Johan Dennelind will go through the quarter, the highlights, and also some part of the strategy and priorities for 2017. Our CFO, Christian Luiga, will go through the actual numbers, especially per country. Johan, please welcome up and give it a start.
Thank you, Andreas. Good morning to you all, especially you here in this so-called spring morning in Stockholm. For those of you out there, it's a very cold spring in Stockholm. Let's take us on the Q1 results. Before the numbers, let's speak a little bit about the highlights or at least the main messages for the quarter. First of all, I'd like to highlight the fact that we are now Telia main brand in all our home core six markets. We have rebranded two more markets during the quarter, Finland and Lithuania. I'll come back to that a little bit later. The key driver for our revenue growth in the quarter is the mobile side, which is actually growing across the footprint, which we'll also come back to a bit. It's a strong underlying performance.
We are in line on our EBITDA for the group with our expectations, I'm also seeing that's pretty much in line with the external expectation as well. The mix is somewhat different, we'll come back to that. For those of you who have dived into the numbers already, you see a very strong cash flow generation in quarter one. We'll also explain that a bit further because there's some one-offs in that number, which will not come through later on. We have closed the Phonero transaction, which will strengthen us significantly in Norway and in B2B and produce more synergies as we did with the Tele2 deal. Last, on the continuing operations, a strengthened balance sheet through a hybrid issue in the quarter with about EUR 1.5 billion. Those are our main messages.
Let's look at some other key messages which refer to our Eurasian footprint, the discontinued operation. A couple of operational performance points first. There is a continuing positive trend for the region on the revenue growth and on the EBITDA performance. That is important to mention. The markets are turning around. It's been very difficult, as you know, over the last 18 months or so. We're coming through, that's very timely, we'll come back to that, I'm sure, on the questions. We have now today also taken out the fact that we have closed the deal in Tajikistan. We are no longer present in the market. We have no longer any outstanding liabilities or risk exposures. It's a closed divestment of Tcell in Tajikistan. Two out of five have been divested.
Finally, and not least, the provision that we made in conjunction with Q3 last year, we took a provision of $1.45 billion for the settlement discussions with the authorities around Uzbekistan. It's taken time. We are now at a point where we have reasons to revise the US dollars. The constructive dialogue that we've had, that has taken time, but has also put us in a situation where we see a better outcome when we finalize this. It's just not the number. We will have to settle a full package with the authorities, and we're finalizing that now. Hopefully we can conclude this in the near term before the fall comes into Stockholm. That are really the key things in the report and in the quarter, which I'd like you to pay attention to, and I'm sure we'll come back to this somewhat on the Q&As.
Let's look a bit on the continuing operations and what's happening in the performance. We are in the positive territory for revenue growth, and it's the second quarter, but it's higher than last quarter, and that's good. We're not guiding you on service revenue, as you know, but we're happy to see that we're in a positive space. It's driven very much, of course, by the mobile performance across, and I'll come back to that shortly. The EBITDA, however, is not following that growth. Of course, that's not satisfactory. Our ambition obviously is to grow at least in pace with the revenue growth on the profitability side. This quarter has some good explanations, which Christian will take you through in more detail. There are some one-off characteristics on the cost increases in Sweden and Finland.
We are not worried for the year, and we'll come back to the fact that we will normalize costs going forward. On the growth drivers, we are then on the mobile build service revenue, around 2.5% growth for our core Nordic-Baltic footprint. It varies from a small growth to strong growth in our footprints here. Overall, it's around 3.5% across the markets, the total mobile revenue growth, and the build is 2.5%, as I said. Looking at where it comes from, you see on this slide a strong growth in Norway and Finland. Finland very much driven by the retail side and the ARPU uplifts and good pricing initiatives. Norway, strong both in wholesale and in retail, driving growth in the Norwegian market, which is very positive to see. Sweden hampered somewhat by the B2B drag still, but in the positive territory for mobile.
I think there is more to come based on the new pricing and bundles launched recently in Sweden, which we'll speak more about later, I'm sure. Denmark is in a good position on the mobile side with growth. All in all, mobile driving positive growth. Let me just reiterate and reaffirm our strategy, which is there and which we are executing on. It is about enhancing the core. As you know, we are investing in our networks, both in mobile and fiber footprints. We're working hard to produce and shape our convergence offerings across the footprints where we are able to both bring fixed closer to the homes, but also to stimulate that mobile lifestyle.
Competitive operations is about that efficient operation with the right platform products and systems, which are taking place mainly in Finland and Sweden in big transformation initiatives, which has a bit of a drag still on our full potential. We're investing in opportunities close to the core, and I want to emphasize close to the core. Our initiatives here should be clearly boosting our core business as well as taking us into some interesting new verticals where growth is very much higher than in our core business. The priorities for the year are very clear. We have lined up the guidance for you, at least SEK seven billion of operational free cash flow. That is our key measures for the year, and we are comfortable on that measure clearly, especially based on the over-performance to some extent in Q1.
EBITDA. Very focused on delivering an EBITDA in line with 2016. And then also shaping that balance sheet to be according to our leverage targets and rating, but also creating space to invest further in our core Nordic-Baltic strategy. Those are three very clear priorities, which we'll continue to update you on. Speaking of convergence, when I'm out meeting a lot of you on the road, we end up a lot speaking about our convergence ambition. Let me just spend a couple of minutes on this. It's not a discount game. That's my main message. For us, convergence is not a discount game. Convergence is about creating a better customer experience with more services seamlessly delivered to you or your home, or your family, or your company for that matter. But this is mainly the consumer convergence we talk about here.
Our strategy is to value load more, give more to our customers, as well as then step up pricing as we add other type of services into the bundles and offers that we have. And there are example of that in the Swedish market for the moment where we have launched Telia Sense, Telia Zone, that adds to the holistic brand experience of Telia. This is implemented across the footprint. Of course, it is also about bringing more products into one seamless interface, TV, fixed broadband, and mobile. This is done with an ambition of a digital seamless customer service and interface, self-service, and that is not done overnight, of course, and that's a lot of focus in that transformation in our core markets to create that superior digital experience, which will create loyalty among our customers and create that loved brand of ours.
Of course, convergence is about exploiting or exploring, rather, the fixed and mobile technologies to bring fixed as far out as possible to offload capacity, but also to give the full experience of the ever-so-increasing data demand of homes and companies for that matter as well. That takes me into, again, the fact that we have rebranded Telia in all our markets. We are now in a position to leverage the brand across, not just on one product, but on many products. And there are clear examples of that already on the roaming propositions, for instance, in the Nordic-Baltics, which by the way, now are also taken fully out on a EU roaming pack for our customers in Sweden and Finland and Estonia and Norway, and also Lithuania coming with Denmark.
The rebranding has been very, very positive, and I have to say, exceeded our expectations in terms of brand awareness achieved in the Telia main brand on a very short notice. These are 4 markets that we rebranded over the last 18 months, starting with Estonia, Norway, Lithuania, and then Finland just recently going from their historic brands into Telia as a main brand and achieving record brand awareness in a very short period of time. Very happy with that and more to be done and seeing results of this. Another thing I want to mention in this context is our Unite initiative that we launched during the quarter.
It is our way to make even more impact to society, linking it to the UN Sustainable Development Goals and to our digital mission that we have of making societies more digital, but also enabling inhabitants and citizens to benefit fully from the digital era. This ambition is very clear. We want all our employees, 21,000, to spend a day per year doing good in society and creating more impact. It started off very, very well with our partners across our markets. Let me end on a couple of things. First, the M&A in Norway that we got through after long and hard work, dialogues with the authorities. It now closed, and full steam ahead to make sure this becomes as good as the Tele2 integration that was very successful. As you know, it created over a billion in synergies.
We have been clear that this should be 400 million synergies when we have the full run rate, and also strengthen us significantly in the enterprise space. I'm very glad to see that, and we now have step up to do in Norway, which you have seen is the star of the quarter in terms of performance. Even more to expect out of already strong Norway. Summarizing Q1, as I said, we are continuing to execute on our strategy. We have good momentum. The priorities are very clear for the year, and are very much in line with the guidance we have given. There are more to be done on costs, very clearly so in Finland and Sweden.
Rest assured that the cost management and focus is high, and we are sending the message that we are comfortable that we are back on normalized levels in Q2, Q3, and Q4 for Finland and Sweden. All in all, very comfortable on our guidance given earlier in the year. I think Christian will give you even further comfort on that. With this, I will invite Christian to take us through the numbers even more in detail.
Thank you, Johan. Morning, everyone. I welcome you as well to this morning. I will reiterate Johan's highlights. We have a stronger revenue growth this quarter than last quarter. It's improving. It's 1.4% compared to 0.4% last quarter. We are also stepping up on the mobile, and that is the reason. The other thing is cash flow. The cash flow is coming with the right drivers, the expected drivers that we have talked about already before. We also have a strong balance sheet that we'll come back to, and then I will start with going through country by country. If we start with Sweden, a flattish growth in Sweden. We have a somewhat increased decline in the fixed side this quarter. It is around SEK 175 million negative compared to around SEK 150 million to SEK 160 million in previous quarters. It's slightly up.
That said, we do have an ARPU uplift, and we have a good development in B2C, but the negative trend in B2C comes from the fixed decline. The B2B is continuing to be only 2.9% negative. We have had numbers around 5%-6% in the previous year. This is too early to say it's a trend. The B2B mix is that the SoHo/SME is still growing with about close to 1%. Meanwhile, the large is declining with about 6% in the quarter. The EBITDA is down 6.5%, and that is OpEx and cost that I will come back to, but it's also the service revenue mix with the fixed decline increasing and other type of service revenue coming in. COGS is also something we work with.
As we talked about before, the savings that we see and come through in our operation does not come only on OpEx, it also comes on the COGS side. That is a pretty much 50/50 split. If we look at the cost level in Sweden, we have illustrated that on the OpEx side here. This is not the COGS, this is only the OpEx. We see that we have a small saving, elevated cost situation, customer experience in this quarter. We are definitely not satisfied with this position, and this is not something that we think is sustainable. We see that these costs in IT is mainly projects becoming OpEx instead of CapEx. Some of that is the security and privacy development work done in GDPR, and some relates to the IT journey that we're doing.
On the resource cost, it's both on customer operations, but also part of this uplift comes in the technicians that we now sell as consultants. Service revenue is increasing, and resource cost on consultants selling the personal technicians in the primarily SoHo/SME segment is also increasing. That said, we will take down cost in the coming three quarters. It will come through in quarter 2, but it will be visible primarily in quarter 3 and quarter 4. The initiatives have started, and it will include the resource cost. If we go to Norway, a strong execution and good execution on ARPU. We know we have customers leaving us to our smaller competitor in Norway. They are leaving at a lower ARPU than our average.
That is helping the ARPU uplift, but without that, even taking that out, we have a slight ARPU uplift in Norway from a very good management of upsell in the retail business. That brings us to about 5% mobile growth. On top of that, cost management is good. In addition, we should remember that we had a rebranding cost in quarter one last year that was up to SEK 30 million from comparison reasons. Still strong execution in Norway. We believe that we will also now gain from the integration. We have done it before, so we feel quite comfortable we can handle that in a good way during the year. Finland is also having a good ARPU development. Finland is having a B2C growth of 1.7%, and where mobile is compensating for fixed. We have a ARPU uplift there from the migration from fixed to mobile.
We also have price increases, and we also have upsell. A good combination of reasons for ARPU uplift in Finland. The B2B side is flattish. A mobile side. Overall, good revenue development in Finland. This quarter, we had one-offs and primarily the rebranding. That rebranding will also spill over a little bit into quarter two, and then that should disappear. The decrease this quarter is fully explained by one-offs. The Danish market continues to be very competitive, especially on the MVNO side. The MNO are more stable on the pricing side since last summer when we had a price uplift in the MNO side. We continue to drive our strategies on the interesting customer, those who want value and not only price.
That means that we have a slight price increase or ARPU uplift, and resulting in a flattish bill revenue that some wholesale and interconnect impact makes the service revenue mobile go up in Denmark. I also want to reiterate what I've said in previous quarters, that I think that our Danish management team is doing a good job considering the circumstances in the Danish market. Baltics, all three countries delivering on both growth on mobile service revenue, service revenue, and the EBITDA. It is, even in the fixed side, a stable situation on the KPIs that are important. We are growing customer base and in all these three markets on the mobile side. These, we usually say are smaller countries, but they are important.
They are together bringing in quite a lot of cash flow and value to the group, and important to also have on the right side of the zero bar. They are doing very well in that. Estonia impacted by the restructuring that we did in the second half of 2016 we talked about, and that is coming through now visible in the EBITDA uplift, which is very positive. EPS development. This has been a number that has fluctuated quite heavily in our books the last year, and one reason is, of course, the settlement of Uzbekistan that is coming through. It is SEK 0.95 impact this quarter, positive from the revaluation we have done on the settlement amount. Discontinued operations is therefore negative without that slightly. That stems completely from the Nepal divestment that is out of the numbers and was not in the first quarter last year.
The rest of Eurasia is bringing a positive EPS to the group right now. The other thing is associates. This is the quarter four numbers coming through, and they reported a slight negative impact on our EPS, and the non-recurring is flattish compared to last year and operations slightly down, as we talked about. Free cash flow rolling 12 months, picking up again. I said in the last presentation that cash flow will improve this quarter and for the year from the CapEx, from the works, and that is exactly what we see coming through the numbers. We have an impact on working capital of about SEK 300 million.
I need to also say, which I have done also many times before, working capital goes a little bit up and down in the quarters because of seasonality, but we feel that we have the initiatives now in place and will deliver on this metric for the year. The CapEx is down and should be down. Also a little bit impacted by higher OpEx than CapEx, as I talked about before, but it will also be down compared to last year for the year. This quarter it was SEK 350 million on cash CapEx impact. Then we had, as I also said last quarter, SEK 700 million in refund for overpayment of taxes in 2016 coming through now. We were saying it's going to come through in quarter one or quarter two.
It came through in quarter one in March, That is now a fixed number in our balance sheet and cash. We also had an impact from finance net, That can fluctuate more over the year, so we should be a little bit careful to bank that in completely before we progress a little bit further in the year. That said, I feel very comfortable about cash flow progress, I feel comfortable about our target for the year, above SEK 7 billion. The free cash flow we also watch here is not impacted by associates dividend or licenses in quarter one this year or last year. This is pretty much also the SEK 3.9 billion we have in this quarter is pretty much also our operational free cash flow that we are measuring ourselves on towards you.
We ended up at 1.58 in net debt to EBITDA, which is in the lower range of our target of two. We did a hybrid in the quarter. Hybrid is a mix between equity and bond, normal debt. It is actually booked as debt. It is a debt instrument, but the rating institutes allocates 50% of this to equity based on the construction and the security of that debt. It was well-priced, It was attractive timing, Therefore we went out with the SEK 15 billion. It helps to support the strategy of having flexibility to want to do M&As when we want to do M&As, and have a strong balance sheet to decide when we want to do things and not have to wait for other things to happen first. This is something we talked about before.
We want to have the flexibility and the ownership of our agenda. This helps us very much in that. We have a strong wish to do M&As in the Nordic Baltics, ICT, and in the fixed side, we have talked about a lot, and we have as one very clear example closed in this quarter. We also have a strong commitment to our rating. After we had concluded this, Standard & Poor's kept their A-minus rating and took us off negative watch, which is very pleasing and will help us in the funding costs going forward.
To illustrate a little bit the pro forma situation we have, which is something I usually end up anyway talking to our investors about. This is then the 1.58 we ended the quarter with, and we can then see what is the effect of the hybrid bond on our net debt to EBITDA leverage. Takes us down to 1.3. We have a dividend paid out in April, takes us up to 1.5. With the $8.9 billion that we have in provision that we one day are expecting the best estimate we will pay, we will end up at 1.8 compared to our target of 2.0 net debt to EBITDA. This is why we believe we have a strong balance sheet situation and we have a good cash flow.
Which leads me into the final slide, which is the outlook for the year where we have two guidances. One is the EBITDA to be around the same level as 2016. We have started slightly negative. We have said we will be weak half than the second half, and that is something we reiterate. We will continue the initiatives we have on the strong cost programs in Sweden that we have started, and they will help us to change also Sweden in the same way compared to the first half and the second half. Previous year we talked about that Sweden needs to follow and have the same pattern as the group, and that is also the same situation this year where we will move into another territory in the second half.
The cash flow is we started strong, we expected. We feel confident the above SEK 7 billion free cash flow for the year on operational free cash flow. That is all from me.
Very good. I invite Johan back up on stage and open up for Q&A. I think we start on the floor, and I will forget Robert because he is on the wrong side. You start with Robert.
Thank you very much.
Hang on, wait for the microphone, please.
Thank you very much. Christian, you talked about high cost in Sweden in the first quarter and that they're going to return to a normalized level. Could you maybe discuss, give us a feel for how much was not normal cost in the first quarter? How much we can expect it to go down from that?
I don't want to give you a guidance exactly the same way as last year on guidance on the OpEx level. Cost is measured both in COGS and OpEx. Our model is changing over time. As I said, part of the OpEx is related to service revenue growth, the technicians. That is not a problem. That is part of the increase that may not disappear. We will have to do more on resource cost in general, and that is happening, and that is initiated. We will secure that we deliver on our EBITDA targets.
Good. Johanna?
Yes. Two questions, if I may. First of one, just a follow-up on Sweden. Can you say something, what are these cost initiatives example of? Is it those IT projects that you will close down, or is it totally new, unrelated to what drives cost in this quarter? Yeah, take that.
If I start with that then, we have said before that we are running many, several smaller cost initiatives in each country, and that is ongoing right now. Then on top of that, we have said in this quarter that we will increase that pace and increase the efforts in Sweden because we are thinking the costs are actually not satisfactory. We are moving on in the same kind of program, but we are stepping it up in Sweden.
The second question, can you comment anything on the investigation from EU yesterday? What you foresee could happen if you are forced to let in another player as an MVNO on your network? Or what can be the potential end game here? Thank you.
Thanks, Johanna . Obviously, yesterday, all four Swedish MNOs were visited. There is an ongoing, at least questions ongoing. We're not going to comment so much on what they ask and how that goes. Let me just say, in Sweden, the MVNO space is not reg by the Swedish PTS. It is a competitive market with four players competing for MVNOs. We have around 10 MVNOs on our network today. Of course, that's a business we want, we fight for. Let's see what this is all about, and let's see what comes out later in the investigation.
Lena.
Hey, good morning. A question on the Phonero acquisition and the migration of the traffic there. Am I correct to understand that you will complete the migration already by Q2? Could you also say maybe how much of the SEK 400 million synergies is expected to come from the traffic migration?
Phonero transaction just closed, and it is a lead time to, of course, get the full synergies out. The SEK 400 is a full run rate, and that will not be achieved for the year. Migration, of course, will start as soon as possible, but we're not giving a precise estimate yet on when all traffic is migrated. The full-year run rate is SEK 400. Of course, we target to do this as soon as we can, but it is something that is slightly different from migration on the consumer space. The business-to-business migration is somewhat more complex, and takes a slightly longer time to do in a responsible way to make sure the customers get what they ask for. We'll update you along the year on the progress of those SEK 400 million synergies.
Similar to Tele2 , the majority of the synergies comes from the traffic side.
I think we try to take one or two questions from the ones calling in. Operator, may we have the first question, please?
Absolutely. Your first question comes from Peter Nielsen.
Thank you. If I can just, I'm sorry, but stay with the OpEx in Sweden in the quarter. You're saying, Christian, that you've had to hire OpEx on the customer experience. Why has that been necessary in Q1, please? Given that you're telling us that the cost situation as of now is unsatisfactory in light of the fact that we're coming towards the end of a three-year, a SEK 2 billion cost-reduction program, should that make us concerned? Maybe have to look at potentially another sort of major size cost-reduction program? Then just secondly, any update on the progress on the Eurasian disposal process? Obviously, I'm not asking for specifics. Three months ago, you told us that you were very optimistic and confident of completing this process. Are you as optimistic and confident now as you were three months ago?
Any color you can give us on the momentum of this process? Thank you.
Thank you, Peter. Let me take the Eurasia question for you. We closed one more today, as you know, or we announced one more market exit today in Tajikistan. That means that we have five more, of which four are under the Fintur umbrella. As you know, last year was very much a year where we tried to divest Fintur to our co-shareholder in Turkcell. They were the buyers, but now they are clear sellers. On the sell side, together with us, has been more constructive in finding the new interested parties to take Fintur further. We're making good progress. I think we are as comfortable as we were last time we talked about this, that this is possible to complete during the year. We will definitely keep you posted as soon as things materialize or develop further.
The strong focus, and good conditions to continue this, especially on the back of what I mentioned in my opening, that the performance has improved also in these markets.
On the cost side, Peter, the SEK 2 billion program is coming through, and we shouldn't be worried in general. We need to be on top and serious about that our business model is changing. We are getting a service revenue mix that is different from the past. That means that we need to continue to drive costs, and this is not going to stop. The customer experience part is an uplift we have in customer operations for different reasons to drive our link to our B2C customers, primarily, and B2B also partly in Sweden. Also the technicians that I talked about. Those are the type.
I think that is it. We will just continue to step up and decide, and tune, and shape this company, the cost structure, so it fits the future model as we go. That is the short answer.
Thank you for the question, Peter. Maybe have the next question, operator, please.
Your next question comes from Sam Dillon.
Hi, guys. two questions, if I may. In terms of roaming, can you remind us again what impact you're expecting for the full year, and what are the early indications you've seen on the elasticity of European roaming demand when you've included it in the bundle? Secondly, just on cost, is there anything more you can do around centralization of costs following the Telia rebranding across the board that can accrete the margins for the group? Cheers.
Thank you. Roaming. First thing I'd like to say on roaming is that the customer love it. They really embrace it, we see a strong uptake, an appetite, of course, to now live freely in the EU zone. This creates a behavior also about using your devices more often, which will also stimulate other type of usage and growth outside EU. Our impact, if we do nothing, of course, is negative. Of course, we're doing things to mitigate. We've seen that across the recent launches, both in Sweden and Finland, that it comes with an increase in price, that we are not shy to talk about. We give more, we charge more. Of course, our cost situation needs to be carefully managed and monitored as roaming traffic grows.
Our size and our agreements on wholesale helps to put us in a good position with good visibility to manage this within our guidance on keeping EBITDA flat for the year. On the cost side, the reason that we have rebranded to Telia is not mainly cost driven. It is customer experience driven and proposition driven, get best practices across and leverage our convergence as we go along. Of course, it creates opportunities for best practice and synergies to some extent, but they will not be material in that space. Having said that, of course, group has other cost initiatives, where we see clear and large synergies of, for example, running operations in one place for several markets. That one, we have higher ambitions on creating more cost efficiencies through. I'm sure we'll speak more about that during the year.
Thank you, Sam.
Cheers, guys.
Do you have a follow-up?
No, thank you.
Operator, could we have the next question, please?
Absolutely. It is from Roman Arbuzov.
Thank you very much for taking the question. I have two, please. The first one is on Sweden, and in B2B segment. You're talking about some stabilization in the large enterprise. Could you please just talk about what is driving that in a little bit more detail? Is it the end of a repricing cycle, for example, or is it a particular initiative that is driving that? Secondly, just on Denmark. We are seeing some modest improvements. They are modest, but we saw flat to maybe even marginally positive mobile service revenue growth in the quarter. Are your views on Denmark evolving at all to the positive side? Do you think an organic solution in Denmark is actually becoming more feasible now, or do you still think that that's not really an option?
Thanks, Roman. Sweden B2B. I wish I could say we're out of this negative trend and territory. We see only positive going forward, but we're not there yet. We do have to say that it is a stabilization, as Christian mentioned. Two quarters in a row with significantly better bad numbers. The reason is, of course, hard work and good sales and management of customers, good negotiations, but also keeping and gaining customers from others. It's a result from hard work, but it's also some cyclical effects, and therefore, we are not ready to say that this is a clear trend shift yet in the B2B large. Having said that, I also like to mention that SoHo/SME is, and still on a good pace. When we said it was a trend shift, it was a trend shift.
Let's keep an eye on the large as we go further, but it feels slightly better. Denmark. Even if we see some kind of stabilization in the pricing environment from the MNOs, there is still crazy price fights going on across market from MVNOs, which puts pressure on pricing actually across the board. We haven't changed our view in terms of the prospects of creating enough value just being smart and efficient and great organically. That will not cut it to create value for shareholders over time. Therefore, we're still very focused on finding structural solutions for our Danish situation. Let me repeat what I said last time. We haven't ruled out anything in terms of structural deals.
When it comes to TDC, as I said before, the valuation and the risk was not attractive and is still not attractive. We're focusing on other options.
Thank you very much. It's very clear.
Thank you, Roman. We have plenty of questions from the phone conference. We'll take another one, operator.
Your next question comes from Maurice Patrick.
Yeah, morning guys. Maurice here. A question on the cash flow, please. You guided to greater than SEK 7 billion of free cash flow for this year on your definition. Very strong, sort of SEK 4 billion in Q1 already. You've highlighted some of that's one-off in nature, but you have talked about an intention to grow cash flow in the future. Thoughts in terms of how much of the 1Q beat will unwind possibly during the rest of the year? And any changes in your view around the intention to grow cash flow sustainably over the coming years? Thank you very much.
Clearly, you are spot on in your analysis. The cash flow growth over time needs to come from CapEx working capital and our profitability. That is the fundamental base for cash flow growth, not tax and financial net. We can work with that as well, and that will have an impact, but that is not our core, what we're driving. That's what you should foresee over time.
Thank you.
Thank you, Maurice. Could we take one more from the floor? I know that Thomas Heath is eager to ask a question.
Thank you. Two questions, if I may. Firstly, in Sweden you have competitors launching unlimited mobile data offers, albeit at quite high price levels, and we already have unlimited offers from competitors, at least in Finland. Just curious to hear your thoughts on this development, perhaps in a longer term thinking on how you view these type of offers. Secondly, on Latvia, which you've moved to other operations, how should we think about Latvia again in the longer term? Thank you.
Thanks, Thomas. Well, unlimited or not, I think the main point and the main focus is to give our customers what they need and want. Right now we're doing that. We have generous buckets, if you call it that, which are well and competitively priced. That's the feedback we're getting, and that's the numbers we're showing. Of course, there are more to do, but we're still reluctant to go unlimited because we don't see the reason for it, in fact. Of course, perception-wise, we need to create a value that works for our customers, and that you need to then be very close to the market and see what happens. In Finland, we have tuned it to be very competitive. In Sweden, we're still competitive, but I'm sure we can do more.
We saw some competitors coming out with very strong numbers, and we're looking at that, of course, and see if we can change anything and tune our proposition. Right now, I think we're in a good spot with the Telia brand in Sweden, giving a lot more, charging a bit more. On Latvia, thanks for bringing that up. That was the missing piece in our seven markets in the Nordic Baltics. We still have two companies there, associate and subsidiary. We have a clear ambition and the desire to bring them together to create the full potential of the two companies coming together like we've done in Estonia, like we've done in Lithuania, and Finland, by the way, and Sweden also bringing fixed and mobile together. We see the clear proposition for that, but we need other shareholders to agree with that.
Mainly, of course, the Latvian state. We have good constructive dialogues, which we hope to progress during the near future. Thank you for the question, Thomas. We return to the conference, and operator, could we have the next question, please?
Absolutely. The next question is from Sunil Patel.
Thank you. Good morning, everyone. Just two questions from myself. On Sweden EBITDA, you grew the EBITDA very slightly, but you grew it last year. Do you believe that Sweden EBITDA can grow in 2017? My second question is, Johan, you mentioned convergence, I think earlier in the slide deck. Can you give us maybe some statistics of sort of how many of your customer base take three or even four products from yourself? Really what your ambitions are in terms of those KPIs. Thank you.
Thanks, Sunil. Let me be clear on Sweden. Christian has said it several times. It will improve over the year, especially from stronger focus on the cost, getting that in line with our expectations. That's a very clear message and a very clear focus. We don't guide on country per country EBITDA, but as Christian said, the shape of Sweden EBITDA is that it improves second half. I think you should take comfort in that. In terms of convergence, there are many measures you can have. We have introduced a new definition, for instance, of ARPA in Finland, which we follow very closely. Average revenue per account. That's one measure. We see strong improvements when people take up, of course, more services.
The key measure that we look at also here is the churn. That reduces significantly as you take one or two more products and services. That's the whole point of my triangle that I showed you on my slide. We're starting from the top. We're starting from offering the segment that want more from Telia brands, more services, more products, and are prepared to pay for it. That creates stickiness and loyalty. Then you can trickle down later. We don't start with discount. We're keeping an eye on loyalty and churn as key measures.
Thank you. Just as a follow-up there, how much of your base, what % of your base are within such a bundle? I appreciate it's not discounted, but actually take such a converged platform. Thank you.
I don't think we have disclosed that specific number on how many products we have in our various segments. I think when time is right, we'll come out and show you how it looks in the respective countries. We're not mature enough on our convergence across the footprint yet. That's why I bring it up, to show you our focus on that. It's more important to take step by step than rush in to show convergence, which I swore, and that's not all.
Thank you, Sunil. May we have the next question, please?
Your next question comes from Nick Lyall.
Yeah, morning, guys. A couple of questions. One on Sweden, please. In the B2C business on fixed, some of the ads look pretty weak this quarter. Is there a rising competition in the fixed business that you're seeing? Secondly, on Turkcell, any progress at all on talks with the other parties on the prospect of a dividend from your standpoint, please?
Thanks, Nick. Let me take my favorite subject, Christian, you can take the Swedish one. Turkcell, clearly there are a lot of things going on in Turkey, as you are aware, and also quite active Turkcell agenda. There was an AGM ambition for Q1. I think that is now scheduled for later for a dividend. There is nothing we have counted or put in our plans or forecasts. If a dividend should happen, that's an upside.
On the fixed side, as I said before, we had a slightly increase to SEK 170 million drop in Sweden compared to SEK 150, SEK 160 in previous quarters. We don't see an increased competition. It's too early to say in this legacy segment if there is any changes. We have to wait and see. We will keep our eye on it, but nothing alarming at this point.
Okay. Thank you.
Thank you, Nick. May we have the next question, please, operator?
Your next question comes from Andrew Lee.
Thanks. Good morning, everyone. I just had a question on M&A and content, and another question on Swedish mobile. On the content side, I wonder if you could just talk through how can owning content improve your customer proposition in domestic fixed, and are there any organic or inorganic opportunities to deliver that? Then secondly, our perception is operator confidence in Swedish mobile growth seems weaker. Most of you seem to expect relatively low growth, at least over the next year or two. Wonder if you could just talk about what has changed structurally, do you think? Swedish mobile no longer offers greater top-line growth than European peers. Thank you.
Thanks, Andrew, on a broken line there. I think we picked up your questions. Let me address the content question. It becomes a bit generic, but still. Of course, great content is a prerequisite to have a TV offering. Then the question is, how do you deliver that content? We do that today as a distributor or a smart distributor or an even better distributor. We, I think, have shown a good track record across our markets to do that. Then the question is, how do you get the right content on that distribution? Today we do it in a classic way. We buy content from the content houses, and then we deliver it to our customers. The question we have, how sustainable is that over time?
What do we need to do to secure our content for our customers to make sure that they stay with us, not just on one product, but back to my convergence discussion on more products, which will be, as we all know, a great business case. The strategic question is how do we secure content? That we can do in many ways. I think we need to do more than we do today to just buy content. We can partner up. We're looking at that as we go along. We haven't done anything yet. That means that we haven't found any attractive value creative way of doing it. That's always a prerequisite when we do these things, that we look at it strictly from a value creation point of view.
If we do anything, we will come out and give you very clear views on how to create value on that type of investment. Christian.
You wanted me to talk about the top line growth of mobile in Sweden.
Yes, that's your favorite topic.
That's my favorite topic. Well, on the lower growth in Sweden compared to the Europe market, your expectation that it should be higher in the future compared to the European peers. I don't think we have a situation today where we believe we don't have a potential for growth in mobile going forward. Then the question is what the rate will be, and we will see. We will do our best to increase both pricing and value creation for our customers. That's a combination, of course. That's it. Difficult to answer actually your question of if we will be lower than Europe in the future.
It was more just you've consistently delivered higher growth. That doesn't appear to be the case, at least over the next, at the moment, and it doesn't appear to be your kind of soft guidance for the year. What are the obstacles? What's stopping you kind of delivering the above average European growth that you have been delivering in the past, is it something new that's holding you back?
Let me have a go as well then at the important question. Let's zoom in. This is all is relative, and it's all also domestic. You can't really compare us to Greece or Sweden to Portugal because they're all in different stages of the growth. The relevant comparison is in country, and that's a very important measure, how we do against our peers. Some quarters we win, some quarters we lose, and our ambition is always to win on revenue market share. I think there is more growth in Swedish mobile. We're still in growth territory. We see some competitors delivering great numbers. Of course, it's possible. That is encouraging. We're not let down by just being behind one quarter. We're encouraged that there is growth out there if we get the propositions right.
I'm sure that Sweden will continue to have growth if we do things right, on a good level.
Okay. Thank you.
Thank you, Andrew. I think we have time for a couple more questions. Operator, please, the next one.
Your next question comes from Ulrich Rathe.
Yeah, thank you. My first question is on fiber in Sweden. Obviously Q1 is always a bit slow, and I think this one was a bit slow. I was just wondering, how is it on the end customer side in the first quarter? Do you see signs of increased competition based on all these sort of statements from some competitors about a push in this area? The second question is, again, coming back to Swedish costs. The overall commentary you're putting forward today sounds a bit as if something has sort of gone slightly off-pace there, and that it wasn't entirely as planned. Obviously there are elements of there that were planned because you sort of guided for a back end loaded here.
I was just wondering, when you talk about sort of the incremental measures you're now taking to alleviate this sort of possibly slightly unexpected developments, could you just sort of single out what exactly happened that was maybe slightly unexpected compared to the more sort of planned elements of all this? That would be very interesting. My last question, if I may, is sort of coming back to Andrew's earlier question. I'm not sure. I might have missed it, but I don't think you have, in fact, disaggregated the Swedish mobile growth this quarter between B2C and B2B. That will be interesting to get an update how that went for the two segments separately. Thank you very much.
Let me start, and then Christian, you'll take the two last ones. On fiber, yes, there is an increased competition, which is no surprise, which is good. I think you have to divide it for us then into two areas. On the retail side, I think we're still doing well, taking our share, delivering in line with last year on the OTC. You also have the fact that when we lose in retail, we can get some of that back on wholesale, which then should compensate for some of the loss in retail. The reason we really want to have the retail interface, of course, is to be able to offer our converged proposition with the full range of portfolio. That we lose if we lose in retail. With all respect for wholesale, we're not happy just getting wholesale.
I'll start from the end then. On the revenue side, sorry for not mentioning that. We had around 3% on the B2C mobile growth and negative 1% approximately on the B2B. There we did grow on the SoHo/SME and went down on the large. On the cost side, well, as you say, we have guided for a heavier first half, and this is in line with that, but we're still not satisfied with the level, and the drivers are the elevated customer operations and the cost that goes to OpEx rather than CapEx that has been sort of the ones impacted most from an expectation point of view.
Okay. Thank you.
Thank you, Ulrich. Unfortunately, time flies, I think we have to end this presentation here. For those of you that didn't manage to get your questions asked, please reach out to me or my colleagues, and we will provide answers to you. Thank you, boys.
Thank you.
Thank you.
See you back in July at the latest for the Q2 presentation.