The Telenor Group Strategy

Capture growth in our three regions

Telenor Group’s main growth initiative in the coming years is to develop our India operation according to the established business plan.

In addition, Telenor will:

1. Maintain or improve voice market share and further develop data positions in our existing markets

Fixed and mobile voice represents two-thirds of Telenor’s revenues and the strategic focus is to keep or improve our voice positions. We will do this through churn-reducing initiatives like attractive price plans that target customer segments more precisely, and new distribution concepts.

In addition to defending and growing our voice revenues, the focus will be on capturing the significant growth potential coming from data and Internet. Within our footprint, we will increase our focus on small-screen data services by leveraging netbooks (small PCs) and mobile phones as access devices.

Additionally, we will develop sustainable mobile broadband business and pricing models.

2. Capture value-creating opportunities from related communication services, with primary focus on M2M communications and financial services

Telenor sees the potential for value-added services to support our core voice and data services. We are likely to succeed with services that leverage our key telecom network, technology skills, customer base, and distribution strengths.

Our two main priorities are in the areas of Machine-to-Machine (M2M) communication and in providing a select set of financial services to the un- and under-banked population in our emerging markets.

3. Capture value-creating opportunities emerging from telecom/media/IT convergence, primarily through third-party applications and services

Outside the Nordic countries, Telenor positions itself more as an access provider and service enabler than a full-service ICT and integrated media and telecoms company. We control many valuable assets that can be further developed and exploited together with third-party developers and content producers to defend and expand our core revenues.

By opening up communications enablers to third parties and allowing them to integrate with their software and Internet services, Telenor will grow revenues in adjacent industries as well as increase demand for our core voice and data services.

4. Capture local and regional consolidation opportunities

The next three years may present attractive consolidation opportunities in our regions. Telenor will need strategic and financial flexibility to exploit these opportunities.

Strengthen operational performance and leverage Group scale and competence

To enhance profitability, operational performance must be improved. This will be accomplished through four main initiatives:

1. Further improve the customer experience

Telenor’s vision and supporting values focus on the customer experience. To deliver an improved customer experience, we have established two non-financial KPIs with targets for all companies in the 2009 to 2012 period. These are:

• Brand preference

• Customer satisfaction

2. Focus on operational efficiency

Continuous focus on operational excellence is needed to ensure increased flexibility as long as   the macro-economic environment and the revenue development remain volatile. Internal operational excellence initiatives targeting opex and capex have been established in all OpCos. All OpCos have already explored or will explore network sharing opportunities, and outsourcing of IS/IT is also in focus.

3. Further develop people, organization and HSSE quality

The Telenor Way framework is the basis for how we conduct business in the Telenor Group. The overall Group governance model will aim at finding the right balance between local autonomy and leveraging global scale and coordination. Telenor will further strengthen its efforts in the HSSE (Health, Safety, Employee Security and External Environment) area, including awareness building, monitoring, and reporting.

4. Leverage business environment management, corporate responsibility, and a stronger Telenor Group identity as competitive differentiators

To succeed, we must align our business objectives with the expectations of our shareholders, customers, employees and society at large. Business Environment Management (BEM) will focus on systematic stakeholder engagement, sustainable business through integrated corporate responsibility (CR), and strengthening of the Telenor Group visibility and recognition.

Ensure capital discipline

The Group has through its India investment limited the short to medium term financial flexibility to undertake new large-scale merger & acquisitions (M & A) activities. To fulfill the desired dividend and rating policies, be resilient towards macro-economic uncertainty, and capture growth opportunities, the Telenor Group will:

1. Deliver on the financial strategy, including the rating and dividend commitments

As a means to restore confidence among our stakeholders, Telenor will commit itself to a clear and transparent financial strategy going forward. The main objective should be to regain financial flexibility in order to be in a position to pay dividends, however with the constraint of maintaining a solid balance sheet.

2. Strictly prioritize investments in existing portfolio

We have already started scrutinizing capex and are holding back investments in the short term. An increasing part of Telenor’s investments will be allocated to data services and new technologies.