Telia Company AB Q3 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Maurice Patrick - Barclays Bank - Analyst : So it's a value versus volume question. I noticed if I look at the Finnish market, you have seen a slowing in service revenue and EBITDA momentum serious revenue is now falling. You cited of course, some of the legacy and regulation runoff there. But I also noticed a small reduction in postpaid subs, but an ARPU up 9%. So I'm just curious as to your approach going forward around ARPU versus subs, whether you're going to grow defend your market share or just happy to see what we see some market share to see higher ARPU? And just a sort of a related point and it relates to Sweden. I was intrigued seeing Shell from Tele2 yesterday. He said in a meeting that he saw in the long term, a significant consumer surplus in the Swedish market, i.e., people under paying for their services and talked about maybe over the medium term, ARPU could be SEK 50 to SEK 100 higher than currently years. Just curious of your thoughts in terms of what is the opportunity longer term for price and the ability of customers to where that increase? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 7:30AM, TELIA.ST - Q3 2024 Telia Company AB Earnings Call

Question: Andreas Joelsson - Carnegie Investment Bank AB - Analyst : A follow-up to Maurice question on price and maybe a little bit more philosophical. If I look at Sweden mobile postpaid ARPU that you reported, it's basically flat since Q1 2019 despite that you now have 5G and probably a better service. Just curious how you see that trend changing going forward? Or do you see any other sort of growth drivers for the mobile side in Sweden?

Question: Stefan Gauffin - DNB Markets - Analyst : Yes, a couple of questions relating to Norway. You mentioned the value of the deal to the arm forces in Norway of NOK 300 million for 4 years, but this is an extension is this an increase in order value? And then secondly, Other mobile service revenue in Norway is at least my expectations, and it was up close to 25% quarter-on-quarter. What was driving this? And how much is ICE out of this business? Telenor quantified the impact to them to around NOK 400 million in 2025, NOK 400 million in 2026 and NOK 200 million in 2027. This would indicate that I represent more than half of the revenue in this revenue line in 2024. So any comment related to the ICE contract and if it is that drove the strong performance in this revenue line this quarter? .

Question: Ajay Soni - JPMorgan Chase & Co - Analyst : I had a couple. Firstly, on your pricing, you said it's going to impact your service revenue over the next 3 quarters. So can you just remind us what you did on pricing this year and what percentage you pushed through? And then following on, do you expect to do a similar increase this year and at a similar time? And then my second one is just on Norway fixed service revenue. Can you just give us color on what's driving the decline here and when we could expect this to move more into growth phase? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 24, 2024 / 7:30AM, TELIA.ST - Q3 2024 Telia Company AB Earnings Call

Question: Viktor H÷gberg - Danske Bank A/S - Analyst : So just on the risk EBITDA growth guidance here, is that solely due to Q3 isolated or something which would change your expectations for Q4 '12?

Question: Viktor H÷gberg - Danske Bank A/S - Analyst : EBITDA. EBITDA, yes.

Question: Viktor H÷gberg - Danske Bank A/S - Analyst : And a follow-up on that new organization from the first of December. Just for your guide for next year, the at least 5% EBITDA growth, what else needs to fall in place to be realized? Or was this the main item?

Question: Stephen Malcolm - Redburn (Europe) Limited - Analyst : A couple, please. First, just on the restructuring plans, and I'm wondering if you can maybe update us some conversations you're having with the unions. And when you expect to get clearance sign off for your various programs across the region, that would be great. And then just coming back to service revenues, Eric and Patrik, appreciate the extra color on the short term. But I'd still like to sort of try and better understand how you kind of hate the word inflect second half of next year. I mean, obviously, you're going to have a bigger impact from the loss of the ICE revenues in the second half. I mean, do you have sort of specific pricing programs in mind already for the second half of next year? And are you -- how linked to sort of economic growth recovery, are the second half growth ambitions because if you're going to grow kind of low ones in the first half, you're going to need to grow nearly 3% in the second half to hit the 2%. So I know it's difficult given commercial sensitivities, but any sort of extra confidence you can give us that you can absorb that loss of ICE and still be exiting the year, 2.5% or 3% to get to 2 would be great.

Question: Stephen Malcolm - Redburn (Europe) Limited - Analyst : No, I was just going to ask you, I mean, do you think you've got enough a difficult question to answer, but enough in your kind of cost locker to get to the EBITDA guidance even if service revenues maybe don't quite hit the 2. I mean it's 1.5, 1.6, is that still 2 in your mind? Can you still get to the EBITDA, given the cost savings you've got almost in the bank, it's tenant negotiations being finalized?

Question: Keval Khiroya - Deutsche Bank AG - Analyst : I've got 2 questions and then really follow on from the last. So I mean, I appreciate you got the regulatory drags affecting the absolute trends. But just looking from Q2 to Q3, we had a 1.7 percentage point slowdown in Finnish mobile service revenue growth and 1.9 percentage point slowdown in Norway. Could you just elaborate a bit more on the moving parts from Q2 to Q3 on mobile service revenue growth for those 2 markets? And secondly, just going back to ICE as well. For Norway specifically, have you identified additional measures to compensate for the ice related EBITDA? And if so, what would those be? And when should those kick in?

Question: Usman Ghazi - Joh. Berenberg, Gossler & Co. KG - Analyst : I just wanted to ask a clarification question and then a follow-up. Did I hear correctly that was SEK 15 million tailwind from told energy costs in Q3. And if that is the case, obviously, that seems to be higher than what was being projected because you already had a (inaudible) reduction in Q1. And I think for the year, you had one correctly, you're anticipating up the (inaudible) million reduction in energy costs, but not in that (inaudible) renting above. But I guess the question is, if you have had that level of energy cost reduction to the EBITDA growth that you post-all of it is just driven by energy right. So there's not much that we're seeing in real cost efficiency or just some comments there is the application that we have. second question was on the enterprise side, you've mentioned a few instances in a few markets where it stepped away because pricing was too low or that lost contract that has impacted the KPIs. And the question here is that are you seeing anything on the enterprise market specifically where your traditional challenges in the consumer space and now just going into the enterprise market more aggressively? (inaudible).