Earnings Call: Q2 2015

Jul 17, 2015

We have a little bit of a new start up today. We're present in the Lobbeov TD Asana headquarters, but hopefully everything will work fine. And not to make you too confused, we have the same lineup as usual. And I start to present Johan Dennerleggen, our CEO and after that, Christian Louiga, our CFO will come in. So please join. Thank you, Jesper. And I'm told to not to be too far away from the mic. It works fine here. Excellent. Welcome. Summertime and for those of you online, there is also ice cream here in the lobby, I can see. So we will take you through quarterly report number 2. 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 and also positive that we're taking steps on our innovation agenda. So 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 and 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 SEK 4,700,000,000 dividend that has arrived safely into the bank accounts of Teleosmera. Looking at Norway then, 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 broader network on 4 gs, 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. And this is really the first time we feel that we have a fantastic opportunity also on quality and coverage versus our main competitors. So that's great news. We also have an organic service revenue growth in Norway of around 3% driven by consumer. And we are committed to the 98% 4 gs coverage over the next 18, 24 months or so. 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 and A, you can see the service revenue reaching almost up to EUR 2,000,000,000 for the quarter and EBITA EUR 7.30 billion. And what is really pleasing is that the synergy takeout and the effects of the M and A activity is ahead of plan. So strong integration activities from the team, realizing synergy ahead of plan, raising our estimates for this year from around 300 that we talked about last quarter to about €700,000,000 already this year. And then of course, it impacts also the synergies that we talked about full run rate that we had previously around SEK 800,000,000 with full effect in 2016 is now up to SEK 1,000,000,000 full year 2016. And that is obviously very, very pleasing and we are glad to follow this progress further. So that's Norway as a highlight. Looking at the Swedish side then, there are a mixed picture and you know this. 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. But we have a pressure on fixed telephony obviously not just in consumer, but also on the enterprise side. And moving to enterprise side, we have a general pressure still. And these are the same causes as we have talked about many times here in this setting before. And we don't see that easening 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. And also 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. So 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 and the impacts of our investments in the marketing activities and the mix of the 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. And the hardware business, obviously, is a very important part to get right because it has a margin dilutive impact. But we are working our way to improvements on the investment side in Sweden. So better than last quarter. Then we have we move to Eurasia, and it's a different type of picture. We have some really good news, but we also have some not so good news. And 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 and FX and the high uncertainty and it is trickling down into the consumer behavior and consumer spend both on consumer enterprise. Then we have a very rough competitive situation. I'll come back to one market specifically in the next slide, which is Kazakhstan. But apart from that, it is an okay stabilization and 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. But I'll come back to that during the outlook discussion with Christian. Just a few words first on Nepal. We know 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 and then also to make sure that the business in itself wasn't badly impacted. And I'm glad to say that we have managed on all those accounts and also seen that the numbers are holding up in Nepal and we have taken some nonrecurring costs in the quarter as well, which Christian will take you through later on. Then let me move to Kazakhstan, which is clearly speaking 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. But you have to look further to what's actually happening in Kazakhstan. Beyond the macro aspects, we have a price war situation. And that has been going on for the last 2, 3 quarters, but intensified in the Q2, and 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 a lot of you actually more data, you get free calls, free SMSs already in Kazakhstan. And 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 called Active. So we are we're seeing some good pickup on this Hello Kazakhstan proposition. And 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 and that's while maintaining an EBITDA margin about 50%. So under the circumstances, the team is doing fairly well and 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 and 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. And also on the competitive operations, we are clearly investing our way into a better future here with which I'll come back to as well. And then we are exploring opportunities close to the core. And we've told you this before, and we are working on various partnerships across these various areas. And in the quarter, it was quite heavy on that side when we have some music initiatives that is portrayed here today with and also displayed on this slide. And 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. And we had a situation where 4 gs is leading the way. Internet traffic is booming. 4 gs penetration is growing rapidly. And that is opening up a completely different behavior among our customers. And we need to be stay relevant in this field. And 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 more strategic deeper partnership, where we also invested to show our commitment and belief also in that business model. And then lastly, Sound Industries, we announced, I think it was like 9 months ago. And at the time, we didn't know, of course, all about what's going to come. But yesterday there was a very interesting launch where you have 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. And it's one attempt to see if we can stay innovative and relevant with our customer base, supporting and working with partners. Then to some of the heavy lifting that is going on in 2 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. And these are some of the measures that we have put out to reduce complexity, improve customer experience and then eventually also improve our cost base. So this is a program that is investing SEK 2,000,000,000 over 2 years to save SEK 2,000,000,000 on OpEx going full speed into 2018. And we are broadly speaking on track. We are have invested about SEK 300,000,000 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. So 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. So Christian, with that, I would leave it to you to take us through the numbers, and I'll be back for Q and A. Thank you very much. Hello, everyone. Welcome, and 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. So we have a quite solid quarter, I think, and it is stable in the base with build revenue in the Nordics, very stable, and I will come back to that. Revenue growth is up 8%, and the profit is up 84%, very much depending on the ForEx exchange, of course. And 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, and it's from a weakening Swedish krona. Therefore, you can see a lot of currencies like the Nepalese rupee and kasakteenge, very strong on this picture. But also, we have to remember the biggest base is in euro, and euro is up 2.8% towards the Swedish krona and has a good impact also on the base. If we then go to the different elements of the revenue, build revenue is down slightly in the quarter. This is related to Eurasia and primarily Kazakhstan. Both Sweden and Europe is up in the quarter. And if we look at the different parts of that in the build 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, but the uplift and upgrade of the impact will come in quarter 3. The interconnect is flat, but we have 2 strong growth companies in Uzbekistan and Nepal, and 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. And on fixed, it continues to be a decline, primarily Sweden and Finland. And 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, and that is from the improved optimization of our way of working with the cost related to this. We're not there yet, as Johan has said, but we have taken a good step. And in Europe, it has increased. One reason for the increase in Europe is Spain. Last year, we had a quite weak quarter, and I'll come back to that shortly. The EBITDA is up 4% in reported, and this is, of course, an effect of the currencies. The acquisition in Norway compensates for the negative growth in local organic. So 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, but also a little bit higher cost on that service revenue and relationship wise. And that's on the off net minutes that we have added in our packages like our competitors have done as well. If we then 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. And then we have a decline in fixed in Sweden. And in Finland, we also have a decline in fixed, but also an increased ambition in customer operation and that we talked about already last quarter. A short recap then 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, and we then bounced back quite heavily, both on very low cost for marketing and subs and then a high profitability. This year, we have a much more stable and even subscription intake, but also profitability in Spain. And that's the reason why the comparisons becomes a little bit odd here. If we look at Sweden in quarter 1, we talked about 3 elements that impacted the profitability. 1 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 2014 from recalculating our big pension fund base that we had. So it was a small comparison difference, but it's important also to understand that when you look going forward. Finland, we talked about. And 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 2 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 EUR 300,000,000 over these two quarters. On quarter by quarter, we have still increased with EUR 1,000,000,000. All three regions are behind this increase. If I start with Sweden, it's network related and fiber related. 60% is 4 gs 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 4 gs, 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 4 gs 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 duration impact comes from Uzbekistan, Nepal and Azerbaijan. And you may wonder why it's not Kazakhstan part of that increase. We did a quite high uplift in Kazakhstan in quarter 4 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. On 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. So now we have an ambition of 55,000 SDUs during the year. We have sold all of them already. So now it's just to deliver before the end of the year. And the impact from the revenue 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 a same EUR 4,700,000,000 and that is coming through net of taxes paid already. We should remember also that we have a EUR 2,000,000,000 coming pretty much from Russia soon on our late payment of the shares we sold in MegaPharm. And 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 68,000,000,000, SEK 1.91,000,000 net debt to EBITDA. The impact here as well is that we can see an M and A activity in the last 12 months. It's the Norwegian acquisition. It's Spotify. And then we have some smaller acquisitions coming through. And 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 2 per share, which evens out at SEK 13,000,000,000. Just then 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. And 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. And we do that with also keeping a solid balance sheet. As today, we have no changes in our rating, which is Standard and Poor's is A minus stable outlook. That's all. All right. Thanks a lot. And I think it's time to open up for some questions here. Very much. Okay. Thank you. It's Erik Persch, Deutsche Bank. Firstly, I think you did surprise a lot of the service this quarter by investing in Spotify. Are you willing to tell us how much you prepare 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? And then thirdly, just on a number, how many fiber installments were invoiced in Q2 in Sweden, please? So let me take 1, 2 and then you take number 3. On the investments and partnerships, we're not predicting any more of that type in the near term. But we also don't earmark any specific for investment at this point in time. As you know, this is a core part of our strategy in taking steps into adjacencies, which we believe will benefit our core. And 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 Teliasenorra going forward. So 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 have to we need to move through some more turbulence, I think, because it is price war going on. And in the price war, the market leader with superior margins will suffer more than the challengers and that we have seen. Now we are in the market with a proposition that is aggressive, but not the most aggressive. And 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. So this is a tricky balance to get right. We shouldn't expect the short term turnaround on that. Christian? Yes. On the connections on the private 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. Or 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 3 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. But 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 in quarter end of last year and quarter 1, and that will have an impact itself by €80,000,000 on Sweden alone between the first and second half. So these kind of activities we have done, but we haven't talked so much about them. All right. Thomas? Thank you. Thomas Sieg 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. So whilst you're making this pickup, it's the sort of hardest time perhaps. So 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. And then the cost side that Christian talked about are the 3 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. Once I go to Mike, I'll throw in a few more. On Norway, can you say anything about the market development this quarter? We saw Iosnet launch soft launch perhaps. Have you seen any sort of impact from them yet? And do you expect any sort of changes in the next part of the year? And then 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 4 gs pickup and prices 4 gs prices are at a premium. So sort of what's happening here? Why isn't telethunder benefiting at all at the same level? Thanks, Thomas. Norway first. Market dynamics, I think we're a 3 player market on the network side and MNO side and that will continue to heat up, I think. You've seen 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. But 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. So if there was something as an effect of the acquisition, maybe we will dynamics drastically, but we expect it to increase. But we are ready for that competition now. It's 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 that we need to fix. We have a situation in Finland where we have tried to move the market to a more kind of a better monetizing model for data that is not working. So we just need to get in the market on the same terms and get back to winning also monetizing. And 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. And 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 I should move on to the conference call. Operator, could you please open the line? Yes. Sure. Thank you very much. And so the first question is coming from Peter Nielsen. Peter, please ask your question. Thank you very much. A couple of questions please. Firstly, if I may just return to the outlook just more specifically on Sweden. I mean 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 will comment a bit that will be much appreciated. And 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 sort of the synergies from the traffic from Toyota. But if you could elaborate a bit that would also be useful. And thirdly, can I just ask Johan, you told us for some time that regarding Spain Joergio, you were sort of waiting for the orange gesture remedies as obviously that might have an the remedies the remedies? And has that supported Joico 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 Kristian will take the first one. Thank you. Joico, as you've seen in the quarter, we continue to win against the big 3 market share wise. We have a model that works now with a good data proposition, but we haven't solved our long term strategic problem. Where we had and we talked about it, where we had our eyes on the remedy discussion going on, where we were not very excited about what was offered from Jaffel and Orange. And we were very clear on that, that that was not something that we believe would be value creative in short and medium term for OIGO. And therefore, we are not part of that for the moment. On the Norway side, synergies, yes, they're realizing faster across the board. So 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. So it's across the board you have synergies. But if I should summarize it one way, it's 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, but I will not go into giving you a guidance if it will be flat year on year. Okay. Thank you very much. And the next question is coming from Jakob Bluestone. Please ask your question Jakob. Hi. Scott, one question just to follow on on the guidance issue. Just Christian, you mentioned that there were 3 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 onetime connections? And then 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. It's a good point. I was actually thinking about it when I talked before, and it's both, of course. So we have a bigger installed base that will have then a higher ARPU in the second half. And then 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? I don't want to we have we can say like this. In quarter 2, we have increased pricing on TV. And first of which is on related to the triple play of course with fiber. We also in MDU side, we have done some price increases in the quarter. And then other than that, we have done on mobile side. 1st July, for example, we have increased the price on our lowest 0.5 gigabyte offering to from $199,000,000 to $239,000,000 So we have price increases a little bit all over the board. And they will have an impact, of course, in the second half. Great. Thanks. And so the next question is coming from Roman Arboza. Please ask your question, Roman. Thank you for taking my question. My question is related to Sweden mobile and particularly the consumer market. And so I understand that your growth has slowed down somewhat from plus 6% to plus 4% in the quarter. So I 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 and the double data environment, you were obviously very keen to get out of this double data promotion mode. This hasn't proven to be possible. So 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? And also finally related to mobile, if I may, just in terms of the additional go to market cost that you were talking about to Q1, which was €180,000,000 Were there any costs of this nature this quarter? And then do you expect any terms of 3Q? Or have you stopped sort of spending aggressively on the various promotions that you were doing up until at the end of May as I understand? Yes. I think I got all your questions. I was a bit weak on the line there. But Sweden mobile, yes, we have then 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 1. So in that sense, we shouldn't be happy. But remembering that we are trying to take step by step approach here to monetize to optimize the monetizing, not be too eager to jump into flat rates where it looks like people are moving or operates are moving. We're still creating some resistance to that as we monetize moderately, I would call it, at this point of time. So 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. And I'm not going to go into the details of exactly how much we are trimming on what line. I can just say that we have strong focus on our SAC engine both on retention engine and we're optimizing those investments across the board, but remembering also that the comparables are slightly better this quarter than Q1. Equipment sales in absolute terms are about the same level. So this is more about trimming it even more going into second half. So 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 Khamset, please? Sorry, could you repeat please? In terms of the working capital outflow this quarter, how much was Kazakhstan handsets? Kazakhstan handsets wasn't that big actually in this quarter because Kazakhstan is about EUR 300,000,000. But in total, we did actually most of that purchase in quarter 1. So but it has an impact. But I think you need to look also a little bit on the cash flow over 2 quarters or even sometimes more because we have a big shift in payment terms depending on the year if it comes on the 1st 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. So 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. Right. Let's move on. Could you please limit your questions to maximum 2 questions? Maybe we should move on here, move over ahead to the floor. We have one question here. Stefan Gossang, Nordea. One of the larger deviations this quarter was in Nepal on EBITDA. And here, you're right in the report that you benefited from international, both voice and data traffic. Can you quantify the impact from higher international traffic this quarter? And has this continued into Q3? Or has this stabilized to a more normal level? So Nepal, it's a mixed emotions quarter, as I said in my presentation. But if you take the pure financial view on it, it has been a lot of traffic obviously in Nepal, both incoming but also domestic. But the majority part of the increase is coming from the international incoming. But we have seen a strong uplift also on domestic traffic as a result of a lot of the communication needs. And 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. And even though we actually gave away some free minutes and data, we have this uplift. Thank you. All right. Should we move go back to the conference call again. Operator? Okay. Thank you very much. So the next question is coming from Nick Rejal. Nick, please ask your question. Yeah. Good morning. It's Nick from SocGen. Could I ask 2 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 cord play launch or all the IT systems ready, etcetera? And 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 guidance? Or would that have to be something separate? And then 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 foreign exchange? Could you just tell us how you're thinking about Eurasia please? Thank you. Nick, thank you. The Quad Play question, I think I haven't given you any time line for any launch. I've said that we are working hard on understanding how we could get value more value out of combining products across our markets where we have the capabilities. And as I said, we are starting the most 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 the system wise as you pointed out. And very, very particular about not discounting too early on any of the product mixes. So 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, but that happens in many places. So you just need to adjust and get your act together. And then we have a high competitive pressure, which we're working to mitigate. And 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. So we're not taking it further than that at the moment. Okay. Thank you. And the next question is coming from Ulrik Rathe. Ulrik, please ask your question. Yeah. Thank you very much. Two questions. The first one is maybe a 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. So I'm just wondering whether when you sort of 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 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. You're giving some indications here how this is going to progress. But 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. So in other words, I'm trying to sort of get through what is transitory here and what is more structured, whether you have any color on that. Thank you very much. Thank you, Ulrik. 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. And 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. And there's a 2 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 a 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. And there is, you say, clearly both upsides and downsides in the forecast that could come in. And therefore, it's not a time to change a guidance, but it is a time to clearly state that these are 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 4 players and they haven't really made a move, but they can do it quite quickly. And we have not released a macro environment, which we don't know the effects of yet. So I think all those two things together is making it difficult. Okay. But 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 to 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? Look, we are flagging a high risk and a high uncertainty, but we're sticking to the guidance. And then implicitly, which we're lining out is that we need to compensate for that somewhere else, which we believe we can do. And that's what it is with 15 direct markets and 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. And 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 4th entrant. So I just wondered if you can share with us whether you've seen any impact from them on your customer base and whether you've had to respond in any way. And then 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're working with constructive dialogue with Telenor and the EU Commission and Commissioner. And we're progressing pretty much according to expectations. This is a deal that it will be under scrutiny. We expected that and we're still sticking to second half as a prediction. On Uzbekistan, Christian mentioned there is now 4 players. And then the question is how much impact have they actually had? And you will probably say very low so far, but of course will make their way into the market over the next quarters. But one the 4th one is really just present in parts of the capital, where the MTS is broader already. But there 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. Next question please. And so 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. Now that's absolutely an evidence of clear corporation where we work together to achieve the dividend. That happened in late Q1. And 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 percent 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. And then that requires a solution on the top level where there's still a lot of disputes ongoing. But I think as I've said previously on these discussions that we have a much better climate when we discuss these issues. Thank you. And the next question is from Maurice Patrick. Maurice, please ask your question. Yeah. Hi. It's Maurice from Barclays. So a quick one on Swedish markets. On the B2B side, you did say you saw some stabilizing in the SOHOS meet trends due to Ibase Cloud. The enterprise clearly tougher. Is that more around just the timing of which enterprise customers react your larger customers? Are they just much slower in terms of their upgrade cycles? Or is it more structural? And 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 sort of fiber and fixed line and video and more pricing power in the segment by segment, quarter by quarter. And we believe so. Segment by segment, quarter by quarter. And we believe so. I believe so that we are should be able to price up on a service where there's huge demand, you should be able to price up. But 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 2, 3, 4, 5 year contracts even getting shorter and being renegotiated more often. And 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. I mean, there is a bit of lag among the larger corporates. The good news here is that 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. And the next question is coming from Georgios Irodekano. Please ask your question Georgios. Hi. I was wondering if we could go back to the guidance. I know earlier you 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? And 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. Will make it I will not be fully compliant with your question here, but I'll try to guide you a little bit. But 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. And I would say we feel a profit in that market, keeping our 7% market share. Also, we have a small uplift, 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, many years of negative growth and cost cutting. And Finland, we talked about positive build revenues suffering from fixed, tough journey in transformation and an ambition in service operation or customer operation. But 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. And the next question is from Andrew Lee. Andrew, please ask your question. Yes. Good morning, everyone. A couple of questions. Just firstly on Sweden. Obviously, Telesys 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. And Telesys started talking about a more difficult upselling situation in Sweden at the moment, but you're expecting an uplift in B2C mobile. So 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? And perhaps more on a 2 to 3 year view as well in light of that? And then second question was on fiber rollouts. So we've heard from other companies about them using other or new technologies to reduce the cost of ultrafast broadband. So 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 learning here to kind of reduce the cost or increase the returns of your ultrafast broadband rollout? Thank you. Thanks. The consumer mobile again then 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. And once you've gone flat rate, yes, there's no way back. And once you take a stepwise approach, you can still then gradually monetize and that has been our strategy and is our strategy. And if we change that, we will talk about it. So therefore, when we say we see upsides, we see upsides. On the fiber side? Yes. 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. I mean, we don't want to rebuild this after 3, 4 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. And I know their way of doing it as well. But then 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. We have time for one final question here. So please operator. Thank you very much. So the final question is coming from Sanddieland. Sanddieland. 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 Turk 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 the Chairman of Turkcell. And then we meet, of course, regularly in various forums CEO to CEO. So 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. Oleg, I think we conclude. Thank you all. Thank To the ones in the room, there is also Helian here, a new Swedish CEO and Erik Hallberg, I think he's also around the corner somewhere there heading the region. So please feel free to