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Telenor Reports Q1 Growth

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FORNEBU, Norway -- In the first quarter of 2014, Telenor Group reported revenues of NOK 26.5 billion, representing an organic revenue growth of 1.5%. EBITDA before other items was NOK 9.3 billion, the EBITDA margin was 35% and operating cash flow was NOK 5.6 billion.

"I am pleased to present a solid start to the year. We added 6 million new mobile subscribers in the first quarter of 2014, the company's best customer surge in two years. This growth was mainly driven by India, Pakistan and Bangladesh. The underlying mobile service revenue growth improved to 5 percent in the quarter,'' said Jon Fredrik Baksaas, President and CEO of Telenor Group.

"In Norway, our growth and efficiency initiatives continue to be a top priority. We see rising demand for larger data packages, which resulted in improved mobile revenue growth of more than 3 percent in the quarter. Competitive pressure and declining revenues from traditional fixed telephony require us to focus on streamlining our operations and investments. At the same time, Telenor is implementing a major technology shift with an annual investment of more than NOK 4 billion," said Baksaas.

"The migration of customers to our new 3G network in Thailand is on track, with some 60 percent transferred. The move from a concession to a licence regime is already contributing to significant regulatory cost savings. The slow-down in revenue growth is explained by reduced interconnect rates, lower voice prices and the recent weakness in the Thai economy," said Baksaas.

"Mobile data represents the next growth curve for Telenor. We are persistently working to increase the number of active internet subscribers across all our markets. Out of our total customer base of 172 million subscribers, some 20 percent are currently active internet users, representing a large growth potential. While Telenor recently secured new spectrum in India and Pakistan, our business in Bangladesh, significantly improved its 3G coverage during the first three months of the year. Our Indian operation reported an organic revenue growth of 44 percent in the quarter, gaining significant market share. We also launched a new internet strategy in India, focusing on affordable and service-based internet offers," said Baksaas.

"In conclusion, we had an encouraging start to the year. Our efficiency agenda is progressing, while we continue to work on bringing affordable internet to all and connecting the unconnected. However, we need to see continued improvement in all our markets, in particular a pick-up in revenues in Thailand and improved returns on the significant investments in Norway," said Baksaas.

"We maintain our financial outlook for the year, excluding Myanmar, of low single-digit organic revenue growth, a stable EBITDA margin and a capex to sales ratio of around 16%," said Baksaas.

Telenor ASA (Nasdaq: TELN)

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