So, as usual, we'll have a Q&A session immediately after the presentation. First, hear from the audience, and then later on, from our conference call participants. For media present, there will also be the opportunity to speak to Sigve and Richard after the Q&A session. Without any further ado, Sigve, if I could ask you on stage, please.
Well, good morning to all of you, and also good morning to those of you that are following us online. This being my first quarterly presentation, I think I got a good start. The figures we are delivering today are solid figures. I'm happy with the 10% subscriber growth, now approaching 200 million very fast. I'm happy with the 4% revenue growth, and I'm even more happy with the 6% EBITDA growth. And that's something we are going to actually have as a KPI for our CEOs going forward, that EBITDA should be growing more than the revenues.
That's a way we can get our business units to focus on lowering costs when there are difficult industry revenue development, but also keep costs low when the industry is developing with healthy revenues. As always, there is a mixed bag of result. Norway is continuing to deliver good on the data monetization. Sorry. This quarter, Sweden is also coming relatively strong on data growth, and Hungary is also a positive surprise this quarter. Also now finally starting to monetize some of the data growth. And of course, as the last quarter, Myanmar is still the star.
The challenging views we have, it's continuing to be Thailand, Malaysia, also due to macro factors in addition to competition, and Denmark, and I will come back to that. The main focus we have, and I will have in the future, is how to monetize data. As you can see now, it's around 95% growth in our network year-on-year on data, and we are having 16.5% CapEx to sales ratio, so relatively high. I will come back a little bit later to how I see that going on, forward. Then, as also known, we made an announcement of exiting VimpelCom.
We did that after a strategic review with the board, where we decided that we want to focus our core businesses, being in Europe and being in Asia. We have, because of that, taken also an impairment of VimpelCom, writing it down to the current market value. The sales process has been initiated, but as we also announced, when we came out with this news, we are not going to do any fire sale. We are going to run an orderly process, and that will take time, knowing the complication of the VimpelCom situation. Okay, go a little bit more in depth on Norway and Sweden.
Norway continuing to deliver good with its 5% growth. I will claim, I see Berit there. I will claim that we are holding up very nicely in the competition. We don't really see an effect of aggressive actions now from the number two operator, NetCom. However, we are going to speed up the 4G rollout, and we are going now to put 4G equipment on all our 2G base stations, and that will happen in the coming 2.5 years. And the way we see that now is that we will be able to do that without changing the guidance we have on the CapEx.
The challenge in Norway is on the fixed line. We are losing market share on fixed line. The ARPU is keeping up very nicely with the customers that we are migrating, but we are losing subscriber market share. We are probably now down to 42% subscriber market share on fixed line, and that is a loss of around 2% points last year. We added 16,000 new fixed line customers in the last quarter, and so far this year, I think we have added around 50,000 subscribers.
What we are going to do to take back the loss we have on market share, or at least stop the decline, it's to optimize the technology we are having. Being, as you know, we have both fiber, we have cable, we have fiber node, we have VDSL, and we need to see how can we optimize that in a better way. And we are also going to now use the cluster methods to go into the various areas where we think that there is a position for us to take. Again, we are not going to change the CapEx guiding, even though we are going to do more and be more aggressive on fixed.
In Sweden, it's a little bit the same picture. After cleaning up some of the unlimited data plans we had, we now see a growth on data, and I'm happy with that 2% revenue growth, after many quarters with a challenging situation. The Swedish operator have focused very much on getting back on revenues, and the fixed is also a challenge in Sweden. A little bit different from Norway, but still, we are around 20% market share on fixed line customers in Sweden, and we need to make sure that we are taking more of the growth we see, especially in the fiber to the villa market in Sweden.
I think we added around 8,000 fixed line customers in Sweden in the last quarter. In the European operations, Hungary already mentioned, after many months with challenging top-line growth, we are now having a 4%. Bulgaria, we have arrested the decline in subscriber uptake or subscriber market share, so it's now stable. And the main challenge we have in the rest of Europe is Denmark. The Danish market is continuing to be very, very competitive. We have an EBITDA margin of 15% in the last quarter if I adjust for the joint venture cost.
If I also adjust for the IT transformation project that we're having in Sweden, the EBITDA margin would probably be around 16%-17%. We think that we are not losing market share. We think that the margins for our, the other two, smaller competitors is about the same. However, the Danish market as such is not developing in the right direction. Of course, we were disappointed when we had to withdraw our application, the joint venture application, that we went to the European Commission with. So we are now looking into other strategic options.
I cannot go through what those strategic options are, other than saying that Telenor doesn't have to be in Denmark. Denmark is not a strategic market for us. So when I'm talking about strategic options, you should read that as all the strategic options are up in the air. Thailand, continuing to be a challenging market. We see that the competition is not easing. The unlimited data plans are unfortunately back.
You may recall that, dtac tried to get the industry out of those unlimited packages. For a couple of quarters, it looked like the competitors were following the dtac lead, but they are now back on quite aggressive packages. However, unlimited in Thailand is not completely unlimited. They are throttling down after a certain volume. We also see that TrueMove is continuing to be aggressive on prepaid subsidies. The dtac year-on-year is a -2% on the revenues. Most of that is coming from the 70,000 less customers over the one year.
The 2 million, it's mostly coming from the cleanup of dead customers after all the customers had to be registered. We have a healthy EBITDA development in Thailand in the third quarter. Most of that is coming then from pulling back on the prepaid subsidies. And we are not going to to continue with that to meet TrueMove. However, in the fourth quarter, you will see iPhone sales in Thailand and the subsidies that comes with iPhone sales is going to hit our our EBITDA in the in the fourth quarter.
But this the the the the bundling we have on iPhone on the postpaid customers is a much more giving us a much more healthy return and than the the prepaid phone bundles. dtac is continuing its turnaround process. I will say that they have made significant investments now in the network, and I will claim that both on 3G and 4G, we are getting up to the same level as our competitors are. But there is still a job to be done there. In addition to that, it's that turnaround on the distribution. And that turnaround is very much based on the cluster model that we have developed in other Asian markets.
And for us, or for dtac, to be able to compete with the giveaway handsets in the mass market that TrueMove is having, we need to be much more granular in the way we are operating our distribution. So that probably will take another couple quarters before we see the full effect of that. They are also progressing on the discussion we have with the CAT, trying to secure a future model for fiber and for tower. As you know, after 2018, the towers and the fibers has to be returned back to CAT. An agreement with CAT has been met, but we are still waiting for approvals higher up in the government decision chain.
Malaysia, very challenging macroeconomics. The ringgit, the local currency, it's down 15% in this quarter versus the US dollar. That means a weak consumer sentiment in general, and especially this hit our migrant segment, where Digi is traditionally very strong, and it also hit the international traffic margins. The competition is also continuing. We see the number one operator, quite aggressively now going after the migrant segment, and we see that hitting the stronghold that Digi used to have, both in the Bangladeshi, Indonesian, and the Nepal population.
We also see U Mobile, the number four operator, aggressively coming out with data plans. Despite that, I think Digi is increasing slightly its revenue market share. They are doing, and you also see a 1% revenue growth now for, the quarterly year-on-year growth, compared with the market, which is probably minus 1%-2%, growth year on year. And I think Digi do that with, continuing to focus on its data position. They have now more than 50% coverage on 4G, up from 40%, previously. And, that's the widest 4G coverage any operator have in this market.
In addition to that, I think Digi has done a good job with taking a position on digital content or data content. Bangladesh, Pakistan. Bangladesh is now back with a growth, subscriber growth, 10% year-on-year subscriber growth, with now several quarters with zero subscriber growth. So we are happy to observe that. We also see that data is finally starting to pick up, also in the mass market in Bangladesh. We added 2 million data subscribers, also active data subscribers, the way we count it. Subscribers that are using at least 50 KB over three months.
And they now are having 27% of their subscriber base are now then active data users. So we see that there is an appetite and also willingness to pay out in the mass market. Pakistan, the market is now back to a more normal situation after the biometric verification system. And we see a healthy revenue growth. And even more interesting, I think, is that out of that revenue growth, 2% points now out of the growth comes from the growth we have on financial services.
And from the overall revenues now, I think financial services is accounting for around 11% of the total traffic and subscriber revenues in Pakistan. We also see an improvement on EBITDA in addition to the revenue growth. We see that from lower energy costs, and as you know, energy cost is a very important part of our operational on our network cost in Pakistan. We took a position of giving away free Facebook initially in Pakistan.
That we have now moved back on, so now we are charging the Facebook users. And to our pleasure, we see that the people that used to come in on the free offer are now willing and able to pay. So again, there are some positive signs on the ability in the mass market and willingness to actually pay for the data usage. India, 19% subscriber growth year-on-year, 7% revenue growth. When we analyzed the second quarter, the industry's second quarter figures in India, we saw that Uninor or Telenor now has a 6%, approximately, revenue market share in the six circles where we operate.
That bring Uninor or Telenor up to the number four position in these markets. There are only the three biggest ahead of Telenor in these markets. When you then think about that in these six circles that we are operating, we actually cover only 50%-55% of the population. Then we can assume that the 6% in the coverage area is significantly higher. So we see now that we are starting to get some volume. We are starting to get a scale good enough for also having pull, customer pull, not only customer push.
We rebranded then Uninor to Telenor in this quarter, and that is about NOK 53 million out of the negative NOK 58 million on EBITDA. So, if you adjust for the rebranding costs, the EBITDA will be more or less around zero in the third quarter. I think that operational model now, it's sustainable on a slight positive EBITDA development. We also see that despite not having spectrum enough, data spectrum, 22% of the Telenor customers in India are actually active data users. And they are using then the network that we are providing them for communication services, and for simple internet applications.
So we are not losing out. However, with the growth we now see in the market, we need more spectrum. And the way we look at that is that we are now viewing different options, and we are talking to several of the industry players. Spectrum trading, spectrum sharing are now being allowed. There is also then opportunities for participating in the new auction. There will be a new auction coming out in the first part of next year, and this is the real auction. The previous auction was actually only an auction to renew the licenses of spectrum that expired, so it was the incumbent's auction.
This time, there is 2.1 MHz coming out and also 2.3 MHz coming out. And as far as we understand, there is spectrum enough in these two bands for us to be having a chance to take a position. Going forward in India, we are going to have a very prudent approach. I know that most of you will probably credit me or blame me for what we have done in India so far. And you should continue to credit me or blame me for what we are going to do in the future.
What I'm going to say here is that we are going to stay in India for a long term, but we are going to use a very prudent approach. And that's the reason why, why we are not making any big acquisitions, rather than taking this step by step, trying to, to secure our future position through getting more spectrums, as I just explained. Myanmar, I already used the word star for Myanmar, another very strong quarter. Past 12 million subscriber growth in 12 months. 39% EBITDA margin, 37% SIM market share.
We don't know the revenue market share because we don't have the figures from the others. And we actually added another 2% points, I think, on the subscriber market share in the last quarter. Since last time, we have rolled out another 1,000 sites. We are now 3,300 sites out in the market, and during quarter four, we are going to be present in all states and in all regions. That means that we are now starting to get into the real rural part of Myanmar.
The ARPU is now $4.9, slightly down quarter-over-quarter, and you have to assume that this ARPU will not be the same for the new customers coming in. So, I'm kind of guiding you a little bit, being cautious, do not take these numbers and forecast the coming year. We will see now more marginal customers coming in. Competition, it's heating up a little bit. We see very aggressive offers on net from our competitors. However, our volume, our base now is 12 million customers, so we can also do aggressive offers on net to avoid interconnecting costs.
Elections seems to be coming up eighth of November. It's a little bit question mark around the date, but it seems like the government is quite firm on now running through that election, and we don't really see any risk around the election for our business going forward. I said in the beginning that we are very focused on the data monetization. This is a graph showing how the revenue overall organic subs and revenue, traffic revenues have developed over the last three years. We have been in the range of 4%-6% in this period.
Then you see now that the traffic volume is actually doubling. If I look at the median usage, you will see a doubling of the median usage with our customers. 1/3 of our customer base do now have smartphone, and we see that when people get smartphones, they suddenly start to be active data users. And out of the almost 200 million customers now, 37% of them are active internet users. So there is a growth, and there is a cost to that growth. That's why you also see that our CapEx to sales ratio is now around 17%.
If you compare with our peers, this is more or less the same. And I don't see this coming down for some time. We still see CapEx investments needed in Norway, we see it in Sweden, we see it in Thailand, and we also see it in markets like Bangladesh and India. So you have to assume that this 15%-17% ratio will continue for some period of time. Of course, if you are able to continue to grow our revenues, that may take down the ratio a little bit, but we will have to continue to invest. So the only way we can make this picture explainable to our investors is to monetize data.
And the focus we have on that is that we need to constantly be able to launch price plans and to monetize the customer's usage. I do not want to say that we are going to fix all this with taking digital positions. We are going to do that as well, but the revenues coming from those positions are probably a little bit longer ahead. We need to look at the price plans and what they do today. So this is going to be one of the core focus areas for the management going forward. Then I want to close up with a little bit the key priorities.
As a new CEO, I want to tell you a little bit about what I'm going to focus on. And I'm going to focus on keeping Telenor as a growth company. As I showed on one of the previous slides, we have been growing the last 3-4 years in the range of 4%-6%. That's my ambition to continue with. But this growth has to be profitable. That's why I'm also saying, that my focus is going to be that EBITDA should be growing more than revenues. And on top of that, of course, I need to make sure that we have a healthy return to our investors. In addition to that, we are now in the middle of a strategy period, where we are looking at how can we better be, taking a position as, in the digital space, being a digital service provider.
We are going to do a very careful, approach there, but we are going to look at how can we digitalize the customer journey? How can we digitalize distribution? How can we take a position of developing more applications ourselves? For example, the Min Sky in Norway, or a storage service, that we now are rolling out in all our markets. My Telenor in Norway, which we are also rolling out in more and more markets. And that's also why we have reorganized and make a new digital group, which are going to be based in Asia, to deliver on some of the digital verticals that we have invested in.
And you know, the cooperation we have with Schibsted on classifieds. So we are going to move into this space step by step, because we would like then to secure our future with being more in the digital space. Then efficient operations. I think we have developed, and we have delivered on what we have said in the past on operational efficiency. However, I think there is more to be done.
I've asked Richard to come up with a plan, top-down plan. How can we be even more bullish in doing something with the main cost elements we have? And the main cost elements we have, if we compare with our peers, is related to IT costs, it's related to customer service costs or customer engagement costs, and it's on the network side. So we will then run a project to see how can we simplify, standardize IT, how can we digitalize customer front costs, and how also, how can we take the network sharing concepts into new areas?
On top of that, those of you that think that I will have different priorities when it comes to the financial priorities, I have to disappoint you. The financial priorities will stand, and you know them all. You know that we want to keep a healthy balance sheet. We want to deliver on our dividend policy. The debt ratio will be, as we have talked about before, and not least, we will have a very careful and prudent approach to M&A activities. I don't want to change those policies, which I have been a part of myself, sitting in the group executive management over the last years.
Short term, we have to return to growth in Thailand. We have to do something with the challenges we have in Norway and Sweden on fixed line, and we need to secure additional spectrum, not only in India, but in several other markets. As you know, there are spectrum auctions also coming up in Thailand, there are spectrum auction coming up in Norway, and there are spectrum auction coming in most other markets. I think that's the overview, Richard. Now it's up to you.
Yeah, thank you. Thank you, Sigve. So, good morning from me as well. What I will do is I will go into some more details on the profit and loss and the balance sheet, and give you a little bit more color on the guiding. So, let's start with the revenues. We are reporting 15% growth in revenues. But as you know, the Norwegian kroner has weakened considerably over the quarter, so the organic revenue growth is around 4%, i.e., 11% points comes from weak currencies.
What you see on this chart to the right there, is you see apparently a slight negative trend on the organic revenue growth, i.e., the adjusted for currencies. That was at 7% in Q1, and now down to 4.5%. Most of that is driven by lower handset sales, and also the challenges Sigve talked about on the fixed side. The mobile revenues, the mobile subscription and traffic revenues are developing quite healthy. Mobile is actually up 5.2% points year-on-year on the total revenue base.
I'll go then a little bit more into detail on the mobile subscription and traffic revenues to explain what the drivers are there. If we then look at only the subscription and traffic revenues, that's excluding handsets, it's including interconnect, and in stable currencies organic, those are up 8.3% this quarter. That is higher than it has been the last three years. Like Sigve said, we have been at around 4%-6%, but this quarter it's 8%.
So it's a very strong quarter on subscription and traffic revenues. We have 5 million new subscribers, mainly in Asia. But we also see from the breakdown here, between the regions, that Norway is still holding up well on mobile revenues, 5% revenue growth and solid underlying ARPU growth on the domestic business. Lower interconnect not included here, but lower roaming is down. We've reduced the roaming prices, but domestic mobile revenues in Norway is very strong this quarter. Then we see Europe around zero.
We are now in positive momentum in Hungary and Sweden, but we have negative decline in Denmark. A rapid ARPU decline in Denmark also in this quarter, and the lower subscriber base in Bulgaria is pushing Europe down to zero. But again, promising signs in Hungary and Sweden. Then our growth engine, Asia, very strong quarter, 12% growth in subscription and traffic revenue growth, mainly from new subscribers. And also given the fact that both Thailand and Malaysia is now around zero growth, this quarter, Malaysia slightly positive, Thailand slightly negative, we report 12% in Asia.
That's mainly due to strong performance in Myanmar, but also good subscriber adds in both Bangladesh and Pakistan in, in this quarter. Then to the EBITDA. We also have a 15% increase in EBITDA, year-over-year. EBITDA increased approximately NOK 1.6 billion, which is a 15% increase. 10% points of that is also due to currency. So we're also helped very much by the weak Norwegian kroner when it comes to EBITDA.
Also from what you see on the chart to the right down here, Myanmar is a strong contributor to our EBITDA growth, almost NOK 800 million coming from Myanmar. Then strong contributions also from Pakistan and Grameenphone this quarter, while you see even Denmark is a very small operation in the total Telenor picture, it's reducing our EBITDA by approximately NOK 100 million year-over-year. On the margin side, we have stable margin year-over-year, 37%. We have lower handset sales. We have scaled back on the low-end smartphone subsidies in Thailand.
That is an improvement to the margin, but we have significantly marketing spend in several markets. We have the rebranding in India, and we have increased market spend in Thailand, and we also have extra cost in connection with the JV in Denmark pulling the margin down. So that explains the revenues and the EBITDA. Then to our CapEx. Like Sigve said, we are on a very high CapEx level on the last 12 months, which is in his chart. And this quarter is, in my view, exceptionally high. We are at 18% in this quarter, and you see the breakdown compared to last quarter three in 2014.
And what you see is that we have very high investments in dtac this quarter. We have increased investments with NOK 1.4 billion, and we're now rolling out on both the concessionary licenses and the regular licenses in dtac on both 3G and 4G, and we have improved the network considerably in Thailand during this year. Then on Myanmar, the rollout continues, and we're now entering more challenging areas, but we increased CapEx by NOK 600 million from Myanmar year-over-year, and then Grameenphone to secure the network position there, we have increased investment by NOK 258 million.
So all in all, we have invested NOK 5.7 billion this quarter, which is up NOK 1.8 billion from the same quarter last year. If you compare it to second quarter this year, you see a decline, but that is largely due to that expense, the satellite, in the second quarter this year of approximately NOK 1.5 billion kroner. So strong development in EBITDA, but also high CapEx. So what does that do with our cash flow? Q3 last year, we had a cash flow of NOK 6.3 billion.
This quarter, we have NOK 6.1 billion. And if you remember, we improved EBITDA by approximately NOK 1.6 billion, and then we have increased CapEx with approximately NOK 1.8 billion. And there are some round offs there, but the decline on cash flow is around NOK 300 million year-on-year. We believe the investments we are doing now, the heavy investments, both in Norway, Thailand, Malaysia, Bangladesh, are the right ones to secure the data position.
But, I also just want to reiterate what Sigve said, that to monetize on those investments by solid EBITDA growth and healthy financial returns is, is paramount for Telenor, going forward. Then some, other more financial items, on the net income. We, here you see the comparison of Q3 last year with Q3 this year, breaking down by the lines in the P&L. Revenues and EBITDA, we already explained. Then on other items, we see an expense of NOK 418 million this quarter. Two main effects there is redundancy cost in, Norway.
We've taken a headcount reduction in Norway in part of the continuous efficiency program in Norway, and we have scrapped some network assets in Denmark of NOK 177 million. Depreciation, amortization increased NOK 900 million, year-over-year, and there are several factors explaining that. We have started depreciating Myanmar, of course. We're depreciating Thailand, now towards the end of the concession period in 2018, and we're also accelerating depreciation in India, that we're doing a network swap, so higher depreciations.
Then on associated company, earlier, we had the, the message that we intend now to sell the VimpelCom share and the resulting impairment, that we then changed, our impairment evaluations of VimpelCom, and, we have then, wrote the, the VimpelCom shares down to market value. That resulted in an impairment of total NOK 7.5 billion, which NOK 5.4 billion went to profit and loss, and NOK 2.1 billion went into other comprehensive income as they were currency related.
So we had contribution from the second quarter results of VimpelCom of approximately NOK 300 million, and then the impairment hits our P&L with NOK 5.4 billion. So the net then comes out at a negative of NOK 5.1 billion. Net financials, approximately NOK 800 million negative this quarter, also a weaker development from Q3 last year. The interest level and the interest cost is approximately the same. These are currency losses related to Myanmar, that we have liabilities in Myanmar in foreign currencies, and the kyat has weakened approximately 15% against the US dollar.
On the taxes, nothing abnormal there. Underlying tax rate in the quarter is around 29%, NOK 1.8 billion in taxes. So that's result in a net income to Telenor of minus NOK 1.8 billion to Telenor shareholders. Adjusting for the VimpelCom impairment, we are at NOK 3.6 billion positive, which is an earnings per share, adjusted for the VimpelCom impairment of NOK 2.4 billion. And, as you know, when we are looking at our dividends, we are normalizing things like impairment. So, the 2.40 is a more guiding number for where the underlying performance is.
Then to the balance sheet. Like Sigve said, one of our key financial priorities is to keep a healthy balance sheet, and we have set a ceiling on net debt to EBITDA of 2x. We are comfortably below 2x now. We are at 1.1 net debt to EBITDA by the end of Q3, which is a slight improvement from the second quarter. The debt level is more or less stable from the second quarter, but we have a strong development in EBITDA that takes the ratio down. There are not that many special items in the reconciliation on net debt from second quarter to third quarter.
Just like to point out a few. CapEx paid is at NOK 4.9, but remember, CapEx accrued is higher. So, we have done a good job on working capital by extending credit terms with our suppliers. That's the reason. And then the big one is the currency effects of NOK 4.1. We have strong help from the weak currency when it comes to revenues and EBITDA, but as some of our debt is in euro and dollars, which has strengthened compared to Norwegian kroner, our debt level measured in Norwegian kroner increased by NOK 4 billion.
So total net, based on all these factors, are around forty-seven billion and a factor of 1.1. Then to the guidance. The main headline on the guidance is that we more or less maintain our guidance from the second quarter, but we have to include Denmark. When we were in the joint venture situation with Telia, we had classified Denmark as held for sale, and it was not a part of our consolidated figures.
When we withdraw the application, we had to include Denmark back into the consolidated figures, and Denmark contributes negatively on the top line, but even more important, it dilutes the EBITDA margins with approximately one percentage point. The group now, we have this quarter around 37% EBITDA margin, and Denmark reported a 10% EBITDA margin, so you see the dilution effect. So the main change to the guiding is Denmark. But let me go through the various guiding parameters one by one. Organic revenue growth, we are guiding now around 5%.
Year to date, we are at 5.7, and the previous guiding was 5-7. There are two effects there. One is Denmark, that reduced the revenue growth, but we also had very, very high handset sales in Q4 last year. We sold a lot of low-end smartphones, subsidized in Thailand, that we have stopped with. So in all likelihood, handset sales will be lower, Q4 this year than Q4 last year, which will impact the growth year-on-year negatively. We don't see the mobile subscription traffic revenue growth. We don't see any big change there.
Of course, Berit has tougher and tougher comparisons, but the underlying trends in Norway are very strong. On the margin, I think even if we've included Denmark, I think we can say we have improved the guiding somewhat on the EBITDA. The previous guiding was at 34%-36%, and just including Denmark, we should have adjusted it down to 33%-35%.1% point down, both on the top number of the guiding and the bottom number of the guiding. We're now guiding at 34-35. That's why we're narrowing it down.
We don't think we will come in in the lower end of the band, and that's consistent with what we said in the second quarter, that we will work on our OE. We will work on the revenue agendas to try to be in the high band of the EBITDA margin, and that's still our ambition, and that's also why we have cut the low end of the EBITDA guiding. CapEx to sales, we are at 18%, year to date. That includes the satellite, which contributes between year to date figures between 1.5%...
A little bit more than 1.5% points. And we also had a high CapEx level, low in Q3, not least due to heavy investments in Thailand. So we are in the middle of the range of 18%. We know that Q4 typically is a high CapEx quarter, but we have tried over the last year to level out CapEx more during the quarter. So the expectations we have, that we should be within the CapEx to sales ratio that we earlier guided of 17%-19%. But again, I just don't want to create any big changes around the guiding, because the real effect there is the inclusion of Denmark.
On the remark of the dividend, the board of directors also have now declared the second tranche of the dividend of NOK 3.50, which is in line with the plan. Just to recap, earlier this year, Telenor decided to move to semi-annual dividends. What this does, it allows us to align the cash flow profile from operations with a payout. The AGM declared the first tranche in May of NOK 3.80 per share, and then they gave the board authority to declare the second tranche later in the year.
The board decided then to declare the second tranche of NOK 3.50 per share, and that will take the total dividend up to NOK 7.30 per share, in line with earlier communication. This represents a total payout to Telenor shareholders of NOK 11 billion, and it's a growth year-on-year of 4.3%. The ex-dividend date for the share will be second of November, and we expect the payout date to be approximately twelfth of November. So then we're at the summary and Q&A.
So I just want to reiterate just one point. It is the focus we have on monetizing, increasing data consumption on the backdrop of high CapEx level and continue to work on the revenue agenda, and like Sigve said, taking a further step up on the efficiency agenda. So by that, Meera, I think we can move to Q&A.
Sigve, could I ask you also on stage? We'll start with questions from the audience.
A s a reminder, to ask a question today, please press star one.
The mic is coming first.
Thank you. Christoffer from DNB Markets. Just a quick question to Sigve regarding the CapEx to sales. You mentioned 15%-17% over the next few years as a driver for continued strong growth. You're in a high CapEx environment now, as you've stated, and where do you see those monies being spent over the next few years? That's question number one. And secondly, what would be a good benchmark for us to understand your ambitions with respect to the organic growth you're supposed to achieve with that CapEx?
Now , the first question, it's, I think I've briefly mentioned already. We need to continue to invest in Norway. As I said, the ambition is now to put 4G equipment on all our 2G base stations. And we will do that in the coming two and a half years or so, and that will take some investments. To take back some of the loss we have on fixed line in Norway will also take investments. So Norway is still going to be relatively high in the coming couple of years. Thailand, the same.
A little bit dependent on how we now see the auction. As you know, there is an upcoming auction, both on the 1800 band and 900 band. How the outcome of that will be, we don't know, but a little bit dependent on that, we have to continue to invest in Thailand. In Malaysia, we have only 50% population coverage on 4G, and then we see now the growth of data in that market. That will also be a market we have to invest.
And then I will say, Bangladesh, as I also indicated, we now see a healthy growth on data monetization in that market, and we see now that the mass market are starting to picking up, and we will have to invest there as well. And then the last one would then be India. So those will be the main markets, I will say, that need CapEx in the coming two years. That's why I think that you will see that ratio more or less be there in the coming two years.
The second question was on the revenue growth. Now, on the revenue growth, I think you will see that there is still revenue growth coming out from new subscribers, and both in India, in Pakistan, in Bangladesh, and in Myanmar. Those markets will still drive subscribers, subscriber uptake. Similarly to what we have seen in the last quarter, with around 5 million new subscribers, so that will be one part of it. But more importantly, I think, it's the data monetization. We hope that the Thai market is going to be rationalized, such that the industry can come back on the revenue growth on data.
Same with the Malaysian market. We hope that, Berit and her team in Norway are going to, to continue to stay, on the levels that we have seen, and that the early positive signs we have seen in Sweden and in Hungary is also going to continue. So that will be where we think that, hopefully we can continue with a 4%-6% quarterly revenue growth year-on-year in coming couple of years. So if we are able to do that, the ratio will probably go slightly down because of the revenue growth, but the investment level will still be high.
Thank you, Sigve. Any other questions from the audience? Just the gentleman behind you, if you just pass on the mic. Thanks.
Thanks. Fredrik Thoresen with SEB. Can you provide some more color on the India investments? In the report, you mentioned that you're doing an ongoing network refresh. What kind of investment levels should we expect there going forward? Some more clarity on that, perhaps. And also, you mentioned that you want to be more in the digital space. Does that entail also doing a more internally developed services like we saw Comoyo in Norway, or is it more partnerships?
You can take the first one, and then I can take the second one.
Yeah, no, the network swap in India is done the typical Indian way, at a very, very low cost. So we got a good deal for Indian operation. So we don't expect that to increase CapEx levels significantly in India going forward. The main expense we need to plan for in India going forward is for spectrum. And of course, we will take a prudent approach to spectrum, but there's no doubt that we need to secure more data spectrum one way or the other in India going forward. So that's - and that's more in a way, unpredictable on quantity and pricing, but that's the main uncertainty when it comes to CapEx in India.
To your digital question, I think four answers to that. The first one, it's what I call digitalizing the customer interaction. And what I'm talking about here is that we need to start building down the physical distribution and trying to engage with the customers digitally in a digital way instead. The physical distribution is still going to be, but hopefully we will develop new interactions with the customers in such a way that we can bring down the costs and using the digital platform. That being the distribution part of it, but that also being the call center or the customer service part of it.
This we see an opportunity for both in the developed markets, but we also see it in the developing markets, like Thailand, for example. dtac is really actually quite good at being in forefront of doing this. What we are going to do. And then there are three other areas. One is what we are going to do ourself. We, that's going to be a limited part. We are not going to have any big bets on our ability to understand what's going on in the digital services space. So currently, we have only two successful services, three successful services, I will claim. One is the storage services, the storage service.
The second one is the My Telenor, and the third one is appear.i n, also a video conference services. And we will continue to do that, test out services in one market. When it works, like my Min Sky has done in Norway, then we take it out across. But there is not going to be put a lot of neither effort or money into that part. The second pillar is what we do on what we call digital verticals. And we, so far, we are quite satisfied with the online classified investment we did together with Schibsted. And we try to develop that further.
And the reason for that is trying and only both to develop that as a vertical, but also to take the customer insight that comes out from that customer engagement and utilize that in our core telco business. And then the third part is on partnership, and I think that there is a long way before we can say that we have developed good partnerships here, but we are getting there. For example, we are having a relatively good partnership model with Facebook in Asian markets. We are experiencing now with YouTube, also in some of these markets.
And we're trying now to see how, especially in the growth markets, these partners also see a benefit of cooperating with us due to not only the customer access we have, but also our ability to actually build the customers. So, so that is the digital space. And, and I could have talked about this for a long time, but what, what I would want you to have as a takeout there is that we, we are not going to move into this space overnight. We are going to have a very, very prudent, careful approach, and, and not only do this for revenue reasons, also do it for cost reasons.
If we can digitalize a lot of the physical interaction we're going to have with customers, that, that will also have a major impact on our OpEx costs.
Thank you. If there are no further--
There's one more question, can we limit ourselves, please, to one so we can... Yeah, just in the second row, please.
Hi, Robert Nelson from Carnegie. limit myself to one question then. two, I would like to hear your thoughts on, on the timing of CapEx and, and growth. Do you see you're able to grow, four to six percent going into next year? Or do you have to make, more investments first and, and seeing that growth coming later towards year end or towards 2017?
Now, let me start, and then Richard can correct me if... No, my answer to that would be that, no. We are investing now, and we are enjoying the revenue growth out of that, and that's exactly what we are going to continue to do. And I foresee that we, going into next year, should be able to have a similar revenue growth as we have had in the previous quarters, without waiting for monetizing after we have done the investment. So, this should happen in parallel.
I just to add on that, we run a process, what we call a dynamic CapEx allocation, that we have a baseline of CapEx. So there are predictable in the business units, what they can use, which is significantly lower than the total CapEx frame. And then we allocate the additional CapEx over and above the baseline to the units that really are able to deliver revenue growth. An excellent example was Norway a few years back in 2013, where it was not visible at all that we could increase revenues, and it was the kind of chicken and the egg of CapEx, but we did it dynamically, said:
Okay, we do a little bit, and then we see, okay, can we monetize on that? And then we got into a positive momentum that has now resulted in that we have aligned technology and commercial and finance and really made now a solid plan on the 4G rollout that we think can bring great revenues to Norway. And so that will be very important. So when Sigve is now saying that we need to maintain the nominal CapEx, it is not an automatic maintain. Of course, if you don't see the revenues, that has to have consequences for CapEx. So that will go hand in hand, and we have a very prudent and dynamic CapEx allocation, so we don't spend the whole CapEx limit before we see that the growth is coming.
Thank you, Richard. I think we're gonna open up now to the conference call participants. If we could please open up the line.
We will now take our first question from San Dhillon. Please go ahead. Hello, the line is open. If you're using a speakerphone, caller, can you please pick up the handset or depress the mute button on your telephone?
Hello, can you hear me?
Yes.
Loud and clear.
Please just go ahead and ask your question. If not-
Oh, hi.
We'll move on to the next one. Can we just move on to the next question, please?
We will now take our next question from Thomas Heath. Please go ahead.
Thank you. Thomas Heath here with Handelsbanken. A few questions, if I may. Firstly, on Thailand, you're saying you expect a turnaround to take a couple of quarters. What sort of leads you to believe that we'll see improvement in this time frame? What's the scenario that you see playing out? And then secondly, on India, if we could expect slightly positive EBITDA margins, how will this be profitable over the long term?
Are you still—You're still paying off license payments for a long, long time in cash terms. You're signaling that you're spending more on spectrum. What is gonna drive up EBITDA margins significantly to make this profitable for the long term? ...And then thirdly, on CapEx being at 15%-17%, just to confirm, that that's excluding spectrum. Thank you.
Yeah, let me address Thailand. No, the reason why I am referring to a couple of quarters, it's as you saw now from Richard's presentation, we have invested significantly in the network over the last year. And I think we are now getting up to a competitive level on both 3G and 4G coverage. And we have been lacking behind there now for the last couple of years. I could even say that we probably underinvested in Thailand 2-3 years ago. We should have seen the data growth coming faster than what we thought. But now we are getting up to competitive level.
We are almost done with the investment program, so I think that the disadvantage we have had on the network side, both on 4G and 3G and 4G, is about to be leveled out. Secondly, it's a lot to do on the distribution. And Thailand, even though it is now enjoying a data growth market, it's still very much a mass market. People go and swap SIM cards. People go and take up prepaid offers. People go and top up their SIM cards almost on a daily basis, so you have to be present out in the trade. And in Thailand, I think there's around 20,000 points of sales, which customers are engaging with on the daily basis.
So we need to be there, and that's why I'm saying that we are revamping the distribution model into a cluster model. And we are almost there now. We have divided Thailand into five regions. We have split up the regions into clusters, and we split up the clusters into mini clusters. The same way as we now are seeing benefits out of in Myanmar, in Pakistan, or in India. So we are almost there, but it probably take us a couple more quarters before we can start enjoying the benefits out of that. So that's the rationale for what I'm saying.
Then, of course, on top of that, this should be enough for us to arrest the market share decline, and hopefully we can gain back a little bit. On top of that, I hope that the industry as such are also going back to a growth path, also moving out of some of these aggressive unlimited offers. The CapEx part in India, you want to answer that?
Yeah. Well, I think, like Sigve says, we are now at the point in India where we need more data spectrum, and we see a strong demand for data services with our customers. We have not been very much impaired on that up to now, we have more than 20% of our subscribers on data. But we see the other operators are growing revenues rapidly on data because they can offer more with their spectrum position. So we see a big opportunity by getting more spectrum to increase revenue per user. And of course, we are only around 50% population coverage in the circles we are in.
So the main focus would be also to create additional scale in the circles. As you know, there are not that much pan-Indian or circle-by-circle synergies, but there is strong synergies within each circle, which you can almost regard as a separate country. So with more spectrum, we can definitely get a better scale and a better profitability in each of the circles. And of course, as you point out, Thomas, is that we cannot be at just a slight positive EBITDA breakeven to get returns on what we need to acquire in spectrum and earlier spectrum acquisition. But we see that opportunity by getting more spectrum to get more revenues.
There was also a question if the spectrum is a part of the CapEx yourself?
No, that's comes in addition. Spectrum is on top of that.
Thank you. If I can just follow up on India then. So what are the drivers that will make EBITDA rise? Because as I recall, when you started, a lot of the cost is very variable with all the outsourcing. So what's gonna drive up EBITDA margins? Thank you.
Yeah, no, I mean, the main costs are infrastructure, and the more spectrum we put on a tower, you don't increase the tower rent or the electricity cost by any means. So that scales very well with additional spectrum and additional revenues.
And the customer call center, that's also paid per subscriber. So of course, if you add more subscribers, you get more call center costs, but if you add more services to the single subscriber, you should not expect that your call center cost per subscriber goes significantly up. So I think the model in India will scale quite well if we get the right data spectrum and the right data services out to the consumers.
That's very helpful. Thanks.
Yeah.
We'll move on to the next question, and could I kindly ask you to limit yourself to one question with one follow-up, please? Thank you.
We will now take our next question from Roman Arbuzov. Please go ahead.
Thank you for taking the question. My question is on Thailand. You've mentioned that, the network investments and the current distribution investments you're making will allow you to stabilize your market share. But can I just check, do you think—Well, also early in the presentation, you've commented that, the, the unlimited data plans are back as well, and then competitors are also doing, still, the prepaid handset subsidies.
So, so in light of this, can I just check that, you can actually, stabilize your market share and return to growth, despite these competitive, issues, or, do you think you're still sort of very much dependent on, on what happens competition-wise, or, do you think you're sort of strong enough with the investments you've made already?
No, I think over the last well, half year probably, the two main reasons why we have lost market share, it's due to network coverage, also data network coverage, and due to distribution presence. And when we now then are scaling up the investments and then are becoming competitive on the network side, I don't see that as a reason for losing market share anymore. And on the distribution side, the only way we can compete with what our competitors are doing with heavily subsidies on the prepaid phone, is to be a physical presence ourselves out to the point of sales.
And that's the whole idea around revamping the distribution. So with these two components in place, I don't see any reason for us losing market share anymore. And that's why I'm relatively positive that that will be stabilized, and hopefully that we will gain back some. But on top of that, I think more interesting is that if the whole industry now can move out of that unsustainable competition we see on data pricing. And dtac has taken some moves on that, and unfortunately, our competitors have not followed, but I hope that over time, the whole industry now, when their network also starting to be filled up with a lot of free data traffic, that they will move up such that we can get back on industry growth.
Thank you.
Thank you very much. Can I just follow up?
Yes.
Actually, with a quick question to Richard. With regards to the weakness in profitability in Malaysia, a lot of it is related to the weakness of the ringgit, which was somewhat sudden, you could say. So, do you, in terms of the step down in margins, do you think this is sort of the new normalized levels? Or do you think, because the weakness and effect was so sudden, perhaps pricing on the international traffic can actually adjust in the coming months, so that there could be some profitability improvement on that side?
Thank you for that question. It's a very good question. Like you said, it's a sudden drop in the ringgit, 15% down versus US dollars in Q3. And that, I think, has, together with tough competition on international traffic, wiped out the margin to many countries. And of course, that is not sustainable for any of the operators in Malaysia. So, economically, you should expect some kind of price improvements on that going forward, but that's not what we see currently. So I think that may take some time. So it's really the international dialing that's taking us both from competition and also the currency. But the question is very good.
Thank you.
Thank you very much.
Next caller, please.
We will now take our next question from James Britton. Please go ahead.
Well, thanks very much. Good morning, James Britton from Nomura. So I just wanted to sort of cover your views on returns in the industry. You mentioned in the statement that you're looking to, or you focus on generating healthy returns on your significant investments. So, I just wanted to check whether you feel that returns can actually head higher, given the very strong demand for your underlying product at the moment?
And, if that is the case, why wouldn't you essentially sink as much CapEx into the ground as possible to chase those higher returns, which are going to be a lot higher than your current cost of capital? And then just, just linked to that as well, how do you see competition evolving in some of these Asian markets, given that these high returns are actually attracting new entrants into these markets? Thank you.
I can maybe start, James, and then I can hand over to Sigve on the more, competition and how that's developing. But on the return side, we will not just sink CapEx in, like you say, but we will follow this dynamic CapEx allocation that that I mentioned earlier. And we will also very prudently look at our return on capital employed. And I think it was the last quarterly presentation, we indicated approximately where we are on return on capital employed. And I think also going forward, it's paramount for us that we don't dilute our return on capital employed with the high investments.
So we now, we have discussed, Sigve and I, this efficiency program that is key to take out costs, also on the OpEx side, to finance some of, these things we do on CapEx, because we're not sure on the revenue line. I mean, we have excellent examples of data monetizations like in Norway and Sweden, and Thailand was a stellar example back in 2012 and 2013 on, on data monetization. But we also have markets where these have gone totally wrong, like in Denmark, where nobody are able to, to monetize data.
So we have to be very careful and optimize this, both by what I call dynamic CapEx allocation, but all, but also, that we monitor, that we don't dilute our, our overall, return on capital employed. Then I also want to remind you that we are in the middle of the strategy process now, and we will guide on CapEx to sales for 2016 when we're back here in February. So just to remind you on that. And when we talk about CapEx ranges now, we're talking about quite wide ranges, and it's a lot of optimization, it's a lot of work to be done on the CapEx and also on the efficiency side, and we'll come back to more precise guiding on this in February.
Yeah, just on the last one first. I see the share price is slightly down now because we probably have overemphasized the need for continuous high CapEx, and that was actually the purpose. Because we want to be open and transparent about that. There is a need for continuous investments. But at the same time, I think we now have a model where we also show some evidence on our ability to monetize, not only in the Nordics markets, also in Hungary, but we also see some early positive signs on that in the Asian markets. For example, when you take away a free Facebook in Pakistan, and people are willing to pay for it.
But then to the question: No, I don't see any new, also any increased competition in the Asian markets. I more see it the other way. I don't see any new entrants, and the latest auctions you have seen, being in India, being in Pakistan, being in Bangladesh, there has been no new entrants. And I think you will see consolidation moving forward. You have seen that in India already, or meaning people are scaling back from circles, which is also a kind of consolidation. You have seen that in Bangladesh, where Airtel is now being picked up with from the number two operators.
There are rumors about consolidation happening in the Pakistani market, and so on. So I, I'm more moving to that direction, because the... Even in Malaysia, the number four player, it's so far from making money that I think it's a very hard case, even for number four operators in some of these markets, apart from India, which is so big, to make money. That's how I see the competition moving forward.
Thank you, Sigve. Next caller, please.
Okay, can I just follow up and ask Sigve directly? Given that backdrop of potentially more consolidation in the Asian markets, are you quietly confident that returns can go higher for the group?
It would be very nice if I said yes to that question, but I don't want to do that. Let's focus on where we are now, and I don't want to go more into more promises than saying that our aim is to continue with the 4%-6% top line growth. Our aim is to continue with profitable growth, meaning EBITDA should grow more than revenues. And then we have to see how it leads us. What I could say in addition to that is that the data demand in the Asian markets, it's higher, and we are learning more about this almost for every month that goes.
If we are able to monetize that data, if we are also able to give them more relevant data, or digital services, I think there is absolutely an upside there.
Thank you.
Maybe just one, one addition-
Sorry.
To my previous answer. I said that consolidation in most of the Asian markets, with one exception, and that's Myanmar. I think in Myanmar, we have to be prepared for a potential fourth license to be granted or a fourth operator to come.
Thank you. We'll have time for another 2-3 questions. Could we move on to the next caller, please?
We will now take our next question from Giorgio Ierodiaconou . Please go ahead.
Hello, and thank you for taking the questions. I have two very short ones, hopefully. The first one is around Thailand. I believe, during the presentation, you mentioned that you have reached an agreement with your partner there. To the extent that you can share any information, regarding the agreement, or at least the broad principles, whether you expect the concession fees to be lower going forward as a result of this, it would be great. And my second question is around the revenue guidance of 4%.
Obviously, comps get tougher as Myanmar becomes less of a contributing factor over time. So my question would be, are you confident you can deliver 4% revenue growth, even if you don't get any extra spectrum in India, or is that a key driver to getting to that number? Thank you.
To your first question on Thailand, what I said was that we haven't reached an agreement. Also, we have agreed on a concept where which secure us access to both the towers and fiber after concession expires in 2018. However, this deal need to be approved higher up in the government. As a part of that, we are also discussing a potential settlement on legal disputes that we have with CAT. So hopefully, that will be approved in the government, and hopefully, we will then have a deal which, as I said, secure us fiber and towers.
But it has nothing to do with the concessionary payments. This deal is not that, and the concessionary payment will have to stay in place until the concession expires in 2018. When it comes to revenue growth, now, I think most of that revenue growth is coming from our ability to monetize data, so I'm back to that. And of course, it's also coming from new subscriber additions, and I think I already mentioned that, that you will see similar subscriber growth in the coming quarters also coming from the growth markets in Asia, also being India.
So the 4% is not dependent on spectrum in India or spectrum there or conditions here. It's an overall view on our ability actually to continue to drive subscriber growth, but most importantly, being able to even better monetize the data growth in both the Asian and the European markets.
Thank you. We have room for two more questions. Please, could we limit ourselves to one each, please? Next caller.
We will now take our next question from Eric Paris. Please go ahead.
Thanks. I actually had the same question from CAT, but the other one was on there's more and more industry talk, I think, about embedded SIMs and also handset leasing schemes offered by vendors. How do you expect that these things will impact your business? And are you considering any concrete measures to counteract these changes, please?
Yeah, you are right. There is a lot of discussions about the embedded SIM or soft SIMs. It's not coming, as of now, as you know, but this is an issue that is being heavily discussed in the GSMA, also in the association among the operators. And this is also going to be an important part of our digital strategy. So, I don't have any clear answers to you now, and this is a part of our strategic discussions, as I know.
By the way, when we are through the current strategy process, which we will finish by before the end of this year, and also then put some strategic financial numbers to it, we will come out and inform you in the first quarter sometime in next year about how we see the digital position going forward.
Thank you, Sigve. The final question, please, of the day.
We will now take our final question from Ulrich Rathe. Please go ahead.
Oh, thank you very much. Yeah, I would like to ask on Denmark, you say you can't comment on the strategic review, and I understand that. But sort of, you know, if you leave aside any inorganic measures, do you think there is a standalone case for the Danish operation? And what sort of market backdrop would you require, and on what time scale would you see that unfold? Sort of leaving aside anything that is inorganic, and you can't talk about. Thank you.
Oh, I think, Telenor in Denmark, they are doing a great job. They are holding up quite well in a tough market now, taking subscribers. They also embarked on a very heavy transformation project on the IT side, and they've been extremely worked hard on the JV. And I think they will continue to fight and... But we are now at the profitability level, when we look at a level now at slightly above 15%, then with the CapEx and also spectrum coming in, that the returns are absolutely not where they should be.
We see potentials for driving efficiencies further in Denmark, not at least what Sigve talked about on digitizing the business, customer service, customer journeys, and so on. That's why we're implementing the new IT platform in Denmark, and hopefully that will take out costs, and that can improve the margin. But the way the top line is, if the top line continues to develop, and that's really the competition, the ARPU is going down, it's difficult. So it's hard to predict.
Only thing I can say is that we need to look at all options in Denmark, and structural options are uncertain, so we have to just continue to work very hard on the revenue agenda and the cost agenda in Denmark.
That's very clear. Thank you.
Thank you. Thank you both to Sigve and Richard. This concludes our session today, and I will be taking a list for media presence.