Good morning, everybody. My name is Andreas Joelsson. I am Head of IR at Telia Company. I would like to welcome you all to this presentation of the full year and Q4 2016. Warm welcome to everyone on the webcast, and also to everyone here in Solna. It is a pleasure to see so many of you here. I would have loved to say that it is because there is a new IR in the house, but I guess it is other people that you want to hear from. We have our CEO and President, Johan Dennelind coming up, followed by our CFO, Christian Luiga. Welcome, Johan.
Thank you, Andreas, and welcome to you, I should say as well, and getting started in the new year. Hi, everyone online and here. We have a quarter four and full year to talk about, and I am sure we will be talking also about 2017 to some extent. Should I use this clicker? Okay. As I look back at 2016, if I should use just a few words to label it, I think we did what we expected to do, slightly above actually to the market on EBITA, where we started the year. I feel that we have a great potential now in the Nordic-Baltic core, and that is for us to show and prove 2017. By looking at the numbers, we said that we would deliver an EBITA in line or slightly above, and that is a revised EBITA, as you remember. We did.
We came in on 2.5, roughly, above last year. We had a CapEx estimate of SEK 14-SEK 15 initially in the year. We then guided you up towards the upper range of that, and we came in on pretty much SEK 15. We said that we have a dividend policy of at least 80% of the cash flow, or at least SEK 2, and we are proposing SEK 2 to the AGM. Those are the real highlights for the quarter and the year. If I then move to some more numbers. The quarter four numbers, one thing I would like to point out here is that it is actually organic growth on group level. It is small, but it is what we strive for.
We strive to find growth, and we strive to balance the declining fixed with the new services that we have across our Nordic-Baltic continued operation, this is of course. I am glad to see that we are actually able to produce some growth. On the reported side in Q4, obviously Yoigo is out, and therefore the reported numbers are affected. On the full year side, we are then, as I said, 2.5 up on EBITA. For the quarter it is down, and that is very much in line with how we have guided you, and that is the comparables for 2015 that was difficult. The shape of the curve for the year that we have guided you to was coming through and slightly above. Let us dig in a little bit more on the highlights for, if I take a few wordings on the year as such as well.
We are refocusing the company, as you know, to the Nordic-Baltic footprint. That is both organically and non-organically. We have solid/strong performance in our core markets here, and specifically Norway, I would say, on the back of the Tele2 acquisition, really producing the results that we expect and above, and getting ready for more. As you know, we have Phonero in the pipeline, hopefully to be approved shortly. Our investment strategy of high, admittedly, CapEx is paying off. We have been awarded through the year the best networks in five of our core markets, including Sweden, Finland, and Norway. That's very good news. On Q4 again, service revenue growth, it is what we strive for, and we did that in Q4.
We have announced a new operating structure where we have brought a bit more of the P&Ls, Sweden, Finland, and Norway now in the group executive management team. More focus on the direct P&Ls in the new core. I want to mention a few words on Telia Carrier, which we seldom do, but during the year they have improved EBITA with about 25%, around SEK 100 million in absolute EBITA improvement. The refocusing from low-margin voice to higher-margin data services paying off, and a well done job to the carrier team. We are seeing trends in Eurasia, and I'll point you to some of those trends later on.
That's important both for our existing business, of course, to make sure that we do the best as long as we are there, but also to the interested parties that we're talking to show that we believe we now have hit the bottom in our markets in Eurasia. Again, a fantastic fiber quarter in Sweden. A high pace to meet the pent-up demand that still is out there on the fiber plays in Sweden, and we are now at about 1.5 million households and 186,000 through the year. Pretty much in line with what we've been talking about in our discussions since Capital Market Day, et cetera. Let's move in to a couple of points on some really positive things that we see across our footprints.
Our TV business is very strong, both on customer intake and on ARPU uplift, which is then generating, of course, good revenue growth in key markets, driven by Sweden as the largest, but the other markets also delivering on the TV proposition. As you know, we believe strongly in fixed mobile and TV in our converged offerings, this is good news. On top of this, we also have our OTT TV product growing double digit or triple digits in subscriber base. In Sweden it's called Telia Play Plus, and it's a fantastic service. Please try it. If you move on to the build revenues mobile across our footprint, we also see this is blended build mobile and growing in Sweden, in Norway, in Finland. In our three largest markets, we have mobile build revenue growth.
Very important, because we still are under pressure in some parts of the B2B segments, but very well mitigated by consumer. In Finland, we're actually in the positive territory across segments. This is a highlight I'd like to make, that our mobile business is strong and growing. On the group level, we have a service revenue growth, as I mentioned for the quarter. It's a mix of Europe, which is higher driven by Norway. Sweden also into black positive territory on service revenue growth. On EBITA, very much as expected, as I said, where Sweden came in just below zero, and fought well in the end against hard comparables. Europe, strong EBITA uptake, Norway, key driver in that uplift. Let's focus on Sweden a bit. A couple of slides on Sweden.
On the left, the B2C and B2B split, on the service revenue in total. We have a growth on B2C, also excluding OTCs. B2B is recovering, and I'll get to that in a minute. On the service revenue side, organic growth. You see on the right, you have SME SOHO in growth territory still. We've been talking about this throughout the quarter. We have a proposition that is working well in Sweden. Personal technician, very much the face of the proposition out in the market. On the B2B large corporate public, we are still in negative territory, even if it's a better number there. I wouldn't call it a big trend shift, but it's definitely signs of recovery. There are some one-offs in here that make it look a little bit too good. Don't get your hopes up too high yet on the B2B Sweden side.
On revenue trends and ARPU, we have, except for fixed then, growing ARPUs and growing revenues across Sweden. I think this is an important picture. We will get back to this when Christian talks about core services, legacy services, and the pressure we have on our profitability. The new and core services are growing. The ARPU trends are still in positive territory here, for our converged pillars, mobile, fixed, and TV. A solid platform, with growth is the short of it in Sweden. A couple of words on the fiber play. To the left, you have the absolute monthly recurring service charges on fiber. After you get the OTC, you will get the monthly fees, of course, going forward, and that's growing between 20% and 30% per quarter. That's a strong growth on the fiber aftermarket, if you want.
Don't just look at the OTCs, which can distort the picture. We have underlying strong growth on fiber revenues. A couple of data points then on the fiber play, 44% growth in the villas, SEK 1.2 billion in OTC revenues, 186,000 new installations for the year, which comes with CapEx around SEK 3.2 billion for the year on the fiber side. We believe we have growing market shares in the fiber universe. All in all, a consistent story, which what we've had throughout the year, and we tried to tell you that last quarter when we had a bit of a dip. We said it's not a change of ambitions and not a change of market dynamics. We're sticking to our plan, and we are. That's the summary of Sweden. Let's move on to Finland.
New CEO since January 1st, Henrik Welan, vast experience from running various businesses across Europe and Asia, taking over from Valdur, and have a solid platform to grow from. A job well done in transforming Finland, and now in positive growth on mobile revenues. Let's take it to the next level and also get the EBITA moving, because it's not. As you see here, we have a decline on the organic EBITA in spite of some uplift on revenues. In this specific quarter, you have some one-offs. It's not as bad as it seems, but it still should come through better numbers in Finland over time. Norway, the star of the year has been, and the quarter, of course, we see a strong uplift in the EBITA numbers, and we have growth. This is two things, and you find it to the right on the slide.
We have an uplift on ARPU important. Even if there is a decline in customer base, we are growing our ARPU, and we are, yes, we're losing some customers to competition. Some of that loss in customers, low ARPU customers, we are getting back on wholesale agreements. That's also an important part of the growth story in Norway. Strong focus on existing base, monetizing, and getting right into the right buckets and sizes for our customers. Denmark, a tough market. We have talked about Denmark many times, and we see that in the picture here. We're struggling to get any movement on revenue growth or EBITDA growth in spite of great efforts on the ground from Morten and the team. We are reviewing our options, as I've said before. There are a lot of options that we can do.
We have been clear today also that when it comes to TDC, we think there's a lot of speculation. Our response to that has been, that's a too risky play with a too high valuation. We're looking at other options in Denmark, and we're not excluding the rest of the options on the table. Let's talk about them more when we know what to do. In the meantime, we are focusing on the organic improvements in Denmark. The Baltics, a couple of words. A little bit mixed picture, I have to say, and also a bit of one-offs in Estonia, had a bad comparable against a one-off deal in Q4 last year. Otherwise, that would have been a pretty positive picture on revenues. On EBITDA, fine. We are expecting more from our merged entities in Estonia and Lithuania.
We expect to get more out of that in our converged plays going forward. When it comes to Latvia, we are working hard to find a solution with the Latvian markets, where we have two different companies run differently and get no benefits from the trend that we see in many of our other markets in convergence. A couple of words for once about our Eurasian operations, and I'm just going to point you to the trend shift that we are seeing, or the trend is continuing, I should also say. As a portfolio as a whole, we are actually in growth territory here on service revenue, slightly still below on EBITDA growth, but it's coming up.
Main contributor to the improved numbers, of course, is Kazakhstan, which has been extremely rough market and macro competition and legacy from Kcell, but now improving and getting ready for 2017, where we should expect better deliveries. If I should summarize before I let Christian come up and talk more about the numbers, again, a full year EBITDA in line or above even if you take our outcome from a year ago. We have solid performance or good performance in many of our core new markets or core home markets, as should I say. Eurasia on a better track, which gives us comfort on the dividend SEK 2 for the year, obviously, and then also comfort into 2017, which we will come back to shortly. I will leave it with that for now and invite Christian to come up. Thank you.
Thank you, Johan. I will take that one. Again, welcome to our head office here in Solna. Nice to meet you all. I will take you through some of the numbers and also a little bit about our guidance and dividend policy today. Let us start with 2016. It was a year where we had a slight negative service revenue growth of 0.4%, as Johan said. We talked about international carrier had a voice decline, voice revenue, no margin decline. Without that decline in the first half, we would have had a flattish service revenue for this year. On top of that, we report SEK 25.8 billion in EBITDA for the year of 2016. It is up SEK 600 million compared to the year before. We are happy about that, of course. It is a good start. In addition to that, we have been working.
I have said that, but not given you so many proof points, and we will come back to that more clearly during 2017 on the working capital. Two years ago, it was down SEK 500 million, and last year was up SEK 300 million, so the delta is SEK 800 million. It is another step towards improving the underlying potential we have in our working capital. That was the year 2016. A little bit about quarter four. The quarter four service revenue we talked about, it is up in service revenue growth, very much coming from the mobile build revenue Johan talked about. We had no impact from carrier in this quarter. It is flattish on the voice revenue, and the company has stabilized on that level, and as Johan said, is making also an improvement in profit and cash flow.
The OTC compensated not as much as we expected, I will come back to that, it was still a contributor. The fixed decline of SEK 183 million, the fixed telephony was down SEK 183 million, was compensated primarily by the fiber and the TV. As Johan said, fiber growth has impacted this. TV subscriber growth has actually also impacted on this, but we also have price increases on both these. On the DSL, primarily broadband, we have price increases that have impacted in a good way and also on the TV side. Those are compensated on the fixed side, making it not as bad as SEK 183 million in one drop on this picture. We said that we would deliver 35,000 SDUs in quarter four. We delivered 34,000, so we were close enough.
We have therefore also spillover into 2017, which I'll come back to when we talk about CapEx. The OTC was impacted in the sense that 6,000 of these that we concluded in this quarter did not have an OTC, and they were taken over by other vendors that had started this and already had paid. They are not in these numbers as an income from revenue. Therefore, you will not see that there. That is the first time we have that in quarter this year, so you shouldn't go back and see if there's any other quarters with this kind of impact. It is down around 2%, two, 3% in this year, not in this quarter, in this year. It is around 17,000 flattish right now on the total holistic Sweden picture.
As I've said before, the differences in pricing, depending on how we step in in the different markets, is getting more and more different and also the price is slightly down from competition, but it's not dramatic. On the EBITDA side for the quarter, down 1.9%. This is exactly in line with what we have guided. We said that the first half would be a better comparison year-on-year, and the second half would be worse, and we will come in slightly above for the full year. This is exactly what we are delivering on. We also have If you look at this in more detail, you will see the Swedish and the European numbers, and you will understand them quite clearly, and Johan has also presented these.
There is a group function thing that you may wonder what it is in this quarter if you go into details, and there's three elements there. One is that last year we had a revaluation of Sergel upwards, positive, that we don't have this year. Secondly, we have a pension difference, a negative pension impact on the group level, also around SEK 50 million. Then we have a new division called Division X that is driving our adjacent business, IoT primarily, and that cost is also in that bucket. That will, of course, over time materialize in products and other services that we bring out to the markets, and then the cost and the revenue will move out to these entities. We need this hub to start and get the engine rolling. Invest to save.
In 2014, we announced that we would now invest and make a program internally for two years time, where we will spend both time and effort and money to bring down the cost and efficiency improvement in the group. It was about transformation, procurement improvements, and other efficiency improvements. That program was supposed to invest SEK 2 billion in CapEx, a smaller number, not defined at that time in OpEx, and also then bring savings on a run rate of SEK 2 billion from end of 2017. The program is now ended. We have invested SEK 1.7 billion. It was a slight SEK 100 million also in 2014, but it's just a decimal. SEK 1.7 billion has been invested. We are now clearly seeing that these achievements are making the result that we expected. I'll come back to that a little bit on the next picture.
We now end this program, but we will continue with our efforts, of course. Transformation type of work will continue. We will continue to work with our efficiency and with our legacy. That doesn't change, but this specific program will end. We will come back during this year and tell you how we work on our cash flow initiatives, that we call it now, which not only includes taking down savings on cost and efficiency on cost, but also on the working capital side and the CapEx side, combining these three, and prove how we bring efficiency in all these together. Taking that to the next picture and taking the example of Sweden, which is the bulk of this program that was directed to Finland, Sweden, and group functions, GSO, and look at how that has impacted and try to understand where did the money go.
I think this picture illustrates that in a good way. As you know, in Sweden and in Finland, it's very similar. We have 3 types of revenue. We have the legacy revenue, mainly the copper-based type of services. We have core, which includes both the mobile and the fiber and the new in addition to that, which is value-added services and others coming in. These three come with very different margin, and the margin mix and the gross margin mix is one of our challenges that we work with. That is what we're trying to visualize with this picture. That is the same in Finland. The gross margin mix is one of the things we are working and challenging every day. With this, we can see that the gross margin on legacy has then decreased the EBITDA.
The gross margin here from telephony is around SEK 150 million in Sweden. The core has compensated that, but not fully because of the margin difference. Then they had a new. How did we go still then from SEK 14.3 billion to SEK 14.5 billion in EBITDA? That is the invest to save initiatives that we have been driving on the transformation, on the procurement, and on our other efficiency initiatives that we have been driving. Then we have a slight other that is the rest of the company's performance. What are examples in Sweden for this? Well, we know we have better procurement, and we have better pricing, but we also know that we have 23% lower errand calls. That has led to 7% lower customer operation costs since 2014 to today, including that we have salary increase in this department. We also have 53 less IT systems.
These are examples of how we have delivered on this program. As I said, we will continue with our cash flow initiatives, and we will come back to that during the year. CapEx has been a very interesting topic for 2016, and it will probably be an interesting topic for 2017. It doesn't help you when I say we will stop guiding on CapEx, and we will guide you on cash flow instead, and I'll come back on that. I will give you some input and try to help you to understand how we will drive this. First of all, if we end this year, we have a SEK 15 billion CapEx for this year. We can see that Europe is down. SEK 200 million of that Europe down is Spain. The rest is actually Finland and Norway starting to decline in their other CapEx.
Sweden has gone up, and Sweden has gone up with around SEK 1 billion. In Sweden, we also have the fiber investment. The fiber investment in Sweden was SEK 3.2 billion, and the majority of the increase comes from the fiber increase. The guidance for next year that we want to give is that, first of all, we have a slight rollover of fiber initiatives into 2017. We also are unsure about how the market development is, but we feel right now it's quite positive. We expect that there is a potential for an increase in the fiber CapEx in Sweden with a couple of hundred million SEK. But that is something we'll have to come back on because it depends a little bit on how we see the market going through the year and how we do the rollout.
That said, we also want to say very clearly that the group CapEx will go down. That combination means that the CapEx not going to Sweden fiber should go down even more. That is the guidance we will give for 2017. On top of this, in the fourth quarter, just quickly, we did close 700 MHz in Finland, EUR 22 million paid over five years, and also we closed the 1800 MHz in Denmark in our joint venture together with Telenor. That's just to tick off. Total EPS has then changed positively from Q4 last year to Q4 this year. We know that last year we had the impairment in Denmark, and this year we had a capital gain in Spain. This impacted the EPS.
On the discontinued operations, we know that we had a huge writedown related to Uzbekistan of SEK 5.3 billion last year, and it was SEK 600 million this year. That is also two of the main differences between the years. If we look at the full-year picture, it is down SEK 1.11, and that is then the DoJ that also plays in as a very dramatic item. The DoJ, Dutch Authority investigation, we've made a provision that is now booked to around SEK 13 billion. Oh, we're missing a value here, I see on the chart. But the net debt to EBITDA is 169% when we end this year, very close to the last quarter, and it was 153% last year. The level has been quite stable over the year. I'm happy that we have introduced last year dividend payment twice a year.
It even outs our cash flow and also makes it easy for us to manage the net debt to EBITDA. We can see that the dividend and the Yoigo disposal is compensating each other quite even in this quarter. With the Sergel outside this of around SEK 2 billion, adding a 0.05 in improvement to this picture, also the provision for the Dutch and the U.S. investigation outside this picture, which will impact up to 0.5 on the net debt to EBITDA. Free cash flow is ending at SEK 7.2 billion. This is down from last year, if we look at the right side of the picture, we can see the different colors. We have the discontinued operation, the blue part, we have the associates, which is the pink part.
Starting with the pink part, associates, we know we had a dividend from Turkcell of SEK 4.5 billion in 2015, and that we did not get any from in 2016. We had a quite flattish dividend from MegaFon. It was SEK 1.5 billion in 2015 and SEK 1.6 billion in 2016. It did increase more in ruble, but the ruble rate was against us last year. It's turning the wind a little bit right now. We'll see how that continues. If we look at then Eurasia, it's flat this year, and it was positive. Where did that money go? There's 3 elements that impacts EBITDA, and EBITDA is that it's taking down the cash flow in Eurasia. EBITDA is severely down, and CapEx is compensating partly for that.
EBITDA, we talked about earlier this year, Nepal is out, currency impact is severe, and then on top of that, we have had a negative trend, primarily in Kazakhstan, on EBITDA. That is what has changed in the cash flow from Eurasia, the EBITDA trend. We stated in the beginning of the year that we have a target of SEK 2 in dividend to be paid out in 2017 based on the 2016 result. We have now declared also that the board proposes to the AGM to pay out these SEK 2. This then is also proposed to be paid in 2 tranches, one in April and one in October, as we have done this year.
We know that we have a free cash flow of SEK 7.2 billion and SEK 7.5 billion if we compensate for the licenses for this year, meaning about SEK 1 billion below what this cash flow out is. We are a little bit below on that, but that is something we also had in our expectations moving into now 2017. Moving into 2017, before we go into our dividend policy and our guidance, I like to go through a little bit an education, actually, to make sure we have the same language and the same story and the same understanding throughout this year when we talk to each other. As you know, we have reported free cash flow from continued operations in our reporting. We have said then that free cash flow, excluding licenses, should be the basis for our dividend policy.
We see licenses that come and go and are usually giving the return over many years, more as an M&A activity in that sense, when it comes to the dividend policy. We know that some years will be very little money and some years will be huge money, and they will also have different payment terms, but they will also be very unpredictable. As we said before, we don't tell in advance if we are participating in auction. Also it's very tricky to understand sometimes when the auction is going to happen, like the 700 MHz in Sweden. Then we have operational free cash flow, which is a new definition, and that is the free cash flow excluding license, but also excluding the associates.
The dividend we get from the associates, that cash flow we will share with our shareholders, it is something that is hard for us to predict, and it is uncertain by nature. Therefore, we can commit to, and we can talk about with you our guidance on the operational free cash flow, excluding these dividends. We can, of course, also talk about what we believe on MegaFon and Turkcell dividend, it is not going to be as clear. We will guide you on what we can stand up for and have a dialogue with you on in a very direct manner, and that is the operational free cash flow. That is how we have decided to meet you. If you look at 2016, we see that the free cash flow from continued operations was SEK 7.2 billion, as we looked at before.
There are licenses of about SEK 300 million to SEK 400 million, making it SEK 7.5 billion. The definition in our dividend policy is free cash flow excluding licenses was SEK 7.5 billion. The dividend from associates were then around SEK 2.1 billion, and that puts us on operational free cash flow of SEK 5.5 billion. SEK 5.5 billion is the number we will guide you on. If this was in the school class, I would ask you all if you understand, I cannot do that now, I will do that in the one-on-ones. Going to our dividend policy and our capital management. It has been updated, only slightly. Our net debt to EBITDA target of 2 ±0.5 remains. Our ambition to have a credit rating that is A- to BBB+ so we can borrow long money remains.
Our dividend policy is at least 80%, before it was a free cash flow and now it is at free cash flow from continued operation excluding licenses. That is the change. We say that we have a dividend policy of at least 80%, in the same time it is important to understand, we do not have an ambition to use our balance sheet over time to pay dividends. Our guidance. Our guidance for 2017. We start with operational free cash flow. One very important metric for us internally and should be also externally is to move the SEK 5.5 billion operational free cash flow to above SEK 7 billion. We feel comfort on this, that we can deliver this and as we say here the operational free cash flow and the dividends from associates we believe should cover a dividend around the 2016 level.
EBITDA still under pressure from legacy, still working hard on our cash flow initiatives. We believe at this point will be around the 2016 level and that is our guidance and outlook for 2017. I will stop there and Johan and Andreas welcome up.
Very good. We know we're going to get one question, Johan.
Yes. Let's take some questions off the table at least because we only think we have 20 minutes or so for questions. We haven't talked about the various investigations and discussions with authorities with regards to Uzbekistan so let me cover that. As you know in September we recorded SEK 1.4 billion in the books in Q3, and since then we have been in discussions with the various authorities in order to close this in a responsible way for our shareholders. There are many parameters, there are four authorities, three jurisdictions or three countries so it is not an easy process. I can tell you that it is a constructive dialogue. We feel good progress. Time is not the only parameter of course, otherwise we could have closed it. We are working hard to make sure that this gets as a balanced holistic settlement as possible.
We will keep you updated of course as soon as we have something. I think that question we will not say anything else on that question so please don't ask that question. We can get room for more focus maybe on Nordic Baltics or other matters. Please, any questions?
Yes. I guess since we have 20 minutes for questions we start with the telephone conference actually so operator may we have the first question please.
Yes, thank you. The first question is from Roman Arbuzov. Please go ahead.
Thank you very much for taking the questions. I have two please. The first one is on TDC. You mentioned risk rewards, sort of risk and valuation is not quite working at the moment. Can you maybe say is it sort of more risk or more valuation? In terms of risk could you please maybe talk about some of the specific risks that you see in relation to this large Danish acquisition? That's the first one. Secondly on Mail.ru you've supported the acquisition of Mail.ru by MegaFon earlier, could you please just provide us your logic in making that decision and do you think ultimately that decision makes it more likely or less likely the probability that you get paid a good dividend? Whether there were any other considerations on your mind when you were making that call. Thank you very much.
Thank you very much. Denmark again. We evaluate the options that we have been doing that for some time as you know. We haven't excluded any options as I said before. As of now with the risk that we see and the valuation that we see in TDC we're not interested, and that's a holistic assessment obviously. We see some of the risks directly as we operate in the market and those are seen in our numbers by the way. The market is what it is and of course there are other risks we also take into consideration and valuation. I won't point to any specific but I'll say as a holistic assessment that's not something we are interested in as of now. On Mail.ru as you know we have two board seats on MegaFon. Christian was on the board before, he's off the board now.
We're represented by Robert Andersson and Ingrid Stenmark and they have in the work on the board made up their views with both independent advisors and our expertise of course in how to see this. It's a strategic deal that makes sense and the valuation made sense in the end. We made all our other checks that needed to be done and we were prepared to support it. That was as simple as that and when it comes to the dividend MegaFon we will have to refer to MegaFon of course and what they say, and then we will keep you updated on that as we go along and I think Christian also referred to that in our discussions here on cash flow and predictions for the year.
Operator, can we have the next question?
Yes, of course. The next question is from Ulrich Rathe. Please go ahead.
Yeah. Thank you. I have a couple of questions, in particular on free cash flow. The first one would be on the fourth quarter because that sort of sets the base for the year-on-year increase, and in the fourth quarter, it was a lot lower than expected. It's a bit difficult to tell exactly what consensus has penciled in, but it seems there has been a working capital issue in the fourth quarter. Could you explain how you think about the fourth quarter working capital move, whether that's just a timing difference or just the way it goes and the basis that we should expect for 2017? That would be my first question. The second question is, when you talk about the free cash flow covering the dividend at the 2016 level, I assume you mean DPS of SEK 2 there. That's around about SEK 8.7 billion.
Is there any issue that you anticipate with the MegaFon dividend in there? In terms of, I think we all sort of understand the issues, is there any particular issue that has come up with the MegaFon dividend at this time that sort of leads you to be a bit cautious on associate dividends? Thank you.
Thank you. Let me answer the last one. Christian can give you the details on the first. The easy answer is no on the second one. I just want to say that you also read that guidance on cash flow right, and that's the way we think about it. Our controlled cash flow and the dividend cash flow, which then adds up to what we aim for to cover the dividend with our cash flow, because we don't want to use the balance sheet, obviously. We are now sending signals that we're comfortable on the cash flow on top of our operational free cash flow to cover a dividend in line with last year.
On working capital, you are correct that there is timing differences. It's very difficult for us in our industry, unfortunately, and I've struggled the last years to get a grip myself on understanding that in a good way, is the timing differences between quarters, because we have payments of close to SEK 1 billion in one month that can slide between the first and the last day and can distort the total picture of working capital for one quarter. Therefore, you need to look at the trend, and that's why I started my day here today with saying that the trend of year-over-year has now improved and will continue to improve, is our view. If it hits one or another quarter, it's difficult to say in advance.
Thank you.
Thank you.
Next question, please, from the phone conference.
Thank you. It comes from the line of Henrik Herp. Please go ahead.
Yeah. Thanks very much. I had a couple of questions. I just want to follow up firstly on CapEx, and you've obviously stopped giving guidance. But I think early 2016, you were talking about sort of CapEx trending down towards 2014 levels, around SEK 12 billion. I don't know if you've got an update on that. It does sound like you want to push fiber a little bit harder. And in terms of that as well, can you maybe talk a little bit about the mix? Should we still expect you to push for SDU fiber build-outs, or will it be more MDU? Just trying to figure out really where the fiber installation revenues are going. And then the other thing, you're saying on Roam Like at Home, that you don't expect a very big impact. Maybe you can explain why that is. Telia guided for a decent impact yesterday.
Where is your view sort of different, do you think? Why do you not expect it to be a bigger hit? Thanks very much.
Thanks, Henrik. Roaming, we say that we do expect a slight negative impact on EBITDA. Of course, if we do nothing, we know it's going to be more than slight. We are working to mitigate this, partly with our offerings to our retail customers in our footprints. Of course, we're also working on the wholesale side, negotiating and creating agreements that are giving us a better comfort. We have taken the lead in the roaming space, in the Nordic-Baltics to our customers. We have a good understanding of what's required to mitigate, and we want to make sure that we balance that to give the customers what they are getting used to or asking for, but also managing the risk on the cost side.
It is for us to strike this balance throughout the year, and if we do that well, we may be able to mitigate fully, but we want to flag a slight negative impact on EBITDA. On the fiber side, Christian, we can just say firstly, there is a big pent-up demand still. A lot of people still want fiber in Sweden, understandably, and we're doing whatever we can to meet that demand, and we are gaining share in the fiber universe, and we aim to continue to grasp and take more than our fair share of this. That's where Christian pointed you to the actual slight increase, possibly in the CapEx for 2017. Do you want to say anything on the other CapEx?
Well, I can just say that, as I said, SEK 15 billion and minus SEK 3.2 billion is SEK 11.8 billion in other CapEx. That we have said will go down. That journey has started taking down the other CapEx as well.
Okay. Thanks a lot, Henrik. Could we take one question in the room, perhaps? Thomas.
Thank you. Thomas Eckert, Danske Bank. A question on TV. You mentioned a good subscriber intake in the OTT product in Sweden, and it looks pretty slick when you try it out. I'm just curious how you see this playing out ahead. Do you see this evolving as a separate product, a broader shift into OTT TV? How would that impact your financials? Are you willing to sort of take up the competition for TV also with subscribers who use another broadband provider? Thank you.
Thanks, Thomas, and thanks for trying out our service. I agree, it's slick and working nicely. That's one I use at home, by the way. The short answer is yes, we're prepared to try to expand that offering because we're getting great feedback. Of course, that is, I think in our region, we're very much leading the way in the change of behavior. Old TV is dying and new TV is coming, and OTT is a core part of that, and we are well-positioned to be part of that growth. Of course, then we have to go outside our own footprint. We have to address the full market. By the way, we're doing that in some of our markets as well. You can buy it off the shelf, even if you're not a Telia customer. I think that's the way to go.
If you have a great product, why limit it?
Stefan, please.
Yes. Hello. Stefan Gauffin, Nordea. Looking at the Norwegian market, which was a fantastic development, I would like to look a little bit on the loss of mobile subscribers. To whom are you losing to? Is that to ice or is it Get that has started now? Very strong EBITDA development. Are there any one-off items impacting that? Yeah, I'll stop with those two questions.
Okay. No major one-off impacts on the results. It is underlying strong improvement on cost side and also getting the synergies fully working for us, which we talked about last year. On the mobile customer base, we're losing to the other two mobile networks, Telenor and ice, first and foremost. As I mentioned in my introduction, it's so far mainly the low ARPU customers. While we're trying to monetize our base and get our things working for our customers, moving up in the right buckets, and giving them what they ask for on our best network in Norway. Of course, we will always review the mix here, how you can't lose customers forever, obviously. At this point, it's been part of the plan to work on ARPU uplift, defending our customers, our high ARPU.
We're also revisiting our brand strategy in Norway, where we have quite a few brands out there that we need to find a way to optimize over the year.
Okay, I think we have to go back to the phone conference. Operator, could we have the next question?
Yes. Thank you. It comes from Sam Dillon. Please go ahead.
Hey. Two questions, if I may. Firstly, in Sweden, we're entering a period where one of your competitors tends to increase prices. Have you announced any upcoming price increases? Is that part of your plans for 2017, especially as you offer higher speed packages and product? The second question, I guess within your core Nordic and Baltic portfolio, why is it important that you have any Danish presence? Thanks.
Thank you. Prices, as I showed you on the Sweden charts, we have increased prices in 2016, TV, broadband, and we have optimized on mobile. I know we're not optimally priced yet. We're continuing to really focus on finding a balance here. I think we have a great offering on the mobile side in the Swedish space. Best network, broad portfolio, great service on top of that, and touch in the customer care. I believe we can do more. On the Nordic-Baltics, on Denmark, notably, if you have listened to me throughout the year, I haven't excluded leaving Denmark, even if that's not our preferred option. We cannot have any operation that has zero or negative return on capital employed. If you do that for too long, you're destroying value, and that's not why we're here.
If to create value or save value options, that's what option that we want to execute on. We're exploring intensely the various options that we have and have now for now then said that TDC is not the option.
Cool. Very clear. Thanks, guys.
Thank you, Sam. Operator, next question, please.
Yes, it comes from the line of Simon Coles. Please go ahead. Hi, thanks for taking the question. I just had a clarification on the dividend. Am I right in understanding that you're not committing to a two SEK share dividend going forward, but that is your intention? Because the guidance of minimum 80% of free cash flow could imply some downside.
We are saying at least 80% for the year. That's very clear. We are guiding you to comfort on the cash flow on two components. We're adding the wording that we believe that should cover a dividend in line with two SEK from last year. That's the guidance on the cash flow that you need to take comfort in. Of course, as I said, we're aiming for that. We don't want to use the balance sheet for that. That's the focus we want you to have on our operational free cash flow. That's where we guide you. That's where we measure ourselves. That's where we target ourselves. That's the most important thing for us to improve cash flow over time.
Okay, great. Thank you.
Thank you, Simon. Next question, please.
From Peter Nilsson. Please go ahead.
Thank you very much. Just a question on the outlook and Sweden, please. You've obviously discussed in some detail the conflicting trends in Sweden going into 2017, positive and negative. Is it fair to take it that the group guidance for flat EBITDA for 2017 also applies to your largest business area, Sweden? Are there any directional trends you sort of want to highlight to us here? Just secondly, on the transformation program which is now completed, we've mostly talked about the cost and efficiency sort of impact, but I guess one of the purposes was also to create the basis for growth and new product developments. Do you also feel you have delivered on that side of things?
If I can just sneak in one, Johan, I know you prefer not to talk too much about it, but Turkcell, are you disappointed that we didn't get sort of the resolution to the ownership dispute between your two partners lately? Do you see any hope for any resolution of this within the foreseeable future? Thank you very much.
Thanks, Peter. I'll try to be brief so we can allow a couple more questions. On Turkcell, yes, I'm disappointed. We haven't, of course, given up, and we keep pushing for solutions. We can speak more about that, of course, further on. On the Sweden and group EBITDA discussion, as Christian pointed out on one of the slides, the pressure on legacy services in Sweden is heavy. I believe we were SEK 600 million, SEK 700 million revenue pressure on legacy service, and we know that's coming every year. To mitigate that is difficult, especially since it's a very high-margin business going away. We've been successful in 2016. Of course, we aim to do that, but we don't want to guide you specifically on any market. We will report as we go along how we're doing. That's our view on the overall EBITDA picture.
Transformation, Christian, you want to cover that?
Well, we have the program, as you said, was an invest to save program. Part of this change we are through, it will continue, is to move into more agility and customer experience environment, when it comes to how we meet the customers in both our channels, but also in our products. That is going to continue, and that has been ongoing as well. That is not changing. We have delivered some parts of that and will continue to deliver several parts over the next coming years. Consumer is faster than the B2B side in delivering on this promise.
Okay. Thank you.
Thank you, Peter. We have one more question from the telephone conference. That will be the last question for today.
Yes. Thank you. It comes from Usman Ghazi. Please go ahead.
Hello, gentlemen. Thank you for taking the question. It's a technical question, please. Two of them. Firstly, on the cash flow, if I look at the past six years, we've had this constant leakage for restructuring and pension costs around SEK 1.6 billion. Do you expect that to continue going forward? That was the first question. The second question was just on the SDU rollout. You've said yourself 1.5 million homes have been deployed in the SDU segment. That's around 70% of the market. There doesn't seem to be a lot more rollout left here, especially because you're not the only ones rolling out fiber. Are you looking to overbuild fiber in areas where your competitors have also rolled out fiber, or is that not the case?
You want to take the technical one, or should I? I'll do the SDU first.
Yeah.
We don't see a lower demand now than end of last year. We're continuing to try to meet the pent-up demand, both organically and non-organically. When it comes to overbuilding, I'm not sure I understand the word, but we will not obviously build fiber where there is a high penetration of other fiber providers. That is a very difficult business case. There are still territories where they're up for grab, where we are doing well competing with the other providers. That's what we're guiding you for. We still see growth in the fiber universe.
On the technical question, I actually don't recognize SEK 1.6 billion per year over the last six years. We have to contact you separately and follow up on that.
Okay.
Okay. Thank you, Usman. That concludes the presentation and the Q&A. Thank you, boys.
Thank you.
Welcome back for the Q1 report in April.