year over year on an organic basis and slightly above our 2024 EBITDA margin estimate of 43%. Telenor is well positioned to reach its 2024 financial ambitions of low- to mid-single-digit growth in service revenue and mid-single-digit growth in EBITDA. We maintain our NOK 130 fair value estimate.