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Good morning, everyone. 2021 was an eventful year for Telenor. We had COVID effects throughout the year, especially in Asia, and the effect lasted longer than what we had expected. However, despite COVID and mostly remote working, we continued with our modernization. And we announced also 2 large mergers in both Malaysia and in Thailand. In 2021, we also had to handle a very challenging situation in Myanmar. It is now 1 year since the military takeover in Myanmar. Throughout the year, our focus has been to safeguard our employees and to continue to serve our customers.And as you know, given the circumstances, it became impossible for us to remain in Myanmar and the sale was concluded at the least detrimental solution, both to our employees and to our customers. And currently, we are waiting for the authorities approval of this transaction. In this extreme situation, I will say that I have huge respect for the strength and the resilience shown by our team on the ground in Myanmar and what they have been able to do during the last year.Looking back on the year, I'm very pleased for what we have achieved. After several years of modernization and transformation, we are now well positioned to take part in the revenue growth that we see now across our portfolio. Our robust operation demonstrate that we despite uncertainties and COVID effects are able to safeguard EBITDA and cash flow. And as a result of this, we delivered a solid cash flow of NOK 13 billion last year. And this is supporting a proposed dividend for the financial year of 2021 of NOK 9.30. This is in line with the dividend policy that we have been following now for several years.2021 was a year where we started to see real opportunities for 5G. I'm pleased to see that Telenor that we are able to monetize on what we call the first wave of services towards the consumer segment. An important part of this is also the fixed wireless access product that our customers see as a good alternative to fees broadband. We continue to upgrade our customers from 4G to 5G speed and together with partners, we have also started to build services on top of traditional connectivity. And during the year, you see this demonstrated through the ARPU increase we see now both in Norway and in Finland.We are now entering what I call the second wave of 5G, which will be focused on services towards the B2B segment. Telenor has already delivered the first private networks, both here in Norway, in Finland and in Sweden. In these deliveries, revenues from services like edge and security may often be even higher than the connectivity itself. This is an excellent example on how these opportunities, which we refer to as beyond connectivity, that's the term we are using for it, need the connectivity as a basis to be realized. And to enable ourselves to take this potential revenue opportunities, we have also signed up global strategic partnerships with hyperscalers like Google Cloud and Amazon Web Service.We are also executing on our strategic agenda in Asia. We believe there will be significant growth opportunities in Asia coming from both the B2C and the B2B segment. I'm going to talk more about that later in the presentation. In the midst of the COVID lockdown, we announced in April a merger between Digi and Celcom in Malaysia. And in Q4, we also announced an intention to merge our operations in Thailand, dtac and True. This transaction aims at creating a market-leading company in Thailand, and this will provide the opportunities for value creation for our operation in the country.And now let me move into the results, starting with Norway. In Norway, our team is running what I called an ambitious agenda. They are building a legacy-free, future-proof network. At the same time, they are modernizing and digitalizing the entire operation. And on top of that, we are also now starting to see sizable revenues coming from services on top of data connectivity. Norway continues to see growth both in mobile and in fixed future revenues. And the sale of services in combination with demand for more data is driving the ARPU improvement. This quarter, however, the growth in fixed future revenues is lower than previous period as a result of lower run rate of new fiber and fixed wireless access connections.In January 2019, we announced the decision to close the copper network. And looking back, this was a bold decision. And since then, we have experienced a revenue decline of NOK 2.1 billion, and you can see that illustrated in the middle of this slide. When we made that decision, we set a target of maintaining 60% of the customers and 70% of the revenue. The result so far is around 85% revenue retention. This is very pleased to see these results. The program is now moving into the final year, and we estimate a headwind of approximately NOK 900 million from the decommissioning in 2022. The modernization continues in Norway, and the underlying EBITDA is almost flat due to another quarter with strong OpEx reduction from the Norwegian team.Then to the rest of the Nordics. Finland and Denmark both delivered strong ARPU growth of 3% and 6%, respectively in the quarter. In Finland, mobile upselling is driving improved ARPU in combination with growth in the consumer segment for fixed broadband. We do now cover 65% of the population in Finland with our 5G network. And we see that both speed and quality in our 5G network is very competitive. The DNA performance is even better than what we expected when we acquired that company 2 years ago. I will especially mention DNA's customer-centric operation and the way they have built a very strong DNA brand. And these are also examples on areas that we are taking learning into other Telenor operations.In Denmark, we see another strong quarter. Telenor Denmark is true. It's significant digital modernization, able to take down cost and at the same time, improve customer journeys. As one example, 80% now of our customers are being served by digital channels. As a result, we are able to grow ARPU and also increase profitability in this very competitive market. This transformation activities have improved the EBITDA margin in Denmark with 15 percent points over the last 6 years. When they started this turnaround operation, the EBITDA margin back in 2015 was 11%. Last year, it was 26%. I see this as an impressive performance.The stabilization in Sweden continues. I'm also pleased to see that what I believe are positive effects of our revamp to go-to-the-market strategy. We delivered strong customer intake of 25,000 new customers in the quarter, which 13,000 are coming from Telenor's main brand within B2C and SME. As I have mentioned before, we believe Sweden is a growth market, and that Telenor Sweden should be able to grow in line with the market growth.Then moving to Asia. In Asia, we see pandemic continues -- continue to ease off, but it took longer time than what we expected last year. I have shown this graph for you several quarters in a row, and it is to illustrate the effects of the COVID waves. How -- what we see now is that vaccination rates are increasing. And with that, we see increased activities and mobility across our footprint. And we see the growth with that is coming back. We are therefore prepared to invest to position ourselves for this growth. And we see this already happening in Bangladesh. And that's why you see on the graph as little uptick on -- in the end of the quarter.During 2021, despite the volatility and uncertainty, we have experienced a continued increase in data usage. In the quarter, we saw an almost 40% increase in average data usage across our portfolio in Asia. We see an opportunity to monetize this growing data demand with upselling and also implementation of digital services. This is also driven by an increased smartphone penetration and an increase in digital payment solution to enable digital top-ups. In Bangladesh and Pakistan, for example, 30% of all the top-up is now happening digitally. While in Thailand, the digital sale is almost 80%.We are meeting this increasing data demand by building the most efficient and modern data network. To give you a number, over the last 5 years, we have seen around 4x higher data volume. However, at the same time, our network modernization and efficiency programs have delivered a 4x decrease in cost. We have by this managed to decouple the data growth and the data cost. Both the need for efficient data production and the ability to build a service universe is depending on scale. And this is an important driver behind the consolidation thinking we have in Asia.2 years ago, we saw the potential of strengthening our B2B position in our Asian business units. And we now see a strong development in this segment. Although this is currently a relatively small proportion of the revenues during the year and despite the pandemic, we see a double-digit growth within the segment, which we also expect to continue in the coming years.I will talk a little bit about what we do on the technology area. Over the last years, our technology modernization has had the ambition of transforming Telenor into becoming what we call a digital telco. And today, I would like to claim that this has positioned us in the industry forefront. To give you some examples of what we have done so far, 90% of our data traffic is now in the cloud infrastructure. 65% of our network applications and almost 50% of our IT applications are also moved to the cloud. We have implemented process simplification, automatization and use of AI to move towards what we call a touch-free operation by 2023.And with this, we have also made significant steps to digitalize customer interaction, both in sales and customer care. We see that with 5G as a discom with a unique opportunity, both in the B2B and in the B2C segment. Connectivity will become even more important in a digital future and will continue to be the base for our services. But we believe that we can do more than deliver on the data connectivity. And our ambition is therefore, to move beyond traditional connectivity services.In our digital telco strategy, a central element is to unbundle our value chain into modules. And when we do this, we can increase the optionality, and we can start offering those modules as a service, as a service solution, both internally and externally. Examples of that you already see on connectivity as a service are private networks. They're also 5G private networks that they are already delivering in the Nordics and software-defined networks that we also now start to take a position on -- in the Nordics. Another example is what we do in our spinoff company Work Group 2. They have developed a cloud native core platform that we are using already in the digital brand we have in Sweden, and they are also taking positions in other OpCos. And we see a potential also in the future to do the same in the consumer segment.Then let me end with giving you some key priorities for 2022. Firstly, the priority is to grow in the Nordics based on monetization of 5G and services on top of traditional connectivity. It's about adding value to the consumers, building on our consumer customer relationship and on our strong brands and presence in these markets. In the B2B segment, customers are digitalizing their processes and systems to become more efficient, to grow faster and also expand into new areas. And I believe this service beyond connectivity is a significant growth opportunity in our Nordic business units and then later in Asia.My second priority is to strengthen the position we have in Asia. Our ambition is to be a leading regional telco in Southeast Asia, whether it's catering for data growth, serving new segments or delivering on demands for new services, we need scale to be part in these new opportunities. In all our Asian markets, the governments are having digital ambitions. We therefore see an opportunity to be a part of realizing this. And this is why we are stepping up our efforts in the B2B and the SME segment.The third priority is to develop our infrastructure operations into being a leading Nordic player. Telenor Infra in Norway has been operational for 2 years and has confirmed the assumptions we had in our business plan. So far, as you can see on this slide, we have increased external revenues with 12%. Infra -- Telenor Infra has also delivered increased quality of service and confirmed our belief in the model and that we are able to realize operational synergies.And in addition, it's all based of -- on our responsible business conduct approach. Telenor is here to empower societies. And a key differentiator for Telenor is how we conduct our business responsibility. We have the same standards across our diverse markets. And with this, our operations are impacting the societies where we operate. We are proud of this. And although it challenge us from time to time, we also see that it helps us to build trust towards our customers and towards our stakeholders.And with this, I leave the floor to Tone.
Thank you, Sigve, and Good morning, everyone. Reflecting back on 2021, it has been another year where COVID has had implications on our business, and we did expect, as Sigve said, a stronger recovery in Asia in the second half of the year. However, and despite COVID, it has been a year where Telenor has demonstrated the strength of our operating model and the quality of our people. Thanks to our Asian setup and the team's impressive and structured work. We have launched and are currently executing on 2 large merger processes in Thailand and Malaysia, despite these markets being severely impacted by COVID and lockdowns.We have also, as Sigve said, handled the very unfortunate situation as it has evolved in Myanmar. In the fourth quarter, Telenor Myanmar are delivering a very strong financial result in an extremely challenging situation. This is a testament of the quality of our people and the strength of our operating model in the country. In our financial accounts, Telenor Myanmar is treated as a discontinued operation and net asset values are impaired. Further, over the last 2 years, we have demonstrated our capabilities to navigate in uncertainty and opportunities that we have experienced in a very special time.In this period, we have worked diligently to safeguard EBITDA and cash flow, and all these efforts have enabled Telenor to deliver robust result in the second year of COVID. So in 2021, we are delivering stable S&T revenues for both the year and the quarter. EBITDA for the year also remained stable. In the fourth quarter, we see a 1% EBITDA decrease as we were not able to fully offset the loss of the high-margin copper revenues and the increased cost related to sales and marketing, energy and also structural transactions. Free cash flow came in at NOK 13 billion.Let us now have a closer look at the figures, and I start with revenues. As I said, the organic S&T revenue remained stable, both for the quarter and the year. If we exclude the effects of the copper decommissioning, we deliver S&T growth of around 1%, both for the quarter and for the year. In the quarter, we see continued solid performance in Finland and Denmark with a 3% and 2% growth, respectively. In Pakistan and Bangladesh, we continued to deliver growth this quarter of 5% and 4%, respectively. In both these markets, this is driven by our granular market approach throughout the year.In Norway, we see a 3% reduction in total S&T revenues or 1% if we exclude a positive one-off last year. For the underlying performance, continued growth in mobile and fixed non-legacy services, we are not able to fully offset the reduction in copper revenues. Delay in some fiber projects has moved installation volume over to 2022. In Sweden, as Sigve said, the revenues were in line with last year. We have invested in market activities, and we are pleased to see positive effects through a strong customer intake of 25,000. And we are particularly pleased that we now manage to turn in net positive adds in both the B2C main brand and the SME segment.In Thailand, the country has been more or less completely closed for tourists throughout 2021. However, dtac has continued to adapt and has implemented a more domestic focused strategy, which results in close to 300,000 net subscriptions added this quarter. Quarter-on-quarter, the S&T revenues remained stable, while on the year, they were down 1%. So to the full year. In the Nordics, we see 2% growth across mobile and fixed revenues. However, this is offset by the copper decline in Norway, and this is why the Nordics overall deliver stable compared to last year. In Asia, the COVID effects continued and Bangladesh is an important growth engine. But overall, Asia delivers neutral growth.And now to the OpEx. For 2021, we delivered an OpEx reduction of 2% on top of the 7% we delivered in 2020. In the fourth quarter alone, we see a slight increase in OpEx for the group of approximately 1%. But as you might remember, we had a very strong reduction of 7% in the same quarter last year. We continue to deliver OpEx reductions in several categories, but sales and marketing cost, energy and M&A costs are higher this quarter. Last year, we said that we expected some of the costs in the sales and marketing area to come back once the opportunities for growth returned. And particularly in Bangladesh and Sweden are examples where we see this in the fourth quarter.Looking at the OpEx per country, we see material cost reductions in Norway and Thailand driven by structural programs. The largest increase this quarter is seen in Bangladesh, which is driven by the network in IT and also sales and marketing costs. In the other segment, this is primarily driven by NOK 75 million of increase of M&A cost from the 3 large M&A projects we are currently running in Asia. For the full year 2021, structural initiatives more than offset increased costs related to sales and marketing and energy. In 2020, we said that we had positive contributions from COVID on OpEx spend of approximately NOK 900 million, of which more than half was related to sales and marketing costs. As the situation is stabilizing, parts of these costs will gradually come back.An important topic these days is inflationary cost pressure, and I would like to share some insight on how we see this. For the last 5 years, modernization and structured programs has become an integrated part of how we work in Telenor. And over the course of these years, we estimate that we have been able to reduce OpEx by close to 15%. As we now move into a more high inflationary environment, I believe this way of work will be a very strong tool to handle the cost increases and inflation going forward. On this slide, you see some examples of 2 areas in scope for our structural modernization initiatives, namely organization and energy. In 2021, we were able to more than offset the salary increase across our portfolio with FTE reductions coming from the structural programs such as simplification and digitalization.For energy, we are running group wide projects to improve energy efficiency and support our climate agenda to reduce CO2 emissions. This project looks at network optimization and other energy savings to reduce both energy costs and consumption. Had it not been for these efforts, the increase in energy usage would have been even higher in 2021, estimated to around 4%. Finally, on this topic, I would like to mention our centralized procurement company in Singapore. This company is negotiating prices on equipment and services purchased by throughout Telenor. In total, we estimate that centralized procurement has realized approximately savings of approximately NOK 15 billion since 2017. This is then both OpEx and CapEx. Going forward, modernization will continue to be a strong tool to cope with inflation and cost increases.Now to the EBITDA. The organic EBITDA was stable for the year and decreased by 1% in the fourth quarter. The EBITDA performance in the quarter is impacted by a reduction in the high-margin copper revenue of NOK 200 million, high project cost and also the energy prices, particularly in Norway. In the quarter, we see solid performance in Finland and Bangladesh. In addition, we see positive contribution from Thailand driven primarily by special items last year and lease reclassification.Even though Norway has material positive impact from OpEx reductions this quarter, the peak of the copper decommissioning on the top line is also impacting the EBITDA. This is also impacting the group EBITDA negatively by close to 1 percentage point. In the other category, increased energy cost in our infrastructure company in Norway and higher costs related to increased activity level and M&A were the main contributors to the negative impact of 1.3 percentage points.Moving to towers. As of year-end '21, Telenor has around 21,000 fully owned sites, and we have additionally 10,000 sites that we own together with our joint venture partners in Sweden and Denmark. This asset base in total brings Telenor into being the fifth largest tower company in Europe actually. We have tenancy ratios of 1.4 in Finland, 2.3 in Sweden. And in our largest portfolio in Norway, the tenancy ratio is 1.6. In addition to working on increasing the external revenue, we are, as Sigve also said, focusing on improving the operation and efficiency of the towers. We are developing our Nordic tower portfolio to be a leading tower company in Nordics.From the first quarter, we will start reporting financials for the fully owned assets. This includes our passive tower infrastructure insights in Norway, in Finland and parts of the portfolio in Sweden. The towers that is owned through our joint ventures will not be included in our financial reporting from the start. We are executing on a 3-step strategy when it comes to towers. Firstly, we are focusing on improving the operations. The second priority is to visualize financials, which we will start doing from the next quarter. And then the third step will be to evaluate strategic options.Moving to net income. Reported net income to equity holders of Telenor ASA in the fourth quarter was NOK 0.6 billion, a decrease of NOK 7.1 billion compared to last year. For the full year '21, net income to equity holders of Telenor ASA was NOK 1.5 billion. The decrease compared to last year was primarily driven by NOK 7.4 billion negative impact from impairment of Myanmar and also the gain of disposal last year of total NOK 5.8 billion. In addition, we see negative currency effects from a strong Norwegian kroner on EBITDA and net financial items of, in total, NOK 4.9 billion for 2021. Adjusted for the nonoperational items, meaning the impairment and the currency effects, this year's net income would have been around the same level as the dividend.Moving to cash flow. CapEx in the fourth quarter amounted to NOK 5.9 billion. In Norway, the 5G rollout and copper decommissioning is running at full speed and is supporting our superior network and laying the foundation for future service revenue growth. In addition, 5G investments in Finland and coverage expansion in Thailand are key elements to the CapEx spend. CapEx to sales ratio for the quarter was 20.8% and 16.3% for the full year. Cash flow for the quarter was negative NOK 0.5 billion. Free cash flow was impacted by NOK 2.3 billion in spectrum payment in Thailand and payment of the competition fine in Norway of NOK 800 million.Compared to EBITDA, now compared to last year, EBITDA is down due to currency. The cash flow this quarter also includes a contribution of NOK 400 million related to Myanmar. Total cash flow for the year stands at NOK 12.7 billion and NOK 1.3 billion of the cash flow related to Myanmar. The leverage ratio increased to 2.05 this time and ended by this -- the year exactly in the mid-range of our target range. Going forward, we will continue to look for value-accretive transactions, which are in line with the strategy and which visualize the value in the portfolio. As an example, yesterday, we closed the transaction in Sweden and received almost NOK 3 billion for our open universe communication provider, and this will be booked in our accounts for the first quarter.Then to the dividends. Based on the financial results for 2021, the Board proposes a dividend of NOK 9.3 per share for 2021. The proposed dividend represents a total payout of NOK 13 billion to the shareholders. The proposed dividend is in line with our dividend policy and gives a dividend yield of 6.5% and implies a 3% increase in ordinary dividend per share compared to 2020. Telenor has, over the last 2 years, demonstrated a strong commitment to the dividend policy despite the business being severely impacted by COVID. This has been done on the basis of how we are financially managing the operation when it comes to investment levels, cash flow, leverage and dividends. We end 2021 with a solid cash flow while being in the middle of the leverage range. Over the last 6 years, we have returned close to NOK 100 billion to the shareholders. The dividend will, as usual, be paid in 2 tranches in May and October.And lastly, I'll conclude the presentation with the outlook for 2022. In 2021, we have seen that the performance in Asia continued to be impacted by the pandemic. And although we still wait for the recovery, we see signs of improvements across our portfolio, and we believe this will provide growth in the coming year. As Sigve mentioned, we now see growth opportunities both from services in the Nordics and from data migration and B2B services in Asia. These opportunities arise within the traditionally connectivity services, with also from services on top on connectivity. Going forward, we will, therefore, report and provide outlook, including these revenues. We believe this will provide an updated performance measure more in line with our strategy.As we expect the transaction in Malaysia to close during the second quarter, we now provide an outlook without Digi. For 2022, we expect low single-digit growth in service revenue, while EBITDA will be around 2021 level or slightly higher. This guiding reflects our belief in returning to growth in 2022, while the EBITDA will be impacted by investments in market activities, high project and M&A activities and this being the last year of the copper decommissioning in Norway. In sum, this leads to an EBITDA growth, which is lagging some quarters behind the top line development.As we expect growth opportunities from 5G and continue the fiber land grab and copper decommissioning in Norway, together with the network expansion we do in Asia in 2022, we see CapEx to sales for the next year in the range of 16% to 70%. We believe this represents an investment into future profitable growth for the group. And as such, we believe that 2021 and '22 will be peak years for Telenor when it comes to CapEx. However, for the period 2020 to 2022, we are within the midterm outlook of around 15%, which we communicated at the last CMD. We will go more into detail for how we see the medium-term going forward outlook for the Telenor Group, including our strategy for growth in the Nordics, in beyond connectivity in Asia and in infrastructure on a Capital Markets Day, which will take place later this year. We will come back to the date for this in our first quarter presentation.And with this, Sigve, we wrap up the presentation and open the floor for Q&A. Moderator, may we have the first question, please?
[Operator Instructions] We will now take the first question from Terence Tsui from Morgan Stanley.
My one question is around the performance in Norway, particularly on the fixed side. And you mentioned the fiber and fixed wireless installation delays. Were there any specific reasons for this in Q4? And are you expecting this to accelerate or the pace of installations to accelerate in 2022, please?
Yes. Maybe I could address that one, Tone. No, this goes a little bit up and down in various quarters. So that's the reason why we were somewhat lower in the fourth quarter, but we see now that we have the speed to kind of catch up for that into this quarter and in the first half of this year. So those specific reasons. But as I said, it's dependent a little bit on our suppliers and dependent a little bit on the areas and so on and so forth. So we are quite confident that during this year, you will see that we will have a higher speed in the coming quarters.
We will take the next question from Peter Nielsen from ABG.
Just a follow-up to one question on the guidance for this year, please. So I think you've elaborated on a bit on the EBITDA trend. Could you perhaps talk a little bit more to, please, about how the investments for return to growth will impact the EBITDA trends, and perhaps also how important the cost inflation is here in terms of the EBITDA slightly lagging the top line? And are we to understand that the sort of 1% to 3% OpEx reduction target, which you sort of have for the medium term and which you obviously met last year, that is -- is that unlikely to be met this year for these -- the reasons you've just mentioned? So any elaboration here a bit on -- around the EBITDA outlook would be appreciated.
Thank you, Peter. Firstly, on the cost side, we are, as we say, executing on the structural programs continuously. And some of these projects are long and some are shorter. We've also said that it will varies between periods, how much is taken out. We do see now that we have 2 years taken out substantial cost effects, and this has mitigated the inflation that we have seen in some areas. Going forward, we will continue to work on these structural programs. This has become the way we work. But then we also see, as we said, that we are now in the last year of the copper decommissioning. We know it is somewhat more challenging pots to be taken out this year. We also see that we are investing in market activities, and these are basically the reasons together with the structural programs. So it would be a dynamic. But as we've said, we can't say on individual quarters or individual year, how the net will be. But we are managing this the way that we also presented on this slide.
Okay. May I ask a follow-up for Sigve, please? Sigve, in the last few quarters, you obviously have a couple of big transactions going on in Asia. Last quarter, you said you will continue to pursue in-market opportunities and potentially even structural transactions. You're not talking about it at this presentation. Is that just coincidental? Or have you sort of changed your expectations for further in-market consolidation in Asia?
No, we haven't. It's just that we cannot just keep on repeating this for every quarter. So what I said last quarter, it's still valid. We are in the midst of now, as you said, hopefully, concluding what we do in Malaysia, in Thailand and also Myanmar. But we are also looking for other alternative and other opportunities. So that remains.
We will take the next question from Maurice Patrick from Barclays.
If I could ask a bit about the dividend, please. I remember when you restarted with the dividend, of course, some years ago, and you've grown every year since. But now it's sitting at about NOK 9.3. If I heard you on the call correctly, Tone, that's 100% of net income, if you take out Myanmar and FX. It's 100% of free cash flow, which is NOK 30 billion, and you had some Myanmar benefit, I guess, in the free cash flow. So what's your thinking around the right level of dividend going forward? I mean you always will have FX moving around in your business, and you're not really going to grow EBITDA this year much. And so your thoughts in terms of that dividend sustainability. I think you're in the middle of the free cash flow range, but if it's uncovered, will you keep paying that level?
Yes. Thank you, Maurice. Yes. We know that as you say that the net profit of the year is impacted by a lot of elements, including FX. If we take a perspective of 5 years, we see that our net income has been close to the dividend level. So we have over this period, paid out close to 100% or around 100% of the net income in dividends. We believe, as we said also, we have delivered out NOK 100 billion over these last years to the shareholders, but we have also managed to maintain both the dividend, but also the financial policy. So we believe that this is a dividend policy that has served both the company and the shareholders well in the past.
I guess -- sorry to [indiscernible] looking forward. I mean would you readdress it maybe at the Capital Markets Day later in the year?
Yes. I will not preempt what we will talk about at the Capital Markets Day. And you know that the dividend is decided by the Board on an annual basis. So on that basis, I provide the historical perspective of how we have done this in the past. And that is what I can say today.
We will take the next question from Titus Krahn from Bank of America.
Just maybe on the tower company from my side. I mean one of your Nordic peers as we have heard [ since they ] sold minority stakes on towers. Do you think that represents an option for you as well? And more specifically, maybe 2 very small follow-up questions. And do you see a difference in optionality and that attractiveness in your towers between ground-based towers and rooftops? And also, can you remind us on the impact from leases on the financials of your telco? I believe there was something on NOK 900 million in EBITDA. And how do leases impact that?
Yes. Thank you. We have been executing on our strategy where we are gathering, and we are gathering both the ground-based towers and the rooftops as we consider this as an infrastructure setup. So we are not distinguishing in our setup between ground-based towers and the rooftops and other site. There are also other sites as we showed on the slide. We have been now focusing on optimizing the operations and increasing the external revenue, as Sigve also showed. And then the next step will be to show EBITDA and other financial metrics for these companies in the first quarter.And we are now in the middle of setting this up with master lease agreements between the telcos and the telco. So we are in the middle of setting these companies up. We will come back to the financials for this segment on the first quarter. So -- and then after we have executed and as we are executing on this strategy, we will also, of course, evaluate strategic options and also alternatives going forward. But as of now, our main focus is on these 2 first parts.
Okay. Just to clarify, so the NOK 900 million you, I think, announced a year ago, does that still [ is where ] before leases?
That was the EBITDA for Telenor Infra, mainly. And then these numbers, of course, vary -- yes.
We will take our next question from Usman Ghazi from Berenberg.
I just -- maybe I just wanted to follow up on Maurice's question regarding the dividend. Maybe I'll ask it in a slightly different way. And then I had a follow-up on towers, if you don't mind, please. So on the dividend, I mean, I think if I look at free cash flow, free cash flow including M&A, dividend coverage is not a problem right because you're generating roughly NOK 10 billion ex Myanmar, then you've got NOK 3 billion from disposals in Sweden, and you've probably -- depending on your tower strategy and the synergies from the Thailand and Malaysia are approved, you'll be getting higher cash flow from those markets. So it seems like free cash flow including M&A should be able to cover a NOK 13 billion kind of dividend that's growing. But I guess if you take free cash flow ex M&A to be conservative, then obviously, the dividend at NOK 13 billion free cash flow excluding Myanmar and M&A sitting at NOK 10 billion, and that then creates some nervousness amongst investors.So in terms of how Telenor looks at this, is the policy that M&A is just ongoing and we will do whatever we can to support a free cash flow including M&A proceeds that will continue to cover the dividend at these levels? Or is there a different way that you're looking at things? That was just a follow-up, please. And then on towers, would -- I mean, I guess, the view of operators is slightly different. Some MNOs want to create kind of pan Nordic, pan European kind of entities rather than sell out, whereas others see recovers just as less strategic going forward. So we're happy selling out given the multiples that are being paid. So is -- I mean does Telenor have a view here on which camps it lies?
Thank you. The topics of the day. Yes, on -- if I start with the last one infrastructure, we have said that we have an industrial approach to the infrastructure, and that is reflected in the way we are setting up the company. We are working on the operational side and also to grow the dividend. So that is our approach based on where we stand now. And then as you say, there are -- we also observed the high dynamics that is in this market, and we also include that in our assessments going forward. On the dividends, we believe, firstly, I think we need to look at as we have done, we look at dividend over a period of years because we are, of course, wanting to provide some predictability to the investors, and that is why we have had this dividend policy.So as you say, there are -- in some years, there are high net income coming from M&A and special activities. In this year, as you said, it would be -- we will get the NOK 3 billion, and we will also get the last installment on the CEE transaction this summer. And these elements will contribute going into when the Board at the end of the year does their assessment on which dividend they will then propose to pay out for 2022. But we have now had this. I demonstrated the history on how we have executed and also the way we have handled this in the last 2 years, which has been special years and as you say, both in respect of the top line development and the EBITDA.
We will take the next question from Frank Maaø from DNB.
Yes. So just a question on the structure of your power contracts or electricity contracts in the Nordics. So last quarter, you said that basically, you have 6 contracts in the Nordics, except for Norway, where you have a variable price contracts. But you were not able to give us any color on the -- or information about the duration of the fixed contracts that are basically protecting you from energy price inflation in Sweden, Denmark and Finland. Will you be able to provide us with some new information on the structure of the contracts today?
Yes, Frank. I can do so. As you said, in Norway, we have spot contracts, and we also have that mainly in Denmark. And we see a slight increase in energy and cost in Denmark as well this quarter. In Sweden, there are more fixed contracts, which are -- it's not under 100%, but it's on around 60% of the expected consumption during the summer and around 90% of the consumption for the winter. And then in Finland, there is more price indexing to fix the prices going forward. And that is kind of ongoing on a rolling basis. So based on this, there are different dynamics in the Nordic markets of the power cost as we see it in the various networks and operations.
We will take the next question from Ulrich Rathe from Jefferies.
My first question would be, Sigve, when -- it's a long-standing dream, I think, of the telecom's industry to derive growth from adjacent areas. But when operators have tried it in the past, there's almost had been sort of some issues that you are hitting different competitors, you are hitting different customers, you are hitting different buying processes, potentially different regulation, you start competing with customers. There's any number of issues trying to sort of branch out into adjacent areas.So the question is what's different this time? What enables the expansion into adjacent growth areas in a more credible way this time around? How do you think about that? And then the second question is really just a follow-up on the last one. On the energy cost, I understand you are -- you have this sort of drive to reduce consumption overall also for climate and ESG reasons. But are there levers to actually mitigate the energy price inflation that you're seeing in Norway by switching supplier or other means? Is there anything that you can do to sort of mitigate the impact that's been pretty harsh in the fourth quarter, in particular Norway it seems?
Finally, a question for me, Tone. No. On the last question, Tone, if there are any levers, you can answer the levers when it comes to the purchasing contracts. But there are definitely levers in our technology, and we are working together with all our technology vendors now to implement energy, also equipment that doesn't consume that much energy. And we see that, that is really helping us such that there is not a kind of linear increase in energy consumption with the increase of network expansion. So on that part, we are working very good. And I see that our vendors are also really focusing on this, both from an ESG point probably, but also from the cost point.But to your third question. I think there are 2 differences. And you are absolutely right when it comes to the lack of success in the past. The first difference I will say is that now we are trying to focus on products or services that are close to core. And let me take an example. In Norway now, we are having insurance and security solutions for our consumers. And this is something we have been talking about for -- yes, I think, more than a year. And these are solutions where we are protecting your IP address, for example, they are securing your IP address up against thefts or misused. And the Norwegian customers are willing to pay for that.And I think almost half of the ARPU growth you see in Norway now is actually coming from those digital services on top of the data packages. Another example of that is it's checking of your pets, also things that you can easily put close to the core delivery together with partners and monetize it. And now we are rolling out this type of services for the consumers also in the rest of the Nordic portfolio that we had. That we will also do the same in Asia. So trying to pick services that are close to core and not necessarily develop those services yourself, but actually do it together with partner and then use our distribution strength to deliver it to the customers. So that's one difference.The other difference is 5G. And in the 5G area, I see and I tried to talk a little bit about that when I described the digital telco. In the 5G area, it is a potential for us now to break up, decouple the connectivity layer such that we can move into connectivity as a service. And we think there is a potential in a product 5G network, software-defined network, but also in digital platforms, even moving into analytics. And if we are -- and these are all services that are very close to our core. And our thinking is that you have the connectivity as a base, then you put connectivity as a service on top of that. And then you should also be able to take a position in security, for example. And as I said in my presentation, I think we have -- we are now engaging with around 100 B2B customers in Norway, deliver security solution for them. And IoT is another example.So I think these are the 2 reasons why I'm quite confident that together with partners, we can deliver those services, which are close to core and that there is a demand for in the market. That's why I'm quite optimistic on these type of services. But to do that, you have to modernize your operation. You have to do what I also talked about in our presentation on utilizing cloud solutions as to becoming almost a digital native as we call it. And we are experimenting with this in several of our business units, how to kind of move into a complete digital world. Because if you do that, then you can decouple and you are attractive also to work together with partners. So that's what we have been piloting and trying out for the last year and that we now really see is working in practice.
Yes. And then maybe just on the energy cost. As Sigve said, one of the most important things we can do is to make sure that we don't use more energy than we need. And that is, for many reasons. And that is an integrated part of the technology strategy and also the operational part of for instance, the tower operations. And then we will, of course, use the levers we have as Telenor as a large company to negotiate contracts and look for different mechanisms in respect of pricing of energy. But there is no magic solution to this, but it's definitely an area where we are looking into.
We will take the next question from Francesca Schild from Exane BNP Paribas.
So just coming back to the inflationary pressures and the particular wage inflation. So obviously, you are expecting a good modernization efforts. But excluding this, will you expect seeing salary increases in the Nordics? And could you please just remind us how the salary negotiations work? Or how are these taking place yet for 2022?
Yes. Thank you. Salary increases, I think we will experience in most markets this year. And in Telenor, I think the modernization, as I said, is a key tool. It's also about being a place where people would like to work so that we have employees that stay with us and develop in the job. The salary increases and negotiation varies between -- from country to country. In Norway, it's typically done in the first half of the years. In other of the Nordic countries, it's done at different times of the year. But I do think we will see salary increases, but then we will try to mitigate this by the way we work with modernization in the organization.
Maybe just to add to that, Tone. If you look at this historically, we have been able to do exactly that, being able to have flat employee cost with -- and balancing the salary increases with monetization activities such that we also are kind of streamlining our operation. And I think over the last few years, in percentage, we have taken down the number of FTEs in the range of 6%, 7%, 8% year-by-year.
That's right, Sigve.
We will take the next question from Ondrej Cabejsek from UBS.
I had -- I wanted to ask about the corporate decommissioning. So you mentioned in the slides quite helpfully that you had a NOK 0.9 billion drag from that -- in 2021 earnings. But the same roughly in 2022. And I think, Tone, you kind of hinted that there would be a phasing of that, perhaps that being a bit front-end loaded in 2021. So if you can comment on that, please. And then what happens to the NOK 0.5 billion residual after 2020? So and what kind of impact does that have on first of all, the realization of the NOK 1 billion efficiencies that you highlighted would happen after the full decommissioning? And then what does that mean also for CapEx in 2023? Because I believe you mentioned in terms of why CapEx is going up in 2022 is the phasing of fiber.So what does that mean for any kind of residual fiber project, especially in terms of wholesale with regards to the regulatory pushback that you've seen on shutting this down? And then if I may, a follow-up in terms of CapEx, what then would be or slightly related to this, but what would be the kind of return to normal now that you're excluding the kind of low intensity in Malaysia from the numbers? So going forward after 2022, is the kind of medium-term return to 15% that you mentioned at the beginning of the presentation, something that you would be aspiring to or would that be a bit higher over the medium term?
No. We don't want to give you any CapEx guiding going forward. But as Tone said, the last 3 years, we have kind of delivered on what we said in the Capital Markets Day around 15%. And then we also said that there will be a peak in this year for CapEx. And the reason for that, as Tone also said, is 5G investments in Norway, but it's also 5G investments in the Nordics, plus also some investments in Thailand. So this is the peak that we are seeing. And then after that, we will come back to that in our Capital Markets Day.But the first part of your question on the decommissioning. That's really going on plan, and we definitely plan to take out all the consumers that we have in the end of this year. There is still something we need to look at on the wholesale part of it. And as you said, we have got some regulatory pushback on that. Hopefully, we'll be able also to migrate most of the wholesale customers over to future-proof solutions. And then there you will see that the remaining cost outtake of this will then come in 2023.
So just to confirm, Sigve, you're still confident that the whole project can be finalized in 2023?
Well, we are confident with what we see now that the project will be finalized within this year, end of this year, apart from the wholesale customers. As I said, that from regulatory reasons, we need to find a solution for. And we are actively -- now we're working with all those wholesale customers that we have to see if we can migrate them also over to better solutions. And if we are able to do that within this year, then we will also be able to completely shut down the network. If not, we need to keep part of the copper network also going into 2023.
And apologies, I mean, how does that impact then the NOK 1 billion delivery if you're expected to keep this NOK 0.5 billion of revenues from wholesale? What would that mean for the NOK 1 billion target beyond 2020 to them?
No. So for this year, we see that it would be around NOK 900 million, which is taken out, and this is related to the consumers, as Sigve said. And we see now coming back to the phasing of it, we have seen for several quarters now that the consumers are seeking new solutions, and we see that continuing now also in the first -- we expect it to continue into the first half of the year. And then it would be, of course, -- towards the end of such a project, it would be somewhat more different solutions that we need to seek. But we do expect the NOK 900 million to take out and then that it will be the wholesale that remains thereafter. And that was the NOK 1.4 billion that you saw on the graph is at the start. And then if it's NOK 900 million to NOK 1 billion, then it will be the NOK 400 million that remains as Sigve said, which is related to the wholesale.
Apologies. I mean, NOK 1 billion of the OpEx savings. So presumably, there's a large fixed cost with keeping at least the wholesale part of the base life. So how much of the cost base of the NOK 1 billion that you plan to take out would be impacted by this? Was this the question, please?
Okay. So you're talking about NOK 1 billion in OpEx. We believe that the main part of -- we have taken out OpEx throughout the project. We have had an ambition of around NOK 1.2 billion in OpEx takeout. We expect around NOK 700 million to be at the end of the period. And so after we migrate out to customers and particularly or both the consumers, but also the wholesale, these costs will be gradually taken out over the next years after we are taking out to customers. So it will come in the first years after the decommissioning is done.
Okay. I think we have time for one more question, Tone. Yes.
We will take the final question from Nick Lyall from Societe Generale.
It was just one and a follow-up, please. Just on your graph on the energy price rises, could you just explain why the price element in Pakistan is so high? Again is that the structure of the contracts? So is that something we should be a bit wary of into 2022, please? And the second thing, Sigve, would you mind just giving us a little update as well on the Myanmar and the [ tie ] processes, please, for M&A, just to Myanmar in particular, which seems a little bit sketchy in the moment?
Yes. Just quickly on energy in Pakistan. We have seen throughout 2021 that energy cost has impacted the OpEx space in Pakistan. And that is, of course, based on that this market is very -- it is spot prices and it's high energy costs locally. So this is an area -- and this is part of the reason why we are focusing -- we talked in the last call about how we are working on installing both solar but also wind panels to reduce the dirty energy and the energy cost as such in Pakistan. So we are actively working to mitigate the cost increases that we see in the local market in Pakistan.
What's your question regarding the sale process in Myanmar? Did we lose the -- I think we lost him. Well, yes, I assume -- okay. I assume your question was about the sales process. Now, as you know, we announced that we want to sell the company back in July last year. That, however, is due to regulatory approval. So -- and that has taken a long time, and we are still waiting for that. So we don't know what that outcome will be, and we don't know when we will get it either. So in that sense, we are still waiting. There is no other updates in that. Okay.
Yes. By that, we end the presentation. Thank you very much.
Thank you.