Congratulations. We have a little bit of a new setup today. We're presently in the lobby of Telia Company headquarters, but hopefully, everything will work fine. Not to make you too confused, we have the same lineup as usual. I will start to present, you, Johan Dennelind, our CEO, and after that, Christian Luiga, our CFO, will come in. Please, go on.
Thank you, Jesper. I'm told to not to be too far away from the mic. Works fine here? Excellent. Welcome. Summertime. For those of you online, there is also ice cream here in the lobby, I can see. We will take you through quarterly report number two. The highlights for the quarter clearly is Norway, where we are progressing much better than we thought on the integration of the Tele2 acquisition. We're also pleased with the Swedish consumer and our investment programs upgrading internet experience across our markets. Positive that we're taking steps on our innovation agenda. Those are my highlights for the quarter, which we will cover over the next couple of minutes. We go to the numbers, where clearly, if you look at the reported side of life, it looks pretty positive.
Remembering that we're helped here by Forex in Eurasia mainly, but also through the M&A activities in Norway. Removing that, we are slightly down on organic service revenue and also on EBITDA. Cash flow for the quarter, unusually high, of course, because of the 4.7 billion SEK dividend that has arrived safely into the bank account of Telia Company. Looking at Norway, since it is the highlight of the quarter, starting with the operational side of life. The market share now is around 40%. We have significantly upgraded our 4G network over the last nine months. Remember that we started already back in the fall, committing to a broader network on 4G, where we, in June, reached above 90%, covering 90% of the Norwegian customers, ahead of some of the bigger players in Norway, I'm glad to say.
This is really the first time we feel that we have a fantastic opportunity also on quality and coverage versus our main competitors. That's great news. We also have an organic service revenue growth in Norway of around 3%, driven by consumer. We are committed to the 98% 4G coverage over the next 18-24 months or so. On the operational side of life in Norway, very good, and it gets even better when you look into how we're progressing with the acquisition and integration of the Tele2 business to create a leading challenger in the Norwegian market. If we add the effects of M&A, you can see the service revenue reaching almost up to SEK 2 billion for the quarter, and EBITDA SEK 730. What is really pleasing is that the synergy takeout and the effects of the M&A activity is ahead of plan.
Strong integration activities from the team, realizing synergy ahead of plan, raising our estimates for this year from around SEK 300, that we talked about last quarter, to about SEK 700 already this year. It impacts also the synergies that we talked about full run rate that we had previously around SEK 800, with full effect in 2016, is now up to SEK 1 billion full year 2016. That is obviously very pleasing. We are glad to follow this progress further. That's Norway as a highlight. Looking at the Swedish side. There are a mixed picture, you know this is nothing different from before. We have a consumer market that is doing fairly well. Actually, TV, broadband, and mobile are all growing on service revenue organically.
We have a pressure on fixed telephony, obviously, not just in consumer, but also on the enterprise side. Moving to enterprise side, we have a general pressure still, these are the same causes as we have talked about many times here in this setting before, we don't see that easing over the next quarters. We are in a transformation phase, bringing our corporates from old to new to future-proof solutions, and it takes time. There are some light in the tunnel in the SOHO/SME segments, where we see stabilizing trends, where we also have some exciting new launches that we had in Q2. IP-based cloud services for SME and SOHO is taking off well, some innovation initiatives that we hope to take off well, where we actually have music also for companies being an interesting proposition launched in the quarter.
Sweden, I should also say, sorry, I'll stay one more minute on Sweden. Remember we had a big discussion in Q1 on the earnings, the impacts of our investments in the marketing activities, and the mix of acquisition cost on subsidies and commissions. We are working with that to optimize it. We're not fully there yet, but we have an improving trend. On the way we invest into the market. The hardware business, obviously, is a very important part to get right, because it has a margin dilutive impact. We are working our way to improvements on the investment side in Sweden. Better than last quarter. We move to Eurasia, it's a different type of picture. We have some really good news, we also have some not so good news, that has been the case in the region over the last quarters.
Remember that we have a very challenging macro environment in Eurasia, impacted from energy prices, FX, the high uncertainty, it is trickling down into the consumer behavior and consumer spend, both on consumer enterprise. We have a very rough competitive situation. I'll come back to one market specifically in the next slide, which is Kazakhstan. Apart from that, it is an okay stabilization, we are adjusting with the cost to try to maintain the EBITDA level for the year. We are, however, for the year, seeing an increased risk and increased uncertainty in the Eurasian setting. I'll come back to that during the outlook discussion with Christian. Just a few words first on Nepal.
We had a devastating earthquake in the quarter, we had a lot of efforts going on from here, but mainly in Nepal, where we had heroic efforts from our local team, but also from our partners to stabilize the situation, to get all the people safe, to get the network up and running to support the rescue operations, also to make sure that the business in itself wasn't badly impacted. I'm glad to say that we have managed on all those accounts, also seeing that the numbers are holding up in Nepal, we have taken some non-recurring costs in the quarter as well, which Christian will take you through later on. Let me move to Kazakhstan, which is clearly sticking out or standing out in the quarter as a negative if you look at its face value, and it is.
You can't ignore the results, which is not very pleasing to say the least. You have to look further to what's actually happening in Kazakhstan. Beyond the macro aspects, we have a price war situation. That has been going on for the last two, three quarters, but intensified in the second quarter, we could no longer just be cautiously working our way back in the market. We had to launch some aggressive offers ourselves. This is just to give you an example what you face in Kazakhstan. You get actually more data, you get free calls, free SMSs already in Kazakhstan. This is still not the most aggressive pack because we are market leader, over 50% market share, over 50% margins, but we need to meet the competition with offers, and this is the prepaid brand in the market, which is Activ.
We're seeing some good pickup on this Hello Kazakhstan proposition. This is one of the things that have to work to get Kazakhstan back to growth eventually. But remember, we're still in double-digit negative territory for the quarter, that's while maintaining an EBITDA margin of about 50%. Under the circumstances, the team is doing fairly well, we have high hopes now that the new team in place will pick up from here. A couple of words on our strategic agenda. You've seen this. It was launched in the Capital Markets Day almost a year ago, we're continuing to deliver on this. We have a couple of proof points in the quarter. Obviously pleasing to see that the acquisition in Norway is helping us to strengthen our core in the Nordic Baltics. Working a lot on the converged propositions, tested already in Finland.
Interesting things going on there. Also on the competitive operations, we are clearly investing our way into a better future here, which I'll come back to as well. We are exploring opportunities close to the core. We've told you this before, we are working on various partnerships across these various areas. In the quarter was quite heavy on that side when we have some music initiatives that is portrayed here today and also displayed on this slide. Before I talk a little bit about the initiatives that we have, this is an area where our customers love music, be it consumer or enterprises, because enterprises are made up by consumers. We had a situation where 4G is leading the way. Internet traffic is booming.
4G penetration is growing rapidly, that is opening up a completely different behavior among our customers, and we need to stay relevant in this field. We're doing a lot on our own, but we're also now venturing into partnerships where we find it interesting. Soundtrack Your Brand is something we do with SMEs. Spotify is a partnership that we're taking to the next level from a thin commercial partnership to a more strategic, deeper partnership where we also invested to show our commitment and belief also in that business model. Lastly, Zound Industries. We announced, I think it was nine months ago. At the time, we didn't know, of course, all about what was going to come.
Yesterday there was a very interesting launch where you had this new music smartphone launched in London, and we have exclusivity on this one in our markets, and you can try it out with Peter over there later. It's one attempt to see if we can stay innovative and relevant with our customer base, supporting and working with partners. To some of the heavy lifting that is going on in two of our core markets, Sweden and Finland. The transformation agenda is a prerequisite for making Telia Sweden, Telia Finland into more profitable operations going forward based on a much better customer experience. These are some of the measures that we have put out to reduce complexity, improve customer experience, and eventually also improve our cost base.
This is a program that is investing SEK 2 billion over 2 years to save SEK 2 billion on OpEx going full speed into 2018. We are broadly speaking on track. We have invested about SEK 300 million in the first half, and this will be gradually stepped up to realize the cost savings as we have lined it up in the Capital Markets Day. I would summarize this quarter with fairly stable, executing on our strategic priorities, and have a lot more to do in order to make our operations competitive across the board. Christian, with that, I would leave it to you to take us through the numbers, and I'll be back for Q&A.
Thank you very much. Hello, everyone. Welcome, welcome on the phone, and welcome here in Stockholm. I will take you through the financial part and a little bit more of the presentation. I just need to figure out how this works. There we go. Okay. We have a quite solid quarter, I think, and it is stable in the base with billed revenue in the Nordics, very stable, and I will come back to that. Revenue growth is up 8%, and the profit is up 4%, very much depending on the Forex exchange, of course. Cash flow is very much linked to the dividend we got from Turkcell, our associated company. If we start to look at the revenue growth and the currency impact, we see that the revenue is up 1.5%, including our acquisition in Norway. The acquisition itself impacts by 2.8 percentage points.
The currency impact is significant, it's from a weakening Swedish krona. Therefore, you can see a lot of currencies like the Nepalese rupee and Kazakhstani tenge, very strong on this picture. Also we have to remember the biggest base is in EUR is up 2.8% towards the Swedish krona and has a good impact also on the base. We go to the different elements of the revenue, billed revenue is down slightly in the quarter. This is related to Eurasia and primarily Kazakhstan. Both Sweden and Europe is up in the quarter. If we look at the different parts of that in the billed revenue, you can see that Finland is, for example, up 1.7%. That is in a quite stable customer base, but with some uplift from price increases. That will continue into the next quarter.
We have brought some price increases in Finland into the equation, the uplift and upgrade of the impact will come in quarter 3. The interconnect is flat, we have two strong growth companies in Uzbekistan and Nepal, their interconnect is going up by volume. In Kazakhstan, Finland, Norway, and Denmark, we have regulatory impact that is negative on the contrary. Together, it's a flattish position. On fixed, it continues to be a decline, primarily Sweden and Finland, these are the main reasons also why we are having some struggle with the profitability in these two entities. Equipment sales continues to grow. It's on a lower growth rate in Sweden in the quarter, that is from the improved optimization of our way of working with the costs related to this. We're not there yet, as Johan has said, but we have taken a good step.
In Europe, it has increased. One reason for the increase in Europe is Spain. Last year, we had a quite weak quarter, I'll come back to that shortly. The EBITDA is up 4% in reported, this is, of course, an effect of the currencies. The acquisition in Norway compensates for the negative growth in local organic. On net, it's a flattish position. The different parts here I'd like to go into in the organic is firstly, Kazakhstan, primarily driven by the lower service revenue, also a little bit higher cost on that service revenue in relationship wise. That's on the off-net minutes that we have added in our packages, like our competitors have done as well. We look at Spain, we have a higher cost for taking in customers in Spain in this quarter compared to last year.
I'll come back to that in a second. We have a decline in fixed in Sweden. In Finland, we also have a decline in fixed, also a increased ambition in customer operation, that we talked about already last quarter. A short recap on Spain. Last year, quarter 1, we had a dramatic loss, huge intake of customers, high cost per customer. We pulled the brakes March, April, we bounced back quite heavily, both on very low cost for marketing and subs, a high profitability. This year, we have a much more stable and even subscription intake, also profitability in Spain. That's the reason why the comparisons becomes a little bit odd here. If we look at Sweden in quarter 1, we talked about three elements that impacted the profitability. One was a small part, which was storms.
The other one was the go-to-market cost, and the third one was the fixed. In this quarter, we remain with the fixed, and on top of that, we have a small impact from pension costs that we had a one-time reversal in 2014 from recalculating our big pension fund base that we have. It was a small comparison difference, but it's important also to understand that when you look going forward. Finland we talked about. There we have a heavier investment this year, and the most important part of the Finnish game will be to see that we can handle the market and continue to grow our revenue base. CapEx. We have continued to invest according to our strategy. Our strategy is to work with connectivity, the best connectivity, superior connectivity, and convergence. This means that we will invest over these two years more than we normally do.
We have said we will invest to transform, and we will invest to grow. The transformation is a small part of this. Johan talked about SEK 300 million over these two quarters. Quarter by quarter, we have still increased with SEK 1 billion. All three regions are behind this increase. If I start with Sweden, it's network-related and fiber-related. 60% is 4G and fiber in this quarter, and all of the increase comes from those two elements as well. In Europe, Finland and Norway stand for the biggest increase. In Finland, we have an ambition this year to populate 2,000 of our sites with 4G, and we have 93% coverage already in Finland. In Norway, we have built out 10 sites per day, new sites, in our ambition to be a real threat in the market to our competitors and be a very strong player in Norway.
I would claim we have the best 4G network in Norway today. If we look at Nordic and Baltics together, we have over 90% coverage today in all countries except for Latvia. The Eurasian impact comes from Uzbekistan, Nepal, and Azerbaijan. You may wonder why is not Kazakhstan part of that increase. We did quite high uplift in Kazakhstan in quarter four on CapEx, and that is something we bring into this year. The other difference in Eurasia is that we decided this year to be quite heavy in the beginning of the year and still remain with some option to be cautious during the rest of the year if we need to, for example, for macro reasons. The fiber in Sweden, if we just take that for a second before we leave, we have an ambition that we have increased during the year.
Now we have an ambition of 55,000 SDUs during the year. We have sold all of them already. Now it's just to deliver before the end of the year. The impact on revenue will be higher in the second half compared to the first half. Free cash flow. Looking at the picture, you will see one significant item, which is the cash flow coming from the dividend in Turkcell. It comes back as the same SEK 4.7 billion, and that is coming through net of taxes paid already. We should remember also that we have a SEK 2 billion coming pretty much from Russia soon on our late payment of the shares we sold in MegaFon. Cash CapEx we just talked about has increased, and naturally, it will also come through the cash flow.
The net debt is flat compared to last year, around SEK 68 billion, 1.91 net debt to EBITDA. The impact here as well is that we can see an M&A activity in the last 12 months. It's the Norwegian acquisition, it's Spotify, and then we have some smaller acquisitions coming through. That will be balanced then in this picture with the Turkcell dividend and gives us a otherwise quite recognized picture. We paid out SEK 3 in quarter two per share, which evens out at SEK 13 billion. Stopping at our full year forecast and outlook, we remain with the same outlook as last quarter. The uncertainty in Eurasia has increased. The biggest impact on EBITDA will come from Sweden in the change between the first half year and the second half year. There I remind you it will be price increases.
It is cost procurement we have worked with, and it is also the fiber uplift. We have a target of at least SEK 3 for next year as well. We do that with also keeping a solid balance sheet. As today, we have no changes in our rating, which is Standard & Poor's is A-, stable outlook. That's all.
All right. Thanks a lot.
I think it's time to open up for some questions here.
Very much. As a reminder, if you wish to ask a question, you can press star and one.
Should we start here on the?
You can press star and one on your telephone.
Do we have some microphones there?
Wait for instructions from the announcer.
We can start here with Erik.
Okay. Thank you. It's Erik Penser, DNB Bank. Firstly, I think you did surprise a lot of us analysts this quarter by investing in Spotify. Are you willing to tell us how much you're prepared to set aside for such investments to grow, to spur innovation, so to speak? Secondly, in Kazakhstan, what do you think is required to break the vicious circle you have now there with the price war in the market? Thirdly, just on a number, how many fiber installments were invoiced in Q2 in Sweden, please?
Let me take one, two, and you take number three. On the investments and partnerships, we're not predicting any more of that type in the near term. We also don't earmark specific funds for investment at this point in time. As you know, this is a core part of our strategy and in taking steps into adjacencies, which we believe will benefit our core. This is what is happening out in the world today, and we need to be open to what's happening with our consumer behaviors across, and we do things that we believe are value creative for TeliaSonera going forward. We'll speak about the ones that we will do, but not the ones that we plan to do.
On the Kazakhstan side, I think it is a lot of things that we need to move through some more turbulence, I think, because it is a price war going on. In a price war, the market leader with the superior margins will suffer more than the challengers. That we have seen. Now we are in the market with a proposition that is aggressive, but not the most aggressive. This is the trick, to balance and not try to fuel more into the price war. This proposition that I showed you is about SEK 70 for all that, free calls, free SMS, and a lot of data, more data than you get in many other markets, in a country where you don't have the same customer experience. This is a tricky balance to get right. We shouldn't expect the short-term turnaround on that. Christian?
Can we have the
On the connections on the fiber side, we had roughly 20,000 on the SDU side and around 15,000 on the MDU together with our communications operators. All right. Elena over there.
Yes. I just wanted to confirm your guidance for the full year. You're down 4% now, but you still think you'll be flat, and you exclude the synergies from Norway. Just wanted to confirm that. Norway is somehow included in the full year guidance?
Confirmed.
Okay. It's a big pickup.
Yes.
Okay. Could you say maybe a little bit how, you said the three different things, that Sweden will be the
main driver for the turnaround. Could you say roughly how much you expect from each?
No, I can't go into that.
Okay.
I can give you some examples of cost activities that we do. We do both on the resource cost, but we also have done a lot of procurement activities in the beginning of this year that will start to actually have an impact. For example, we did a repurchase of all our field maintenance. We haven't done a big thing of it, but we did that end of last year in quarter one, and that will have an impact itself by SEK 80 million on Sweden alone between the first and second half. These kind of activities we have done, but we haven't talked so much about them.
All right. Thomas.
Thank you, Thomas Heath, with Handelsbanken. Follow-up first on guidance in Sweden there. You show some charts with B2C and B2B. It looks like the comparables are getting tougher, if anything, particularly on the business-to-business side. Whilst you're making this pickup, it's the sort of hardest time, perhaps. Should we understand this to be mainly on the cost side, or is it consumers that's going to do all the work, or if not, has something materially changed in the B2B segment?
I think you should not expect a turnaround in B2B, as I said. You should see some uplift in consumer. The cost side that Christian talked about are the three pieces to watch.
Consumer is both price and offering work that we have done on the mobile side, but also on the fiber side.
That's helpful. Thank you. While I got the mic, I'll throw in a few more. On Norway, can you say anything about the market development this quarter? We saw Ice.net launch, soft launch perhaps. Have you seen any sort of impact?
From them yet. Do you expect any sort of changes in the next part of the year? Thirdly, on Finland, your peer, Elisa, reported pretty strong numbers in Finland yesterday, and there is quite a difference. Meanwhile, we're seeing quite a fast 4G pickup and 4G prices are at a premium. What's happening here? Why isn't Sonera benefiting at all at the same level? Thanks.
Thanks, Thomas. Norway first. Market dynamics. I think we're a three-player market on the network side and the MNO side, and that will continue to heat up, I think. You're seeing some of it already. Actually, if you look through Q1, Q2, we have lost a bit of customers in Q1, picked it up back in Q2, and been quite active in the market, which is seen in the EBITDA organic drop in Q2. That is to get back to winning on all the brands, which are now positive. All brands are positive subscriber intake in Q2. That was not the case in Q1. If there was something as an effect of the acquisition, maybe we will got a little bit off the market in Q4, Q1. We're back in the market in Q2. It hasn't changed the dynamics drastically, but we expect it to increase.
We are ready for that competition now, as a big difference from before. In the Finnish side, market share-wise on subscribers, I think we're holding up fairly well on both B2C, B2B. Clearly, we're not monetizing as well as one of our competitors doing, and that's a problem, and that we need to fix. We have a situation in Finland where we have tried to move the market to a better monetizing model for data. That is not working. We just need to get in the market on the same terms and get back to winning also on monetizing. That's the focus of the team. Remembering also that we have a big transformation ongoing, where customer experience is improving as we move forward. Also do watch the converged propositions that are launched in Finland, which I think will also be a good opportunity. Thank you.
All right. Maybe we should move on to the conference call. Operator, could you please open the line?
Yes, sure. Thank you very much. As a reminder, if you wish to ask a question, you can press star and one please. The first question is coming from Peter Nielsen. Peter, please ask a question.
Thank you very much. A couple of questions, please. Firstly, if I may just return to the outlook, just more specifically on Sweden. Christian's comments here about the bulk coming from recovery in Sweden in the second half, does this mean that we should anticipate at least flat EBITDA in Sweden for this year versus last year? If you could comment a bit, that would be much appreciated. Secondly, may I just ask, the increased synergies you found in Norway, where have they come from? I would assume it would be in turn cost synergies, given that you should know the synergies from the traffic from Telia to Telia. If you could elaborate a bit, that would also be useful.
Thirdly, can I just ask you told us for some time that regarding Spain, Yoigo, you were sort of waiting for the Orange gesture remedies, as obviously that might have an impact on Yoigo's position. To the best of my knowledge, you haven't commented on this yet. Could you give us any comments on how you felt about the remedies, Has that supported Yoigo or neutral or anything here would be appreciated. Thank you.
Excellent, Peter. Thank you. I'll work my way from the bottom to the top where Christian
Thank you.
will take the first one. Yoigo, as you've seen in the quarter, we continue to win against the big three, market share-wise. We have a model that works now with a good data proposition. We haven't solved a long-term strategic problem. We had, and we talked about it, our eyes on the remedy discussion going on, where we were not very excited about what was offered from Jazztel and Orange. We were very clear on that that was not something that we believe would be value creative in short, mid-term for Yoigo. Therefore, we are not part of that for the moment. On the Norway side, synergies, yes, they're realizing faster across the board. I don't want to pick out any specific one that is going better than the others.
We are faster on the integration, network, cost takeout, but also on the brand consolidation, and upgrading the customer experience. It is across the board you have synergies. If I should summarize it one way, it is faster execution than expected.
Okay. On Sweden, Peter, the comps will be positive in second half for Sweden compared to negative in the first half, I will not go into giving you a guidance if it will be flat year-on-year.
Okay. Thank you very much.
The next question is coming from Jakob Bluestone. Please ask your question, Jakob.
Hi. Scott. One question just to follow on the guidance issue. Just, Christian, you mentioned that there are three components to the better second half margin in Sweden, price hikes, cost procurement, and fiber uplift. Just on the fiber uplift, by that, do you mean more ARPU coming from more people taking fiber, or do you mean more installation fees from one-time connections? Maybe related to that, can you maybe just remind us what some of those price hikes are, if any of them have been announced? Thank you.
I think it's a good point. I was actually thinking about it when I talked before, it's both, of course. We have a bigger installed base that will have then a higher ARPU in the second half. On top of that, we have a EUR 2,000 one-time charge that we also will have an impact of in the second quarter, in the second half.
Are there any other price moves you can share with us?
We can say like this: in quarter 2 we have increased pricing on TV, first of which is related to the triple play, of course, with fiber. We also, in MDU side, we have done some price increases in the quarter. Other than that, we have done on mobile side, 1st of July, for example, we have increased the price on our lowest 0.5 gigabytes offering from SEK 199 to SEK 239. We have price increases a little bit all over the board, they will have an impact, of course, in the second half.
Great. Thanks.
The next question is coming from Roman Arbuzov. Please ask your question, Roman.
Thank you for taking my question. My question is related to Sweden Mobile, and particularly the consumer market. I understand that your growth has slowed down somewhat from +6% to +4% in the quarter. Just wanted to hear your thoughts in terms of, do you think this is a market as a whole has slowed down somewhat, or do you think you perhaps may have lost some share in the quarter in the consumer market? Also regarding the promotions in a double data environment, you were obviously very keen to get out of this double data promotion mode. This hasn't proven to be possible. Given this, how would you characterize the overall competitive environment in Sweden Mobile currently, and where do you think we're going to go in terms of the rest of 2015?
Finally, related to mobile, if I may, just in terms of the additional go-to market cost that you were talking about at Q1, which was SEK 180 million. Were there any costs of this nature this quarter, and do you expect any in terms of 3Q or have you stopped sort of spending aggressively on the various promotions that you were doing up until the end of May, as I understand?
Yeah, I think I got all your questions. I was a bit weak on the line there. Sweden Mobile, we have done split consumer and enterprise, where consumer is still north of 4% growth, which is good, not great. There are probably going to be numbers higher than that from our competitors. We have seen one. In that sense, we shouldn't be happy. Remembering that we are trying to take step-by-step approach here to optimize the monetizing, not be too eager to jump into flat rates where it looks like people are moving or operators are moving. We're still creating some resistance to that as we monetize moderately, I would call it at this point of time. I think that answered actually both your first and your second point. The third one, I didn't fully understand, but I think it's about the SAC in Sweden.
I'm not going to go into the details of exactly how much we're trimming on what line. I can just say that we have strong focus on our SAC engine, both, and retention engine, and we're optimizing those investments across the board. Remembering also that the comparables are slightly better this quarter than Q1. Equipment sales in absolute terms are about the same level. This is more about trimming it even more going into second half. You will see more of that.
Okay. Can I just follow up with a very quick question to Christian, please? In terms of working capital, how much was Kazakhstan handset, please?
Sorry, could you repeat, please?
In terms of the working capital outflow this quarter, how much was Kazakhstan handset?
Kazakhstan handset wasn't that big actually in this quarter because Kazakhstan is about SEK 300 million, in total, we did actually most of that purchase in quarter one. It has an impact. I think you need to look also a little bit on the cash flow over two quarters, or even sometimes more, because we have a big shift in payment terms depending on the year, if it comes on the first day of the month or if it come on the last day of the month, and we have a huge customer base that pays all in once. The first half year is very similar to last first half year, and it's quite flattish. It's a little bit less than I want it to be, but it is still in line where we usually end up.
Thank you very much.
All right, let's move on. Could you please limit your questions to maximum two questions? Maybe we should move on here, move over here to the floor. We have one question here.
Then.
Yes. Stefan Gauffin, Nordea. One of the larger deviations this quarter was in Nepal, on EBITDA. Here you write in the report that you benefited from international both voice and data traffic. Can you quantify the impact from higher international traffic this quarter? Has this continued into Q3, or has this stabilized to a more normal level?
Nepal, it's a mixed emotions quarter, as I said in my presentation. If you take the pure financial view on it has been a lot of traffic, obviously, in Nepal, both incoming, but also domestic. The majority part of the increase is coming from the international incoming. We have seen a strong uplift also on domestic traffic as a result of a lot of the communication needs. Therefore you shouldn't expect the same amount going forward.
If I just add there, I think one of the benefits we had is that we had a team that was extremely great in making sure the network worked, and that gave us a possibility to support. Even though we actually gave away some free minutes and data, we have this uplift.
Thank you.
All right. Should we go back to the conference call again, operator?
Okay. Thank you very much. The next question is coming from Nick Lyall. Nick, please ask a question.
Yeah, morning. It's Nick from Societe Generale. Could I ask two, please? Just firstly, you've not mentioned anything about quad play so far, and you were talking a little bit more about the possibility of it in the second half. Firstly, can you just confirm that you're still on track, you think, for a second half quad play launch? Are all the IT systems ready, et cetera? Also, does that have any bearing in terms of marketing and some of the rebound that you're talking about in Sweden, just in terms of general cost? Is that included in guidance or would that have to be something separate? Secondly, on Eurasian assets, you've talked a lot about the uncertainty.
Could you just mention, would it be the right time to think about selling some of the Eurasian assets, for example, to Turkcell via Fintur, to sell on that asset? Or is it the wrong time given weakness in Forex or others? Could you just tell us how you're thinking about Eurasia, please? Thank you.
Hi, Nick. Thank you. The quad play question, I think I haven't given you any timeline for any launch. I've said that we are working hard on understanding how we could get more value out of combining products across our markets where we have the capabilities. As I said, we are starting the furthest we have on those plans is in Finland. In Sweden, we're taking step by step and getting our act together internally first and system-wise, as you pointed out. Very particular about not discounting too early on any of the product mixes. We'll get back to it as we move along. On the Eurasian side, clearly, as we have been talking about, it's a macro situation that is difficult. That happens in many places, so you just need to adjust and get your act together.
We have a high competitive pressure, which we're working to mitigate. That's our focus right now, to take Eurasia to the next level. We have, though, highlighted that some of the markets are very difficult, specifically Uzbekistan, where we have not just normal issues, but extraordinary issues with repatriation and ongoing investigations. We're not taking it further than that at the moment.
Okay, thank you.
The next question is coming from Ulrich Rathe. Ulrich, please ask your question.
Yeah, thank you very much. Two questions. The first one is maybe the question about the additional element of the guidance. You're saying you're reiterating guidance, but you're also making this comment in conjunction with the guidance about increased risk in Eurasia. I'm just wondering whether, when you think back to the time when you initially issued the full year guidance, whether it's a question here of some bits of the group maybe doing worse or having higher risk to the downside, while others actually do better, and therefore overall, you feel fairly confident with the guidance as you did when you issued it. Or whether there's a scenario here where you increasingly see the guidance as a stretch goal and you're highlighting this to the market with this comment about Eurasia risk. That would be my first question, please. The second one is on Swedish margin.
Now you're giving some indications here how this is going to progress. I'm wondering whether in the big picture you do have ambitions or you see the possibility of actually returning to prior margin levels in Sweden, or whether what is happening and has been happening there ultimately resets the attainable margin. In other words, I'm trying to get through what is transitory here and what is more structured, whether you have any color on that. Thank you very much.
Thank you, Ulrich. Let me start from the end and talk about a little bit Sweden. I think we are investing heavily and we're going through a transformation in Sweden. We have clearly said that not only for the group, but also for Sweden, that investment and that transformation should lead to higher EBITDA. We are more focused on growing the EBITDA and that therefore also what is going to help us on the cash flow over time. There's a two-year period where we will work hard on these transformation items, and that will impact the speed of how we recover, but it will also be the critical factor in recovery. On the guidance and Eurasia, we have an increased uncertainty. I think it's easy to see how hard it is to predict the last two quarters with the changes in Kazakhstan and Nepal and other countries.
There is, as you say, clearly both upsides and downsides in the forecast that could come in. Therefore it's not the time to change a guidance, but it is a time to clearly state that there's uncertainties to keep track of. We see a better Nepal than we probably all expected. We have tough times in Kazakhstan, very unclear how the competitive market will develop. In Uzbekistan, we have four players and they haven't really made a move, but they can do it quite quickly. We have not the least, a macro environment which we don't know the effects of yet. I think all those things together is making it difficult.
The question really was at the group level. I understand the situation in Eurasia. I'm really asking about the level of confidence in the group level, whether ultimately there are bits and pieces moving in the group elsewhere that make you quite comfortable or the same degree of confidence that you had at the beginning of the year, or whether really there's an incremental pressure because of Eurasia as you're highlighting here.
We're flagging a high risk and a high uncertainty, but we're sticking to the guidance. Implicitly, which you're lining out, is that we need to compensate for that somewhere else, which we believe we can do. That's what it is with 15 direct markets that you operate in. Some will go better, some will go worse. We're making a judgment on a group level that we did earlier this year, and we're still sticking to that.
Thank you very much.
We have the next question from Terence Tsui. Please ask your question, Terence.
Yeah, good morning. I had a question on Uzbekistan. You mentioned in the press release the fourth entrance. I have just wondered if you can share with us whether you have seen any impact from them on your customer base, and whether you have had to respond in any way. Secondly, just on Denmark, just interested on your latest thoughts around the regulatory process. Do you remain optimistic that the transaction still gets approved? Thank you.
Last one is yes, we are working with a constructive dialogue with Telenor and the European Commission and Commissioner. We are progressing pretty much according to expectations. This is a deal that will be under scrutiny. We expected that, and we are still sticking to second half as a prediction. On Uzbekistan, Christian mentioned there is now four players. The question is how much impact have they actually had? You will probably say very low so far, but of course, will make their way into the market over the next quarters. The fourth one is really just present in parts of the capital, where the MTS is broader already. I wouldn't label Uzbekistan as a market where we see price wars at this point. However, you have seen the growth come down, but that's more on the natural progression of the very high comparables.
Okay. Next question, please.
The next question is from Alan Nichols. Alan, please ask your question.
Hi. Thanks for taking my question. I was just wondering on the, you received the dividend from Turkcell, and is that a sign of more cooperation amongst the various owners, or are there still issues with ultimately control over Turkcell? Thank you.
Thank you. No, that's absolutely an evidence of a clear cooperation where we work together to achieve the dividend. That happened in late Q1. Then we removed all the uncertainty in Q2 with actually cash being paid. However, I'd like to emphasize the fact that the major problems are still unsolved. We're not on the board with 38% shareholding. We're not on the board. We're not happy about that. We're monitoring this from all angles that we can. Not being on the board, very present in Turkey, very engaged with the company as a large investor, but we want to get on the board. That requires a solution on the top level, where there's still a lot of disputes ongoing. I think, as I've said previously on these discussions, that we have a much better climate when we discuss these issues.
Thank you.
The next question is from Maurice Patrick. Maurice, please ask your question.
Yeah. Hi, it's Maurice from Barclays. A quick one on Swedish market. On the B2B side, you did say you saw some stabilizing in the SOHO SME trends due to IP-based cloud. The enterprise, clearly tougher. Is that more around just the timing of which enterprise customers react to your larger customers are just much slower in terms of their upgrade cycles, or is it more structural? Just as a quick follow-up on the Swedish side, you talked about price increases. Do you think there's scope for bigger price increases in the future, given the clear utility you have from fiber and fixed-line and video, so more pricing power in the marketplace? Thank you.
Hi, Maurice. Thanks. On the last one, I think that's what we will test segment by segment, quarter by quarter. We believe so, I believe so that we should be able to price up on a service where there are huge demand, you should be able to price up. That's the commercial excellence that we need, and we're working hard on that. On the B2B side, you're right. This is cyclical. This goes in contracts, two, three, four, five-year contracts even, getting shorter and being renegotiated more often. That's where we take the opportunity to take the step with the customers into the future, which requires a different pricing model normally, especially for the customers coming from old technology, fixed PSTN technologies going into IP-based solutions and services. That's the nature of the Swedish market, and it is a bit of lag among the larger corporates.
The good news here is though, we're keeping market share in terms of subscribers and the lines as such, but we are repricing in many aspects.
Very clear. Thank you, guys.
Thanks.
Thank you very much. The next question is coming from Georgios Ierodiaconou. Please ask your question, Georgios.
Hi. I was wondering if we could go back to the guidance. I know earlier you were asked about Sweden and whether it could grow in the second half of the year. In Europe, which is a bit more predictable than Eurasia, could you perhaps
Give us a similar indication whether you think EBITDA growth is possible in the second half. If you could comment perhaps on some of the smaller markets. I know you commented on Finland and Norway, but perhaps on Denmark and Spain, which tend to be really volatile because of the low margins that they deliver, whether you would see drivers of better or worse profitability in the second half. Thank you.
I will not be fully compliant with your question here, but I'll try to guide you a little bit. If we start with Spain, then in the south, as I said, we have a much more even and stable profitability way of working this year, and that will continue. I would say we feel quite comfortable how to switch on and off the acquisition cost and work with a profit in that market, keeping our 7% market share. We have a small uplift there, which is positive, we haven't talked about in both Lithuania and Latvia. It's small countries, but it is actually helping, and they also have a positive trend after many years of negative growth and cost-cutting. Finland, we talked about positive build revenues suffering from fixed, tough journey in transformation, and an ambition in service operation or customer operation.
I like to guide you a little bit on looking at the comps instead of asking me about the second half profitability for these entities.
Thank you.
The next question is from Andrew Lee. Andrew, please ask your question.
Morning, everyone. A couple questions. Just firstly, on Sweden. Tele2 doubled its data bundles a few months ago, and everyone was concerned, all competitors were concerned that they're basically front-loading the growth opportunity in Swedish Mobile. Tele2 started talking about a more difficult upselling situation in Sweden at the moment. You're expecting an uplift in B2C Mobile. Can you help us understand a little better just what's going on here? How do you see the growth and upselling outlook in Swedish Mobile trending? Perhaps more on a 2-to-3-year view as well in light of that. Second question was on fiber rollout. We've heard from other companies about them using other or new technologies to reduce the cost of ultra-fast broadband.
KPN, for example, has found it has multiple copper lines into each house and can actually use super vectoring to deliver 300 megabits per second plus. Do you have any opportunities here or are you working on anything here to kind of reduce the cost or increase the returns of your ultra-fast broadband rollout? Thank you.
Thanks. The consumer mobile again, and I think you're very spot on in your question, and I've answered part of it already, that we're working on a stepwise approach to try to monetize. Trying to stay away from going all out in the almost flat rates that are out there from some operators. Once you've gone flat rate, yes, there are no way back. Once you take a stepwise approach, you can still then gradually monetize. That has been our strategy and is our strategy. If we change that, we will talk about it. Therefore, when we say we see upsides, we see upsides. On the fiber side?
On the fiber side, it's a good question. We do also experiment on different kind of production methods. We need to balance the long term to be very long term. We don't want to rebuild this after three, four years. In the same time, there is areas where it's too expensive actually to go in with fiber right now, and there we do experiments with other kind of mix between traditional copper and fiber, such as also KPN is doing. I know their way of doing it as well. Also, even more important actually in the typical base fiber build-out we're doing, there we really are also experimenting getting that cost down with certain machines and certain ways of working and making sure we build the right way from the beginning and not have to come back.
Thank you very much.
I think we have time for one final question here. Please operator.
Thank you very much. The final question is coming from Sa Dhillon. Sam, please ask your question.
Hey, guys. A lot of the questions have been answered already, I guess. Could you comment on the new Turkcell CEO? He's changing strategy at the company. He's very publicly telling investors that he wants to leverage up Turkcell to best part of 4 times and internationally expand. As a very large shareholder, as you mentioned, what do you think of that as a strategy? Cheers.
We're very clear to Turkcell the way we can be, without being on the board. We express our views in investor relations settings to the management of Turkcell and to the chairman of Turkcell. Then we meet, of course, regularly in various forums, CEO to CEO. We'll have to monitor and see what they do, and we will when they do things that we don't like, we'll speak about it from a large shareholder point of view.
Okay. Cheers, guys.
Marietta, I think we conclude. Thank you all.
Thank you.
To the ones in the room, there is also Hélène here, new Swedish CEO, and Erik Hallberg, I think is also around the corner somewhere there, heading the region. Please feel free to