Ladies and gentlemen, this is a safety announcement. In case of an emergency, please use the exits that are marked with green exit signs. There is one on the right side of the stage and one in the back of the auditorium. Thank you for your attention.
Good morning, everyone, and welcome to the presentation of Telenor Group's results for the second quarter, 2018. My name is Marianne Aamot. I'm head of Investor Relations, and I have the pleasure of guiding through the session here this morning. As usual, the results will be presented by our group CEO, Sigve Brekke, and the group CFO, Jørgen C. Arentz Rostrup. I hope you all have the presentation material available. And yeah, after the presentation and the Q&A, there will be a separate media session, as usual, here for media present here at Fornebu. And you will have the opportunity to ask questions to the group CEO, the CFO, and the head of Telenor Norway.
With that, and without much further ado, I'll leave the floor to Sigve Brekke to take you through the highlights of the operational performance for the quarter. Please, Sigve.
Thank you. Thank you, Marianne, and good morning to all of you. Welcome to our Q2 presentation. I'm very satisfied with this quarter. We see good market performance. We continue to deliver on our transformational agenda that we laid out in the beginning of 2017. We added 2 million new subscribers in this quarter, and we also continue to monetize on our data investment, where we now have 54% of our customers using data. We also continue our efficiency agenda, and despite tough comparables with the second quarter last year, we reduced 2% OpEx this quarter, and if we adjust for the one-time effects we had last year, it was a 4% OpEx reduction.
So far this year, we have reduced our OpEx with roughly NOK 1 billion. We do that with our effort of digitalizing our business, digitalizing sales and marketing, reducing sales and marketing costs, and the customer journeys and IT. In the quarter, Thailand has had a special focus, and this of course is due to the upcoming end of concession, and at the same time, we are repositioning the company to capture growth on digitalization and on acquiring postpaid customers. Let me then go through our main operations and the clusters we operate in, starting with Norway. In that competitive market, Telenor Norway continue to show strong performance in parallel with efficiency improvements. The second quarter is an important handset quarter in Norway, traditionally.
A year ago, we introduced our SWAP program, the handset SWAP program, and we also took that external retail. We see now in this quarter that many customers have chosen to come and upgrade their device after one year. We also see that our new Fleksi subscription, targeting the mid and high-end data users, is very well received by our customers. As a result, we were able to now grow postpaid subscriptions with 7,000 in this quarter. As you can see from the left-hand side of this slide, the subscriber loss in this quarter is the lowest we have had in three years. We are now satisfied, very satisfied with our competitive offers out in the market.
The ARPU is still affected by lower roaming and handset-related revenues, but if you adjust for that, the underlying ARPU grew with 3% in a quarter, driven by continuous upselling, whereby most of that is happening digitally. In the fixed market, we continue to roll out fiber connections, and in this quarter, we added 7,000 new fiber subscriptions, connections. The rollout is now picking up after a somewhat slow start of the year due to the winter, but it also took some time to ramp up the rollout activities. But we see now, especially in June, that we are able to having a higher rollout performance, and that will continue in the months to come.
In Telenor Norway, we also continue our focus on efficiency, and if we exclude or adjust for new businesses acquired in the quarter and also cost transferred from group, the underlying OpEx reduction is around 3%. The two other Scandinavian operations, solid performance both in Denmark and in Sweden. In Sweden, we continue with our simplification, the business simplification program, and in this quarter, we rebranded our fixed business such that we now have Telenor brand coming through the entire business. Our transformation continues. As you remember, we started a turnaround program, and this is now resulting in, resulting in 21% increase in EBITDA in this quarter, and we are quite pleased with how we are able to do that in a very, very competitive market. Going to Thailand.
As I said in the beginning, we are building a platform for a future in Thailand. We are preparing ourselves for the end of concession in September, but we are also changing the way we operate in this market, including making ourselves more efficient and using digital tools. I must say, I'm very pleased with the way we are able to handle significant uncertainties in a very competitive market, and at the same time, we are executing on a long-term strategy and focusing on value creation. The Thai market is changing from a typical prepaid, sensitive, promotion-driven Asian market into a more European-like market with the monthly contracts, data bundles, and services. In that transformation, in this quarter, we were able to add 154,000 new postpaid subscribers.
Postpaid is now accounting for more than 50% of our overall revenues. With the postpaid subscription, we see a significant lower churn. We see an also significant higher ARPU, and that is resulting in a 6% overall ARPU growth in this quarter. If you adjust for the decline in international traffic, the overall subs and traffic revenues are actually stable in dtac. On efficiency side, we are reducing the reduced regulatory fee is, of course, an important part of improved EBITDA, but it's far from all. We are focusing on making our sales and marketing more efficient. We are focusing on digitalizing the customer journeys. We are focusing on reducing manpower, and we are also then simplifying our business model.
As a result, in this quarter, we are seeing an EBITDA margin in dtac of 40%, despite we now also have included the spectrum payment to TOT. If I exclude for that, we have a 45% EBITDA margin in dtac for this quarter. When it comes to spectrum and infrastructure, as I said, we are well prepared for the end of the concession regime in September. We finalized an agreement with TOT, giving us access to the 2,300 MHz spectrum, which we can utilize until 2025. Our ambition is to have 7,000 sites on air, utilizing the 2.3 spectrum in the end of the year. Combined, we net densified 2100 network, which is now covering more than 90% of the population. We have a very strong position for high-speed data.
We are migrating 2G customers to 3G and 4G, and we have also secured a deal, roaming deal with AIS as a backup. We are also now close to concluding an infrastructure deal with CAT, giving us access to the concessionary assets, both on tower and on fiber. As you know, we decided not to participate in the 1800 auction last month, which then failed. When it comes then to the August planned 1800 and 900 auction, we will consider this when all the terms are clear. In Malaysia. Malaysia, it's what I call the star of this quarter. I'm very pleased to see the strong operational results coming out in this quarter. As in Thailand, we also see the Malaysian market changing, and we are repositioning Digi now into focusing more on data bundles, prepaid-to-postpaid migration, and digitalization of the business.
That led to a 2% growth in ARPU and a 3% growth in subs and traffic revenues. Postpaid revenues grew 15% in the quarter, year-on-year, and prepaid internet revenues grew by 21%. It's also. I'm also pleased to see that we continue our improvement on the Net Promoter Score, and in this quarter, we became number one on Net Promoter Score in the market. With this performance, we believe that we are able to continue to take market share on revenue in Malaysia. On the efficiency agenda, 4% EBITDA growth year-on-year. We had a one-off last year of 75 million NOK, and if I adjust for that, the EBITDA growth is 10% in this quarter.
To summarize, a very strong quarter for Digi, and we are demonstrating how a focused repositioning and strategy execution is giving result. Moving to Emerging Asia and Bangladesh. Customer uptake continues in Bangladesh. We added 1.7 million new subscribers in this quarter, and we also grew number of data users, users with 2.3 million. Still a way to go. We estimate that the real penetration in the Bangladeshi market, if you adjust for the multiple SIMs, is between 55% and 60%. So there are still lots of customers out there that are not even connected to basic services. We had a muted revenue growth in this quarter. Sub and traffic grew at 3%.
That is due to several weeks of bad weather, which gave us power and network outages, and we also saw an increased competitive pressure. However, we believe that we took market share in Bangladesh in quarter two - quarter one, and we also believe that that is continuing into quarter two. Figures from June and July show us an improved growth rate going into Q3. The 4G rollout is on plan. We expect to have around 5,000 4G sites on air in August. We have currently around 2 million 4G customers, and when a customer migrate from 3G to 4G, we see a significant ARPU uplift. Smartphone penetration is still low in this market.
We grew 4 percentage points on smartphone penetration in this quarter, and we have now around estimate around 33% of our customers having a smartphone, and therefore, we see opportunities for profitable data growth going forward also. In the second half of the year, we see improved revenue trends in Bangladesh as we see in Pakistan and on top of that, the data growth. In our two other emerging Asian markets, Myanmar, we saw Mytel launching their services in June with very competitive pricing. In such a multi-sim market, we expect customers to try out a newcomer. Our strategy is to stay focused on what we have done since we launched. There's no surprise to us that a fourth operator was coming, so we have been preparing for this since we launched.
Our strategy is to having the best network, having the best distribution, and also focusing on competitive offers and building brand. In Pakistan, good performance with an 11% EBITDA growth in the quarter, coming from 4% subs and traffic growth. The countrywide taxation on cellular services that have put pressure on growth in the last quarters was fortunately removed in June. If I exclude for those taxes, the growth, actual growth would have been, more than 7%. And going forward, these taxes will no longer have any impact. And as in Bangladesh, we also expect Bangladesh, Pakistan to deliver on better figures into the second half of the year. I want to close off with this slide, and this is a slide showing market share development, quarter by quarter.
We are often being asked if our efficiency and transformation agenda is hampering the growth opportunities and hampering the market positions that we have. I'm very pleased to see that that's actually not the case. We are keeping or growing our market share across our portfolio, growing in two markets, in Bangladesh, as you can see here, and in Malaysia, and keeping in the rest, with one exception, which is Thailand, where we have chosen to stay out of aggressive prepaid device subsidies, and instead focusing on EBITDA and cash flow growth to prepare ourselves for the future. This is the quarter one figures, which then are public figures from our competitors, but we have implemented a measurement system where we follow this month by month, and we believe that the same trend will be seen in the second quarter.
We are not sacrificing on our market position. This is not easy. It's not easy to keep your focus on taking share and at the same time implement the efficiency measures and the agenda that we have. But our regular performance system is now enabling us to stay very close to what's happening in the various markets, close to measure the relative performance, being revenue market share, being subscriber market share, or even the Net Promoter Score, and we measure that on a monthly basis. Being close to benchmarking best practices across and implementing that in cost efficient measures in other markets.
Being close on scrutinizing every dollar or Norwegian kroner being used on CapEx, but also staying close to understand when we see opportunities, like we saw in Norway in this quarter. We saw an opportunity to increase our market spending, and the result of that is that we took 7,000 new postpaid subscribers. This is a slide showing market share revenue, but we are also measuring market share on EBITDA and even down to cash flow to make sure that we are value-driven. We want to be seen as a value-driven, value-focused company. Just to give you some numbers then from the clusters, we see that in Developed Asia , Digi, we increased the market share on EBITDA.
When you, when you compare the EBITDA level on, on, in the industry, we increased the market share on EBITDA with 4 percentage points in Digi. When you look at Thailand, for example, even though AIS is double the size as our operation, we are not far from them in the actual cash flow generation. Or in emerging Asia, we increased the market share on EBITDA in Grameenphone with 3 percentage points or moving to Norway or to Scandinavia. We believe that even in Norway, we increased the EBITDA market share with 0.5 percentage points in the quarter. Summing up, solid quarter, solid performance, a solid base for continuing to deliver on our efficiency and transformation agenda. And with that, I hand over to Jørgen for the financials.
Thank you, Sigve. Yeah, as Sigve is alluding to, we believe that this is another solid quarter delivered by Telenor, building on the good traction and the good performance from last year. Financially, I would like to highlight that we are still growing our core revenues while we are seeing OpEx reduction of the magnitude of NOK 400 million, adjusted for one-time effects that we saw last year and that we talked about as well last year, all in line with our expectations. So far this year also, EBITDA growth is 5% year-on-year accumulated. And in June, we initiated a new 2% buyback program of shares, which will return approximately NOK 5 billion to the shareholders.
When it comes to revenue, we continue to grow our subscription and traffic revenues, 0.5 percentage points, and for the first half, the growth is slightly below 1%. Bangladesh, Pakistan, and Malaysia as the key drivers for that, but we also see good results, as Sigve was alluding to, in other markets from ongoing effort on renewing our revenue base. We are, in particular, encouraged to see Digi continue the positive momentum from their repositioning last year and having the second quarter in a row with growth. Also, rebound in Pakistan is encouraging, and the same, the development we see in Grameenphone, in particular in June, gives us reassurance of improved growth rates into Q3.
Reported revenue declined by 3% or NOK 0.8 billion in the quarter, of which NOK 0.7 billion was a result of unfavorable foreign exchange movements. If you adjust for these foreign exchange effects, the large explanation for the decline was lower interconnect revenues, loss of fixed legacy revenues, a loss of wholesale revenues, and special numbers regulation in Norway. In total, the decline in these revenues were in a magnitude of NOK 0.4 billion. If we adjust gross profit for the NOK 200 million that we have spent paying for spectrum lease to TOT in the quarter in Thailand, the 2300 spectrum. This payment started, I believe, April 25, so we have two full months, May and June, of payments of approximately a run rate of NOK 100 million per month.
If we adjust for that, and we adjust for the loss of wholesale revenues and special numbers in Norway in the magnitude of NOK 145 million, we see that gross profit follows the growth in subs and traffic revenues with approximately 1%. Efficiency, Sigve was quite clear, we are very dedicated. We continue our program. Last year, Q2 was the first quarter with significant visible cost reductions, NOK 0.6 billion in that quarter, including NOK 0.2 billion in positive one-time effects that we discussed at that point. We continue to see further progress this quarter, which is good on the high comps that we had to bring with us from last year. Underlying OpEx reduction this quarter is 400 million, 4% when adjusting for these one-time effects.
We believe, again, this is strong performance. It is according to our expectations. So far, we have taken out approximately NOK 1 billion, close to NOK 1 billion in OpEx reduction, and are trending towards the higher end of the 1%-3% reduction per year that we communicated one and a half year ago at Capital Markets Day. And then we are pleased to once again, this quarter, as last quarter, to see a balanced set of cost reductions for the quarter. We are also, as Sigve was referring to, seeing that we, reducing spend on sales and marketing are not impacting the development in our market share in any negative way. EBITDA margin remains stable in second quarter at high levels. It's obviously then a combination of subs and traffic development and OpEx reduction for the quarter.
Looking at the first six months of the year, we see an improvement of strong 2 percentage points in EBITDA margin. In high margin core revenues, subs and traffic, the 0.4% increase, combined with the strong efficiency improvements, gives us 0.5 percentage point of EBITDA, organic EBITDA growth this quarter. Then keep in mind, again, the high comps, the demanding comparables from last year, and also the NOK 0.2 billion in one-off items. Adjusted for these items, organic EBITDA growth was 2% for the quarter compared to last year. CapEx was NOK 3.4 billion in the quarter, or around 12%. Year-to-date, CapEx is somewhat lower than planned for, and there are several reasons for this. Sigve was touching on it.
We have the later, somewhat later than expected clarity on the 2,300 megahertz spectrum in Thailand, so we had a delayed start-up in the rollout of that. And we have talked about weather conditions, whether it is in Bangladesh, Pakistan, or Norway in the first quarter, and a somewhat delayed ramp up in the fiber in Norway. We expect this to be caught up and to increase CapEx the second half. We are at good speed in fiber rollout in June, and that is continuing July and going forward. We will do the 4G rollout in Bangladesh, and we are also densifying the networks in Thailand. So we maintain the CapEx outlook for the year unchanged. So the P&L is a clean set of numbers also this quarter.
Net income is around NOK 2.6 billion, which means 1 krone and 78 øre per share. As you can see also, there is other items of negative NOK 375 million, primarily related to workforce reductions in Malaysia, related to outsourcing of network operations to Ericsson, also related to group restructuring and to manning reduction continuing in Norway. Depreciation increased also this quarter, some NOK 250 million as expected, and the same reason as we talked about last quarter, primarily related to Thailand and related to the end of concession in September. As we said in first quarter, this number will come significantly down in Q4. Net financial income and expenses this quarter is negative by almost NOK 1.7 billion. This is predominantly a result of unfavorable foreign exchange movements.
Dollar has appreciated, compared to Norwegian krone, almost back to the same extent as, as we had the opposite effect of in first quarter. So that is well, 1.4 billion in negative effect on that. We are hedging net present values, not the equity in our subsidiaries, so we can therefore not use hedge accounting in an efficient way, and therefore we see these effects coming on our P&L. And as you can see from the right-hand side of the slide, the effects of the new accounting standard, IFRS 15, continues to have marginal impact for Telenor. Free cash flow, second quarter was NOK 3 billion.
This is a decrease from the NOK 6.9 billion we had last year, but then remember, please, mainly due to the proceeds that we had from online classifieds and also from sale of VEON shares. And then also this quarter, we have NOK 0.9 billion in settling of accounts related to the completion of the India transaction. Cash flow from operating activities has also been impacted this quarter by higher income taxes paid of NOK 1.1 billion, so that is the other effect.
If we then look at the ordinary cash flow statements and elements that are not shown here, we have paid NOK 2.7 billion in the quarter to the Norwegian state for their shares of the share buyback program, in addition to ordinary dividend in the magnitude of NOK 6.3 billion in the quarter. Total payment in the quarter to shareholders has been NOK 9 billion. Year-to-date, free cash flow amounted to NOK 5.6 billion, or NOK 6.5 billion, excluding M&A effects. Balance sheet continues to be solid. Net debt is 1.1 times EBITDA. We increased net debt by NOK 6.9 billion during the second quarter.
This is primarily explained again by the payout of around NOK 6 billion in dividends to shareholders and the NOK 2.7 billion repurchase of shares from the Norwegian state, as already mentioned. Then we have said over and over again, and we still would like to say it, attractive shareholder remuneration is a key priority for Telenor. 2018 will be a record year for us in terms of distribution to shareholders. This quarter, we have paid out the first tranche of the ordinary dividend, and the second tranche will be paid out in November.
...In total, the ordinary dividend represents a 4% increase from last year. Then, as I mentioned earlier, we have initiated the 2% buyback program of shares, which will return approximately NOK 5 billion to shareholders. And as previously communicated, when we announced the disposal of the CEE operations, we intend to pay out a special dividend of NOK 4.40 per share following completion of that transaction. The completion is still expected to take place during third quarter this year. In total, this should mean that shareholders' remuneration this year will amount to NOK 23-24 billion, which is an all-time high for the group.
So landing this, when it comes to the outlook for 2018, we maintain the revenue guidance of 1%-2% organic growth of subs and traffic revenues, 2%-3% growth in organic EBITDA, and NOK 17-18 billion in CapEx. This is based on the fact that the second quarter is confirming the strategy, and we see tractions in the things we do, and we see results from that effort coming. So we see good development. We see also easier comparables in several of our markets in the second half. And then on the other hand, there is still some moving parts, so to say, in Thailand, so we are leaving the guidance unchanged as of now. I believe this should be it. Maintaining our market positions and maybe also maintaining the tradition of Q&A.
Please come on, Sigve, Marianne.
Thank you, Jørgen. Yes, as usual, we'll start the Q&A session by taking questions from the audience present here at Fornebu, before we open up for the conference call participants. I kindly ask you to limit yourself to one question and one follow-up. May we have the first question, please? Any questions from the audience here at Fornebu? If not, we'll go straight to the conference call participants. May we have the first caller, please?
Thank you. Your first question is from Peter Kurt Nielsen from ABG Sundal Collier. Your line is open, sir.
Thank you very much. Yeah, my main question would be first and foremost on the improved net adds momentum as you talked about in Norwegian Mobile. Could you talk a bit about what's been the driving factor for this, whether it's your new family and friends offering or you're seeing a positive impact of pushing a bit the convergence? And then just to follow up, please, do you have any comments to expectations for the announced merger this morning between Telia's business in Norway and that of TDC? Do you think this will have any impact on the market? Will you make you perhaps push forward your FMC offerings a bit? Thank you very much.
Yeah, I think I can address that question. Starting with the announcement this morning. We don't see any big effects of that. We have seen Get having different owners, and now it seems like they're getting a new one. And this is and has always been a competitive market, and it will continue to be. And now we see some consolidation in the market, but other than that, we don't see any effects of that. We are very satisfied with the strong position we have on Telenor ourselves. We are, as you know, continuing now to take market share on an aggressive fiber rollout. And on top of that, we also have a good position on TV with our broadcast division. So that's what we are going to continue on.
Your first question. I think that we see now in the quarter that the SWAP program on handsets really works out. When we extended that from own distribution into external distribution, we see that this is becoming very popular. And on top of that, also the Fleksi program, which is tailor-made for the mid and high-end users, has also been very, very well received, well received by the customers. And then on top of that, we have family and friends packages. We have unlimited including, you know, packages, and I think we are able now to demonstrate that for the high-end customers our offers are very attractive. So it's an effect of things that we have done and that we also introduced in this quarter.
Of course, we are going to continue to focus on that.
Thank you very much.
Next caller, please.
Your next question is from Maurice Patrick from Morgan Stanley. Your line is open. Please go ahead.
Yeah, hi, it's Maurice here from Barclays. Question really on Thailand. You made some points about deciding on bidding strategy for spectrum, once you have clarity on the auction process. So maybe a few words just in terms of identification efforts you're currently making, if you need additional spectrum on top of the 2.3 and 2.1 that you have, and the extent to which you, yeah, you need new spectrum over the next 3-5 years. Thank you.
You want to comment on that?
Yeah, you know, what we have said before, and what also you and I have talked about is that when it comes to too many comments around the spectrum situations, we refrain from that. It's a very liquid situation.
So, we are always evaluating any spectrum process that takes place in any of our markets. Our main concern, our main focus, I should say, is to make sure we have a good spectrum covering the expectation for our customers. That also goes for Thailand, and we are sure we will—we have it today, and we are sure we will have it tomorrow. We see good development and good effects from the 2300 spectrum that we have talked about previously. We decided not to participate in the previous spectrum auction simply because it wasn't value adding for Telenor to participate, and as Sigve said, it also failed. We will evaluate the next spectrum auction that is coming up when we see the full details of that auction, and we are working on that right now.
Just adding to what Jørgen is saying. With, with the 2.1 spectrum, we already now have densified, and we've done access to, yes, almost 60 megahertz on the 2.3 spectrum. It's, it's a fantastic high-end spectrum band, which we now are deploying and will deliver very good data services. So, so in, in that sense, we see now that this is very well received by the postpaid customers. That's why we added 154 new postpaid subscriptions this quarter alone.
It's very clear. Thank you.
Next question, please. Your next question is from Terence Tsui, from Morgan Stanley. Please go ahead, Terence.
Yeah, thank you. Good morning. I had a question on Myanmar, please. Perhaps you can share with us a bit more color about the impacts on the competitive dynamics ever since the fourth entrant launched. Just wondering now whether it's quite common that operators are pricing below the regulatory price floor that's been set. Thank you.
Yeah, I think it's still too early to say. They launched just a month ago in June, and they came with quite attractive offers below the threshold that was set by the regulator. And they got, they were allowed to do that as promotional activities. But then after the promotion has expired, they need to go back. The rest of the industry have sticked to that regulatory floor, also the price floor. So I think it's too early to say. And in the midst of this, the best thing we can do is just to continue to execute on our strategy, having the best network, having the best distribution, and also having competitive offers.
Okay. Thank you.
May we have the next question, please? Yes, your next question is from Ulrich Rathe from Jefferies. Please go ahead.
Yeah, thanks very much. I'd like to come back to Thailand. You were really hesitating with sort of comment specifically on the upcoming auctions and your strategy there. That's understandable. I'm just wondering if you can ask sort of some of the concerns in a different way. If you were to operate such a network at 2.3 gigahertz, and then you would not have access to any lower band spectrum, obviously you would incur CapEx and a large part of that done, I understand already. But to what extent do you see yourself at a disadvantage with regards to operating costs? Because a very dense network presumably also incurs higher OpEx in terms of backhaul needs and maintenance on a very large number of sites.
Do you think such a network can be competitive from a cost perspective? That would be my first question. Thank you.
You want me to take that? Yeah, well, I cannot answer your question because that's in the midst of the calculations that we are having.
I wanted you to say that.
And of course, you will have a disadvantage with not having the lower spectrum. However, you can also continue to densify the network as we already do. And this is basically a financial calculation. Having said that, I think to having the bandwidth we now have on 2.3 is giving us also cost advantages because we can deliver data volumes and capacity the needs that you need to invest yourself out, or if you have a much lower bandwidth. So it's a calculation that we are making. And the reason why we didn't participate in the last auction was just that we didn't—the figures didn't match up. We are a value-driven company.
We are not buying spectrum and throwing money out there if it's not needed. And then it's better for us to densify the network as we did in 2.1, and then roll out to 2.3. So those are the numbers that we are looking at, and that's impossible to finalize that calculation before we see all the terms for the upcoming auction.
Thank you. And if I may follow up, in Norway and the EBITDA sort of trends, obviously, the comparables and the quarter so far in 2018 have been rather volatile. And I know you usually don't give guidance on divisions, but can you give some sort of sense whether you'd be able to hold EBITDA in Norway stable in the second half, give and take, compared to the 4% decline that we are now seeing in the second quarter? Thank you.
It would be a shame to break a good tradition of not giving guidance on business unit level now before the summer, so I'm not going to do that. You know, we have a volatility on the top line numbers . So on the top of the revenue stack, there are some volatilities, whether it's roaming or it is other issues, it's three- and five-digit numbers this quarter, et cetera. But we focus a lot more on the total revenue base, and we also have a tremendous experience and a proven track record of renewing that revenue base and maintaining it and developing it. And we basically feel the numbers from Norway is strong also this quarter.
It builds on a very strong last quarter, last year, and we are quite satisfied both with the numbers and also with the measures taken. Sigve has talked about the new acquisition of customers, which is very interesting. We are increasing the fiber customer base, and we're also continuing renewing the company and transforming the company, including making it a more robust and efficient company. So we are quite pleased with the numbers, and then you will always see some fluctuation in the quarter-on-quarter, but that is of less importance to us.
Thank you.
Okay. May we have the next question, please? Yes, of course. Your next question is from Viktor Högberg from SEB. Please go ahead. Your line is open.
Yes, thanks very much for taking my question. I was just wondering on the revenue contributors for the second half of this year, where do you see the main opportunities and the main threats? And if you can just explain a bit around Pakistan, because now this tax is gone, and last year you had the tax, and you mentioned how you trend now. I assume it should be possible to think that second half in Pakistan could be very strong given the trends. And then just a quick follow-up on a previous question on Norway, phrasing it a bit different, if...
Are you going to invest much longer in building the customer base, or was this sort of a special situation here in Q2, and maybe we think you'll see costs coming down ahead, and then you get the benefit from the new customers? Or just the dynamics in Norway, how you plan to run it, on marketing versus customers and costs ahead will be helpful. Thank you.
Yeah, start on your revenue question. As I said, in Pakistan, if you adjust for that, that tax, the actual growth, underlying growth, was around 7% in the quarter. I cannot give you any guiding on what that growth number will be in the second half of the year, but we see that the growth is picking up. We saw that in June, and we see that in July and going forward. So we think Pakistan will be a growth market. We see the same in Bangladesh, coming from growth on the 4G customers, but also coming from now weather being more normalized. Again, we see the growth figures picking up both in June and going into July. So those will be the two main growth markets.
Then we see that they have a good attraction in Malaysia. We did well, very well in the second quarter, we did very well in the first quarter, and what we have seen so far in the third quarter is that that development continues, so I'm very happy with that as well. The two uncertain markets in Asia, it's Thailand. We don't, we, of course, cannot be very precise on predicting what's happening around the concession end, and then in Myanmar, which I already commented on. In Europe, I think, Norway is doing well. The underlying ARPU growth in Norway is 3%, and that's been that for actually several quarters in a row. And we see no reasons why this should be changing going forward. Then to your second question.
Of course, we stay competitive in all the markets, in Norway as well, and when we see opportunities, then we spend some more money. That's what we did in the second quarter, and that's what we are going to do in the following quarters also. The customer fall we have seen in the past is very much coming from data cards that is now churning out of the market and also from our low-end customers. We stay focused on the value customers, the high-end customers, the postpaid customers, and those are the ones that we continue to upsell. So we are going to stay competitive in the coming quarters also, as we did in the second quarter. But again, I cannot give you any guidance on what that means in practice, but that's the way we operate.
May I add, Sigve, that what we did in Norway this quarter is not anything special compared to what we did, for example, in Bangladesh last year. We did the same when we saw the opportunity to have strong effects from extra marketing spend, as we will do when we see strong effects from deploying capital in other ways. The whole point with our combined growth focus and restructuring efficiency focus is, of course, to be more granular in the end. It's, of course, to reduce spending and so on. But the main point is to get a higher return on what we spend, to become more granular, more precise, to question old habits, and to create new, better habits, and then deploy capital accordingly.
So this quarter was Norway, we had a previous quarter was Bangladesh, and, we'll see, what we do the second half. We will focus on cost and spend where we see that we have good effects from extra spending. And that will then hit the cost line, but that will be well worth in order to achieve other things that is important for us.
Just adding one more comment. We see now the result of the investments we have done in the network over the last few years. We have 4G now on 99.something%, 99.4% of the population. It's 4G everywhere, and not only 4G, the speed experience you have with our 4G network, it's superior. And that is what we now see that the customers are satisfied with. They basically use our 4G services now rather than connect to Wi-Fi, when they are watching their content. And this is the reason why we are able to constantly upsell and upgrade our customers to richer data packages, and that trend is going to continue.
...Let me also just add that on seasonality in the Norwegian mobile market, Q2, and in particular, June, is a very important season for handset sale in the Norwegian market. And that was why it was natural also to focus a bit on that this quarter, this year. In addition, we combined that with the new Fleksi products that we had launched in March, and it was natural to make some activities around that, and we are very pleased with the uptake we see on those products.
Okay, thank you very much for elaborating on that. Very helpful.
Next question.
Your next question is from Henrik Herbst from Credit Suisse. Please go ahead. Your line is open.
Yeah, thanks very much. I had one question and one follow-up. Firstly, in terms of CapEx, as you point out, you're now a bit below sort of the run rate to hit your guidance for the full year. I was just wondering, I mean, I guess there are some limitations in terms of how much you can practically spend, like building out fiber in Norway, there's sort of a cap in terms of how much you can actually do over a certain amount of time. Just wondering, is it fair to assume that you probably end up at the lower end of your CapEx guidance, and maybe some will spill over into 2018?
And then the follow-up is also on CapEx, and on Thailand, where you point out the relationship between you and AIS, and how you're having high market share, I think you said, on, on free cash flow. Is that, is that necessarily a good thing, I guess, when the market is increasingly moving towards 4G, data usage is going up the way it is, wouldn't you want to invest a little bit more? Is that, is that sustainable basically, or should we expect that gap to close? Thanks very much.
Yeah, there are two main reasons why we are below the spending plan, and that is Norway and Thailand. So we are definitely planning to invest in Thailand, which we have done for quite some time now. We have densified the networks, and we will continue to do that and also continue to roll out the 2300. So, fully subscribe to your comments. We do not lack any willingness to invest in Thailand. Then we believe, right or wrong, that we are fairly efficient in the way we roll out. We also believe that we have significant advantages now from our global procurement company and our global procurement philosophy.
So we think we are also, in that sense, fairly competitive, and we will spend the money on Thailand. When we compare the cash flow, it is still a recognition for us that we can do what we want on the network rollout side and still, on a cash flow basis, appear to be very competitive, and it's just to compare the numbers. When it comes to Norway, we have a run rate in June, July, which tells us that we will get very close to the plans we have had for the year, if this kind of continues, and we see no reason why it shouldn't. Obviously, there is a limit to how much you can roll out, but we think we are well within those limits.
If I were to put a flavor on the 2017 to 2018, I agree with you, I would probably put the foot on the lower end rather than the higher end.
Okay, thanks. Thanks very much.
We have now come to the last caller in the line today. May we have the last question, please?
Yes, your final question is from Usman Ghazi from Berenberg. Please go ahead.
Hello, thank you for taking the question. The impact from the special numbers and the wholesale revenue declines was higher than expected this quarter. I was just wondering if you could give us an indication of what this impact was in Q1, and whether this high rate of impact, the NOK 150 million year-on-year decline, is what you expect for the next 2 quarters into 2018. Thank you.
I believe, Usman, it was broadly in line with the first quarter. It's around NOK 100 million on the mobile wholesale contract, and then around NOK 50 million on special numbers.
Right. Okay. Thank you.
Okay, if that was, was it, then we have approached the end of the session here today. As I mentioned earlier, there will now be a separate session for media present here at Fornebu, and my colleague, Atle Lessum from the communication department, will take you to that session. So, thank you all for attending the session here today. Have a great summer, and see you at the third quarter presentation. Thank you.
Thank you.