Telenor CEO Sigve Brekke has revealed the telecom operator company’s strategy for 2018 and main achievements in 2017.
The global telecom operator has achieved cost savings of NOK 1.6 billion in 2017 and an EBITDA margin of 37 percent in Q4 2017.
The main achievement for Telenor was the addition of two million wireless subscribers last year despite competitive pressures.
Telenor achieved EBITDA margin of 36.9 percent in Q4 2017 as compared with 33.6 percent in Q4 2016 and 39.3 percent in 2017 against 36.7 percent in 2017.
Telenor main gains
# Revenues of NOK 125 bn (+1%)
# Opex reductions of NOK 1.6 bn (-3%)
# EBITDA of NOK 49 bn (+9%)
# Net income of NOK 12 bn
# Free cash flow of NOK 25 bn
Telenor’s net income fell marginally to NOK 2,226 million in Q4 2017 as compared with NOK 2,286 million in Q4 2016. Net income rose to NOK 11,983 million from NOK 2,832 million.
Telenor could reduce Capex to sales ratio to 19.2 percent in Q4 from 21.3 percent. Telenor cut Capex to sales ratio to 17.1 percent in 2017 from 20.2 percent in 2016.
Telenor Group CEO Sigve Brekke said the company delivered solid results due to strong execution from across the company and continued follow-through on efficiency measures and strategy.
Telenor achieved Opex reductions of NOK 0.6 billion in Q4 thanks to cut in sales & marketing cost driven by Norway, Thailand and Pakistan.
Telenor achieved Opex reductions of 3 percent in Norway, 2 percent in Sweden, 9 percent in Denmark, 6 percent in Hungary, 5 percent in MNE & Serbia, 5 percent in Bulgaria 8 percent in Thailand, 3 percent in Malaysia and 7 percent in Pakistan. Opex of Telenor increased 14 percent in Myanmar and 3 percent in Bangladesh.
Telenor is targeting 1-3 percent net Opex reductions per year for 2018-2020 and significant part of Opex reductions in 2017 were from structural initiatives.
“We met our financial targets and reported strong financial results for the past year, marked by a 1 percent organic increase in revenues and total net cost reductions of NOK 1.6 billion, leading to increased profitability and cash flow of NOK 25 billion,” Sigve Brekke said.
Telenor strategy for 2018
The priority of Telenor in 2018 will be to deliver on its digital transformation agenda, to seek efficiency gains and revenue growth, while simplifying portfolio and way of work across the telecom company.
Telenor said it will be making additional investment in people in order to succeed with our transformation. “We seek to personalise our customers’ experience and improve satisfaction based on their needs and preferences,” Sigve Brekke said.
Telenor aims to enhance efficiency and customer experience of its 178 million wireless customers by transforming its operations and delivery of services through the digitalisation of IT and technology.
Telenor has made investment towards Capex (capital expenditure) excluding spectrum and licences of NOK 5.5 billion, resulting in a Capex to sales ratio of 17 percent.
Telenor said its 4G coverage in Norway reached 99 percent pop coverage, with 8,000 sites. Telenor continued its investment for network densification in Thailand, with 10,000 new licensed base stations in 2017.
Telenor has sold its India business to Airtel. Telenor also exited from Russian telecom giant VEON. It established cluster organization and project-based way of work. The company is rightsizing of workforce. Telenor is in the process of decommissioning legacy IT platforms to improve performance.
As part of transition to digital channels, it introduce MyTelenor app in all markets and achieved >11 million million users in total. The company’s digital investment resulted into dip in call center volume in all markets.
# Move from concession to license in Thailand
# Common delivery centre for network & IT in Asia
# Fixed value chain transformation in Norway
# Simplification of product portfolios
# Shift from physical to digital sales channels (MyTelenor)
# Self-service (MyTelenor) and chatbots for customer care
# Advanced analytics to improve marcom efficiency
# Cloud-based and standardised IT solutions
# Digitalisation of work processes, and robotisation of recurring tasks
Telenor introduced Contextual marketing engine live in six telecom markets. Telenor reduced commissions and increased effectiveness through digital sales.
Telenor has a common network & IT delivery center for Asian business units, driving standardization and consolidation. The company could improve capabilities towards automation and customer-centric operations.
Telenor is undertaking transformation of core functions towards virtualization and hybrid cloud platform. Telenor aims to achieve 75 percent of IT virtualization in 2018, and 90 percent of functions in Telenor Cloud in 2020.
Telenor believes that automation and digital interactions and simplification and removal of duplicating functions will assist the company to reduce ~2,000 employees per year.