Good morning, everyone. Welcome to the presentation of Telia's first quarter result 2019. It is a quite busy report day. We will try to keep it as swift and efficient as possible. We will do a little bit different this time, given that there are some accounting changes in the world. We will actually let our CFO, Christian Luiga, take the stage first and explain the changes that have been made. Johan Dennelind, our President and CEO, will come and talk about the quarter and hand back to Christian so that we all keep ourselves on our toes. Christian, welcome.
Thank you, Andreas. I have been looking forward to this day where I get to start, finally. Welcome to today's conference. It is a sunny day in spring of Stockholm. We have a report that came in very much in line with what we announced at the Capital Markets Day. I will give you the two highlight numbers to start with. One is the cash flow growing from SEK 4.2 billion to SEK 4.4 billion. SEK 200 million up in the operational free cash flow, which is also the basis for our guidance and where we also base our dividend on. The second one is the adjusted EBITDA growth, which is a negative 4%. That is the one I will explain a little bit now, how we have calculated that and why we have calculated it in the way we have done.
In previous years, we had something called local organic. Now we have something called like-for-like. Looking at this picture, you will see on the left-hand side of this picture something called reported. This is the official reported number from Telia. Here we can see growth of the EBITDA of 15%. The yellow bar represents what we did report actually in the report last year for 2018 in the first quarter. On top of that, we have made acquisitions, primarily you recognize the Get acquisition in Norway. On top of that, we also have currency effects. In the purple line, we also have the famous IFRS 16 effect. The 15% includes the M&A, the currency effects, and also the IFRS impact, which we have in 2019, but not in 2018.
We have created something called like-for-like to actually adjust for the acquisitions and for the FX effects. That will be, over time, the prime number to follow how we do operationally. When IFRS 16 hits into 2019 and 2020, we go in and having comparable numbers over time. This will be where we search for the truth of how Telia is doing. Meanwhile, we are waiting for that. We need to do some adjustments. We have in the middle bar here, we have added the M&A, i.e. Get how it looked in 2018. That is the prime change to this number. If we add Get last year and adjust for the FX effects, but we still have the IFRS impact on the numbers, we are doing an EBITDA growth of around 6%.
To make sure we can then compare it during this year and understand the numbers, we are adjusting also then in the final bar here, like-for-like growth, including IFRS 16. We are adding in IFRS 16 in 2018 to get a true like-for-like comparison. You can see the yellow bar is what we reported last year. We add the M&A, and then we add an estimated value of IFRS 16 in 2018, and our growth is 4%. We said when we left the CMD and when we came to the CMD that we thought that this quarter would be in line or worse than quarter four, and we will explain that shortly. I will first leave to Johan to guide us through. This is just to understand how we're going to measure Telia. Thank you.
Crystal clear, Christian.
Thank you.
I like to report the number this quarter better. We got a lot of feedback this morning from friends and families and analysts, a lot of people saying very good numbers, 15%. Now we have a chance to at least give our true story. Before we dive further into the quarter, last time we met, we were at the CMD. Thanks for being there and engaging. A quick recap of this is that we of course see that the main message that we took out was the cash flow for this year, but more importantly, going forward to sustain and grow beyond the 12 to 12 and a half. We also took out our new daring goals to take on our way of helping out and fighting climate change, but also doing good business around that. A lot of good feedback coming through, of course, on that.
We presented the operating model and the effects of that. I'll come back to that a little bit later. Also for the year, the OpEx ambitions for the group of 2%, Sweden 3%, and continuing into the next 2 years as well. While Anders for Sweden clearly put out the trend shift in EBITDA for 2020 to come, Norway, we upped our synergy estimates for the Get deal, which is now fully implemented as in Q1. Synergy for Finland, we're very clear on the convergence roadmap and propositions to build further on the acquisitions we've made in Finland. These were the highlights. Thank you for the feedback that we got when we reached out to you afterwards. Just briefly, you thought we were very clear on cash flow and gave comfort on the cash flow.
We saw some upgrades on the cash flow for the year afterwards. You gave us feedback on the strategic red thread on the convergence champions integrated in all our markets and transparency on the financials. What you would have liked to see more of was some structural cost opportunities into the future. I'll cover some of that later. Bonnier Broadcasting, obviously, we would have loved to tell you a lot more about, we can't because we're not the owner yet of the asset, even if we showed you that it's trading better than we expected. Hopefully, we'll come back to that soon and integrate that in the way we talk to you.
Also, you wanted a bit more on the convergence upside and the strategic story in Norway, which we will definitely bring back now when we are fully on top of the asset and integrated fully into Telia Norge. That's 2 minutes on the CMD. Christian covered the SEK 4.4 billion, 4% up on cash flow, operational free cash flow for the year on year. The negative four, which is better than we flagged, somewhat helped by one-off in Norway, which we'll come back to. The big negative, which we'll highlight transparently, is the 2.1% down on mobile service revenue as a group. That's the worst we have seen in a while. I'll come back to that and explain a bit more.
Nothing new really on the process in Brussels with the update on the acquisition of Bonnier Broadcasting, we will of course come back to you as soon as we have news on that. We got approval on the AGM recently for our new buyback program for the year and started to execute on that. Already repurchasing shares in the second year program. You have been paid SEK 1.18 of the SEK 2.36 dividend for last year, which is the second tranche comes in October. Those are the highlights. Maybe not all of it is highlights. We have some low lights in the presentation. We are in a negative growth territory, pushed this time down by the mobile service revenue. Even removing the carrier zero margin traffic, we are in a two negative space. We have mitigating activities to turn those trends. I'll come back to.
You saw the reported number and the adjusted number for EBITDA, so I'll skip that. Important slide. We see at first time that mobile service revenue is declining in this context this much. You know that we have had negative fixed service revenue through the years. This is the first time that the mobile and it's not just one market, and that's the news here then. We have it in Sweden, Finland, and Norway for different reasons. In Sweden, the good news is that we're growing based on the postpaid side. The negative thing is, of course, that we're dropping more than we want in prepaid, and also in some of the enterprise segments. That needs to turn to get back to stabilizing the trends.
We have comfort that we will do that over time, but it's a market softness as well that we start to see. Finland, actually, if you remove the interconnect impact in the Finnish number, it is positive mobile service revenue growth. That goes away, and it's pretty equally spread on B2C, B2B. Norway, we have improving trends in B2B, but we haven't been able to improve the trends in B2C. That's something that Abraham and the team is working hard to do. We have comfort that that will also come around. All in all, the three biggest countries are soft. It becomes a lot on group level. Good news.
This morning, we took out a press release that P3, as you most likely know, have done the study and survey in the Swedish market, and we come out clearly number 1 and actually rank number 4 in the world as the best mobile network. That is a great asset now when we're pushing new propositions into our customers and also building into the 5G era. Great job from the Swedish team and something we'll make sure the Swedish customers know about. We told you that Q1 will be soft, and we'll be improving through the year, and this is the shape that we're showing and sticking to. Revenue side, we have done quite a lot already in starting to mitigate the softness. We have invested, as you probably have seen, a bit more in the marketing in Q1.
We have done price changes as of 1st of April for fixed in Sweden. We have tweaked some propositions in other markets, and we're stepping this up through the quarter. I feel good about the roadmap for stabilizing the service revenue trends, and you also get some easier comps into second half. On the OpEx side, similarly, we'll step down costs to meet the 2% down on OpEx, and that is many different activities. Maybe the most important ones being the synergies from Get coming through in Norway. The new operating model that is in play already for Sweden will come through in Finland and Norway through the year. And then general G&A savings that we have in our various cost programs, well on track as you may have already picked up from the results. A few words on the operating model. We will come back to this.
This time, I just want to remind you that in the last three years in the old operating model, we had something called GSO, Global Service Operations. We took out a lot of cost in the central functions around that, and that's to the left. In the new Common Products and Services unit, we're going then for more efficiencies, which at full run rate will be somewhere around SEK 600 million to SEK 900 million on a yearly basis. Beyond cost, it will give us speed and flexibility and standardization and world-class products taken out in six markets. This is an industry benchmark-setting activity, probably the first in the world when we get there, of having a converged machinery for six markets. Just repeating that the acquisitions we are doing is and will be one important growth factor of Telia Company.
Get is already in and can start to contribute. The numbers we take in is SEK 1.8 approximately pro forma. Then you get the synergies that we upped of around SEK 800 in cash flow. Similarly for Bonnier Broadcasting, as they also traded better, we have upped that, the numbers they come in with. We haven't changed our synergy estimate yet. All in all, you will have a pro forma when all synergies are fully and running of SEK 4.2 billion and EBITA minus CapEx around SEK 3.3. Very important part of the cash flow story going forward. Ending then on our outlook, reiterating what we said in the CMD and in Q4 report, SEK 12 to SEK 12.5. No reason to change that. Also repeating our capital management activities around the balance sheet for the rating and the buyback and the dividends.
All in all, a solid capital management story to build on into the future. Now, Christian, you're welcome back.
Thank you very much. Thank you, Johan. Let me go through some of the numbers. Be careful of time. Make sure we get time for questions. Just starting with the overall picture. I think this picture illustrates maybe more than it looks first at a glance. Here you can see the service revenue and the EBITDA decline in our markets. Looking at this picture, it's clear that the service revenue decline in Sweden transports directly 100% into the EBITDA decline in Sweden, and the service revenue decline in Norway also results in a decline in Norway in EBITDA. The flattish service revenue in Finland results in a decline in EBITDA.
That means that something else has moved the EBITDA in Finland, that's what I'm going to talk about in the next couple of slides about what the different three main markets have in their boxes. Before I get there, though, I want to follow up on the cost agenda for the group. We have a target of 2% for the full year. We feel confident about that target. We have declared that that will be mainly coming through the second half of the year. We have a lot of activities ongoing in the group, we also have a quite tough comp in the start of this year. The first quarter started with a 1% up. That 1% is primarily driven of energy cost and higher marketing in all three main markets. That should of course result in something as well compared to last year.
The bad debt has also been slightly higher. There's no significant amounts on bad debt, it's just been a little bit more bad debts in certain markets, they add up to actually be on a group level one component. Meanwhile, the resource cost is actually down in the first quarter. We are working with the new operating model that will actually bring in a cost reduction during this year. We also have the other reductions that we're doing in resources in the different markets. I'll mention some of them. We have the overall cost program around the robotics and the sourcing activities, et cetera, that Johan mentioned. 2%, feel very confident about that. It will come during the coming quarters step by step. If we look at the Swedish numbers, the service revenue is down and the cost is quite flat.
The cost in Sweden is a little bit like the group. Energy and marketing is up and resource cost is down. The development of the cost will change like on the group over the year, it will be a 3% decline, which we have as a target. If we look at the service revenue and just touch on that, what Johan talked about, we have a decline in the service revenue, that service revenue is primarily the mobile that has changed. Legacy is continuing to decline in the same pace on an absolute number that we have had in the last four quarters on average. The mobile has decreased and primarily then on the prepaid side and ARPU side, going into negative. On top of that, we have a one-time charge effect of -20 million SEK. That also impacts the B2C number.
The one-time charge effect will continue during the year because we will have lower fiber rollout this year than we had previous years, the effect will be bigger in the quarters that are typically higher build-out in. If we look at Norway, the Norwegian result is affected by service revenue. The mobile business is down. In Norway, we see that the customer intake on B2B has flattened out from being the decline before. Now it's actually flat. It is primarily large and public accounts, which has then taken down the average ARPU for the B2B side, but it is revenue coming in, it's good customers and good deals, and we're very happy about that change and shift. We continue to have the same loss on the B2C side, though.
Instead of, in the past, covering up that loss with a higher ARPU, it is now a more flattish ARPU, which makes it challenging. Here we have activities, as Johan talked about, and we look forward to see how we will execute and deliver on those during the year. The other thing on the result in Norway is SEK 100 million that we have brought in as a result of selling old actually receivables. Typically what you do in a business like ours, you build up a receivable to a customer, the customer pays, and those who do not pay, you sell them to a debt collection agency. When we have acquired companies, and we acquired Get, and we have then got some old, already written down receivables.
We have sold those, they have resulted in a gain of SEK 100 million, which is true money and real money that we typically get in the normal business, but not as a one-timer. It's actually usually an ongoing monthly activity with a debt collection agency. It's just a cleanup of the old base, you could say. That has helped us both in the, of course, driving cash and the result. On the Get TDC side, it is very stable. The B2C broadband is growing around 5%, and that is both on the customer increase and ARPU. Solid performance on Get. TV is slightly down, overall, a stable development and costs are in control. The EBITDA from Get is where we want it to be and continue to be very stable. Finland had a very tough start of the year.
It was a hard comparison quarter, that's why I've been clear at the Capital Markets Day that the quarterly result in Finland will improve, even with the same result going forward during the year. It is a very hard comp. On top of that, it was a mixed bag of different things. It was SEK 25 million in write-downs in the inventory that we have done. It has been some bad debts in Finland, and we also had a lower margin on equipment sales, which we now see coming in and out when we have a lot of ICT sales that some quarters will be better and worse on the equipment side. We feel confident, very confident, that the margin will increase, and this is an exceptional quarter in Finland during the year, and we have said that they will contribute to EBITDA growth for the year.
Baltics is a good market, has been for a while. Denmark is a tough market in our led portfolio. In Denmark, the market pressure continues both in fixed and mobile. The reason why we keep the EBITDA at the level we do, meanwhile, we have a decline in service revenue, is super good cost control and working with that, turning that upside down in different ways. It's a small business. In that way, easy to work with, it's also great work done on the cost side. I like to mention also Estonia, where everything pretty much goes on rails, it feels very comfortable. Both mobile fixed growing translates into growth in EBITDA. We are a market leader, we do the right things, and it's a country that loves digitalization. Lithuania, we are doing some reshaping in Lithuania.
It looks like there is a negative trend on revenue, but in reality, mobile service revenue is actually increasing with 8%, but there's a lot of transit revenue that is declining, that is not creating profitability, and therefore, we have a growth in profit. Meanwhile, we have a decline in revenue, but it's no margin on that transit revenue. We have somewhat higher OpEx in Lithuania, but we also announced in this quarter that we will release 285 people from the service in a reduction program that we are doing there. On CapEx. As you know, it's the cash CapEx that is the important thing. It's going to be even more important going forward now when we have IFRS 16, and we need to book everything that was in the EBITDA before in the OpEx and the COGS as CapEx partly then.
That makes this line very difficult, the blue line, to look at. That's why we already last year and the year before started to talk about cash CapEx. That will be the important part of how you invest, and the rolling 12 of that is the pace. It goes up a little bit in quarter one. Two reasons. We have acquired Get, brought into the CapEx. Secondly, we have pushed quite hard in the first quarter compared to the coming quarters in this year. As we have said at the Capital Markets Day, we see on a rolling 12-month basis that this year will be slightly down on a year-on-year basis. Higher net debt. Here you see the effect of IFRS 16 again. The net debt to EBITDA is impacted by 0.5 based on the debt and one quarter of EBITDA.
Net debt is the last 12-month EBITDA plus the debt side. We only have one quarter with IFRS 16, therefore the net debt to EBITDA impact is 0.5. We also have mentioned here that when the quarters come in, pro forma, it would have been 0.3 and not 0.5, the effect from the IFRS 16 impact. The overall level is where we expect. We feel comfortable with this balance sheet, and that's why we also have a buyback program. We can see that without the IFRS impact, it is quite flat. Finally, cash flow. Cash flow, our guidance is SEK 12 billion-SEK 12.5 billion. We reiterate that guidance. The first quarter is SEK 4.4 billion on operational free cash flow compared to SEK 4.2 billion last year. That means that we are stepping up to SEK 11 billion in rolling 12. EBITDA will continue to grow.
Get is the main reason for that. We have a net working capital that was strong in quarter one, but we have said that for the year it's more likely that it's slightly less than last year. We have a CapEx that should be a little bit an improvement, and total operational free cash flow is then better. We have started from last year to compensate and make sure that the pension fund compensates for the natural payout we do to the pensioners that the pension fund is for. Last year it was SEK 650 million, and this year it's SEK 675 million, and this year it's SEK 850 million . We are compensating for actually negative cash flow this year. This is why it's not a one-timer, it's actually just making sure we use the pension fund for what the purpose is of it.
That was everything I was going to say, Andreas. Thank you.
Very good. Swift and efficient as promised. We open up for questions. We can start in the floor if anyone has any question. If not, we go to the conference call. Operator, could we have the first question, please?
Thank you. We will now begin the question and answer session. If you wish to ask a question, please press star and one on your telephone and wait for your name to be announced. First question comes from the line of Peter Nielsen. Please go ahead and ask your question.
Thanks a lot. I have two questions, please. First one, I am sort of interested in gauging a bit on how you view Q2. You made it clear that second half will improve versus the first half. OpEx were up by 1% for the group for Q1. I know you do not give OpEx guidance on a quarterly basis, but could you give us any sort of indication on how you see Q2, whether this is severely skewed towards the second half, please? Secondly, on the mobile service revenues, which appeared somewhat concerning, particularly Sweden and Norway. You are telling us that B2B is broadly unchanged, so this is from the consumer market. Anything you can tell us, elaborate a bit on this. Should we be concerned that we are entering a new downward cycle, so to speak, in mobile service revenue growth trends? Christian talked about initiatives.
Anything you can do apart from price increases, if possible? That would be appreciated. Thank you.
Thanks, Peter. Let me take the second one. I think it's a fair question, and we should all be concerned when we see softness in the growth engine, so to say. It's too early to say whether this is going to be the new normal. I don't think so. I think there are definitely room for growth in mobile across our markets. We have worked hard to be in a position to step this up. If you take Norway as an example, then we have definitely, you know, in the past been accepting a customer loss, if you want, with the new dynamics that we have in the market, new entrants and so forth. That is natural. We said last year that we want to start to really work to turn those trends.
We haven't done that yet, but what I see in the roadmap in Norway with the brand consolidation, and also now with the opportunities of convergence, I feel really good about the prospects of getting back to growth in Norway. Sweden, similarly. There, I think we have just to find ways of be smart in the way we take propositions out. We have, as we showed you, the superior network, and that is going to be increasingly important as we move forward, and we have such a strong position here, so we need to be able to yield that. I know Anders and the team is really excited about those opportunities. Here we see definitely opportunities. Again, we spot a slight weakness in this total Swedish market, which I think we all are determined to try to turn around.
On the OpEx, it's a good question. It will be a step change, but the step in quarter two will be smaller than it is in quarter three and quarter four. You will see a curve that is making a shift in quarter two, but much more in quarter three and quarter four. A couple of things coming through here is that, as I said, I mentioned the Lithuanian case. The new operating model, we have had a reduction program in Sweden and in the new CPS already now in quarter one, but those people leave then during quarter two. We have synergies coming out of the integration in Norway, which was only SEK 5 million in quarter one, but it will be SEK 100 plus for the year, and they will also come gradually through during the year.
Finally, the comps in quarter one was, as I said, somewhat tougher. Those are the reasons why you will see that shift in cost over the year.
Okay. Thank you.
Thank you, Peter. Can we have next question, please?
Thank you. Next question comes from the line of Roman Arbuzov. You can now ask your question.
Thank you very much for taking my questions. Perhaps you could elaborate a bit on Sweden and also Finland. When it comes to Swedish mobile, your competitor, well, Tele2, reported yesterday, and they were talking about particularly tough trends in ARPU in the large corporate segments in the B2B side in Sweden. That is presumably one of the factors that is also impacting you. When we look going forward and think about Sweden mobile, where do you expect most improvement? Is it the B2B side? Which sounds unlikely from what Tele2 is saying, or is it the B2C side, rather, and this is the network that will be driving that. That's the first one. Just the second one on Finnish mobile as well. The performance there has been very volatile.
If you look over the last three quarters, you went from roughly +4% to probably on an organic basis comfortably into the negative territory. Can you maybe elaborate what's going on a little bit? Is it B2B? Is it B2C that's driving that? Whether you feel positive about the Finnish mobile momentum going forward as well. Thank you very much.
Thank you, Roman. Try to be brief. There is tough price competition in some segments in Sweden, clearly. We have been good in defending our market share in the corporate segments, and we're not the driving force for price erosion, to put it that way. We try to work with our various propositions and shields in protecting the revenues that we have. Again, we also want to make sure that we keep our customers, and in some instances, that results in lower pricing on the existing base. That's what you see in our case when it comes to ARPU and revenue decrease in the B2B space. It is, at the same time, something we feel that the corporates are starting to appreciate more and more and starting to use data more and more.
There are certainly repricing and repackaging opportunities in the B2B segment, which of course, we as a market leader will try to drive. Similarly, in the consumer space, we feel obligated to lead the way in our various activities to show what is possible, especially with the networks that we now have, again, demonstrated that we carry. On the Finnish mobile, as you say, it's a bit volatile. I think we're a bit soft this quarter in comparison. We have been stronger in other quarters. Similar actually trends in the B2B space that we do fight too often on price rather than getting into the quality propositions that all operators actually do have in the Finnish market. Consumer, that is a different story. There you go a lot below the line competition.
We're trying to stay as rational as possible, but we also need to defend and fight for the base that is up for grab. I'm sure that will be an interesting game in the coming years with our new competitor in town.
Thank you very much.
Thank you, Roman. Could we have the next question, please?
Yes. Thank you. The next question comes from the line of Maurice Patrick. You can now ask your question.
Yeah. Morning, guys. Maurice here. Just a couple of questions on Norway, please. You've flagged the, I guess, deteriorating, slightly disappointing service revenue trends in the Norwegian market. I'm sure there are lots of moving parts in terms of what's driving that. You do highlight, I guess, low ARPU from large contracts. You've made a number of sort of M&A moves in the Norwegian market. Is there any churn taking place there that's perhaps impacting the revenue line that's perhaps temporary? You've, I think, retired some of the legacy brands. Is that impacting? Perhaps sort of if you could share some thoughts around the high end. My understanding is you've lost some high-end share to Telenor. Is that the case? Are you seeing ice at the low end? Perhaps some sort of more color on those trends would be super helpful. I guess just linked to that.
You've flagged in Sweden a lack of change in market share, but clear pricing pressure. Telenor clearly very dominant in the enterprise space in Norway. Do you see a similar kind of pricing sort of dynamic on B2B in Norway, or is it very different? Thanks.
Thanks, Maurice. Yeah. I agree with you. There are some slight worrying trends. On the B2B side, though, we are stabilizing trends. Linked to your second question, you don't have the same dynamics that you have in the Swedish and Finnish area. It is slightly more, I would say, predictable and rational on the pricing side. There we're hopeful that we are about to turn those trends into positive territory. You're raising a couple of interesting points on the legacy brands. We did retire Chess, for instance. Yes, there was some churn from that, some expected, some more than expected, which then takes you into the second part of your question, which is the high-end part. We did lose too much there, and that's why we launched a hybrid flat rate high-end product in Q1.
That is to actually mitigate some of the porting out to Telenor, which actually has resulted in a better porting versus Telenor in the quarter. There, we think we're on the right path, and I think that actually covered your two questions.
Thank you. Next question comes from the line of Andrew Lee. You can now ask your question.
Yeah, thanks for taking my question. At the risk of course, flogging a dead horse, I just had another question on Swedish mobile trends. I still don't fully understand what exactly went wrong in Q1 and Q4 last year versus the rest of 2018. Is it competition picked up? Is it just no price rises and it continued and tougher comps? I think you hinted, just as a follow-up question to that. You hinted at the requirement of yourselves to lead the market to more rationality, and you've been doing that in fixed line with price rises. I wonder if you could talk about the potential for price rises in mobile and whether you think the competitive dynamics are supportive for this. Thank you.
Thanks, Andrew. Yeah. What is happening in the Swedish mobile, is that our core ARPU is not growing. The value-added services ARPU part has been growing in 2018. That is no longer helping out the way it did in the second half of 2018. We don't have any price increases in the last six months to compensate for that into 2019. We believe, as I said before, generically speaking, that there are definitely room for better yield and better pricing optimization in the Swedish market in key segments. Of course, that's something we are working on, trying to find out where and how and when, and we will tell you once we do it. Absolutely, something we believe in. Maybe adding that there is also when you're in bucket, that goes for Norway, goes to Sweden.
When you're in bucket, people have found their right level of bucket, and therefore less top-ups and less upgrades is part of the slight softness in the ARPU development. Yeah, fixed line, we did price increases. We're doing price increases. We'll continue to do price increases. I think we've been better there in structurally doing it than in the mobile side. That's a learning we're taking through into the converged thinking, both in Sweden, Telia life and the other markets.
Thank you.
Thank you, Andrew. Any question from the floor? Nope. We continue with the conference call.
You can now ask your question. Terence Tsui .
Morning, everyone. It's Terence Tsui from Morgan Stanley. Just following up on the previous question around your answer to Swedish mobile, and some of the challenges you face towards upselling. Given that the bucket sizes in Sweden are already quite big, have you ever thought about moving more into unlimited and introducing unlimited tariffs like you do in Finland as another point of differentiator and trying to encourage more upsell in the future? Secondly, just on Finland. The ice hockey season is almost over. I'm just wondering now how you start to judge the success of those investments and how we should start looking at whether you've been successful on those investments in ice hockey. Thank you.
Thanks, Terence. We think a lot about how to change the way we price and the way we package and bundle. We continue to do that internally, and of course, if we change the way we are strategically pricing in the Swedish market or any other markets, we'll tell you. So far, I'll stick to my statement that we certainly believe there are upsides in many segments still, and therefore back to my earlier comments in the call that there is reason to believe in uplift across our markets. Finland, ice hockey. We say it like this. We had a slow start. Now we're running fast. In the playoff season, we are actually surpassing our expectations on the subscriptions on the Liiga passes that we have. We have many different type of offers and passes, and that's been really successful in the last couple of months.
We're still lagging a bit on the link into access, the access part was the slow start, and the access part has picked up. If I should rate ourselves at this point, first season out of six, I would give it a four out of six. The upside to six performance clearly would be better access uplift, and that's now the positive that we start to see. Leading into next season, we feel extremely good about first-year learnings.
Thank you.
Thank you, Terence. Could we have the next question, please?
Thank you. The next question comes from the line of Ulrich. The line is now open. Please ask your question.
Yeah, thank you. I have three questions, two very short ones, I think. If I simply compare the market expectations, Norway certainly was the outlier to the downside. Then, of course, you are describing the situation in mobile as slightly unsatisfactory. Overall, the scale of what happened in mobile doesn't seem to quite match what people had expected. That leads me to the question, is Get really doing as you expected? It seems to me as if really expectations for Get growth in the quarter were maybe a bit higher. Since you now include that in the new like-for-like definition, I'm just wondering whether you could give us some indication of how Get contributed or not and what you think about that vis-a-vis the unfolding quarters. Second question is on bad debt.
Christian, you highlighted bad debt issues, I think, across several markets. Could you go into that in a bit more detail? Is this simply just a volatility confluence thing, or is there something more underlying going on why this is big enough to now highlight separately? The last question is on the IFRS 16 impact on slide 26. You're giving the impact, which I understand to be the first one Q 2019 impact. On slide three, you are highlighting that the impact, the way you look at it, is added back in one Q 2018, then you calculate the underlying figures. I'm just wondering, the numbers on slide 26, are they actually one Q 2019 or one Q 2018 numbers? Thank you.
I don't have the slides in front of me, I think it's 2018 all over when we talk about it, Andreas. We don't have any slides.
Yes. It should be fairly the same for both.
Yeah, exactly. They're fairly the same, but it is the 18 numbers, and they are fairly the same on IFRS 16. I'll come back to you on that when I look at the numbers on the slides later on. On the bad debts, actually, I wish I had a much clearer answer, but they are a little bit all over the place. It's small numbers in the total, but they add up. We don't see any trend per se, but it's of course something, if the economies will change, we will keep an eye on. But at this time, we don't see a change in our customer base on that. On Norway, Get is not negatively contributing on the EBITDA to the Norwegian business. As you say, service revenue is not explaining everything.
We have two entities together now that have a synergy and cost program that is implemented as we now have integrated in February, and that will give a heavy takeout from quarter two and going forward. That's the answer on that.
Thank you.
Thank you, Ulrich. Could we have the next question, please?
Our next question comes from the line of Nick Lyall. The line is now open. Please ask your question.
Yeah, morning, everybody. It's Nick at SocGen. Could I just ask a couple, please? Just to go back to Get after Ulrich question there, would it be possible to give us a like-for-like for Norway for last quarter as well, Christian? Just on the same basis that Get was in for 100% of fourth quarter 2017 and fourth quarter 2018, if that's possible, just to get a rough comparable versus the growth this quarter for the Norwegian business. Then on churn, you said at the CMD you were still happy with the churn so far, at least from Sweden. You've now got the price rises through. Could you just confirm that everything's looking okay, particularly on the TV side? It seemed like TV's not been great for Sweden this quarter.
Is that more of a case of holding back to see what you can do with Bonnier later if it goes through, or is there maybe something else going on there in terms of TV numbers? Thank you.
Yeah. Let me start with the fourth quarter one, if that's fine.
Yeah.
I can't give you that number, but we did say on the revenue side that it was very stable in the fourth quarter as well. I don't have that number with me, and I can't answer it. It was stable Get on a year-on-year basis in fourth quarter.
No. We're definitely not holding back or waiting for anything to happen on the acquisition side with Bonnier. We are full steam ahead on our existing proposition that we have. Our statements on churn still stand in terms of the more people add on, the less churn we get, the more loyal they get, and the better prospects of the higher ARPA we do have. In the quarter, yes, some softness on some TV KPIs, but nothing that we worry about on the overall trend line. Not to worry, Nick, on that.
Okay, thank you.
Thank you, Nick. We have a few more questions on the line, so let's take them, operator.
Yeah, our next question comes from the line of Lena Österberg. The line is now open. Please go ahead.
Yes. I was wondering if you could say something about the price increases that you've implemented as of 1st of April, roughly how much you expect in financial impact from that. Then also, going back to Sweden and mobile service revenue growth, if you could maybe give some indication of where your customers are today in terms of bucket utilization and how many quarters you expect it will take before we can start to see customers starting to top up again following last year's expansions.
Thank you, Lena. On the pricing question and the top-up, I think it's part of the analysis we're doing and the planning we're doing for the Swedish and other markets, for that matter, is to see if you need to change anything in the strategic pricing area, i.e., change the logic of buckets, size of buckets, speed unlimited or not. All of that goes into our analysis. Of course, I won't tell you what we're planning to do. I can just say that we are still strong believers that there are key segments that we have upsides on when it comes to yielding on pricing on mobile. On the fixed side, we did a quite big headline price increase on April 1st, but some customers will actually get a lower bill, because it's flat rate pricing now on fixed telephony, but most people will get an increase.
So far, so good. No acceleration beyond the expected, and all the expected impacts that we have talked about is kicking in, and as both Christian and I mentioned in our presentations, it is a key component of the stabilizing trends Q2 onwards for the Swedish business.
Okay. Could I maybe just rephrase the bucket upgrade question, because last year we saw significant expansions of buckets from you and your competitors, starting with Three, and you responded. After that, you've had limited upselling, and that's one of the triggers for not having the mobile service revenue growth. How long do you think that effect will last?
The effect of not having upgrades, you mean, or what trend are you referring to?
Customers have big enough buckets today. When do you think they will start to outgrow them again?
Goes a bit back to what I said. Now when people are starting to get used to their usage, we need to bring the right product and offering to them that still gives us an opportunity to upsell along the way. That's the whole logic of our pricing strategy. I will not tell you here now what that answer is. I can just say that it is definitely part of the analysis ongoing, and Anders will let you and us know as soon as we go out with something new.
Okay, thank you.
Thank you, Lena. Could we have the next question, please?
Next question comes from the line of Henrik Herbst. Thank you. You can now ask your question.
Yeah. Thanks very much. I had two questions. Firstly on, just trying to understand and make sure I got the maths right. Norwegian EBITDA on sort of a underlying basis, and if you adjust for the one-off, organic EBITDA in Norway declined by about 10%, and if you can sort of talk about whether there is anything else going on other than the weaker service revenue trends just make sure I got that right. Secondly, on Swedish fixed line, your broadband subscriber trends were pretty good given you put through quite a big price increase. I'm just wondering what's going on there. If you can talk a little bit about the churn impact from the price increase. It seems like it was very well received. Whether we can expect still some sort of churn from the price increase coming through in Q2.
On the TV side, why your TV ARPU were so bad, it seems like the weaker subscriber additions were on the back of the price increase, if you could just confirm that as well. Thanks very much.
Thank you, Henrik. You're spot on. If you take out SEK 100 million in Norway, the service revenue decline automatically goes into a loss in profitability, which is the main effect. Cost is, as I said, going to be affected in the coming quarters more rapidly as the integration starts now to effect.
Yep. Broadband Sweden is, as you said, fairly stable. A couple of things happening there. As you know, we have the decline in fixed DSL, broadband DSL. We have the decline in i.e. lower OTC on fiber, we are compensating with higher OCN, i.e. selling on other city networks. That one is really important for our reach to Swedish households, that has been a good pickup from the Swedish team over the last quarters. Now a really important part of the Telia life story, the converged story , to reach more households. That's where you see the subscriber numbers being stable thanks to the OCNs. The TV, I just repeat, we don't see any reason to change our view on the growth prospects for TV.
We have some softness in some of the KPIs. Overall, we feel confident in the TV roadmap even without Bonnier. Of course, it becomes stronger with that acquisition coming through second half of this year, hopefully.
Thank you. Can I just follow up? Do you see a similar ARPU on the open networks as you do on your own infrastructure? Also, do you think you have the same type of pricing power? I guess competition is a little bit tougher in open networks. Thank you very much.
The ARPU is not the main differentiator or difference really. The proposition can be as strong to the consumers or the households once we're on the OCNs. Of course, the margin picture looks different. That's where you will see a different add-on and value creation in the short run. It's pressured on the COGS side.
On the OCN, it's more MDU than SDU. The total TV includes an SDU and an MDU package.
Correct.
Thank you very much.
Thank you, Henrik. Could we have the next question, please?
Thank you. Next question comes from the line of Keval Khiroya. I am sorry if I mispronounced your name. Your line is now open.
No problem. Thank you. I have got two questions just back on mobile service revenues and secondly on Norway. When you showed that chart on page number five showing that service revenue trends will improve during 2019, how are you thinking about individually for Sweden, Finland, Norway? Should we expect mobile service revenue specifically to also be improving, or do we feel that visibility is too low for that at the moment? Secondly, when we look at Norway, the other mobile service revenues were down year-on-year in Q1. Obviously, that had been growing before. Is that due to ice? How should we think about the revenues from ice going forward as well? I understand obviously that is mostly in their hands, but what do we think you want, and what are you baking in going forward? Thank you.
Yes. On the mobile service revenue question, again, I think I'm just trying to summarize and repeat some of my previous messages that across the board in the three countries, there are different reasons for the softness in Q1. The mitigating activities and the plans and the roadmaps are different from each country into the coming three quarters for the year. They're all aiming, of course, to stabilize and improve the service revenue trends. We have no reason to change our view there because we have strong plans and proposition in the making or just recently out. Q2 will go deeper and then explain how we're tracking on those trend shift activities. The market is there for it. On the ice in Norway-
Yeah.
-wholesale, I didn't really pick up that question.
I'll pick it up.
Yeah.
Thank you, Keval. It is a wholesale decline, which is coming through on the other mobile service revenue, and we don't see any further trend shift in that during this year.
Thank you.
Thank you, Keval. We have time for one more question. Operator, please.
Okay, thank you. Your next question comes from the line of Fredrik Lithell. You can now ask your question. Your line is now open.
Thank you for taking the questions. I have a few, if I may. Can you maybe comment a little bit on why you felt you needed to offer some remedies to EU on the Bonnier deal? That would be great. Also then secondly, Telenor acquiring parts of DNA in Finland. How do you feel that would play out? How do you prepare yourself on the B2B side as they have alluded to being more active on that? Then I have also your ongoing closure of Sonera, how is that progressing, and how is that impacting your CapEx, your OpEx? Then finally on your rollout plans for the 700 MHz spectrum that you acquired, what should we expect on that, in what timeframe? Thank you.
We have time for four more questions, but let's take them quickly. I have nothing new really on the Bonnier Broadcasting deal. As I said, we are working hard to get that through, discussing with the commission, as and when required. We'll keep you posted. I welcome Telenor to Finland. They're a good competitor, so that will be positive to see. When it comes to Sonera, we are in discussions obviously with our partner in Sonera to make sure that we get the best out of Sonera the last years as part of our agreement, and we'll update you further when and if we have something. The 700 is something we really like in Sweden.
Of course, we got good spectrum bands for that to roll out in rural, as and when required, and that's part of our overall improving a world-class network to be whatever is next, a universe class network. The 700 will be exceptionally important in our ambition to serve the Swedish households, companies, and people on the move. Thank you very much for tuning in. Thank you, Fredrik, and thank you all for asking questions and for coming here, and we'll meet you out there on the road and during the second quarter, and we'll see you all here in the summer when we report our Q2. Thank you.