Good morning, ladies and gentlemen. Welcome to year-end report for 2017 conference call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session, at which time, if you wish to ask a question, you will need to press star 1 on your telephone keypad and wait for your name to be announced. I must advise you that this conference is being recorded today, 26th of January, 2018. I would now like to hand the conference over to your speaker today, Andreas Joelsson. Please go ahead.
Come to Telia Company's year-end report for 2017, where we report a strong cash flow and a 15% dividend increase. As you know, there's more to the story than that, with me to present that is our President and CEO, Johan Dennelind, and our CFO, Christian Luiga. As usual, we start with Johan. Christian will come back later. Johan.
Thank you, Andreas. Thank you for stealing the thunder straight away. Welcome all in here and welcome you online as well. I wish it was as beautiful outside as we have on the picture here in Stockholm. Let's go straight into our Q4 and 2017 results. As Andreas mentioned, we are ending on a very strong note with a very strong cash flow for the year, stronger than we expected, we have to admit, and we will explain why. We also delivered on our EBITDA ambition, which was flat for the year. We did, just slightly, 0.2 down, very well in line with our ambitions, which has led us to be able to propose a dividend of SEK 2.3 per share, which is an increase of 15%. That is, of course, a combination of the strong cash flow and a strong balance sheet.
We also laid out a cost story for Sweden during the summer, which we have delivered on, actually slightly above our ambitions of 5%. We delivered 6%. We'll certainly get back to the cost story through the presentation today in Q&A. Very happy with the Q4, and we have good speed into 2018. Let's look at it a bit more in detail. Service revenue, we know are under pressure, mainly from the service revenue decline in fixed. We are compensating to a large extent from the new services and the demand for more internet, better internet, more media and entertainment. We're yet to fully balance that out with a flat organic revenue. We are improving EBITDA, very much, of course, thanks to the cost efforts we have across the group.
We have a strong cost focus on management. We are growing EBITDA in five of our seven Nordic-Baltic markets. If you exclude fiber, you can see that it's actually even 7% on a group level year-on-year for the quarter. Underlying a strong development on the EBITDA side and cost side. Sweden specifically, I will not go very much into the depth of Sweden today because we have Hélène Barnekow, the CEO of Sweden, here with us. She will join us after Christian comes later. We'll have a chance to dive deeper into Sweden. The highlights, we are very focused on going through a couple of years, as you know, in transformation in Sweden, investing out of legacy and into new platforms and systems.
Meanwhile, we're doing that, we're also focusing on the short term with costs and propositions to the market. This quarter, as I said, minus 6% on the OpEx side. If you remove the fiber one-off installations where we have some problems still with delays on permits, if you remove that from the EBITDA and also take out the pension one-off from Q4 last year, which is about SEK 100 million, we are actually ending up in a positive EBITDA territory of 3% for the quarter. Please look at the one-offs and please look at the fiber installation fees. Then you get the underlying pretty strong performance on EBITDA in Sweden. On my note of changes in Sweden, we are working through the legacy part of the business in our strive for simplification and better customer experience.
That is the transformation, as we refer to it, is still ongoing, heavy lifting. On the other side, we're getting now a lot of proof points into the customer and better value propositions, especially under the umbrella of Telia Life, which is our convergence proposition, where we have been, as you know, combining fixed and mobile and TV in one umbrella under one brand through the last two and a half years. That's now starting to yield results. The convergence space we own in Sweden. We are really much looking forward to stepping that up. As so far, we have not used the discounting route. That's very important for us not to go out and give away things, rather combine it and create that better customer experience. We have some really interesting examples of that, which Hélène will talk more about.
Let's move east to the positive Finland. We have a strong development in Q4, over 10% organic EBITDA growth, which we have flagged for during the year that we'll see a strong Finland coming through, which it did. I'm very happy with that. Then even more excited about what we have in store for this year, 2018. I will move straight to why I'm excited. We have worked a lot to invest ourselves into better positions and propositions in Finland, especially around the convergence, both in enterprise and consumer. In the enterprise side, we made three acquisitions during 2017, which we're all very happy with. We targeted the special skills, special platforms, and products that will complement our B2B offers, not just in Finland, but possibly also across the rest of our markets. Exciting M&A.
We think it's about SEK 700 million in additional revenues. We will see synergies coming through also in Finland on the cost side. We have invested in content. We are about to launch very exciting propositions into the Liiga, which is the top of the ice hockey league in Finland. We know it's a big thing, and we want to make it an even bigger thing for the Finnish consumers during the year. We have also, as part of our B2B offers, a very interesting proposition around data center and the hosting and the credible, secure local infrastructure player in Finland, which we will gear up during the year. All very exciting. As you know, we are changing our group profile from the old, fragmented, spread across very many markets into the Nordic Baltics.
We are continuing to invest in adjacencies, where we are looking for new revenue streams supporting our core. I mentioned the Finnish acquisitions. We know what we've done in Norway with Tele2. We have done Phonero, which is coming through this year, 2018, with about SEK 400 million full run rate effect. We're also doing smaller acquisitions, which may not always be highlighted on this level, but I want to take the opportunity to point to the IoT space in Division X, which we run, where we've done a couple of acquisitions, notably Fältcom, which is very much specialized in transportation, smart transportation, and the leading cutting-edge competence, which we believe will help us further enhance our IoT revenues. Which has doubled from 2016 into 2017, which will continue to grow very much in the double digits through the year 2018.
Humany is a smaller player, which enhances our artificial intelligence competence within the customer-fronting activities. Very exciting, which we hope to leverage further in the portfolio. The big news for today, obviously, the divestment of Geocell. We have come to an agreement with Turkcell to divest bits of Fintur rather than the full Fintur. It's been a long process, as you know, but we're very glad that we have reached a point where we can start to divest the pieces, and Geocell is first out. We signed an agreement late last night or this morning even, I don't remember the time, where we took it out at 8:00 A.M. It's a local acquisition from the leading fixed telco in Georgia, Silknet, who has the same ambition as we have in the Nordic Baltics, creating a convergence proposition in Georgia.
I think it's a great combination, and I want to take the opportunity to thank all our staff in Georgia and Geocell who has done a tremendous job, not just repositioning Geocell, but also living under some uncertainty for a bit too long. I want to thank them for their patience and wish them all the best into the new venture, which is yet to be approved, by the way, by the local authorities. We're hopeful that that will go through in the next couple of months. We also divested MegaFon during Q4, which helped us strengthen the balance sheet. It was just a couple of months ago, so we're still enjoying the benefits of that. Remember, we're also losing the dividend from MegaFon going forward. Take us in a bit looking at 2018.
We set out the cost ambition during the summer also for the year 2018. We're well into execution of this cost program, where our ambition is to take out SEK 1.1 billion. Let me add the very important word of net cost takeout. It's not the gross, it is the effect that we will see coming through on the net basis. You see the split, which is just to show you that is how it looks today. It's identified and in execution, where Sweden obviously has the big chunk, slightly north of SEK 500 million net cost takeout in Sweden.
The reason Finland is so slim with cost takeout is not because they're not doing anything on cost, it's because we have added a lot of acquisitions, as I mentioned, and they have added to the cost base, and we're not able to mitigate that fully or more than this before we come into 2019. Where are we looking or where are we going and where are we executing? Examples of that to the right on the slide. We're doing a lot on vendor consolidation nearshoring. We're transferring obviously from physical stores into online. It's a big transformation in itself, which enhances the customer perception and experience. It's not just about cost, it's about customer experience. Use of robotics and AI, as I mentioned, a core part of the future Telia. I think we are far ahead and working across ecosystem with partners.
Of course, we need to further optimize the acquisition cost and retention cost. That's not where we go cutting short-term. We go optimizing to ensure that we also stay competitive in the market meanwhile. Taking us into Andreas' early point, we were able to increase dividend with 15%, which is very much spot on the dividend policy of at least 80% of the cash flow from our continued operation plus the dividend from associates. That gives us, to be precise, is SEK 228, but we thought rounding it up to SEK 230 would be better, and it's a 15% increase, and we were very pleased to propose that to the shareholders. A couple of notes into 2018. This is how we view 2018 and onwards.
Remember, we have still legacy headwind, notably Finland and Sweden, that, to be clear, is the decline, conscious decline, expected decline of fixed telephony mainly. Nothing we can do about, we really want customers to come over and join new services and solutions. We know what's happening there, but it's a heavy headwind still. That means we need to look for tailwind, which we're doing obviously through our cost programs, which are materializing, but also through the synergies that we're getting on the M&A, notably so far in Norway, SEK 400 million from Phonero, full effect 2018. Also in Finland, where we're getting some synergy benefits from the three acquisitions made. The other part we're seeing supporting improving cash flow is the net working capital, CapEx decrease in cash CapEx. That will continue to support the cash flow in 2018.
We believe that these are together balancing out into the maintained high cash flow of SEK 9.7-ish. I would say it's going to be on that level also for 2018, which is a high, and more importantly, sustainable level. That's the last note we are making on this slide, which is then looking even further into 2019, 2020, we see further opportunity to grow cash flow from core metrics. That is why we are comfortable with both the dividend and how the business is trading. Concretely for guidance then in 2018, this means, as I mentioned, the cash flow around SEK 9.7 billion, which means we should then be able to defend another dividend of the same level, at least. EBITDA, we see at the moment with some uncertainty on a couple of areas, notably fiber Sweden, how well that progresses.
We see us being in line or slightly above 2017 level of SEK 25.4 billion. Excited about 2018. I am looking forward to take more questions later, but first, Christian Luiga on the numbers and some more on some countries.
Good morning, everyone. I will start also just saying that I am very happy for 2017. I think we should be very proud and happy for the hard work that has resulted in meeting our guidance on EBITDA, and we overachieved on the cash flow. I'll come back a little bit on the reasoning of that. We did that despite a super tough year on fiber, as we have talked about a lot this year, the 45%-50% decline in fiber, that was expected to do much better. Despite that, we did get the cost programs running exactly how we wanted them, and the cash flow programs have actually been faster. It is a good feeling leaving 2017, going into 2018 with good momentum. Into Q4, we have a 2.3% decline in service revenue.
SEK 220 million comes from the fiber decline, still a decline in Q4, I'll come back to that. We have the fixed telephony and the legacy declining as well. We do have mobile growth continuous coming through. We have strong growth in Finland, we have strong growth in Baltics, and we have strong growth in consumer Sweden on the mobile. Underlying, we have in the mobile side, a very good business. The EBITDA is positive despite the decline in service revenue. Cost coming through in most markets. In Sweden, Johan talked about the 6%. Head office, we also have in the IT network side and other head office functions been driving costs down. We have a central organization that we also drive the efficiency gain in. That has resulted in a positive quarter on the EBITDA.
In Sweden, the cost measures also came with the 650 resources taken out that we talked about last summer. Service revenue in Sweden, down 4.5%, SEK 220 million, pretty much 2% coming from the fiber installation fees. The MVNO with TDC, SEK 30 million last year, nothing this year. It was moved, as you know. We also have a mobile consumer behind this growing with 3%. Flattish on postpaid customers in the quarter, down in prepaid, and the ARPU is up 5%. This is the way we want to drive the market. We want to drive the pricing and the value in the market, and we do that and keep our market share in that sense. Happy for that. In the B2B side, a weak quarter on service. We had a strong Q4 in 2016 with some one-offs that we talked about in those days.
Without that, the service revenue is still 1% growth. The B2B large is now 7% in this figure, but it is underlying around 5%, which we will have throughout the year. We still feel some pressure in bringing up the potential in B2B large, but we are working hard on that. On the fiber side, we have a SEK 500 million decline in service revenue for the year, which means SEK 350 million plus on EBITDA that we have compensated for. This is, of course, somewhat failure from what we expected, but it has a lot to do with permits. We talked about in the summer that we had problems with the authorities on getting permits, and they would start up during the second half.
Unfortunately, we have to say that it has failed to ramp up in the speed we needed, and we still have issues with the authorities on the permits. That has not moved away from our agenda. We had a meeting yesterday with the ministers, and we continue to work with this because it is an important issue, not only for us but for the country. We have 18,000 households to be connected that we now move into 2018 and have as a base starting point. We have somewhat higher CapEx if you look at Q4 this year compared to the volume that we are delivering. That is because we have built up some of that 18,000 for next year in our CapEx, ready to be delivered when we get the permits.
We know it is going to be a little bit uncertain going forward, therefore, we guide on 60%-90% of this year's volume. That you would say is a very big range, and that is also the reason is because we have little visibility at this point in how we will handle the permits. We are getting into the tail, and we will evaluate as we go on how we are going to do this. Still, we do not feel there is an issue to reach our 1.1 million in household reached in one year from now. Norway. Norway had a flat service revenue. We have somewhat pressure from the something we call special numbers that have been in Norway. We have special pricing on that disappeared in the second half. That have put some pressure on the revenue for the quarter.
We also have data growth, which brings compensating that. Flat on total. The B2B continues to grow, both in number of customers and in our product offering. Very good momentum there. On the EBITDA, it is more a one-timer. It is not a trend that you should see continue into next year. We have a high pressure on the cost on Phonero from the other vendor of data to that company in the last quarter before we move over to customers. We also have some one-timers, and that impacts the quarter. As per today, we have 80% now of the customers moved over, and within a quarter, they will have moved over to our network, all of them. We are still comfortable with the SEK 400 million in annual synergies that will come through from the Phonero deal. As Johan mentioned, we have done some acquisitions.
We also bought 40,000 customers from NextGenTel that we are now migrating over in quarter one. That was B2C customers, by the way. Baltics and Denmark. We have good momentum in the Baltics. They are growing, and they are growing throughout the year. Service revenue, both in fixed and in mobile, is growing. Together with cost programs, that give a good pressure upwards on our EBITDA. It is really fun to see how we are developing in these countries. We also have implemented converged offerings in Lithuania in October and in Estonia, actually, I think it was yesterday, with something we call the Telia One. It is a triple-play type of offering. We can see in Lithuania, we already have gained more than 3,000 new customers on this within one quarter. It is positive to see how we succeed with our converged offerings in these markets.
Denmark did a tremendous job on cost and keeping the revenue flat for the year. Cost is down, revenue is flat, EBITDA is pretty much flat, and they have done a lot of cost takeout, both in customer operations, but also moving more self online handling with My Telia for the customers, taking out a lot of administration costs internally. It is a somewhat more stable market, and that makes it easier for us to also handle the service revenue. Cash flow has improved. Good thing is that we do get a positive cash outcome from Denmark right now. Eurasia, Johan told us, we know that Geocell was sold this morning at a valuation of 4.5x EBITDA, brings SEK 700 million approximately in cash to Telia when we have completed the deal, which we expect to happen during quarter two at the latest.
Eurasia is continuing on the good momentum of growth in EBITDA and the service revenue. That is despite the devaluation in Uzbekistan that has pretty much halved the value of that revenue and EBITDA. Kcell, as you can see, Kazakhstan, has continued to have their tough one and a half year transformation, and we had to reboot. Both price increases and cost is driving the trend in Kazakhstan. Really good momentum. Into net debt. Net debt ends at 1.14. Strong balance sheet, somewhat also impacted by the MegaFon divestment. The MegaFon divestment came in quarter four. It was not maybe a surprise, but it was faster than expected. We succeeded greatly, both in timing and in value, I would say, to get this asset on the market and sell it. We received around SEK 12 billion in net proceeds. We made a profit in the quarter of SEK 1.5 billion.
I am very happy that it happened that fast, and we can put that into our balance sheet going forward and focus on Nordic Baltics. We can also see that we have paid out the second tranche of dividend and the cash CapEx have improved also the quarter net operations. Good quarter. We have still SEK 1.6 billion to be paid out based on the DOJ situation, and we will wait for that and see how long time it can take, up to one year, before we get information on where to pay the money, because it is decided the amount. CapEx. CapEx has been a very important topic for us. It is part of how we create value for our shareholders over time. We said very early that we would peak 2015, 2016 in CapEx and thereafter improve. We continue on that path. I think the rolling 12 months graph shows that.
We have said that both the CapEx without the fiber rollout and the fiber rollout should go down over time. We are measuring this internally and with you externally as cash CapEx, because that is what is important when it comes back to the cash flow, and thereafter, the dividend for our shareholders. We have progressed, and we have moved forward from SEK 11.6 billion to SEK 10.8 billion. We see a continued trend into next year, and we have said that all along. Into 2018, we will continue to decrease, and we will come back after that. The main topic for next year is fiber. That we know will go down over the coming years because we are getting into the tail of the fiber rollout.
We have somewhat higher fiber this year, maybe than expected based on the OTC decline, but what I said before, we have built part of those 18,000 ready to get the permits and get them into the OTC. We are on progress, and we are improving our cash flow from this momentum. We have not compromised on our best network. We are winning five out of seven markets. We get the best network, and we are very careful to balance that, because that is one of our core pillars in our strategy. We have a much-improved investment process and synergies within the vendor handling when it comes to CapEx. The operational free cash flow came out better than we expected, at SEK 9.7 billion. We guided above SEK 7.5 billion. It is several factors that have helped the cash flow for the year.
We talked earlier about the tax one-offs with you already in quarter one. We talked about cash CapEx also earlier with you, full control. We have also started two projects within this year, when we also have started to guide on cash flow to you. One is the cash flow program, which goes much on working capital, but it is also the CapEx, and CapEx we talked about. Working capital, we are below benchmark, and I have said it before. We are below benchmark with our peers on working capital. We have a two to three year at least journey of good takeout of working capital if we do things right. We have worked on that program, and we are happy to see that the things that we expected to start hit our working capital hit faster than expected.
In quarter four, many of the contracts that we worked with and new models with vendors have started to kick in. We will continue to see that going into next year. We already see and have initiatives that we know will also materialize in next year. We are now on that journey, and we have stepped up to the full speed in that. I'm happy to say that that was faster than expected in delivering on that target. It is both the vendor side and it's the customer side that we're working on. That leads me into next year and our guidance of SEK 9.7 billion next year. We're going to stay at the same level. We have a one-timer, as we said, in the midsection here on tax. The finance and tax and other will go south next year.
It will be worse than this year, but we see continuous improvement on the EBITDA working capital and CapEx together. The underlying operational drivers will continue to improve in this group. We will normalize the finance tax and others. In total, we are then around SEK 9.7 billion for next year as much as this year. We're getting close to the SEK 10 billion mark for this group, which I'm really happy to see. With that, moving into the outlook, which Johan already talked about. SEK 9.7 billion, in line with this year. Strong fundament for covering also our dividend level that we have today, and the EBITDA in line or slightly above, based on how we drive this company then into next year. Thank you very much.
Thank you, Christian. Before we move into Q&A, before I try to steal even more thunder, I would like to take the opportunity to invite our head of Sweden, Hélène Barnekow, up to say a few words on Sweden. Then we start the Q&A, and I urge you to take the opportunity to ask questions about Sweden. Hélène is full of answers.
Thank you, Andreas. Good morning, everybody. Good morning to everybody online. It's great to be here and be able to speak about Sweden today. I obviously would like to start and talk about that we actually take great pride in the fact that we delivered on our cost agenda in the second half of 2017. We actually managed to reduce our operational expenses by 6%, which is a bit more than we had committed to. This is extremely important also going into 2018, because it's not a surprise to anybody in this audience that we have a declining legacy business, and Johan already pointed this out. There is no reason to believe that this would change in next year. Obviously, we are working on mitigating that. Christian mentioned the fiber business.
Our fiber struggle really started in Q2, because in Q1 we were still rolling out what was sold and got permits for in the previous year. Unfortunately, we see no improvements on the permit side. We have lots of dialogue with the ministers, with the authorities, and all of it. Sweden has a very ambitious broadband target for 2020 already. With the rate we are going now, that target would not be met. I think this will be a big agenda point for many people in our political offices in the coming years. We are hopeful, not the least because our customers are waiting to be connected and everything is sold. We feel the pain from our customers, and we're very eager on that. There is no decrease in the appetite for fiber in Sweden. That should be pointed out.
As we are by far the largest XDSL provider, we can clearly see that. You see in our numbers that the XDSL is going down. What you don't see in our numbers, I think, is the fact that we added 24,000 fiber customers in Q4, which is a very high number, and we haven't seen everybody reporting, but I would believe that we actually took market share in the fiber service provider business in Q4. A significant part of that is now going on the Open City network, so not on our own network. That's been a very decisive strategy in 2017, will continue in 2018. That's important, of course, to mitigate the XDSL and take those customers. It's also important for our converged footprint. We want to be able to offer convergence in as many parts of Sweden as we can.
When it comes to the B2B business, we have stabilized, and we have improved the growth rates. We are now around the 2%-3%. We remain in a market where, especially in the large segment, the price pressure continues to be very strong. It will continue to be strong next year, but we feel that we have stabilized here, and we are running the business on that. All of this, of course, means that the cost focus and continuing driving a cost agenda and taking out structural costs will remain absolutely in focus for the Swedish business. I also want to talk about something that is really positive. Our mobile, Christian and Johan alluded to that, our mobile business, we had the best Q4, actually, for our consumer mobile business, we have a growth of 3%.
This is a mix of the fact that we have had a strong net intake during the year, 75,000 net postpaid customers, and we have an increase of ARPU. That's exactly how we want to grow the value on the consumer business. That then takes us into converged offerings. Actually, the whole year we have been working on adding to our converged offering, on September 1st, we launched Telia Life, which is then packaging the whole piece. We believe we can see as well, we have 70,000 customers now under that converged offering, we can see the positive feedback we have from customers and the loyalty that actually increases. We're now adding to that offering.
We launched, I think last week we came out, or this week we came out with a press release on personal technicians for the consumer segment, which was one of our success factors, how we managed my SoHo business. We're launching personal technicians, and we're also building this into our converged offering right now. Going into this next year or to this year, to 2018, that will be core of our strategy. I think we have the insights what our customers want. We also have everything in-house. Now this year, we actually go on to all this new transformation, which means that we will be able to deliver this with a customer experience that we know customers expect and with the cost efficiency that comes with that long term.
We're very confident on the converged offering and that we will be able to develop Telia Life going into 2018. Thank you for that.
Very good. Thank you, Hélène. Please join us up here, Christian and Johan, and we open up for questions. Perhaps we start with Johan this time.
Thank you very much. Two questions, if I may. The first one, basically, looking at you, Johan, on the balance sheet. After you get proceeds now from Geocell and perhaps Kazakhstan later on, so you will have a very strong balance sheet still, stronger than your target of net debt two times plus or minus 0.5, if I remember correctly. How will you use that balance sheet? Just remind us also on the sort of M&A strategy that you have going forward. Then my second question was actually your view, perhaps a question to you, Hélène, on the content. Will Telia in Sweden enter into content or not? Thank you.
Thank you. Let me start. First, I just want to remind you and the rest that when we are divesting Eurasia, and as we are through that, it will not necessarily be positive on the balance sheet and the ratios, because we are, of course, divesting EBITDA as well. We have said, a guide that as we divest Eurasia, that is not going to materially change our balance sheet and the ratios. What you see is a strong balance sheet as it is, yes. That came recently on the back of the divestments we have done in Turkey during 2017 and also the last divestment in MegaFon. As of now, we are evaluating how to use our stronger balance sheet. Still some uncertainty out there to deal with, but definitely in a better position now to move forward into building a new generation telco in the Nordic Baltics.
We haven't been clearer than that, and we will, of course, come back to you when we have made up our minds on that. No, we feel the pressure, but we also want to be prudent and ensuring that we are doing the right thing for shareholders. We will come back on more developments on how to proceed from here.
On the content question. Obviously content is really important, both to the actually converged space, but also in the consumer business as in general with TV. So far, we have managed to keep improving our TV offering and the content offering, actually, and the TV experience with the partnerships we make. How that will look in the future, and we are open for different types of discussions and partnerships, but we haven't made any announcements on anything else.
Thank you. Johanna, can we take a few questions from the telephone conference, please?
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one on your telephone keypad. Your first question comes from the line of Peter Nilsson. Please ask your question, Peter.
Thank you very much. A couple of questions, please. Firstly, the cash flow is obviously strong and the outlook is for strong cash flow. From our side, I guess the EBITDA outlook seems a bit cautious given the OpEx reductions to come, the SEK 400 million in Norway. Is that related, Christian or Johan, to your cautious comments on fiber deployment in 2018, and your comments on fiber for this year sound fairly downbeat. Would you not think there should be upside given how weak 2017 was and the fact that, well, at least the regulators were supposed to improve on the momentum here? That's my first question, please. Secondly, can I just ask Johan, I guess that part of your M&A agenda has been fixed in Norway. Obviously, you have a stronger balance sheet.
Can you tell us whether you're actively looking at adding fixed businesses in Norway at the moment? Just finally, Johan, is there anything you want to add to us in terms of, obviously you sold Geocell today, it's a relatively small part of Eurasia, about the remaining process and how we should view the impairments you're making. Is that an indication not to be too optimistic in terms of selling prices and timing, et cetera? Thank you very much.
Thanks, Peter. I think I will be addressing a lot of the questions that probably other people are wondering about. Let me take a bit of time on this. On the guidance, we have said that in line or slightly above. The reason we're doing that is precisely to your point, Peter. There is uncertainty, as Hélène pointed out, and me and Christian earlier, around the fiber deployment and the pace we can keep, and mainly actually related to things slightly out of our control. Yes, that's one of the reasons we are slightly vague in that sense, whether it's going to be in line or slightly above. Definitely, as we proceed through the year, we can then be more precise on how we see EBITDA coming through.
Rest of countries, if you take Sweden away for fiber reasons, rest of the countries should support an improved EBITDA. Fixed Norway, yes, is the answer. We are actively looking for fixed in terms of enhancing our value proposition with converged offers in Norway to our customers. We haven't said exactly what that means and how we're going to do it, obviously, but it could be everything from strategic partnerships to enable us to offer combined services or even M&A, as you say, in the fixed space of Norway. Yes, that's on the horizon. We have divested Geocell. Let me then say as well, if you have digged into the numbers and the valuations of [Eurasia pieces, we have taken an impairment relating to Azerbaijan, Georgia, and Moldova.
The reason for that is we're no longer valuing Fintur as one package or as a whole Fintur company. We are valuing now the respective companies on a standalone basis with a fair market valuation, which means that we are having in the books what we think we will get when we sell. Of course, that means that we are selling piece by piece as opposed to before when we looked at divesting the full Fintur. The reason for that are many and complex, and I will not go into the details, but there has been, of course, discussions with our minority shareholder in Fintur, which is Turkcell, on how to proceed. I'm glad that we have now taken an important step in starting to divest the companies in Fintur, and I feel very confident that we will now get an accelerated process in the divestment of Eurasia.
Remaining would be Ucell, Uzbekistan, which we have said is late into the divestment process due to the activities and the global settlement of the history, but it's catching up process-wise. I feel good about the momentum and the process and the interest also in Ucell, even if it is still slightly behind the process of the remaining companies. I hope I thereby addressed three important questions that I'm sure other people would have had as well. Thank you, Peter.
That's very helpful. Thank you very much, Johan.
Thanks a lot. May we have the next question from the conference?
Thank you. The next question from the phone line would be from Lena Österberg. Please ask your question, Lena.
Yes, first question maybe for Hélène. I was wondering a little bit about the, I realize it's early, but the initial impact in the converged offering. You said that you see loyalty increasing and churn going down. Could you indicate maybe what's the difference in churn level between customers which are on bundled services and the ones that are not? Also for Christian, I wonder a little bit about the dividend guidance and the cash flow guidance. Currently you guide for a free cash flow of SEK 9.7 billion. The dividends will be SEK 10 billion, and you say you expect to bridge the difference with dividends from associates. Is that Lattelecom which should bridge the difference? I assume you don't expect a certain dividend from Turkcell.
If I should start, Lena, thank you for your question. What I can say is that we see our new customers coming on board. We see a balance between new mobile customers coming onto our fiber customers and our fiber customers coming onto our mobile customers. The churn rates, of course, are different depending on which way we count it from. I would like to give us a couple of quarters probably to come back and give you a metric that we can track on that, because it's a bit too early to give you something that you can actually go and come back to and track. We see a very balanced way of bringing customers, and we do see a reduction in churn on all customers, basically.
Okay. First of all, Lena, we haven't guided on 2019 dividends. We have said that the guidance for our cash flow for 2018 is covering the level we have proposed to pay out this year of SEK 230. Of course, yes, we have Latvia, they stand for around SEK 150 million to SEK 170 million in dividend the last years. I don't see a reason why it should not be possible to continue with that level. Of course, Turkcell we have as a more unknown item. We have succeeded in the last three years to get an amount out of Turkcell. Now we have a lower shareholding, so we will have to see. We are definitely working on the item without knowing if it will happen.
Thank you, Lena. Stefan, you have been waiting a long time.
Yes. Stefan Gauffin, DNB. Some of my questions have already been taken. I wonder if you could give a comment on how you view the landscape now in Sweden with the proposed deal, Tele2 Com Hem. How does that change the competitive landscape? Does that change your position in any way?
That's an excellent question for you, Hélène.
Are you passing this to me? Yes. Of course, we paid close attention to that announcement, obviously. We understand the logic because basically what they're doing, they're building capabilities so they can pursue the strategy we were just talking about. I understand the logic, and in a way, it consolidates also the Swedish market with many big players, actually, and strong players. In a way, there's a line of consolidation into that, actually. I think it maybe gives us even more energy to accelerate what we're doing because this is our strategy that we talked to you about for some time, and we are in full execution of doing. I think it will be even more focused on the customers in this space and delivering excellence to our customers.
Thank you.
Thank you, Stefan. Next question from the telephone conference.
Thank you. The next question is coming from the line of Irina Ibristova. Please ask your question, Irina.
Hi. Good morning. Thanks for taking my question. Just to follow up, I guess, on the convergence in the Swedish market following the M&A news. How realistic do you think it is for both Telia and the combined Com Hem Tele2 entity to maintain this value-added convergence strategy without going to discounts? What do you see as the most likely thing that might derail this? My second question is on Denmark. Given that the market appears to have stabilized somewhat, any changes in how urgent you think it is to find a longer-term solution there? Do you think you can perhaps continue to run operations as is?
Should I start with the convergence in Sweden? Thank you for the question. We have taken a very conscious approach of not doing discounting strategy. Also looking at some of the other European countries that didn't go down so well, instead building it up from a customer experience and value loading it. That's how we're building our propositions. We're value loading it and giving benefits for having more things with Telia. We see that working. I think that also has to do with how the Swedish consumers actually work. It is the most digitalized country in almost the world, I guess maybe after Korea or something. There is a digital life happening out there. I wouldn't say that the majority of those people are just looking for a cheaper mobile phone subscription, a cheaper broadband subscription.
They're looking to make all of that work, I think that's the strategy we're going after and want to perfect this year. I believe that in our, we don't comment on what they will deliver on, I think they have also stated that they're looking for that and not looking for discounting into the market, which we obviously think is positive if that's not what's happening. We are confident in that strategy, we see that it meets what our customers are asking for.
Thank you, Irina. On Denmark, we have not changed our view. We still struggle to make a turnaround that is long-term sustainable in terms of value creation in Denmark. We are close to 0 on return on capital in the Danish operation, that is still not a sustainable position. We need to find solutions in Denmark. We're working with our same agenda as we've had through the year to try to, one, improve our operations, of course. We're glad to see some better performance in the Danish side. Also we need to look at what options do we have long term in Denmark, we still obviously don't have any good answers to that, unfortunately. No updates on the Danish side, Irina.
All right. Thank you.
Thank you, Irina. Next question please.
Thank you. Next question from the phone line comes from the line of Roman Arbuzov. Please ask your question.
Thank you very much for taking my question. I had two, please. One is on cash flow guidance. Thank you very much, Christian, for providing some color, and the slides are very useful in this regard. I was wondering if you can just give us a little bit more where you can. Specifically, I was just wondering on cash tax. What is a normalized level for cash tax for continuing operations? You've only paid SEK 700, and clearly that was positively impacted by the SEK 700 million one-off last year. Is the right answer for a normalized Swedish cash tax around SEK one and a half billion, or do you think you can, or for example, do you have some one-off lined up for 2018?
On interest, in terms of the hybrid coupon, which is about half a billion, is that what you expect roughly to happen to the incremental year-on-year changes to the cash interest, or can you actually reduce this through the cash that you got from MegaFon, for example? Finally, if I understood you, on net working capital, that should be also a positive number of some magnitude as well in 2018. Can you confirm what happens to the treatment of the Finnish hockey rights, the cash CapEx related to that in 2018, whether that enters your definition of operational free cash flow or it doesn't?
If I may, just in terms of 2019, 2020, your ambition to continue to grow cash flow, can I just check at a very high level, do you, for example, expect this to be more operational in nature as the 2019, 2020, and the 2019 improvements versus, I guess, working capital and cash tax driven kind of improvements that we've seen in 2017? Basically, is it more EBITDA driven going forward beyond 2018 or it's, for example, more CapEx and net working capital driven?
Okay, we're building up to a workshop here, Roman. I appreciate it while you ask it. I'll try to be brief, and we can come back separately, but I'll try to be brief because they're very important questions. I'll start from the end, actually. From 2018 into 2019, 2020, yes, the operational part should be the main driver. Hockey rights, we have to book that as a CapEx in the books, but of course, the cash effect comes as we pay. That cash effect does come in our operational cash flow. I said SEK 100 million next year of the SEK 1.2 billion we booked in 2017, and then it will follow six years ahead, the remaining part evenly. That's how that will come through in our operational free cash flow.
We will continue to decline in CapEx even with the hockey rights. That's what we have said. We don't separate that from our thinking of what, that CapEx will go down, of course.
On the interest in hybrid, yes, we have a little bit higher cost next year. We are also managing our portfolio. Our treasury department is doing a tremendously great job in that, and we are taking down other things. We did buy back some bonds, as you know, in Q4 and Q1 last year, and that will also help. Those quite expensive bonds that we got a good deal on. We are managing that portfolio. Yes, we will have a slight impact from the hybrid next year. I cannot say more than that the SEK 700 million in one time that we had last year is what you should add back in your mind, going forward.
Cash tax has been a little bit difficult to read into, I have to admit, because when we do a sale or get a dividend from the associates, it has impacted both reported tax costs but also the cash tax, especially the dividend with the withholding tax. It makes it a little bit difficult. I hope our IR department is giving you the answers on those when you ask them. I think I'll leave it to that, and I'm happy to take a separate discussion on these items if needed.
Okay. Can I just push my luck and just ask one very quick direct question to which there may not be any simple answer. On Denmark, we've already had a couple of questions on this and the balance sheet. From memory, I think in 1H 2017, you were mentioning that at that point, you did not have large Danish M&A on the agenda as a possible long-term solution to Denmark. Can you please perhaps confirm that this is still the case, or is it not the case?
Thanks, Roman. That is your final question, so you know. On Denmark, as I said, nothing has changed in my view on Denmark since last quarter when we said we had troubles in Denmark operationally and getting return on capital going north. We still have the strategic challenge in Denmark long term. We're evaluating that and see how we can proceed. No further updates, really. We'll come back to you when we know more. Thank you.
Okay. Thank you.
Thank you, Roman. Look forward to your call. Next question from the phone conference.
Thank you.
We have three minutes left, so not all of you will be able to answer your questions, but we'll be here all day. Next question, please.
Your next question comes from the line of Simon Coles. Simon, please ask your question.
Hi, thanks for taking the question. It's just quick, most have been answered, but on Finland, you've obviously improved again this quarter and are doing a great job there. In 2018, how do you see the competitive outlook looking, and also, I guess, are you concentrating more on consolidating the assets that you've bought, or are you still trying to improve your market share there? Thank you.
Thank you. Well, I think Finland and the team has a lot on their plate after all the initiatives they have executed on in 2017, both acquisitions, partnerships, and build out of the new brand, Telia, which was launched during 2017. We will see results of that during the year, so I don't expect any new bigger activities on the non-organic side in Finland, for sure. It's about executing on the things we have on the table. If we do, it will be another good year in Finland. That's for sure. We should look forward to that. Thank you. Thank you, Simon.
Thanks.
Take the final question from the conference. Thank you.
Thank you.
Could we have one more question from the conference call?
From the call. Yes. Next question comes from the line of Keval Khiroya. Please ask your question, Keval.
Thank you. I've got a question on Swedish fixed, please. I think historically you have tried to manage the legacy business by raising prices for products and broadband in 2016 and most recently for PSTN as well. Looking at Q4, the line loss still seems pretty high, and the telephony revenue decline isn't actually too different from where it was before the price increase. Do you think you can still raise price for these legacy products, or is that now more difficult? Thank you.
Thank you, Keval. The question is if we still can raise prices on the legacy products.
Correct. Yes, on the PSTN and broadband.
We will be depending on more movements in the market, but there's less window than there was when we raised the prices in 2016 when we did a substantial price increase. It will depend on the market moves as well.
Sure. That's very clear. Thank you.
Thank you, Keval. That was the final question. Thank you for joining. Thank you for answering. Thank you.
Thank you.
We look forward to see you here all again in April at the Q1 presentation. Thank you.
Thank you.
Ladies and gentlemen, this does conclude your conference for today. Thank you very much for participating. You may now disconnect. Have a lovely day.