Good morning, ladies and gentlemen, and welcome to the Telenor Group's Capital Markets Day 2022. My name is Ola Jo Tandre. I'll be your host today and make some introductions along the way. My first introduction is, as we're jumping straight into proceedings, our Chief Executive Officer and President, Mr. Sigve Brekke.
Well, good morning to everyone, and welcome to the Capital Markets Day. Welcome to a sunny Norway. It's really a pleasure to welcome you all, now finally to also see you physically. Let me start with talking about the Telenor as you know it today. This is Telenor. We our purpose, empowering societies, connecting you to what matter most. Every day, 175 million customers in the Nordics and in Southeast Asia can connect to what matter most for them because our services. Irrespective of being a farmer in Bangladesh or a student in Sweden, we connect people to people. We also bring internet to all those people that never had an internet experience before. Today, 165 million customers in Asia are representing 51% of our revenues, and 10 million customers in the Nordics are representing 47% of our revenues.
Think about that. A customer in Pakistan gives us an ARPU of NOK 8 a month. A customer in Norway gives us 45 times that. That requires very different business models, and that's exactly what Telenor have done for so many years, taking a proven business model from Norway into the Nordics and into mass market low-cost models in Asia. We have also learned from how we operate in these low-cost environments in Asia and brought that with us back to our Nordic operations. Over the years, we have delivered significant value in this portfolio. What was a successful business model from the past is not going to be the answer for tomorrow. That's why we today are going to present to you what we call a reshaped Telenor.
The core of our strategy and the core of our belief is connectivity. Connectivity has been, is, and will be the core of our business because it's important for our customers. Going forward, we believe that connectivity is going to be even more important for our customers and for the societies that we operate in. Because with new technology, connectivity will also change from what we know it from today, one size fits all, into connectivity-as-a-service where we can tailor-make that connectivity to new customer needs. As I say on this slide, connectivity is the lifeblood of modern societies because connectivity enables, connectivity includes, and with connectivity, going back to our purpose, we empower societies. We see this clearly also in our responsible business agenda or our ESG ambitions.
We can set high standards everywhere we operate, here in the Nordics, but also in Asia. For example, we have global standards on our diversity ambition. We work against corruption, and we work for human rights. We work for health security and well-being in our own operations with our own workforce, but also with our suppliers. Being a large operator in every market where we operate, we have influence, we have scale and influence to also raise business standards for everyone. Beyond what we can do, connectivity in itself is bringing access. We are bringing access to 120 million data users across our portfolio. Through that, we can also have various initiatives for digital skills and online safety. We contribute to make digitalization safe for all. We also wanna be a part of the green shift.
Our internal climate goals are ambitious, especially in Asia, but the biggest impact comes through connectivity, and the green shift cannot happen without digitalization and without connectivity being a part of it. It sounds like someone is struggling with their cars outside here. I have been CEO in Telenor since 2015, now for seven years. Before I go into the next steps on what we wanna do in our reshaping journey, let me take one step back and one look back. After many years with growth focus in Telenor, our first step was to simplify Telenor and concentrate our portfolio around where we saw future value creation. From 2017, we initiated and delivered on an ambitious modernization and efficiency initiatives, and we also continued to reshape our portfolio. When 2020 started, we were ready to proceed on our step-by-step approach.
As we all know, COVID hit us, and it hit us harder than what we expected back then. We still see negative revenue effects of COVID in our Asian operations. As also known, we were forced to exit Myanmar, and then also more recently, challenges we have in Pakistan. I also think that the two last years showed that we are adaptable, because in the midst of COVID restrictions and travel restrictions, we were able to pull off two big merger arrangements in Malaysia and in Thailand. We also accelerated our digital ambitions and our modernization programs to protect our cash flow. During all these three periods I'm showing on this slide, our focus has been on value creation, and it has been important for us to deliver on our dividend policy, also throughout the two challenging pandemic years.
Since 2017, we have paid out NOK 98 billion in dividend and buyback programs. While we have been doing relatively well in the past, I also recognize the need for change. On the one hand, we see connectivity demand increasing. We see customer trusting us increasing on the back of privacy issues. We also see opportunities, especially in the B2B segment on the back of 5G and digitalization. On the other side, I see challenges. I see macroeconomic and geopolitical uncertainty. I see value chain disruption, and I also see high competition between the telecom operators in the markets where we operate. Lately, we also see that these industry challenges are catching up with us. We are not satisfied with the recent share development.
We do believe it's possible to overcome these challenges and be a part of the opportunities that exist. Our aim is to grow profitably. This requires us to take a different approach, a more granular approach to value creation across our business. This is why we today are presenting what I call a reshaped Telenor. Let me go through the key ambitions for the four business areas that we are reshaping into. First, we want to become a leading telco here in the Nordics. What that means is to continue to grow core connectivity, but also to grow services on top of the data connectivity. In addition, focus on margin expansion through modernization. Two, create a strong Asian entity operating more independently from the group than it does today.
A cash flow-focused Asia realizing synergies in the two big mergers that we are in the midst of and also drive operational performance across. Three. Nordic infrastructure. Create a leading Nordic infrastructure company. Our focus will be on monetizing our infrastructure. We will also, when we do that, we will also consider a share buyback program following these transactions to mitigate dividend leakage. Four. A new approach to develop adjacent business. We want to develop some of the assets that we already have into a leading Nordic service position in areas where we see high growth. We plan to unlock value of these assets through transactions and partnerships. With a new set up that I'm going to talk more about, a portfolio with funding logic that allows us to pursue the goal in a disciplined manner.
This new reshaped Telenor has a new setup. Four autonomous business areas empowered to execute on our ambition. With those four autonomous business areas, also a much leaner group headquarters. Leaner, focusing on strategic ownership, governance, risk, and compliance. The new leadership team is already in place, and they are sitting over there. You will hear them presenting through the various sessions we have today. The team has a mix of experience and competence from various industries, also outside telecom. Jannicke and Dan are new to Telenor, and they bring in senior leadership experience and also expertise from other companies. I'm very sure that this is a team well equipped to embark on that reshaped story. Let me go through some ambitions in each of those four business areas, starting with the Nordics.
Starting with why we believe in revenue growth in the Nordics. Petter-Børre will go more in detail into that in the Nordic session. I do want to underline the firm belief we have in the growth opportunities we see in the Nordics. The Nordic countries are the most attractive telecom markets in the world, and the growth formula is actually quite simple. More customers in all segments who stay with us longer and who are willing to pay more because we are providing more value to them. We think that the growth in the Nordics will comes from two things. One, it's a focus on core connectivity, as I already talked about. We also see and we see growth opportunities in delivering secure and reliable connectivity in all the segments, both the mobile and on the fixed side.
The second focus area, we will grow with services beyond data connectivity. We want to use our brand and our distribution capabilities to develop those new services together with partners. With services on top of the data connectivity, we can provide more value to our customers, and we can drive the ARPU. We can also use that to differentiate the value proposition we have and protect the connectivity position with our customers. We have demonstrated that we can do that. Many telcos talk about this. Over the last five years, this is exactly what we have been doing in the B2C and mobile market here in Norway. Now we are taking that experience, that learning, into the rest of the Nordic assets we have.
In the second quarter, I said that we see now a 13% of the overall mobile revenues in the Nordics coming from these services on top of connectivity, and they are growing with 15% year-on-year. Longer term, we also see growth opportunities in the B2B segment coming from digitalization. We see that the piloting several pilots we have been running over the last few years are now starting to come into commercial contracts. Private networks are an example of that. We did one of the first private networks in the world when we in 2020 roll out that with Atlas Copco in Sweden. Software-defined networks is another example of that. We are, for example, helping Skanska to connect more than 500 construction sites across the Nordic with software-defined networks.
Managed security is a third example of that, and it's a good example of where we can externalize competencies we have been building for ourselves and sell that to customers. As I said, we believe that we want to become a leading Nordic telco with profitable growth. What I mean by profitable growth is to do what I just now went through on the revenue growth side, but it's also to combine that with continuing modernization. As I just went through, the revenue growth part of this is to grow connectivity, daring to set prices on the right level to reflect inflation, 5G monetization, and servicing customers with the need for connectivity. On top of that, continue to drive services with a double-digit revenue ambition year-over-year.
When you combine this, our ambition in the strategy period up to 2025 is to have a low to mid-single digit revenue growth in the Nordics. At the same time to accelerate modernization, we need to be faster, more flexible, and more open to work with our customers, but also with partners. To do that, we need continuous improvement, continuous automation, new ways of working at the BO level to increase efficiency. We also, in the Nordic setup now, plan to take steps to see how can we build one operation across the four Nordic markets. We will start with forming a common organization for technology and also for support function across the Nordics, and with that, take out synergies.
On the back of that, our target is then a net OpEx reduction in the Nordics in the strategy period of 1%-3%. When you combine that, the revenue ambition and the OpEx reduction, this is the ambition that we have set together with Petter-Børre and his team. They will start executing on this right away and deliver that mid-single EBITDA growth in the coming three years. You will hear more about that from Petter-Børre in the next session. To Asia. When Telenor first came to Bangladesh, no more than 20 years ago, there were many people being skeptical. Would a Norwegian-based telco be able to work in a mass market with low affordability, significant macro and political and regulatory risk?
Today, 20 years later, we are an important part of these fast developing countries. While growth in Asia has slowed down, we still believe that there are pockets of growth areas that we still see growth. In our footprint in Asia, we have a population of 500 million people, and we see that in this footprint there are still around 150 million people that are not connected at all, not even to the basic mobile services. We see then on top of that a high double-digit data growth in Bangladesh and Pakistan that we want to be a part of monetizing. We also believe in a double growth in the B2B segment where we are currently under penetrated.
Having mentioned the growth opportunities in Asia that we have done so many times before, we also recognize that the risk, reward picture has changed in recent years. We therefore need a different strategy in Asia going forward. The Asian ambition is threefold. First is to strengthen the market positions where we are. This is what we want to achieve with the merger we are doing in Malaysia and the merger we are doing in Thailand, creating strong number one position. As I also said in the second quarter, this is the reason why we are looking at structural opportunities also in Pakistan. The second ambition is to reduce risk, with entering into new partnerships that will better position us to handle political and regulatory risk.
The third ambition, we want to set us up in a way that can give us strategic optionality going forward. To deliver on those three ambitions, we have set up now a strong Asian entity to maximize the cash flow coming out from Asia. The new Asian team will ensure operational performance and good governance, also a focus on risk and compliance. We will develop market-leading positions, being number one, as we already are in Bangladesh, being number one in Malaysia, being number one in Thailand, and also seeing how the future can look like in Pakistan. Out of that, we want to create value and mitigate risks with partners. The key elements to this are the two mergers that we are in the midst of right now and the synergies that we plan to take out.
It's a sizable synergy takeout that we expect from these two mergers in the range of NOK 20 billion-NOK 25 billion, which is the Telenor part of it. These are large companies that are merging together. These synergies and the numbers I'm showing you here are well anchored with our new partners in Malaysia and Thailand. The next step will be to continue to look also for structural opportunities on a regional level, on an Asian level. This can be done in forming new partnerships, or it can potentially be done through an IPO in Asia. In our new strategy, I will let Jørgen and his team develop more independently from the rest of the Telenor Group, and Jørgen is going to talk more about that. They will be empowered to manage the significant operations that we have in Asia.
One common ambition we have for Telenor Asia is that they will also contribute significantly to an overall cash flow. The ambition we have in the strategy period is NOK 12 billion coming out of Asian cash flow. You will hear Jørgen talking more about that. To the third area, infrastructure, where we want to create a leading Nordic infrastructure company. We are now in the midst of strategically reviewing each of the infrastructure assets that you see on this slide. Our ambition is to realize the full potential of our portfolio. In fiber, we are looking at how can we better accelerate fiber roll-outs here in Norway and at the same time crystallize values. To achieve this, we are in the process regarding a potential fiber transaction of a minority stake in the Norwegian fiber assets.
We will also consider our options in other Nordic countries. For towers, we have now for many quarters in a row updated you on our three-step strategy, and Tone is going to talk more about that later. Now we are moving towards the third step, which is to explore to bring in partners also on our tower infrastructure. We will also, and we have started a review of the options we have of our data center assets. I'm looking forward to Jannicke coming in, and to take the challenge, bringing with her the experience Jannicke have from infrastructure in the utility business. You will focus on crystallizing the values of these assets and at the same time assure operational performance with a focused infrastructure team. The last and the fourth business area is the adjacent business.
Today, as you see on this slide, we own a portfolio of various businesses. Most of those assets are close ties to our core. As you can see, some of these assets are wholly owned, some of them are joint ventures, and some of them are in minority positions. You also see here that these assets or this business hold a significant value. We estimate the current value of these businesses around NOK 10 billion-NOK 15 billion . We have now established a more independent governance of these assets. The reason for this is to be better shaped to address the assets, asset by asset, and also to see how can we maximize the value coming out of each of them. I'm glad to have now Dan on board to start executing on this.
Our goals and the ambition that Dan has got is to further build on the solid growth we see in these businesses, close the link to our core, mobile, and fixed connectivity. It is to take security and the IoT business into leading Nordic positions because both of them are areas representing attractive markets where we see a double-digit growth, healthy margins, and where we as a telco has a right to play. Through our discipline approach, we aim to unlock significant values with limiting funding requirements going forward. We will unlock that through partnerships and also potential divestments of what we see as not core assets. Part of the proceeds, we will then put back in the portfolio to fuel growth in services close to core. I have now given you an overview of the four business areas.
Let me then also take one step back and look at the modernization agenda that we have. I have several times already in this presentation talked about the balance between growth and modernization efficiency, because we want to grow profitably. This modernization effort that we have had now for several years is going to continue and is going to be across all the four business areas. We have a solid track record on this. We have exceeded the targets that we talked to you about in our Capital Markets Day in 2020. Two examples. Because of this focus, our technology OpEx, excluding energy, has been almost flat. Our energy consumptions have remained flat over this period, despite a 200% increase in the traffic growth.
Going forward, we are committed to stay in the industry forefront in this modernization journey, and we believe we are in the industry forefront. We will continue to replace legacy with new technology. We will continue to drive automation and work for a great customer experience. We want to develop further our security position, and we will also take our global procurement scale to the next level, while we are also now seeking new partnership to see how we can scale other part of our business. We are building on what we have done, we are building on a solid platform. With new technology and more partnerships, we believe we can do even more. Modernization for us is to build technology as an enabler for growth, make room for new growth, and then also continue our cost reduction.
Ruza, she's going to come back to this in her technology presentation. We are now setting up ourselves for execution. We are changing the organization, we are changing the governance of Telenor Group, and we are continuing to enable technology for that growth. At the heart of this is our people and our culture. We are proud of the culture that we have, which is based on performance and exploration, because that is what we need even more of going forward. In our telco business, we will deliver core connectivity and do that more efficiently while growing services together with partners. In our infrastructure business and adjacent business, continue then to improve operational performance, while at the same time look for new revenue opportunities.
To do that, we need to evolve the way we also work, involve new skill sets, build new competencies and new ways of working, develop great teams with competent and engaged people. With this, I am very assured that we are good have a good setup to overcome the industry challenges and take the opportunities that we see. This is why we believe in this mid-term ambitions. Tone is going to go more into details on this. We want to keep our dividend policy as we have done now for many years. As you may recall, it is a year-on-year growth in the DPS. We want to generate enough operational cash flow to cover the dividend in 2025. We want to have the same gearing ratio on our net debt to EBITDA.
We are also putting forward targets on growth and on EBITDA in the Nordics, and we are coming more back to that. Let me summarize what our Reshape Telenor strategy is really all about. We go from an integrated telco, a global company, into now splitting up assets with clearer purpose and with strategic flexibility. We go from four very autonomous Nordic business units to take out synergies and develop scale across the Nordics. Look at it as one market. We go from having similar ambitions in Asia and Nordic to now letting Asia develop more standalone from the rest of the group. We have shown that we are willing to consider all options to create shareholder value in Asia going forward.
We continue to transition infrastructure into being a separate business rather than being a part of our integrated historical, value chain. We take a new and disciplined approach to adjacent business to develop leading Nordic positions in IoT and security. This is a transformative journey for us. We haven't done this in the past, and a challenge that all our employees now are ready to embark on. In fact, the execution has already started, and in the end of this transformation, you will see a Telenor which is faster, more flexible, and a more efficient company, and a company that is focused on value creation for our shareholders, for our partners, for our customers, and a great place to work for our employees. Thank you. With that, let me welcome Petter-Børre on the stage.
Thank you, Sigve, and good morning, everyone. The leading Nordic telco at delivering profitable growth, that is our ambition for the Nordics, and I'll, I'm happy to talk to you about that today. We are already executing on a regional strategy for the Nordics, and we have from 2019, when we acquired DNA, become a full-fledged Nordic player. We followed that up with establishment of the Nordic Hub in 2020, which was meant to facilitate a deeper collaboration between our business units. We also use it as a stepping stone now for what we have done this year by establishing Telenor Nordics. Our mandate is to drive growth, drive modernization, but also then through pan-Nordic synergies.
We have established a strong team, as you can see on this slide, which consists of the four business unit CEOs, plus strong leaders with functional roles. It's we that will form this one Nordic team with a clear mandate, as Sigve said, to execute on this plan for growth, modernization, and efficiency. We will, as Sigve also said, be working much more autonomously than we have done previously from the group, but also have a pure Nordic focus and not the same degree focus on Asian issues. We have been given the mandate to do prioritization on behalf of the Nordics, do strategy planning for the Nordics, resource allocation, and then also performance management, which will be done with this team at the regional level.
Value is, in my view, created, or in our view, created in this interaction that we have with the customers in the local market, which is also why we believe that it is crucial that we maintain speed and agility in how we execute in the local markets. It will, with this structure, also continue to have a strong autonomy for our business units, among others, in terms of how you actually plan and execute sales and marketing. That being said, we also believe that there is a strong potential within the Nordic to create synergies on shared functions like network, IT, and also staff functions, and also that we can share products and expertise cross-border through type of central excellence models.
I believe that this change that we have embarked on will make it much more attractive for current and future employees, as it entails new opportunities to collaborate with colleagues across borders, also new opportunities for jobs across borders, and that we are creating this one Nordic culture. We are already, I would say, in terms of, the market positions, a leading telco in the Nordics. We have a strong customer base, we are good on revenues and profitabilities, and we have offerings to our customers which are in the forefront of what you can see in the telco industry. We have also taken important steps through the last few years in terms of modernizing our operations in the region. Despite the fact that we have strong positions, our positions vary and therefore also provide different opportunities in our four markets.
We have, for instance, a very strong brand in Norway across mobile, fixed, both on B2C side and B2B side, and we're the leading market player. While in the three other markets, we're more of the challenger across both mobile and fixed. We're actually predominantly a B2C company. 65% of our revenue is coming from B2C, but we're also well-positioned in the B2B to serve our business customers in all the markets. Our revenue today is primarily coming from connectivity service, but we do see to an increasing degree, they're also now coming from near to new services connected to the connectivity.
Our profitability varies across the business units, as you can see, but we have achieved satisfying levels through our modernization also over the last few years. As Sigve stressed, we believe that the Nordic market represents growth opportunities, both with respect to core connectivity and also with respect to the new service areas that are closely related to connectivity. I'll get more into that later. We have an engaged 8,000 staff, colleague base in the Nordics, and we have been upskilling people consistently. Just this year, we have upskilled 300 people in critical competencies like cloud and cybersecurity, and 900 are currently being trained. We have a strong learning culture, and I also believe that is a solid foundation for what we are embarking on. To what we are focusing on to deliver for the next three years.
We have a strong focus on delivering growth on core connectivity business. We will grow by scaling new service areas, but we will also continue with our modernization and efficiency efforts to secure that this growth is profitable. Our efficiency focus will be on what we call non-customer facing activities, which is enabling us to support investment in customer facing areas to deliver on this growth plan. Through this, we believe that Telenor in the Nordics will be much stronger in 2025. Let me now dive into how we are going to do this. It starts with the customers. In the Nordic region, we serve digitally extremely advanced customers with a very high purchasing power. They also have very high expectations to us as providers.
We believe that we are well-positioned to serve those needs, and I'll give you a few examples. We have advanced rollout programs now undergoing in all our markets to deliver 5G. We are also rolling out fiber in some of our markets at a very high speed to provide coverage and secure and reliable connectivity. With our ability to execute on making compelling offers and optimizing the sales and the marketing mix, we also believe that we are strongly positioned to serve the customers. We have the portfolio of value-added services which is also attractive to our customers. On the business side, we believe that we are a strong advisor in terms of helping both private companies and public companies on their digitalization journey, which they're in the midst of right now.
We also believe that it is a strength to have the ability to serve customers pan-Nordic. This graph shows the growth and how we actually expect to generate the growth coming. Because as Sigve said, our ambition is to deliver revenue growth in the range of low mid-single digit towards 2025. We believe 50% of the growth will come from our core services. As you can see, primarily from the consumer side, as we are predominantly a consumer business in the Nordics today. 50% will come from new services, and there you see that there is a weight towards the business side. This is because there are great opportunities, as also Sigve mentioned, in terms of new service areas materializing through the rollout of and upgrade to 5G.
In line with analysts, we believe that the overall Nordic connectivity market is expected to see low single-digit growth in the years to come, and we're observing it in all the markets as we stand here today. We believe that we are well-positioned, actually, to capture this market growth and go beyond. I'll explain with a few examples on the next slide how we're gonna do that. Before I do, I think it's also important to keep in mind that our copper decommissioning has previously been a significant hurdle on our revenue development in Norway. For instance, this year with NOK 1 billion reduction year-over-year, which accounts for approximately 4% of the service revenue in Norway.
We expect that will not be a significant hurdle as we go now into 2023 and beyond, and I'll later get back to more details on that. When it comes to these new service areas, on B2C value-added services, we have actually observed, as also Sigve mentioned, 15% growth the last year. We, as well as analysts, are actually expecting that this will continue. On B2B side, we, as well as analysts, are predicting more than 30% growth, on private networks and SD-WAN, of course, coming from very small levels, but the size of the market is expected in 2025-2026 to be quite sizable. In one of the breakout sessions today, you can listen and hear more about that.
Also, when it comes to security services, we and analysts expect an 8%-10% growth, and this to become a sizable market in the three-four years we're looking into. The overall market outlook as we see it is quite positive when it comes to growth opportunities. Of course, in the environment we're in today, there are concerns and questions related to inflation and related to our ability to have both competitive offers, while at the same time maintain healthy margins. We have implemented price increases across our markets in the first half of 2022 to compensate or to counter the general market development, including then the inflationary trends. I'll give you a few examples.
In Telenor Norway and DNA. Some of our mobile and fixed B2B contracts are subject to index regulation, and if they are, we are adjusting. In Telenor Sweden, we have introduced new offerings with more for more when we are increasing prices, both for the B2C market and also the B2B. In Telenor Denmark, we have increased prices on the entire mobile base and on broadband earlier this year. There are, of course, also some concerns, I know, related to affordability. However, we expect that the demand for our core services will be maintained as we consider them to be critical to everyday life. We believe that also value-added services, which are close to core and supporting then digitalization and productivity will be in high demand going forward. This was the overall picture in terms of the revenue growth that we are looking at.
Let me now give you a few examples on how we're going to achieve the growth. On this slide, you see four examples, and I'll touch upon them from left to right. Because at the core of our business is the ability to execute better than competition on all the elements of the marketing mix. I would claim that we haven't always been good enough at that and have from time to time lost focus in specific segments or in markets. To win in the markets and create growth, we believe that we have great teams and this strong ability to execute. An example of that is how our colleagues in Sweden have turned around the performance built on a stronger brand, new value propositions, optimized price and portfolio, and are monetizing investments, and are also leveraging their fixed portfolio as a part of an FMC offering.
The second example is that we historically have been good at upselling customers based on higher and higher data usage. With a 5G rollout, we have seen that both DNA in Finland and Telenor Norway launched unlimited and speed-based price plans, where the upsell logic has been attached to either the 5G or the speeds. To monetize our 5G investments, we see it as essential to develop new ways of differentiating the service offering and 5G in addition to expanding our fixed wireless access offerings, so the wireless broadband offerings. The third example, and now I'm moving into value-added services, both within the business segment as well as within the consumer segment, value-added services has been vital to support ARPU growth in the past few years. Sigve mentioned it, but if you look at the ARPU growth from 2020 to 2022 for Telenor Norway, approximately 4%.
We have observed a 4% CAGR. The key driver for this services growth in Telenor Norway on the consumer side has been insurance, ID, and security services. The share of revenue from services adjacent to core on B2C and B2B was, as Sigve said, 13%. If we include TV as well, it's actually 23%. We continue to see strong demand for these services, both from our B2B and B2C customers, and we see potential for increasing the attachment rate, so more customers actually taking on these services, introducing new services, and also then accelerating the growth of services from one market to another market within the Nordics. The last example I'll use, the market for mobile private networks and SDx, we and analysts expect will grow with more than 30% and security services with 8%-10% in the period.
We believe that Telenor has a unique position to combine connectivity with security, software-defined networks, and 5G enterprise networks to support companies in digitizing their operations. We believe that this will be increasingly important to improve productivity and reduce cost also for our business customers. We are confident in our ability to deliver on these areas represented by the examples. I'd like to also say that the degree of uncertainty is increasing from the left side of the slide to the right side of the slide, because it takes time to mature new service areas. To fuel and support this growth agenda, we also believe that it is crucial that we can fund the journey through continued modernization and efficiency.
Because growth requires OpEx and CapEx, and we will deliver then in total OpEx reductions sufficient to deliver both of the growth agenda as well as net OpEx reductions. I'll now talk more about the cost side of this story. We have demonstrated in the Nordics an ability to drive modernization and reduce costs, and OpEx has declined approximately 4% annually from 2019 to 2021. However, we believe that there's still room for efficiency gains, and we'll address central cost areas to fund both growth and expand margins. We're planning for net OpEx reductions in the coming three years of 1%-3%. These reductions will be back-end loaded for the period considering short-term inflationary pressures. I've categorized this into three buckets, and you can see the size of them relative to each other.
On the network and IT modernization, our key focus is actually on continued copper decommissioning in Norway. It's crucial that we are finalizing that project and able to take out the cost, and I'll come back to that later in the presentation. Mobile network modernization in general for all our operations. We are focused on reducing our energy consumption and ensuring the price predictability through power purchase agreements, and I'll come back to that as well. It's important that we are simplifying, modernizing, and cloudifying our IT stack to enable both growth, better customer journeys, and also to reduce risk and costs. The second category is, as new initiatives, we are establishing also shared functions across the Nordics to create synergies. We are, as Sigve mentioned, establishing a pan-Nordic technology unit to collaborate across the Nordics and customers to enable both innovation and growth.
Likewise, we're pursuing efficiency and support functions by standardizing processes and economies of scale, and by removing duplications such as accounting, controlling, procurement, et cetera, et cetera. Then lastly, within future fit organizations, we seek to continue our efforts in operational efficiency initiatives across our Nordic business units, addressing such areas as digitalization of sales and distribution, agile ways of work, and then simplification of processes and operation. I'd like to touch upon impact of inflation also on our cost side. On the left-hand side, you can see the split of our costs, which is the total cost, COGS, so cost of goods sold, as well as OpEx. It's across the Nordics that we have aggregated these numbers. Handsets, as you can see, accounts for 21%, and this area is impacted by inflation and also dollar appreciation.
However, impact on us will depend on the degree of subsidization going forward, and it varies from market to market. Personnel cost is approximately 16% of the cost, and we're handling this with regular negotiations with employees and unions, as well as through organizational optimizations. Within operations and maintenance, we will mitigate inflationary pressure by structural initiatives and also the modernization journey we're on right now. We also anticipate that sales and marketing will be impacted by inflation, and we will address it through the optimization of our sales mix and also the distribution. Other costs comprise several categories, and we'll be focusing our efforts on operational efficiency, strict target setting, to combat the inflationary pressure. The large part is, and the new significantly increasing part is, of course, energy.
Energy cost has grown from around 2% to now 5% of our cost base. I'll tell you a little bit more about how we are addressing that. As I said, there's been significant increase in electricity prices, both in Europe but also in all the Nordic countries. Despite the fact that our energy consumption has been stable, we have had stable energy consumption despite actually increased traffic in our networks. The upswing in cost is entirely driven by price increases. We are of course working on reducing energy consumption by decommissioning old technology. The copper network in Norway is crucial in that respect because it accounts for a very large part of the total energy consumption in Norway.
Also by testing and implementing artificial intelligence and machine learning on our radio access network, we are seeing and observing that we're able to actually take out energy reductions. Lastly, we are moving more of our IT into the cloud, which is also contributing over time to reduced energy consumption. We have also recently entered into power purchase agreements of supply of renewable energy in Norway and in Denmark. This is important because these are the countries where we have the highest impact of price increases so far. This secures price level predictability significantly lower than the market prices, and they will start to deliver from 2024. In addition, these power purchasing agreements, of course, supports our ambition to become carbon neutral by 2030.
Power purchasing agreements are our preferred mechanism to do so, as they will also contribute then to new green power coming into the market. DNA is the next in line to consider a PPA for their energy needs. In Sweden, we have a fairly high degree of hedging in 2022, but we have not secured hedging for 2023. As of yet, current estimates indicate a 50%+ increase in costs in 2023. In DNA, we have hedged more than 50% of the volumes in 2022 and in 2023 and 2024. However, this arrangement is also regulated yearly by an index, so the prices will increase, but still with lower than the current market prices.
Before I end, I'd like to talk a little bit about the copper decommissioning, because it has a huge impact both on Norway but also on the Nordics in total when we look into the future. As one of the first telcos in Europe, we are in Norway now entering the final phase of the copper decommissioning. We're still confident that we by the end of 2022 will have migrated all Telenor customers to fiber or mobile and retained 70% of the revenues from when we started, and with 95% of the customers now on a significantly better product and solution. By year-end, there will be no more fixed phones customers, both Telenor customers and wholesale customers left in our network. However, we will have approximately 28,000 wholesale DSL customers left.
The regulator Nkom has requested us to provide DSL services until September 2025. We are in good dialogue now with our wholesale customers about how we can support them in migrating their customers to fiber or fixed wireless earlier than the deadline set by the regulator. That being said, 2022 is financially a challenging year as we are currently at the peak in terms of revenue reduction measured year-over-year. You can see that on the upper left slide, how the revenue for the last two years has been dropping with approximately NOK 1 billion. With more than 90% gross margin on the corporate revenues, it translates into a significant negative impact also on our EBITDA. We've seen it so far this year, and we will continue to see that in Q3 and Q4 also this year.
As I presented also in the Q1 presentation, we see an end to it. If you look at the year-on-year reduction for next year, we're talking about NOK 380 million reduction, and then we are finished. We will continue to offset this loss of copper revenues with more modern technologies. We are selling both fiber and fixed wireless. Due to acquisition costs, the gross profit that we generate in the initial phase from these new products is of course significantly lower than what we have lost through the decommissioning of the copper. As you can see on the lower left side, the cost of running the copper network in 2018 was approximately NOK 1.2 billion, and it's estimated now this year to be NOK 700 million, and that's including a sizable increase in electricity costs.
It will go down to zero after 2025 as we empty the network, but we also expect that in 2023, we will be able to take out approximately 40% of the remaining costs. The direct costs related to the copper includes, for instance, rental, field maintenance, and repair, as well as power. More importantly, I think we need to keep in mind that the copper decommissioning together with IT modernization will enable in what I in the last Capital Markets Day called legacy-free incumbent, with a significant potential for reduction both in front-end and back-end processes. The impact of that will materialize from 2023 and onwards. Let me wrap up. With our current plans, we believe that we will be strongly positioned to serve our customers' needs in the Nordics.
We will deliver growth in core connectivity fueled by the modernization of 4G and 5G, plus fiber networks, and by executing consistently on our core competencies, which are sales, marketing, and product development. We will also deliver growth from services near core. Services on top of connectivity are important, as also Sigve mentioned, for differentiation in the market, and they support the sales of core connectivity. That's why we will focus our efforts on a few services, both for B2C and B2B. Finally, we also see a potential for continued modernization of our operations to reduce costs. This is a vital part of the four-pillar plans, in addition to activities we have to support common and shared platforms and solutions in tech and IT, and also in shared functions like HR and finance.
With this, the financial ambitions are to deliver low mid-single-digit revenue growth, a 1%-3% OpEx reduction, which translates into an expected EBITDA growth in the mid-single digit. Thank you. With that, I leave the floor to Jørgen.
Thank you, Petter, and thank you all for following and being with us today, both here at Fornebu and also online. I see a lot of familiar faces, and that's great. Let me start by saying that our thoughts are with the people of Pakistan who is affected by the worst flood they have ever experienced. We are, as Telenor, working hard to ensure that Pakistan remains connected. That is critical to rescue and relief efforts, as we know. We will also do all we can to support the country in general through these very difficult times. In Asia, we are executing on the plan that we presented at the 2020 Capital Markets Day.
In 2019, as most of you would recall, we tried merging with Axiata because as the market in Asia are maturing, we see, and we saw already then that the risk reward ratio is shifting. Although the Asian markets have a large and growing middle class, strong demand for our connectivity services, we know that telcos have not been able to generate sufficient returns on the investments. There is simply a need to improve cash generation and to reduce risk. We believe that in several of our markets, consolidation is required to build sufficient scale for larger infrastructure investments going forward. As we recall, we were not able to merge the whole Asia portfolio with Axiata due to complexities, but I feel we learned a lot from the process.
Since last Capital Markets Day, we have signed merger agreements in Malaysia and Thailand, both of which are some of the largest mergers in these markets. This transaction will create leading local companies, and I will of course revert to those later on. We have also taken important steps, we believe, at the regional level. In 2022, Telenor established an Asian hub, we call it, bringing all our Asian operation under one leadership, and we are now setting up this as a more independent entity going forward. In parallel with these structural steps, we have also been working systematically to transform and improve our businesses. That is a bread and butter for us. This to make sure that they are as competitive as possible.
We believe that Telenor has, relatively speaking, a strong portfolio of companies in Asia covering Malaysia, Thailand, Bangladesh and Pakistan. With the two ongoing mergers in Thailand and Malaysia, the portfolio will consist of three number one positions in three large Asian markets. On a 100% basis, the total portfolio will have more than 200 million customers and NOK 100 billion in revenues. The mergers in Thailand and Malaysia will completely reshape these companies. Today, dtac and Digi are mobile-only operators, while the merged companies will offer a much broader portfolio with full converged offerings and a significant presence in digital services, which we believe will be putting us in a much more competitive position. The consolidation will also put us in a completely different position when it comes to supporting the development of the Thai and Malaysian markets.
The merged companies will have a scale to support large infrastructure investments and help local business meet their connectivity needs. Our focus is, of course, to, on value and building strong local operators that will be well positioned for the future. We will continue to be a very active owner in partnerships that we're entering into in Thailand and Malaysia. I believe that Telenor is known for our strong operational focus, and we have seen the value of this, focus through the pandemic. COVID-19, as Sigve said, hit our Asian markets hard. It's fair to say that the last few years has been challenging for many of our customers with reduced income and increased cost of living. It's been hard for the industry, and the telco industry continues to see intense competition and challenging markets.
However, through this period, we have been successfully protecting cash flow and, in my view, performed significantly better than our competitors. Our focus on modernization and digitalization has enabled us to reach our customers outside physical arenas, and we have been thorough in prioritizing investments where they are really needed and where they give us return. More specifically, both Malaysia and Bangladesh have continued delivering leading returns in very competitive markets. In both, we leverage a strong network position.
The Pakistani market has been challenged with high inflation and other weak macro factors, and we have made tough choices to transform the company more and more to what we are calling an ultra-lean operator, and we are continuing that effort. In Thailand, as you know, dtac has been in an investment cycle after they handed back large part of their network in relation to the end of their original concession in 2018. AIS, the largest player in the market, has a very strong position, also capturing a lot of the market profitability today. Hence, over the last years, we have repositioned dtac to be what we call a digital challenger, building still on the strong culture we have at dtac, but with a much, much leaner setup, increasingly serving our customers through digital channels.
In addition to these four, we also in this period had a very challenging crisis in Myanmar. The military coup in 2021 left us with extremely tough dilemmas. We believe we had very limited options available, so the sale of Telenor Myanmar was the most realistic and solid alternative to keep our employees safe, although it sadly meant that we had to leave this great asset in the country. In total, the market conditions have been challenging. We believe we have taken the necessary steps to run some of the best operations in our Asian markets. Going forward, we will execute on much the same strategy, taking the next steps. There are three priorities I would like to highlight. One, we will continue to deliver leading operational performance by continuing modernization and digitalization of our operations.
We again think this is bread and butter of how we should operate. We will realize synergies from the transactions in Thailand and Malaysia, hugely important, in the work we have set out, and we will explore further structural partnerships also on a regional level. Let me take these one by one. We are working continuously, as I said, to modernize and digitize to make sure we continue to have one of the best portfolio of telcos in our markets. There are some examples here. First, how we are changing the organizations and the processes to create simpler and more efficient operations. If you look at the Asia portfolio in total, we have through the last two, three years reduced the number of full-time employees by 30%.
One illustration of this is in dtac, where we have reorganized the sales and distribution with more responsibility delegated to the regions. We have outsourced non-core activities. We have simplified digitized processes, and we have not least strengthened leadership and the leadership bench. The goal has been to reduce complexity. It has been to increase focus on what drives value. A positive in this context effect of all this has also been a 30% reduction in headcount. Second example, how we work to reduce cost per gigabyte. Over the last two years, we have increased data traffic in our Asian network by 70% while we have been able to hold technology OpEx, excluding energy, on a flat level. As part of the technology modernization, we pushed to phase out our legacy technology in all areas of it.
One example, we have completed the 3G sunset in Malaysia and run more than 90% of our data traffic today across our portfolio on 4G. The last example, digitizing distribution. Telenor has historically benefited hugely by focusing a lot on distribution, and we have approximately today 700,000 physical points of sales in our portfolio. We are obviously then working now to transfer this strength to the digital context and the digital world. We today have almost 40 million monthly active users in the Telenor apps in the various countries. This is a 75% increase over the last two years due to our effort and due to the customer preferences and the customer needs triggered by also the pandemic.
We obviously then also work with third-party digital distributors to ensure that products are easily available across a broad range of channels in addition to our own apps. This is handled in a market that varies very much in digital maturity. Looking across the portfolio, our digital share of sales has increased to 75% in Thailand, while it is in the 30% range in Pakistan and Bangladesh. We fundamentally believe that what we have done in modernization enables us to go after the attractive growth areas. Like, let's for fun look at a survey that we just did. In our markets, we believe that the foundation for growth is how our services help improve people's lives and empower society. We have always talked about this.
We have always believed that there is a clear relationship between these two things, our role and the fundamental needs for our customers. Sigve also started the whole day there. To mark our 25th year of operation in Asia this year, we recently did a survey where we asked 8,000 people in eight different markets, the four we are in and four more markets, across South and Southeast Asia about their mobile usage and how it shape their lives. A resounding 93% answered that mobile connectivity improved their quality of life. A standout finding was that especially women said that their quality of life is significantly enhanced. It brings them quicker to a bigger scene and a bigger context.
92% female respondents said that mobile usage has improved their access to financial services, while 89% saw increased access to education and healthcare. This matters, of course, for many reasons, but also because the gender gap for ownership of smartphones and digital usage is stark, particularly in South Asia. When a woman can get online using mobile technology, mobile services, she can earn more, learn more skills, build financial security, cater better for her family, and so on. Interestingly, the survey also found that especially young people are questioning their digital skills and whether they can keep pace with digital advances. Not the older group of those we asked, but the youngest group put this highest on their agenda. This group are also more worried about their security and privacy online as well. This tells us two things.
One, it tells us how important the work we do with youth digital skills training, such as what we do in Grameenphone at the Grameenphone Academy, is. In 2021, we trained close to 750,000 people in online safety and digital skills. This year, we have so far trained 500,000 people. It also tells us that services such as online security, privacy over time will be demanded significantly more in Asia as well compared to what it is today. The study confirms the importance of our services. We, however, see that the Asian markets are maturing, growth is tapering. Therefore, we need to be very focused in our approach to growth. One focus is the penetration in Bangladesh and Pakistan. The penetration is relatively low.
There are more than 150 million people without a cell phone. As I mentioned, particularly women remains unconnected. There is a relatively young population in these countries, and people are moving into the middle class more and more. These drivers continue, of course, to support fundamental growth in these two markets. Also, in the same two markets, roughly 50% are still voice only. We convert them to bundles of voice and data, and that drive data usage. It's not anything particularly new. We've been doing this for years, but it continues to be an important growth driver. B2B is the third area. Telenor Asia's revenue is currently around 5%, and fortunately increasing from the B2B segment, significantly behind still our peers, and we see large potential to grow our share.
We approach the B2B market differently than many of our competitors, with a high emphasis on standardized products instead of tailored solution. We are targeting particularly the small and medium enterprise segments. This help us also keep complexity low or lower, which is highly regarded in Telenor. Digi has, for example, launched products that help small businesses across Malaysia selling their products online. We are seeing good traction. Through the pandemic, where the overall telecom market was actually contracting, we were growing the B2B by 10%, and we continue to see large untapped potentials in this area. Lastly, we are expanding our service portfolio on top.
I believe we are very mindful that many telcos have a poor track record here, and therefore, we try to be very selective and focused on areas where we see that we can expand the value we offer to the customers, we can increase engagement, or we can reduce churn. One example of this is what we call dSurance, which offers affordable insurance to our dtac customers. It has picked up very nicely. We also do gaming services, large program introduced in Pakistan, both these initiatives over the last two years. This is a funnel for us. First connect people, then convert them to data, then expand the value on top that we can offer by new services like these services mentioned.
In addition to the organic improvement, delivering obviously on the mergers in Thailand and Malaysia will be critical for us the next two years. The mergers are the two largest telco mergers in Southeast Asia ever. The enterprise value of the combined companies will be around NOK 190 billion and NOK 130 billion respectively. The Thai merger is not only the largest Southeast Asia telco merger ever, but it's also the largest merger of two listed Thai companies by enterprise value across industries. That is, of course, a result of what has been put into these companies, years of investments, resource injections, but also a significant debt element. In Malaysia, we are venturing into the largest merger of two Malaysian companies. The large scope of these mergers creates a strong foundation for the future growth and innovation.
They are good for the markets. They are good for the societies in which they happen. Combined, they will have a financial capability to implement new technologies and develop innovative products and services. The mergers are also big for the regulators and the authorities in these markets, which, we believe is why it has taken some time to discuss and get the proper support for it. As you know, we are getting full support for the merger in Malaysia, and we expect regulatory clearance in Thailand before year-end 2022. Currently, we estimate the cost and CapEx synergies for the mergers in Malaysia and Thailand in the range of NOK 20 billion-NOK 25 billion Telenor share. The main synergy levers are network and IT, accounting for between 40%-50%. Procurement, 10%-15% approximately, and efficiency measures, 20%-25%, also that significant.
Delivering on these synergies, Sigve has told me, is my priority number one in Asia for the next two-three years. In addition to value uplifts from synergies, improved market positions as the number one operator, both mergers are expected to be dividend accretive following a couple of years of efforts to maximize the synergies. With these synergies, Telenor will enter into minority ownerships in Thailand and Malaysia. We do not take this lightly. Establishing a good governance structure for the merged entities will be, has been already, and will continue to be high on our agenda. I would say we established this in three different phases. It is the upfront phase. We do this through agreeing on core governance principles in our transaction documents and by strategic alignment, not least on key priorities, on leadership, on board positions, and so on.
Obviously, where we are right now during the integration planning through dedicated work streams, focusing on establishing governing structures, practices based on the higher of the two companies' standard. We haven't decided we take your standard or your standard. We take within the different areas the highest standard, and the framework is aligned with Telenor's and international best practices. Once in operation, when it really matters, the merged entity will implement the governing system developed during integration planning. We have already established tight partner collaboration on this. We will follow a structured process to continue this dialogue and execution. There will be strong second line of defense functions in place, governance, risk management, internal controls, compliance. There will be an independent audit and investigation function reporting directly to MergeCo and ThaiCo boards respectively.
As the joint largest shareholder, Telenor Group will of course follow these entities and their development closely, and we will do that through their boards. We will nominate competent and experienced board members, which will also be supported by specialized subject matter expertise in the Singapore headquarters. In addition to today in market mergers, we are taking steps at the regional level. The last two years, as you know, we have run our Asian operation through an Asia hub. We see that a dedicated regional team has been crucial in driving our operations, cross-market agenda, and also the crisis we had in Myanmar. Now we take the next step by establishing Telenor Asia as a separate entity, with the Singapore office as its headquarters.
Telenor Asia will have a dedicated management team reporting to a Telenor Asia Board of Directors. We have also commenced setting up a separate legal holding structure for Telenor Asia and the Asian operations. We are then doing this for two reasons. As I said, we believe it will better enable us to add value in our operations and safeguard Telenor's interest in the region. A second reason is that this is going to prepare us for strategic opportunities such as structural partnerships on a portfolio level or maybe in the future, potentially an IPO. Let me sum up. In the next three years, continue to modernize, improve our portfolio companies to continue to deliver leading cash returns. Realizing the synergies from the two ongoing transactions will be a critical part of this, of course.
We seek as number two consolidation to build leading operators with the scale to lift infrastructure investments while delivering sustainable returns, and this require us to work with partners like we now do in Thailand and Malaysia. In addition, we are preparing for strategic opportunities that could reshape the regional portfolio. Let me highlight in this that we will do what we can to uphold our commitment to strong governance and responsible business. That is a prerequisite. This is an integrated part of who we are and the work we do in the region, and it will remain that way. Based on this plan, we are targeting around NOK 12 billion in cash flow from Asia 2023-2025, of which approximately NOK 5 billion of that will come the last year in that period.
As typical in mergers, the synergies take some time to materialize, and we therefore see improved potential in the cash flow after 2025. We will continue to be value-driven, and we will look for ways to bring value to our shareholders. Thank you very much.
Well, thank you to Jørgen, Petter-Børre Furberg, and Sigve. We will now have a 20-minute break. There will be some coffee and refreshments at the back of the room for the people who are here. For those who are following the webcast, there will be a countdown feature hopefully enabled on your screens so that you can make sure that you are back here in 20 minutes when we will resume the sessions. Thank you so much.
All right. We're back again in the room, and we will resume the sessions. Sigve showed you in his presentation this morning the new management group. Our new head of infrastructure, Jannicke, will not be joining us formally or take up her position until the 1st of October, which means that we will have a stand-in for our Telenor Infrastructure session, which is coming up now. You'll be left in the very, very capable hands of our Chief Executive Officer, Tone Hegland Bachke. Tone?
Both a stand-in and a promotion in one. That was good. Yes. So far we have organized what has been the tower business in Telenor under the CFO. As you heard, when Jannicke joins, she will take the full infrastructure business area responsibility, and we are really looking forward to that. With the establishment of infrastructure as a separate business area, our ambition is to be a leading Nordic infrastructure company, building on our strong portfolio of assets. The Nordic infrastructure market is attractive, with highly digital customer bases, access to green energy, and solid economic conditions. This, together with our established footprint, provides great opportunities. In the infrastructure business area, our focus at the outset will be on our assets within towers, fiber, and data centers. We believe we are well-positioned to develop and capitalize on these assets both through growth, operational excellence, and partnerships.
Let me now go through how we see these three areas, starting with fiber. In fiber, we have the largest installed base in Norway. In the other Nordic countries, we have a mix of owned and leased accesses. In Norway, we have, as you know, been through a land grabbing phase for fiber for the last few years. With the parallel decommissioning of the copper network, we have been expanding our footprint with significant investments in this period. Now we have a network of fiber passing around 600,000 households in Norway. Going forward, we believe there is still growth potential based on further network expansion and densification, and we will continue to focus on growing this area going forward. Moving to data centers. As part of the overall infrastructure strategy, we are also evaluating our strategic options for data centers in the Nordic.
As part of our strategic assessment, we are looking at alternatives for our internal needs and optionality for leveraging our competence and asset base for potential new business opportunities. New opportunities include growth by leveraging on our fiber and smaller sites and tower facilities when it comes to edge computing. We are also well-positioned within security, particularly on cybersecurity and firewall services. As you know, we have a strong brand. Finally, on towers. Since our last CMD, we have carved out just over 21,000 sites of our 100% owned assets. In addition, we also have 50% of over 10,000 sites in the joint network operations we have in Sweden and in Denmark. Continuing on towers.
We have a strong towers footprint in the Nordics, which we will continue to build on, and I will now spend the next few slides on how we see our strategy within the tower portfolio going forward. Last year, we established our Nordic tower company and carved out the fully owned towers, which includes both mobile and fixed sites. Looking forward, we see the main growth potential on the mobile sites. We have around 16,000 sites in the portfolio, whereby around 7,000 are ground-based towers, 8,000 are rooftops, and close to 1,000 are other sites, such as tunnel, indoors, and small cells. We have a mobile tenancy ratio with a total average around 1.6x across the portfolio. In the portfolio, we also have fixed sites, mainly in Norway, and as Petter-Børre explained, many of these will be decommissioned over the coming years.
With our 100% owned towers carved out and plans for fixed decommissioning in place, we are now exploring solutions for the passive infrastructure assets in our joint network operations in Sweden and Denmark. Our strategy for the next few years is on unlocking the value we see in our tower business. Being an industrial infrastructure player, one of the key drivers to growth is increasing tenancy and external revenue, and we believe we can grow our mobile tenancy ratio from the 1.6x we have today. Finalizing the 5G rollout and expanding on 5G related service offerings will give access to new revenue pools and drive growth opportunities. Going forward, we are targeting a tower mobile revenue growth of around 5%. As for the reported numbers, the decommissioning of fixed legacy will hamper the overall revenue growth over the next few years.
To optimize this business, we have initiatives planned for the next years which shall improve value creation, focusing both on the revenue, as I just talked about, but also on the improved operations. These improved operational initiatives will leverage on the infrastructure setup with increased focus and specialization. We will focus on areas such as leases, the sourcing contracts, and other process improvements. Furthermore, we have increased stability in energy cost through the PPA agreements we have signed. Driving operational excellence shall contribute to grow the EBITDA after lease margin from the low 40s%, as we see today, and towards the 50s% towards 2025. In parallel to the operational agenda, we are exploring potential partnerships in order to monetize some value. Moving to the PPAs. An important cost element for infrastructure is, of course, energy.
As you heard, we are committed to reduce energy consumption in all markets. We have a groupwide structural project as part of how we are executing on our structural and modernization agenda related to energy. This project is working on how to meet our carbon emission reduction targets, but also to ensure the most efficient energy consumption in the networks. Further to the work, the tower companies in Norway and Denmark have entered into 10-year PPA agreements earlier this year. The first one is between Norsk Hydro and Telenor Infra, which will start producing energy towards the end of 2023 or early 2024. The other contract is between TT-Netværket, which is our joint venture with Telia, and a company called Better Energy. This will start producing energy in the second half of 2024.
Both agreements are 10-year fixed-price contracts with price levels more in line with historical averages than is seen in these countries. We are very pleased to have landed these agreements, which will provide green energy on favorable and predictable terms once they come into effect. These contracts are naturally also important for our ambition to contribute to the green shift and our science-based targets commitment. As Sigve said, we have embarked on a three-step strategy for the tower business. We believe that by setting ourselves up with a separate business area, we can unlock significant value as an industrial player. We now have dedicated management team in place and commercial agreements between the tower companies and the telcos. With these dedicated teams, we believe we can create value by driving and optimizing performance through growth and efficiency levers.
As we continue to grow and optimize these assets, we will seek also to explore to crystallize the value on the third step of our strategy. We will explore to bring in partners for a minority stake in one or more of the countries, most likely during the next 12-24 months. Finally, on fiber. As we have mentioned earlier today, we are in process regarding a potential fiber transaction in the Norwegian market. With 600,000 homes passed and around 380,000 customers, this is a business with an estimated pro forma EBITDA for 2021 of NOK 1.7 billion. As I said, going forward, we still believe there is potential for further network expansion and densification within fiber.
By bringing in our partner, our ambition will be to invest even more in this area and to continue to improve our operations and financial results. To summarize on infrastructure, our ambition is to be a leading player in infrastructure in the Nordics. Coming from a strong position with experience and wide reach in the Nordics, we have a solid starting point for further value creation. Through carving out the assets and establishing a separate business area, we can further improve the business by running it more focused and efficiently. We will also explore partnerships within all the three asset classes, and we believe that by this approach, we can achieve attractive financial returns. Finally on this, we look forward to Jannicke joining the team and drive this agenda going forward. Thank you. By this, I will invite Ruza, our Chief Technology Officer, on stage.
Thank you, Tone, and good morning to all of you. We heard Sigve and the team talking about our ambition in the four business area and what we are going to deliver. In this session, we are going to focus how do we leverage the technology development and partnership in order to meet those ambition and at the same time, create the optionalities and different, basically development in order to enable Telenor to make the choices which are right going forward. We would like to bring your attention into the three areas. First one is about de-layering the integrated telecom model and shift to the as-a-service, which we find to be the core when it comes into the reshaping Telenor strategy execution.
The second one is talking about how we engage with the partners in order to increase the speed and scale of the deliverables. The third one is the transformation that we have embarked on our procurement capabilities in order to deliver procurement as a service. Everything, what we do in Telenor and in technology and with our partners, is to secure that our 175 million customers are enabled to connect to what matters the most to them. That is secure, reliable, and trusted connectivity services. That is produced by more than 100,000 towers across Telenor portfolio. Even during this 15 minutes of the session, on average, each of them will use their phones four minutes.
Sigve earlier mentioned that since the last time we met in March 2020 in the Capital Markets Day, we recorded a very strong development when it comes to our modernization ambition. Today, we can say that we have exceeded quite a few of our 2023 ambition and goals, and that is primarily done by our strong execution focus and challenging the status quo every day, very competent team across Telenor, and a strong collaboration with our partners. Let me highlight few of those.
We have seen more than 200% data traffic increase across Telenor, and at the same time increased the customer experience measured by the network Net Promoter Score, and kept, as you heard from the previous sessions, our network technology OpEx flat excluding the energy cost. We accelerated the 5G modernization by one year, and at the same time kept CapEx per site ratio at the average of 15%. We reduced our energy consumption per terabyte by 60% in the last three years, primarily driven through the modernization. You heard both Sigve, Petter- Børre, and Jørgen talking about sunsetting the legacy copper, being the prime, but as well the 3G, both in Norway and in Malaysia, and very strong focus on the touch-free operation program that you will hear more in the breakout session.
However, we are fully aware and know that the change is the only constant when it comes to the modernization. What has brought us here is not necessarily going to be sufficient for us to take us forward in the future. Therefore, in Telenor we strongly believe into the continuous improvement culture and continuous focus on the modernization. That's what we believe in, and that's what we are doing. We as well are fully aware that every modernization starts with the customers. What we see, that our customers are in the need and in demand of different type of the services. Of course, connectivity being the core, but they're demanding different type of the connectivity, like a mobile private network or edge computing. They are looking for more secure and trusted services and willing to pay for those services.
Those services, they want to be delivered fast. They want an instant delivery, therefore need to be supported by the self-service portal or the app and activated with one click. The level of the personalization is increasing significantly as our customers are in demand of the same look and feel as they are experiencing in other digital platforms or in other social media. In short, what we believe, in order to really be the choice of our customers going forward and to maintain the relevance of our connectivity business, we believe that we need to mimic the speed and scale of the hyperscaler global player in our local market. Meaning that every day we need to be better and faster. How do we do that?
First of all, we believe that our integrated telco model needs to evolve to keep up with the speed of the customer demands, be flexible enough to allow us to adapt fast and create the optionalities for us in order to meet the customer requirements. Technology is enabling that, 5G, cloud, AI, APIs. Not only that, but they're allowing, and two major shifts that we believe are required in order to meet our ambition. Those shifts are defined as delayering of the telco integrated model and shift towards the as-a-service delivery model. Let me first explain what do we mean by delayering of the integrated telco model. By delayering of the integrated telco model, we believe is basically breaking the integrated telco model into the capabilities that can be developed and deployed independently, like Lego blocks.
Can be offered and externalized towards the external customers and connected through the standardized and open APIs. In that way, we believe we will address the flexibility and agility that our customer needs. As a service is basically truly empowering our customers, giving customer the power to choose and select what type of services they would like to have and order through the self-service portal or through the app. Those services can be connectivity with a predefined quality. For example, speed, specific speed, or the latency. It can be autonomy, it can be security, or it can be process automation. We have defined a set of the principles that are driving our two shifts of the delayering of integrated model and towards the as a service model. Some of them are listed. It's a modular, flexible, secure, and able to sell both internally and externally.
Based on those principles, we have defined four areas that we would like to focus going forward. Infrastructure, connectivity-as-a-service, new connectivity-as-a-service, and the self-service and APIs. The good thing is we are already on that journey and we just heard Tone talking about carving out our infrastructure assets into the independent company that Jannicke from 1st of October is going to take forward. The continuous modernization journey and continuous improvement is continuously basically modernizing the rest of the integrated telco model. Let me double-click on connectivity-as-a-service and new connectivity-as-a-service. Connectivity-as-a-service is basically building on the modernization of the traditional connectivity platform to offer configurable and programmable capabilities, fully self-service, and personalized by customers. It is the SLA, service level agreement, service towards our customer defined. What we can see that connectivity-as-a-service can even further be splitted into the different areas.
We can see that we can offer core network as a service, for example, network slice. We can offer as well the configurable SLAs, the service level agreement, like a speed or latency or operation or analytics. Every capabilities that we have as a part of our integrated telco model can be separated and externalized towards other customers. New connectivity is putting the connectivity in the different context. Mobile private network is a good example of that. It's basically using the network resources not only to deliver the traditional connectivity services, but as well to connect the robots in the manufacturing sites or the patient sensors when we are monitoring the health. They are as well offered through the service level agreement in order to maintain the good quality of service.
We believe that we have been among the first to embark on this journey, and if not the first, among the first ones to offer the network as a service to our customers. It's a joint venture of Telenor and Cisco, and we are offering a fully cloud-native capability, core capability to four external customers and to Telenor. It is fully automated, fit to scale up and down depending on the network size and the development and updates of the network can happen at any point of time. We have more than 100 releases that are being deployed throughout one month, and fully secured and the privacy protected. To continue going forward, Sigve said that we want to be in the forefront when it comes to the modernization. We believe that we need to lead in the modernization to achieve those two shifts.
Those will be achieved through the set of the defined technology capabilities and partnership engagement model. You can see on the slides the one that we find the most important for us to focus going forward. At this session, we will touch upon the multi-cloud public first. We will talk about the multi-partner and the procurement as a service transformation. While the touch-free operation, productize mobile private network, and security as a service will be addressed in the breakout session. Where we are inviting you to join us there. Let me start with the first one, which is the multi-cloud. We believe the core of these two major shifts. We believe that we need to match the speed and the cost of innovation of the global players in the local market. To do that, we need to lead in three distinguished areas.
The first one is the leader in the native cloud adoption. We can make the choice to go for the multi-cloud to meet the customer needs, to secure the national sovereignty and efficiency, and public first in order to leverage the speed and scale of the hyperscalers, but put into the local context, fully complying to the local regulations and laws. We believe we are the leader there in the cloudification. Already today, and you heard Jørgen talking about that, 94% of our network data traffic is produced by Telenor Hybrid Cloud, and more than 50% of our IT workloads is on the cloud. We have been selected by our partner, AWS, to be the lighthouse partner when it comes to the national sovereignty in Sweden. Another area is to lead in industrializing and scaling products.
Standardization is the core for the scale, and we will continue to standardize all of our products, starting with mobile private network, and to shift from one-to-one wholesale integrations into the API-driven. That's the reason why we have, throughout Telenor, a global program to make sure that we develop those standardized APIs, and today we are at 250. To enable the seamless introductions towards the customers and towards our partners. The last one is to be the preferred partner in Nordic, to increase the speed of the innovation. We see already now when we are working with our partners that we are able to increase the development and the releases from once per quarter to more than 1,000 per month across Telenor. Second area is about the partnership.
Working with more than 17,000 vendors and partners and with the ecosystem, in Telenor, we learned that no one is big and strong enough in order to do that on its own. That's why we are delivering and working with the partners under the mantra that one plus one creates the value of 11. Towards 2025, we believe that we need to be the preferred trusted partner, both to the ecosystem partners and our customers, to accelerate as a service offering, first and foremost because our customer wants that. In Nordics and Norway, that's how they want mobile private network to be delivered, through the SLAs, and to double down on speed and the scale. We are as well in this journey, and we are accelerating and noting some good examples. We would like to share two with you today.
One is in on innovation part, and it is a B Lab. It is a one-stop shop as a service platform for the Thai SME markets, which is the innovation of Google Cloud, Telenor Linx, and dtac. Another example is on the speed. By working with the partners and deploying and developing mobile private network, we were able to reduce the delivery time from four weeks to four days. Meaning it does matter to have the partner with you. The third area is procurement. Procurement in Telenor has, is, and will be one of the instrumental capabilities in order to deliver on our ambition. We have systematically worked with procurement since 2008 in three distinguished phases. The first one in 2012, where we created Telenor Collaboration Program. In 2017, by establishing Telenor Procurement Company, we centralized our external spend.
Now we are in the phase to deliver procurement as a service. Procurement as a service is built on our stronghold, which is the standardization and digitalization of the procurement processes and procurement categories. Our ambition is to shift as many as possible procurement categories to the global frame agreements and procure them through e-procurement so that we can free up the time and resources to work with the partners and to work with the strategic sourcing. That's the reason why Telenor Procurement Company and Global Procurement has been the frontrunner in touch-free operation. More than 80% of the purchase orders are touchless. More than 60% today of the invoices, which is 460,000 in the year as well, are touchless.
When we deliver on that, we can then excel in two different dimensions, to grow the scale through attracting and offering those procurement services to the external customers and enhancing the services, leveraging and driving the sustainability and ESG agenda and the strategic partnership. Our ambition towards 2025 is to grow the scale. We want all of our customers, both internal and external, to shift to the procurement as a service model and to increase the external spend that we are managing today through TPC by 50%. In green procurement, 68% of our external spend is cdmmitted to the science-based target. Today, we are at 33%. We believe that that is possible because we did deliver.
We have exceeded the promise that we gave to you in 2020 when it comes to the procurement, both when it comes to the managed spend, when it comes to the number of standardized global frame agreements, as well as on the savings, including the cost avoidance. That gives us the confidence that going forward, we will as well be able to deliver on the same. To conclude, with all of this, we believe that technology and partnership capabilities are enabling growth, but are built on our continuous modernization and improvement journey and can-do attitude because that's what Telenor is about. Thank you. With that, I will then invite Rita Skjærvik on stage.
Thank you very much, Ruza. In this next section, we will update you on the progress of our responsible business agenda and present our 2025 ESG ambitions.
Responsible business is the foundation of our business strategy and is an integral part of all business areas, as you have already heard from Sigve and the other presenters this morning. We act responsibly with the same high standards across all our markets, guided by our code of conduct. We are continuously updating and improving our business conduct in material areas of our operations, ranging from anti-corruption to health and safety. In addition, we recognize the transformative power of connectivity and digitization. That's why we have ambitious targets for how our services should drive positive impact wherever we operate, focusing on digital skills and climate. A few examples of what we have achieved by the end of 2021. Over 5.8 billion people, mainly children, have been digitally upskilled or received training in online safety.
More than 2.5 million newborn children have been given a formal identity through our digital birth registration programs. Our CO2 emissions have been reduced by over 122,000 tons between 2019 and 2021, representing an 8% reduction. We are proud of these achievements, but we also recognize that our commitment to responsible business comes with some challenges. It will come as no surprise that the most difficult decision we had to take the last year was the decision to exit Myanmar. Already a few months after the military takeover on 1st of February 2021, it became clear to us over time it would not be possible to adhere to international standards and Telenor's own responsible business principles whilst also safeguarding the security of our employees.
We had to look for a solution that was the least detrimental to employees, suppliers, and customers, which led to the decision to sell the company. The sale was completed in March this year, and we are currently processing the learnings we have had from this experience. As I already said, it was a difficult decision to take, but it was taken based on thorough analysis of alternatives and risks, and with a firm belief that even in extraordinary situations, we need to keep our values high and do what we can to act responsibly. In the aftermath of the pandemic and considering our business priorities and risks, we have set the key ambitions for our ESG work in the lead up to 2025. First, delivering on the science-based climate targets and becoming more active as an environmental enabler by empowering customers and partners to reduce their CO2 emissions.
Second, be a front runner when it comes to social and digital inclusion while promoting diversity and skills in our workforce. Third, to maintain strong governance across all our entities and leverage our expertise to become the trusted partner for our customers in the security domain. In support of establishing the two regions, Telenor Asia and Telenor Nordics, the ESG targets going forward will reflect the differences in risks and opportunities that we see across our footprint. Let me deep dive into each of these areas, starting with climate and environment. We are committed to reducing our climate impact by contributing both to the prevention of climate change and by building resilience against damage to infrastructure and societies from climate change. As a connectivity provider, we must prepare our infrastructure to endure more extreme weather, like the severe flooding we now see in Pakistan.
At our last CMD in February 2020, Telenor announced a group-wide ambition to become carbon neutral in the Nordics and reduce emissions by 50% in Asia by 2030. The ambitions in Nordics and Asia reflect the fact that there is less supply of clean energy across our Asian footprint. In 2021, our ambitions were formalized and approved by the Science Based Targets initiative. On balance, we aim for a 57% reduction in greenhouse gas emissions in our global operations by 2030, and this will serve as a leading indicator going forward. To deliver on this, energy efficiency remains an important focus area. We are seeing good examples from both Nordic and Asian business units on how to reduce energy consumption in the networks through optimization and deployment of new features such as AI and machine learning.
To address our indirect emissions, we have signed two renewable energy PPAs in the Nordics, as previously presented by Petter-Børre and Tone. We are working actively with our larger suppliers to help them reduce their CO2 footprint. The ambition is that by 2025, 68% of our spend will be with suppliers that have science-based climate targets up from one-third today, as Ruza explained. Lastly, we see an increasingly important role for us as an environmental enabler by providing connectivity solutions to reduce environmental impact for our partners and customers. One example is our IoT cooperation with Scania Trucks, through which they have been able to reduce fuel consumption by 10% using real-time vehicle information. Another example is from Finland, where DNA is now offering a new service that will help households reduce their greenhouse gas emissions from heating through artificial intelligence.
The new service, called Wattinen, is enabling housing companies achieving up to 30% savings in energy used for indoor heating. Using smart connectivity solutions to address environmental challenges is still in the early stages, and we hope and expect to see more innovation in this area going forward. Now turning to the social area. Telenor has a long-standing commitment to reducing social and digital inequalities anchored in the global sustainable development goals. We said this in our last Capital Markets Day and stand firm in our belief that connectivity is a critical first step towards inclusion in any society. As Jørgen highlighted in his presentation, there are many examples on how connectivity can empower marginalized groups, especially women, to improve their quality of life. By delivering affordable and reliable connectivity services, we are opening the digital door of possibilities to 175 million customers across our footprint.
Our target is to reach a 68% share of active data users in our customer base by 2025. Connectivity by itself is not enough to achieve inclusion. Future skills must be developed and shared. To support the societies, we have a series of ongoing projects across the Nordics and Asia with the ambition to upskill an additional 6 million people by 2025, focusing on children, young people, and small and medium enterprises. We are helped on this journey through global partnerships with UNICEF and Plan International, which we recently extended by three years. We also continue our good collaboration with Cisco. Last but not least, we remain committed to the cause of diversity as a tool to do better business. We have set a target to achieve 40% women in senior leadership roles by 2025, up from today's 32%.
To achieve this, we have a wide approach to attracting, developing, and retaining the best talent. We are also actively working on inclusion of other groups which may experience discrimination in the job market. Our Open Mind program for people with disabilities in Norway and other markets, and policies to foster inclusion and equal treatment of LGBTQ in Thailand are examples of these efforts. When it comes to governance, we have gained learnings from managing complex business environments with the help of robust principles and processes. We will continue on this path also as we enter into minority positions in some of our companies. As Jørgen emphasized, we are building the new partnerships on a solid governance structure based on international best practice. As joint largest shareholders, we expect to have continued close monitoring and follow-up through the boards of the merged entities in both Thailand and Malaysia.
To manage risk within our supply chain, we use a risk-based approach aligned with the scope of work with our partners. In addition to direct monitoring, we continue our efforts through the industry platform Joint Audit Cooperation towards respecting human rights, eliminating forced labor, and ensuring health and safety within the supply chain. Some of the markets we operate in, particularly in Asia, represent elevated risks in areas such as health and safety and human rights. In these markets, we need strong culture-building initiatives supported by senior management. As a commitment to continuous improvement in this area, we will further strengthen our ESG requirements and follow-up of vendors. We will ensure regular human rights due diligence across the organization, and we will increase the closure rate when it comes to non-conformities in the supply chain in order to reduce number of incidents over time.
The final pillar in the governance area is looking at how our expertise can provide added value to our customers in the form of new products and services. We have taken an ambition to become the preferred partner for security and digitization based on the expertise we have developed in these areas over the years. We know that the need for secure solutions is bigger than ever. We also know that the vulnerabilities and risks related to cybersecurity brings higher expectations on our basic services and create the need for new products. We plan to develop and deliver security products together with partners like we have already started with our Safe products towards consumers in Norway and Denmark, and SafeZone towards business customers in Norway. It is because of our customers' trust that we can succeed with these services.
In conclusion, our ESG ambitions are clear and require us to consider responsible business in every aspect of what we do. Our key ambitions can be summarized as delivering on our commitments to reduce greenhouse gas emissions, empowering marginalized groups through digital and social inclusion, and securing high international standards of governance across all entities. In doing this, we mitigate company risks while facilitating critical new opportunities, especially in the areas of energy saving and security. And not least important, we contribute to our overall purpose of empowering societies. And with this, I end this part of the presentation and welcome our CFO, Tone Hegland Bachke, on the stage.
Thank you, Rita. I will now take you through the financial perspectives of our plan for a reshaped Telenor. As you heard today, our plan is a comprehensive financial plan.
It includes the operational aspects of how to continue to be at the forefront of modernization and operational efficiency, and it includes what we believe in growth opportunities within connectivity and services going forward.
The plan is, as you've heard, also focusing on how we can leverage on the opportunities of value creation through partnerships within several of the business areas going forward. From an overall perspective, shareholder return is important for us. Looking at the performance for the last 10 years, we have delivered a CAGR of around 5%. In this period, we had a strong return until the end of 2019, but we've had a weaker development over the past few years. This partly reflects the story of telecom over the decade. In Telenor, we believed we have managed well the period of portfolio rationalization and also the telecom transition from growth to cost focus. Since 2020, we've seen COVID hitting our Asian operations harder than the Nordics, and we have experienced our operation in Myanmar being lost in a military coup.
While we believe we have managed the last year's turbulence well from an operational perspective, we acknowledge that this has not translated into returns for our shareholders over the past few years. However, we have stood firmly behind the commitments to our shareholders with respect to dividends. Shareholder return is important for us, and we believe the operational and organizational changes we have presented today will strengthen value creation and unlock value across the portfolio. Looking back, the structural modernization agenda, which we have been running since 2016, has been an important contributor to the performance we've seen over the last years, and it has resulted in a solid OpEx reduction of roughly NOK 5 billion or 13% in the period of 2016 to 2021. This is a result of focus and hard work.
The modernization journey has not come to an end, and as Sigve, Petter, Jørgen, and Ruza explained, we will continue to focus on modernization, efficiency, and creating future fit organizations going forward. If we look at the period 2017 to 2020, we delivered in line with our targets. Back in 2016, Telenor was a different company than we are today, coming off a decade of high growth driven by greenfield expansion and addition of new customers. With growth slowing and cost increasing, our focus turned to improving efficiency and simplification both in operations and in our structure, and we delivered in line with our guidance. Turning to 2020, we held our Capital Markets Day just days before COVID-19 lockdowns, and it soon became very clear we needed to adapt to a different reality.
In this situation, we prioritized to safeguard our cash flow by reducing CapEx where uncertainty were largest and by setting tough OpEx targets. We also used the momentum to accelerate the digitalization and modernization across Telenor. In the same period, as you know, many of our peers held back, and several canceled or postponed their dividends. Due to the pandemic, revenue growth in 2020 and 2021 fell somewhat below our target and ended at -1%, whereas the cost reduction of 5% annually exceeded a target of 1%-3%. Packaged CapEx for the two years was in line. Summing up this brief recap, we believe we have delivered on our promises. However, we need to show continued adaptability and flexibility as we continue to face unpredictable economic and geopolitical situation now in 2022 and going forward.
Where are we now in 2022? Firstly, COVID is not over, at least not in Asia. It continues to affect economic activity in general, and especially in the tourist industry, with the current low number of tourists returning to Thailand as one key example. Secondly, as everyone else, we have started to experience and see some supply chain disruptions and component shortages resulted some delayed delivery and some higher component prices for certain categories. Thirdly, we experience high currency volatility and devaluations, especially in Asia. Finally, we are facing unprecedented high price levels in the energy market. Where does this lead us? As we all experience, the situation in the energy market has gotten increasingly challenging with energy prices going through the roof over the summer and this fall.
As you have heard, we have for several years been focused on and successful in reducing consumption, and we have been able to keep consumption stable despite the rapid increase in data traffic. We have also for several years been working to establish greener energy sources with more predictable costs, both in Asia and particularly there in Pakistan, and in the Nordics with the PPA contracts we have entered into in Norway and Denmark. This work has been going on over time, and these PPA contracts have, as I said, price levels closer to the historical averages for this market. When these contracts come into effect around 2024 in Norway and Denmark, we will be in a different situation than we are today.
With regards to energy cost, as you see on this slide, and using Norway as an example, energy constituted around 2% of the total cost base in 2020 and 2021. Whereas we are now for 2022 estimating it to constitute around 6%. With the energy prices we have seen in August and September, we might be looking at a NOK 1 billion increase in energy cost in the second half compared to the second half last year. If we compare to the Q2 when we met last, this means an additional drag of around 1.5% for the full year EBITDA. This means that it has become increasingly difficult to reach the guidance of a flat EBITDA for 2022. As the situation remains volatile, we will have to return on the Q3 reporting with a further update on this topic.
Looking ahead, as we have presented today, we believe we are entering a new phase with a reshaped Telenor and significant opportunities for value creation going forward. As you have heard from Sigve and the team, we are moving forward with a setup focused on four distinctly different types of businesses and asset types. We have the Nordic business, we have the Asian assets, we have infrastructure assets, and we have adjacent businesses. In the Nordic, we are setting out to continue modernization, be disciplined on CapEx spend, and generate profitable growth. In Asia, we will have a cash flow focus when it comes to how we manage our operations. This is not completely new, but we are, as you hear us today, more explicit on this than we probably have been in the past.
Finally, we are going to drive value creation and be focused on unlocking the value we see in our infrastructure and adjacent businesses. We believe a more individual and focused management, governance, and capital allocation is the way forward to improve value creation and unlock the value potential in our business. Based on this, the cash flow growth we see through to 2025 will enable us to continue to invest, while at the same time maintain the dividend policy. This is the starting lineup. As you see, the four different businesses all contribute to positive cash flow and profitability, and they all have significant value creation potential. For the Nordics, this will be the fully owned and consolidated businesses that are included here. For Asia, as you know, in our financial accounts, we fully consolidate the listed entities of dtac, Digi, and GP.
The cash flow to Telenor shows Telenor's share of the cash flow in these companies for 2021. Once the transactions in Thailand and Malaysia concludes, these companies will be deconsolidated from the reported numbers of Telenor, and the dividends received will be included in the cash flow to Telenor, as you see on this graph. For infrastructure, these are the reported numbers for towers for the first half of 2022. Then, as you know, our operations in the joint ventures in Sweden and Denmark are not included in these numbers. For adjacent business, the revenue, EBITDA, and CapEx figures are for the consolidated entities. These companies are all mature and established companies, and they include companies such as Telenor Satellite, Telenor Linx, which is the merged Telenor Global Services and Telenor Digital. Telenor. It also includes Telenor Maritime and Telenor Connexion.
The cash flow to Telenor also includes the contribution from associated companies such as, for instance, Allente. At the fourth quarter reporting, we will come back with how we see the reporting structure going forward. The new business area structure implies some natural adjustment to the current reporting structure. Our ambition is to do all changes in reporting structure in a transparent and structured way. We are, by this reshaped Telenor, establishing a strategy which creates increased optionality, and we see ownership strategies tailored for each of the business areas. We have a strategy of fully owned Nordic core assets. In Asia, we will have a partnership approach, which also includes minority positions. We look at majority ownership, but with partners in the infrastructure assets. We look at partnerships on an asset by asset base in the adjacent business. We will set individual financial performance targets for these business areas.
For the Nordics, we will generate value through profitable growth. For Asia, as you heard, we will focus on cash flow. For infrastructure, we will seek to improve value creation and explore how we can crystallize values while maintaining operational control. Whereas we will take a more opportunistic approach to our adjacent businesses. This strategy will provide better opportunities to create value going forward. It will allow for a differentiated approach to capital allocation and return requirements within the various business areas. We have an ambition to reallocate some of the capital invested in the low risk, low return assets, potentially being released, and create capacity for increased investments in fiber, increased investment capacity in other parts of the portfolio, while we at the same time aim to mitigate the future cash flow leakages through share buybacks.
With this setup, I strongly believe that we are better positioned to manage the group and the operations going forward, also in a more volatile environment as we face today. Focusing on the Nordics, we see several sources of growth, both within connectivity and services, and also from the higher B2B revenues. The high margin consumer core businesses is estimated to account for 45% of the growth in the Nordics, as you heard from Petter- Børre. Furthermore, we believe in continued sales of services to the consumer market, and that will account for another 20% of the growth. Finally, we see 5G creating exciting opportunities in the B2B segment, accounting for the remaining 35% of the growth we see in the Nordics. As we develop these new services in combination with connectivity, our CapEx requirement and margin picture will change over time.
This is now one of the key focus areas going forward when we will allocate our financial resources in the Nordics. As Petter explained, managing the inflationary pressure currently experienced is a key focus area, both when it comes to pricing strategies, but also by a granular approach to the cost base. This approach is taken both in the Nordics and in Asia. Moving to Asia, our main priority is to increase cash flow and dividends while reducing risk exposure. As Jørgen and Sigve have both talked about, we are setting up an Asian organization which will drive performance management, continued monetization, and can be focused on realizing the large synergies we see can be unlocked in Thailand and Malaysia.
We have earlier talked about the synergies in the Malaysian transaction being in the area of MYR 8 billion, equivalent to $2 billion on a 100% basis. This number remains, and we believe that for both transactions, as we present today, the NPV of the synergies on Telenor's hand will amount to NOK 20 billion-NOK 25 billion. This estimate is based on an ownership of around one-third in both companies following the VTO in Thailand. Over time, these transactions will be a significant contribution to dividend capacity in Asia, and our target is to generate around NOK 12 billion in the period 2023-2025. This will be ramping up towards the end of the period and be on an increasing trajectory, with NOK 5 billion being estimated in 2025.
Looking further ahead, we will seek further value-accretive structural opportunities in Asia with partnerships or IPOs, opening for further value realization and cash repatriation. In infrastructure, as you've heard, our strategy is to create and unlock value, both operationally through growth and margin expansion, and potentially through partnerships and monetization. This goes for all the three asset classes. As I mentioned earlier today, we are in process regarding a potential Norwegian fiber transaction, and we are exploring future partnerships in towers. We are confident that this strategy will provide value creation opportunities, and it will be natural to use part of the proceeds from such potential transactions for share buybacks to compensate for future minority leakages such transactions will imply.
Finally, we will seek to further develop the assets in our adjacent business portfolio, which we believe, as you heard from Sigve, currently has a value of around NOK 10 billion-NOK 15 billion. As previously explained, the fully owned entities here are profitable companies with solid cash flow. The cash flow from this portfolio will vary over time as it will, at any time, reflect the asset composition of the portfolio. For the companies in this portfolio, we will have an opportunistic approach and value-driven focus on how to best create value for Telenor. Going forward, we will develop this portfolio in a disciplined manner, focused on businesses close to core or value-adding to our core business. We will seek to recycle cash flow, we will seek partnerships, and we will divest non-core assets to reduce the capital requirement on the group.
Looking at this from a time perspective, the focus over the next 12 months will be on M&A, carve-out, and modernization. We will close the mergers in Thailand and Malaysia, and we will start the integration work and prepare for taking out synergies. We are shutting down the copper network, we are modernizing the Nordic operation, and we are setting ourselves up to drive value in adjacent businesses. We are also, as I said, in process regarding a potential Norwegian fiber transaction, and this might open for share buybacks. In the next 12-36 months, we expect to see increased cash flow from EBITDA growth and lower CapEx intensity in the Nordics. We will see a positive effect from the synergies realization in Asia, together with potential monetization of our tower business.
In the longer term, we see growth from infrastructure and Nordic services, continued synergy realization and cash repatriation from Asia, and an increase in adjacent business values, especially within IoT and security. We are building on a strong financial foundation with good access to capital and solid credit ratings. This reflects a solid financial position. Over the last year, leverage have fluctuated within the policy of 1.8x, 1.8x-2.3x EBITDA, and that is over the years. But this is not only from the financial performance, but it's also from currency fluctuations as we see in individual quarters. This is particularly related to the Norwegian kroner.
For instance, at the second quarter earlier this year, as shown on this graph, we had a leverage of 2.2x EBITDA, whereas at the end of August, we were lower and towards the levels we've been previously. Over the last few days, we have seen the weakening of the Norwegian kroner, which is again then impacting this. There will be individual fluctuations within shorter periods, and this is an illustration of that. Going forward, we will maintain our current financial policy with a target leverage ratio of 1.8x-2.3x. In our debt portfolio, we have a balanced maturity profile, and the revolving credit facility of EUR 1.8 billion remains undrawn.
When it comes to interest rate exposure, approximately 60% of the debt at Telenor ASA level is fixed rate debt with an average interest rate of around 1.3%. This is an area we are actively managing, and we appreciate a current favorable position. Finally, on this slide, as you know, we have established a sustainable linked bonds framework, and our revolving credit facility is priced based on ESG metrics. When it comes to sustainability reporting, we are continuously working to improve and increase transparency. Over the years, we have adopted most of the well-known and highly regarded sustainability reporting frameworks. We are setting high standards on ourselves when it comes to sustainability reporting, and we believe transparency is necessary to build trust and comfort around how we operate.
This year, we had our first reporting according to the SASB framework, and next in line would most likely be the EU taxonomy, which will further expand our sustainability reporting. From a cash flow perspective, we are showing an illustrative picture of how we believe the cash flow will develop over the midterm period. In this illustration, we are estimating free operating cash flow, including committed spectrum and before M&A. When it comes to upcoming spectrum auctions, the largest upcoming auction is expected in Sweden, where we see an auction coming up towards the end of 2023. We expect to see continuous improvement and increase in cash generation in the Nordic business, as shown on the graph. Nordics will remain the key cash contributor going forward for the group. In Asia, the mergers will impact the cash flow negatively in 2023 as we deconsolidate these assets.
Further, due to the magnitude of the transactions, there will be an integration period before we start to realize synergies. Over time, we will see gradual improvement in cash flow when the synergy realization is coming through in the numbers for the later years of this period. In this illustrative setup, we have assumed that both transactions closed on the 1st of January 2023. For infrastructure, we will see some cash flow improvement for the period, but together with the adjacent business, we believe the main cash contributor from these assets will come from the value increase and cash generated by transactions. Overall, we believe our organic free cash flow will improve towards 2025, and in this trajectory, we will fully cover our dividends in 2025. Today, we have presented you with our plan for how to set up Telenor for long-term value creation.
We will continue to develop our operations focused on generating value. We will continue to invest in growth, and we will continue to modernize, and we will continue to have an attractive shareholder return. By this, in combination with our strong financial position, we will be able to maintain our dividend policy going forward with an annual growth in dividend per share. As always, it will be up to the board to decide on the annual increase. Let me end by summing up our midterm ambitions for 2023-2025. As I just stated, our policy remains to offer year-on-year growth in dividend per share. Free cash flow is expected to improve and to cover dividends in 2025. Our leverage is expected to remain within a net debt to EBITDA ratio of 1.8x-2.3x.
For the Nordics business, we expect low- to mid-single-digit growth in revenue and mid-single-digit growth in EBITDA. These expectations are more based on the inflationary pressure we are currently facing in the volatile environment we have today. You have also heard our expectations for the cash flow generation in the Asian business and the opportunities we see in infrastructure and adjacent businesses. With that, I'll invite you, Sigve, on stage for some concluding remarks.
Yeah, thank you, Tone. Just some few concluding remarks. I started today talking about our purpose, connecting you to what matter most, empowering societies. That is exactly what we mean when we are saying that connectivity is the lifeblood of societies. We are basing our business on connectivity. But we also see that with connectivity, we have an important role to play in the societies where we operate, as you see on this slide. We see how connectivity can be enabler to find the solutions for environmental challenges. We see how connectivity can be a part of driving social and digital inclusion. We see also how our size, how our scale in the markets we operate can be an important part of setting standards when it comes to governance and responsible business.
Today, I want you to take these four main business areas with you. We are going from a successful global integrated business model to now position ourself in a more empowered four business areas. Our plans are then to drive value creation and drive crystallization of some of the assets that we have in these four areas going forward. I think you have heard both myself, Petter-Børre, and Tone talking about our ambition to be a leading Nordic telco through generating profitable growth. You have heard both myself, Jørgen, and Tone talk about how we want to create value in Asia going forward in a more independent role and in a synergy and cash flow-focused manner. You have heard our ambitions on splitting out infrastructure, crystallize, and drive value from that as well.
Then the fourth one, to take what we have in adjacent business, develop that further, but also take leading positions in the Nordics, especially on the growth areas, IoT and security. When you then put all this together, this is how we see that going forward, Telenor will continue to drive value to our shareholders. Having a healthy balance sheet, as Tone just explained, and also generating enough operational cash flow to sustain our dividend policy that has served us well for so many years. With that, Tone, I think it's time for opening up for questions.
Should we start with the room, maybe?
Yeah, we start with the room. I also have, before we get the first questions, I also allow you this time to ask more detailed questions such that I will also call upon some of my colleagues here to address some of them. Okay, let's start here, please.
Thank you very much. Thank you for the presentations. It was very useful. A couple of questions, please, for each. Sigve, you seem to have adopted a new approach to the infrastructure businesses. You talk about monetization. What has driven this change of thought at management and the board? Is it the reflection of the pressure, near-term pressures on cash flow and leverage that is driving this? Or how should we view it? Secondly, Tone, you outline cash flow ambitions. You pointedly didn't mention CapEx as far as I could see or hear here. Anything on sort of an indicative CapEx guidance going forward? Then I have a couple of questions for Jørgen, but I'll take that later.
Okay. I mentioned CapEx, I believe several times. It is a fact that by splitting out infrastructure, there is a different focus in infrastructure. In infrastructure, we want to continue to grow in fiber. Fiber has been a key element of our investments going forward. In the Nordics, we are now at the peak and rolling out fiber, now 5G, for some years. We believe the CapEx intensity will go down in the Nordics over time. We still see that for a few years there will be 5G investments in the Nordics.
The 15% target is no longer suitable?
Yeah. As we are now having four different business areas, we will see that there will be different CapEx appetite requirements within that portfolio, and we don't think an overall CapEx to sales ratio as we've had in the past will serve the purpose as it has done in an integrated model. We can assure you that we will stay close to CapEx and make sure we get return on these investments.
On your first question, regarding infrastructure, I think you several times heard us using two words. We talked about value creation, and we talked about crystallization. What we mean by value creation is that we see a potential to create more value of what we already have. With having a dedicated management focus on both running the fiber, but also to run our tower, towers. We see that on efficiency, but we see that also in increasing the number of tenants to grow revenues. That's the value creation part of it. We also see that there is a crystallization opportunity here, where we are bringing in partners, both to help us to drive this even better than we do it ourselves, but also to get proceeds that we can use to invest even further, especially in the fiber segment.
This is what is driving the split out of infrastructure going forward. Yeah, please.
Yes. A couple of questions from my end as well. First to Ruza, on this slide with moving from the integrated telco model, to the delayered model. It looks fairly simple for me on a slide, but how difficult is that really? If you can say something about that, and when do you think you have a fully delayered model? This modernization will probably lead to FTE reductions. Can you mention anything on that and potential restructuring charges? The final question from me is, if you had the PPA already today, how much would that impact energy costs?
Nice try. Should we start with Ruza?
Yeah, I can take quickly on the PPAs. We also show you the historical levels for energy prices. We have been quite transparent on that, and we show it on this slide. We say that the PPA agreements have price levels more in line with historical averages. We will not disclose the price, but as you understand, it's significantly below the levels we are experiencing today.
Maybe I should answer your FTE question also before Ruza. Over the last few years, when we have been running our efficiency agenda and the modernization agenda, that has also enabled us to digitalize our operation. As an outcome of that, we have systematically taken down the number of FTEs in our operation. I think on average, the last three-four years is around 7%-8% fewer FTEs every year. That's not the target in itself, of course, but it's the result of that modernization. This is something that we also expect is going to happen in the years to come.
Yes.
We try to do it simply, so that is at least a bit understandable. Basically to do that modernization, we have started with the simplification and modernization seven years ago, where we were very clear that we are only going to move to the new technologies, that we are going to sunset the legacy. We were literally measuring how many applications we are sunsetting. We are measuring when we are sunsetting the technology and the copper decommissioning that you heard today is part of that simplification, a whole simplification of initiatives and approach. The second part, which we have as well introduced, is this touch-free operation.
Inviting you to join us on our breakout session later on, where we will address in more detail that we first started with the simplification, then we reduced quite a bit through the partners, the organizational capabilities as well, that shift to adapt to the cloud and the fully automated and intelligent operation that will enable us to move into that direction. It's not easy because it is new not only for telcos, it's new for every single partner.
Because this is a change of the way work. As-a-service is not what telco is used to, not even the vendors, not even the telcos. We strongly believe that that is the way forward, and step by step innovating and moving forward. Our ambition is that by 2025, we can say that we have a sizeable, basically shift towards the as-a-service model, and that will be the proof for us that we have moved to the de-layered model. That's why the cloud capabilities, fully automated capabilities, standardized APIs are the key for us to succeed, and then apply the artificial intelligence and machine learning in order to bring the intelligence into that.
Thank you, Ruza. Next one. Yeah, please.
Marius Lorentzen in Finansavisen. Two questions about the Nordics, if you could clarify on your expectations of margins going forward. You talk about efficiency and modernization efforts improving margins. Does that mean you're not expecting any significant contribution from commercial products, whether they're from consumers or B2B, to those margin targets? And the second one is, given the pressure we're seeing on household disposable income going forward, how could your revenue targets in the Nordics be affected both on existing and new products?
I think I'll let Petter answer both those two questions.
I'm not sure, Marius, I understood the first one, because as we explained, we are actually looking at the EBITDA margin development as a composition of both a revenue growth coming from core and value-added services, as well as net OpEx reductions. We're very transparent on the fact that to grow, we actually need to invest also in OpEx. Some of the new services will have a lower EBITDA margin than traditional connectivity service, but we also see services with a very, very solid gross margin. Overall, it's the mix of really these drivers for revenue combined with then a net OpEx reduction, both to fuel the growth as well as then to take down real costs. With respect to inflation, I also touched upon that in the presentation.
Key to that is, of course, our ability to maintain margins in an inflationary environment. We have and can only talk about what we have done with respect to pricing, but we have done significant pricing moves already in the first half of the year, and are continuing to work on pricing adjustments to maintain margins and still be competitive, of course. Did that answer?
Yeah, just one follow-up. I mean, we're seeing customers actually leaving Netflix for the first time in the company's history. I mean, could you see a similar effect in Telenor that consumers are actually looking to cut down in, let's say, Telenor subscriptions?
Of course, I also touched upon that. There is an affordability potential issue. We have historically seen, and from our Asian markets as well, experienced that this is one of the last services that you actually cut back on. It could, though, lead to people being more cost-conscious with respect to which type of packages, which type of operator they choose. That's of course what we also will have to be quite sensitive about, when we design our packages and potentially adjust.
Yeah. Who's next? Please.
Yes. Hi. Thank you for the presentation, and thank you for taking my questions. I have three, two of them on the Nordics guidance. The first one on service revenues. Can you please let us know specifically for Norway if you are factoring any impact from Ice now being part of the Lyse group within the next three years? The second one would be on the EBITDA guidance, mid-single digit growth. When looking at the chart for H2 energy cost spike, how should we be thinking about 2023 EBITDA, and what are the implications in terms of the energy pricing you are factoring in, within your guidance? The third one is on Thailand. Can you give us an update on the remedies that are expected for the merger, specifically on spectrum disposals?
Thank you.
Maybe you should start with the EBITDA question on how we see these energy prices are impacting us.
Yeah. We see, of course, in the short term that there might be higher volatility and higher inflationary pressure. The guidance that we are presenting today is, as we see it, more on a see-through basis. It should be real EBITDA growth from the business going forward. It is, of course, difficult to say how this will be exactly in 2023, which we are embarking on in a few months. We expect that what we do now will enable us to, despite this inflationary environment, we need to work on both the price side and the cost side to be able to achieve the 5% growth.
Ice in Norway, Petter- Børre. Jørgen, you can prepare for Thailand.
With respect to Ice, yes. Ice is not a new competitor, even though they now have a new owner. We have observed and are observing a very intense competition in the Norwegian mobile market. The fact that you now have three operators with a combination of fixed and mobile might change something, some elements of how you go to market and how you actually can offer things. We do believe that there will be more of an FMC type of trend also happening in Norway than we might have seen in the past.
Yeah, thanks for the question on Thailand. First of all, let's just recap Malaysia. We are done with approvals, and the remedy discussion has been concluded with the regulator. In Thailand, it's different. We handed over a quite substantial application on the 25th of January, I believe, based on the mechanisms with the regulator, that the regulator is not supposed to approve or disapprove a merger, but simply to set the remedies. I tried to explain a little bit about the size and magnitude of that deal, and this has been also a complex deal for the regulator to get their arms around. We are in dialogue with the regulator, and no remedies have so far been concluded.
There was one question in front here, I think. Yep.
Hi, thank you. Usman from Berenberg. I've got a few questions, please. Just on Thailand, obviously the free cash flow upside is quite significant even beyond 2025. So two questions on that. Firstly, on the positive side, is there potential for the synergies to be delivered sooner than you know than what is implied in the CMD guide today? And then, you know, on the flip side, what is the backup plan if the Thai deal, you know, doesn't go through? You know, on a standalone basis, I mean, you know, because a lot of the free cash flow, the confidence to grow the dividend, et cetera, must be coming from, you know, the significant synergy delivery in Thailand if that deal goes through.
What happens if that deal gets blocked? Those were two questions on Thailand, then I have one on infrastructure, please.
Please, Jørgen.
Thanks. First of all, as you're saying, there are substantial synergies on the table in Thailand, but they are still on the table. I would hate to start or to end Capital Markets Day by speculating in getting them higher and sooner. I think we have a big work ahead of us. I'm very happy with how the project has developed and the planning for it, and we obviously have a good benchmark and practice also from Malaysia. We actually have an advantage here of running two, although the synergy profile is slightly different in the two concepts, in the two projects. But I don't think I should indicate sooner. I think there is a full workload to handle that issue.
Then on your question of in case the merger do not come through. First of all, we strongly believe it will come through, and it should come true. In a way, you might smile a little, but in a way, I would say that it's a bad loss for Thailand if it doesn't come through. The reason is simply that there are three players today, but there is one very strong player and two somewhat weak players in that market. This will enhance competition in the Thai market, and it will also build carriers that can participate in all the things around digitalization that the Thai society so desperately want to take a lead on in Southeast Asia.
That is also the key rationale why we think that the deal will come through from a government point of view. If so should not happen, I think, first of all, we have options to running dtac standalone. As I said, we have done a lot lately in making them more digital and more a challenger in the market. We will continue with that, and we will continue to run it hard, and we have several potentials to further improve performance and competitiveness. That will be the first option. Then we know that when times pass by, new options quickly comes to the table. I hold my bet on the first option.
You had another one?
Sorry, just on infrastructure, the returns framework and the cost of capital framework, you know, as you've yourselves alluded to, is very different in infrastructure. I mean, given today is a lot about, you know, simplifying the equity story for investors. Would it not be better to, you know, deconsolidate infrastructure so that you can put more CapEx into projects with a different returns profile than maybe, you know, Telenor as a public company has generated over 10% return on capital that you've been generating. I mean, if you want to deploy more in infrastructure, obviously the returns framework is completely different.
Does not deconsolidating infrastructure kind of hold you back from doing more in that area if that's what you want to do?
Yeah. I don't want to sell control over infrastructure. Infrastructure has been, is, and will be crucial to our future revenue generation.
That's the reason why we are looking at when it comes to fiber and the towers to keep control but to sell out parts of it in minority positions. When it comes to data center, that's too early to say, and we have just started up an evaluation on what the different options are in that segment.
Yeah, I think the final point on deconsolidation is that we could at least achieve some of the element you allude to by having it as a separate business area. That is where we are moving now, so we started with the towers this year, then we potentially might add the others, and at least that will provide the transparency that you're looking for. It's also partly why we are not guiding on an overall CapEx for the group, but we will have a focused approach, particularly on the Nordics of course over the next few years, but also on how we invest in infrastructure going forward.
Frank?
Yes. Thank you for taking the question. I think, when it comes to the dividend cover of free cash flows, which obviously are central to investors, there seem to still be a few unknowns in the equation for how to get there. We have the illustrative chart on page 99 in your material, Tone, the free cash flow cover chart without any numbers on it. It's probably, you know, deliberately kept that way due to some of the factors you mentioned earlier in. Of the unknowns we have CapEx is one of them where you haven't given any specific targets like in the past. Another thing is the dependence on the Thai merger, which was just asked.
Could you still give us some color on the buffer you have when it comes to this to the dividend being covered in 2025? Because, you know, from judging from just the illustrative chart and the size of the blue bars and which is Asia and so on, if you measure that up a little bit, it seems a bit thin from the illustration. Could you give us some color on that, please? That would be appreciated. Thank you.
Yes. What we illustrate on this graph is, as you say, how we see the cash flow develop over the next few years. We see, and we wanted to be transparent on that we see in 2023 that there will be a dip following the deconsolidation. That we start the integration period, and then that there is some time before the pickup of the mergers. As to the buffer, I will not kind of give any guidance, but it is. We are comfortable with the profile as we see it. It is 2025, and we know there are ups and downs that can come down the road. We believe that based on our most prudent approach to the forecast, that is a good trajectory to be on.
The ambition of reaching it in 2025 is very strong with us.
A follow-up please. How important are these deals that you're looking at now like the fiber deal, the potential, you know, opportunistic transactions that you might come about in adjacent business or towers or in Asia for that matter. How important are the, you know, extracting value from these deals and potential buybacks, reducing the share count and so on into actually keeping yeah reaching that goal of the DPS cover? Is that an important ingredient or not?
In this setup and this illustration we prepared, we are including the deals that we have already announced. We have not included unannounced deals. If we look at the deals in Thailand and Malaysia, as we see on the graph, these will actually in the early years impact the cash flow negative by the deconsolidation and by the investments into the integration. In the short-term period, you could see a cash flow uplift if the transaction doesn't go through. Of course, our ambition is to capture that longer term value creation, which we believe lie in these deals. For instance, in fiber, we are including a CapEx profile with as we see it today.
If we should have a potential transaction, that could release even further investments, which could allow us to invest more and get some more revenue, but that will not be what is kind of making or breaking the hurdle as we see it. There are no share buybacks included in the profile.
Peter, you had another question?
Thank you. Yes, please related to you. Peter Kurt Nielsen, ABG. Sorry. To Jørgen. Jørgen, on Asia, you're looking for regional potential structural transactions and or an IPO. How do you view the potential, the opportunities for structural transactions? Do you see opportunities? Has it become easier or more difficult? Will it be on hold until the mergers are approved or rejected? Are you engaged in discussions actively? Just as some color, obviously without being too specific on how you see the scope and opportunities for making such actions would be useful. Then just a question relating to.
You spoke about the need for managing risk, and we can all understand why. What can you do to manage your risk and your investment in Bangladesh today? Thank you.
Yeah. It's hard to satisfy the intention behind the question on the first one. The quick answer is that we are obviously looking around and working on this the whole time and in parallel with other things we do. You know, first of all, we think the Asian markets in market consolidation, as I said, are crucial and we believe more players are seeing that. The observation that we made some years ago has kind of been picked up by others, obviously. Second, obviously, a regional deal is not easy. If it is a merger of assets in several countries, that is a complexity.
If it is a transaction with other type of partners, that has its difficulties as well. At the same time, I think the sentiment is the same. There are observations that we need larger entities to run these companies efficiently and that there are synergies on top of in-market synergies that should be utilized. Therefore, there are discussions around this amongst the players and amongst other interested parties. This is not a quick fix. We are just maintaining that this is part of our thinking and part of our strategy and the mandate that we have for Asia. On risk management. A good and difficult question again.
First of all, I believe a lot of things has happened in Bangladesh and for Grameenphone the last few years. There is a good sentiment in general for the company. There are good dialogues, I would say, both with regulator and the ministry. We have worked significantly on telling our story about how we work and the importance of what we do and others are doing for the development of the Bangladeshi society. I think there are good dialogues on that. You have incidents happening, the latest SIM card situation, which are unfortunate.
I think we should see that in a context of our involvement, our issues being very important for the government, and they from time to time respond in ways that they feel are right because of a bigger picture. They are at times not so happy with the quality of service from the telco industry, and that is understandable. They have a large population, and many people to take care of that wants top services. We believe we are delivering good service, continue to improve it, and that it is also balanced with the earnings side of things. These discussions takes place, and we find solutions. I think we are on track now to finding a solution on the SIM card issue.
We have now got access to start selling SIM cards, issuing SIM cards again and recycling them in the first round.
We have two calls on the line there. Should we let them in now and while you are thinking about more potential questions? Can we have the first caller?
Certainly. We have Nick Lyall of Société Générale. Please go ahead.
Yeah. Hi there. This is Nick from SocGen. I hope you can hear me.
Yeah. We can hear you.
It was a quick question. It was a clarification, please, on those two points on guidance, please, Sigve. The first one on the Ice comment. I think on Lyse Ice Petter-Børre mentioned he may have factored in something maybe for S-FMC. Could he please be a bit more specific about how he thinks about that merger? I mean, is that something where you think Telenor Norway can maintain share, maintain pricing? This is purely about sort of more for more strategy, or is this a potential impact on market share? 'Cause the Ice impact could be very, very large on cash flows if it was to hit in full. Then secondly, on the Thai merger, could you just clarify, have you assumed no remedies in the guidance at all?
Is the guidance that you've assumed for cash flow and the cash flow uplift with the merger as standard, no remedies factored in so far from what you've said? Thank you.
Petter.
Thanks. To the Ice question, I don't think I would like to add much more than what I said when the first question popped up. Ice is not a new competitor to the market, but we now have three players which have both a fixed offering and a mobile offering in the market. I can't comment on what our competitors would do, but we are confident that with our offering, we will be and continue to be competitive in the market.
Very good.
On the Thai question, we have not included significant remedies, but there are some remedies included, or there are provision for some remedies.
As we also did in Malaysia.
Yeah. In Malaysia, we have included everything that we know, but we simply don't know in Thailand.
An obvious question, Jørgen, but I mean, is there no way of expanding on what those might be or what the extent of those are? I mean, you probably can't, but is there any way you could give us a clue on how you've treated that sort of remedy point in the guidance at least?
No, I don't think so, because then we are opening a book which we don't know which end we are opening it in. I think that we assume not significant remedies in Thailand, and hence we have included a minor provision for it. We haven't heard from the regulator yet, so that needs to take place first.
Okay.
That's great.
Thank you.
Do you have another caller on the line?
Yes. Our next questioner is Titus Krahn of Bank of America. Please go ahead.
Hi, everyone. First of all, thanks very much for a very detailed presentation and sharing your medium-term targets and, thanks also for taking my question. I just have two topics, the first one and then a follow-up. The first topic on your group leverage profile. You mentioned already that we saw quite an impact from FX over the last year with revenue to some extent denominated in other currencies than your debt, actually. How comfortable do you feel with the current mix of debt from a currency perspective? Are there opportunities to achieve a closer match to your own currency footprint?
Maybe then in relation to potential infrastructure transactions and the mentioned scope for share buyback following a deal, I know that you have a target range, but could you elaborate a bit on whether there's a specific leverage ratio you would feel most comfortable with before looking at returning cash to shareholders under such circumstances? Maybe then if I can quickly follow up with a small question just on Pakistan, because you mentioned the strategic review earlier, this year, last quarter. Do you have any specific timeline on when you could give us an update on the division, on the strategic outlook? Is becoming a lean organization the main target for now, for the Pakistan division?
I can just comment on Pakistan. We have no more updates on that. We are in the process of reviewing strategic alternatives. We will come back on that.
Yeah. I'm sorry it was a bit of a bad line, but I will answer what I believe was the question related to debt and relation to currency impact, but particularly related to the Norwegian kroner. You see our leverage ratio is fluctuating as we show in the band, and we know that the individual variation can be even larger. It is particularly, as you say, the Norwegian kroner that has impacted the leverage in specific shorter period. We saw it in Q1 2020, and we see it now in Q2. Over the last two years, we paid all debt maturities with cash. We have taken down the debt at the group level with the two maturities we've had. We have a balanced maturity profile going forward.
There is a new maturity next year. When we come then, we will see if we repay full or partly or what we do at that point. We see that we have good access to capital, but and we have a good profile as we see it going forward. This fluctuation when it comes to leverage will of course mainly be driven by the operational performance, the cash flow and EBITDA development. You should bear in mind that over these, particularly the last two years, we have seen the whole value and EBITDA of Myanmar being taken out. You have seen a dramatic change in the business outlook in Pakistan, and we are still fluctuating within this band. We are showing, I believe, a strong ability to adapt and to maneuver in this area.
In our policy, we do say that there could be times when we go outside. It hasn't happened yet, but we have said it all the time in the policy. We will establish immediately and have a plan for how to come back into the band. You had a question on infrastructure and share buybacks. As I talked about, we look at this part of the strategy also from a capital allocation perspective. We have invested a lot of money in infrastructure over the years. We now see an opportunity to take some of those money out at what we believe could be solid multiples. We can then continue to invest in the assets.
We can fund investments in other parts of the portfolio, but we will also have an ambition to safeguard and mitigate the leakage that such transactions will create when it comes to minority holders getting dividend. This would be a dynamic and we believe this setup enable us to better look at capital allocation from a group perspective in this way.
Thanks, Tone. Do we have another online before I turn back to the room here? Okay, Marius.
Yes. We have a question from Ondrej Cabejšek of UBS. Please go ahead.
Hi, everyone, and thank you very much for the presentation. I had a couple of questions, please. First one on the fiber investments in Norway, where I believe the kind of implication from the copper 10% at least in part was that, you know, the big investments that you've been making into fiber in Norway would kind of coincide with the transition from copper to fiber. Now it seems that you've got more of a longer-term plan to build out more fiber in the country. Can you maybe walk us through some of the targets that you have in terms of, you know, number of homes? What kind of geographic areas? You also have a very strong competitor in Lyse, obviously. What kind of overbuild risk is there?
Is this more of a wholesale versus retail opportunity perhaps at this stage? And related to that, you know, why is 30% the number discussed in this case? Is this simply a balance of the kind of CapEx things that you foresee, as well as the leverage target, and maybe you know, more regular, but higher overall shareholder returns that Telenor has had or Telenor investors have been used to until not too recently. And then finally, please, just in terms of Thailand, in terms of remedies, maybe you will not comment on this, but is one of the potential remedies in this case some kind of remedy in the direction of the national telephone?
Could that entity become a player, you know, third player in Thailand? Thank you very much.
Fiber. Laura Petrea.
Yeah, I can comment on the first question regarding the fiber market in Norway. It's true that for the last four to five years, we've had a fairly high level of investments into fiber. It has tapered off a little bit for the last two years due to a prioritization of 5G investments at the expense of fiber, but still at a very high CapEx level in total for Norway. We do see that there's still potential for more profitable investments in fiber, partly coming from still new areas being built, but also from public support or public subsidy projects. From the fact that as we've seen with the copper network, HFC is also a product that by Norwegian consumers are considered to be inferior to a fiber.
On the basis of that, we do see that there is potential for profitable investments, still going forward.
The second question was about Thailand, Jørgen, but I was not able to understand it. Maybe you were.
No, but it gives me a chance to say something. No, I didn't hear it either, but let me just get back to the remedies in Thailand because it was regarding remedies in Thailand. We are simply not willing nor able to say much on it more than what we have said. Because we haven't heard from the regulator on this item and they are working on it, we assume. We have, of course, in dialogue with them, and we have played in our views on many things around this transaction. Just bear in mind that this is really a huge transaction in Thailand. From a transaction national perspective, it is very visible and important.
It's also important because the average Thai is more than focused on his or her mobile services. That is an important issue for the Thai. There is a lot of interest and also in the Thai society in general. There are a lot of mobilizations. Some are pro, some are against, and there are a lot of rumors and a lot of things going on. We are just continuing to work very, very consistently and structured on this. As I said, we believe the deal will go through, and we believe we will get remedies that we can live with and that we should expect.
Did that address your question?
Yes, it did. Thank you very much. Can I just very quickly follow up on the fiber question? So you mentioned cable being a target in terms of your own rollout. Does that mean you're going basically to overbuild some of your competitors' areas, specifically, you know, what kind of areas Get used to have, for example, or is this more of the multi-dwelling areas? Can you give us more color on that, please?
The answer to whether we are going to overbuild, the answer is no. Of course, we are going for profitable new fiber build out. As I mentioned, there is still areas which are not covered by fiber. There are public support projects, and there are probably overbuild opportunities which we see from ourselves and competitors on the HFC networks in the market.
I don't see any more callers online, so let's go back to the room, please. Marius.
I have a couple of questions on your adjacent business. You wrote that you plan on recycling proceeds to develop your assets and fund innovation. Are there scenarios where you could foresee allocating additional capital to this part of Telenor if opportunities emerge? What is your alternative if you divest large portions of this? Is it distribution to shareholders or allocating that capital to other parts of Telenor? The very last part is, you say that you're focusing on IoT and security. Does that mean we should view this as a more mature business that you'd build on existing sort of expertise in Telenor without a venture element, or will there be smaller venture parts that you could invest in?
Now, the reason why we are highlighting IoT and security is partly because we see that there is a big growth opportunity in those two businesses across the Nordics. It's also because we think we have a good position already. We have an IoT company based in Sweden, Connexion already, which has a significant business across Europe, even outside Europe. We think that this is close to our core and close to the connectivity business that we're already in. The same on security, and I use the word externalize. We have spent significant resources on building up our own cybersecurity defense, run out here from Norway actually for the entire portfolio.
We see that we can use that competence, and we can use the platform we have here and actually sell that to others, which we are in the process of doing now. Those are the two reasons. Exactly how we are going to do that going forward, I'm not ready to comment on. It could be partnerships with others also to build that Nordic scale and the Nordic position within those two businesses. To your first question, yeah, we will now go through this asset by asset. It's a little bit early to say exactly how this is going to look like.
As soon as Dan and his team is on board, we will look at what is close to core and should be developed further and, is there a potential to do that also in partnership for some of those assets? What could be divested because it's not really close to core or not really the value creation story that we see. I said on my slide that if we are to divest, we will of course use some of that proceeds to potentially reinvest in others. I cannot go into more details than that. I don't see any more hands here in the room. Are we approaching closure? Usman, yes, please.
Hi. Sorry, I didn't introduce myself previously. Louis Legrand from Credit Suisse. I just have another question on the Asian mergers. Can you give us some guidance on the restructuring costs, both in Malaysia and in Thailand? And then on governance in those mergers, you were pointing that your key priority was on realizing the synergies in both countries. My impression is that in Malaysia, the new appointed CEO, it's from Celcom. And in Thailand, I don't know yet what the current CEO will be. What are your expectations that the execution on the synergies can move forward?
Yeah. Two good questions. First, I don't think I would like to dig deeper into the different parts of the net synergies. What you are seeing is a net number. What Tone told you was that in the beginning, there will probably be a negative synergy effect because the cost of merging and combining these two entities and get started on the various executions will require funding. Let's assume that the first year in Malaysia would be marginally negative, the second year marginally positive, and then the third year, hopefully, much more positive in Malaysia. To the structure and people and the commitment to the program.
We have spent a couple of years talking to Axiata about how we want to do a deal in Malaysia before we announced it in two sequences, as you know. We appear very aligned on the whole priority list of that new company. Almost so aligned that I'm nervous for a surprise. It's been a very good process, and we are thinking the same way it appears. We are very committed around this. The designated CEO is very committed to it, and he and his colleague from Digi, who will have the role of a deputy CEO and have the more commercial operational role, have worked greatly together in the planning work and found the joint positions on almost all tricky issues.
The two of them has developed a very common base of doing this. Both Axiata and Telenor has clearly stated that they want to create a top company, but at the same time want to extract the cash flow and dividend from this. Both companies need that, so that is a high priority. The only thing I'm concerned about is the pure complexity of this because we need to be really clever in handling it. I'm not at all concerned about the commitment from the two principals nor the two, three, four leading people in the venture.
Yeah. Okay, you get the final question. We will round up after that.
Thank you. Usman again from Berenberg. Two questions, please. The free cash flow chart on page 99 where you're showing the profile, 2022 to 2025,
Am I right in understanding that that obviously doesn't include a potential where you sell 30% of an equity stake in the Fiber InfraCo? If that was to happen, and it seems like you're, you know, there's enough appetite and you're in the process. If that was to happen, would that free cash flow profile be weaker in 2023, say? Because, you know, you get the proceeds, and then you decide to reinvest that within the business. Is there a deeper dip than in that illustrative free cash flow profile if the fiber transaction happens? That was the first question. The second question was for Jørgen.
You know, you'd mentioned that after the deal with Axiata failed in 2019, you took a lot of lessons. I would just be interested very, you know, to hear, you know, what were the insights that you took from that transaction and how that influences your view on, you know, this potential for a strategic partnership in Asia going forward.
I can start on infrastructure. As I said, the profile includes what we have announced of transactions. If there were to be a potential transaction, as I said, our ambition would be then to mitigate the dividend leakage, which would come from minority positions. I would not expect a transaction to materially change the cash flow profile.
Yeah. Jørgen.
Very short answer or response, maybe more on your question. I think we just added significant insight, knowledge, and experience from that whole exercise to the whole team that we are using now to carry out what we are doing right now. Obviously we have a M&A team in Telenor, highly competent actually. I'm very impressed by them, and they are running, as I said, the two largest transactions in Asia in telecom ever, Southeast Asia, besides a lot of other things that we are doing. This is lawyers, and it is economists, and it's the M&A core team, and it's technology guys, and, you know, it's. We learned a lot.
We also learned how to save energy and to hold on a little bit on positions and statements and how to discuss with another party that also have strong commitments and strong beliefs and strong interests. I just think in general it was sad that it didn't go through, but we learned a lot that we are benefiting from now. It wasn't more than that.
Maybe just adding to what Jørgen is saying. I think we also learned, Jørgen, how to build partnerships coming from a world where we were running the show ourselves in all our assets. Now we are running partnerships, joint partnerships, in both Thailand and Malaysia. That ends this session. We will go into some breakouts, and you will inform us about that. But before we do that, thank you so much for coming. Thanks for staying with us now for several hours, and thanks for listening to our story. Thank you.
Thank you.