Earnings Call: Q4 2014

Jan 29, 2015

Okay. Good morning, everyone, and welcome to TD Ameras Q4 Presentation. I'm Jasp Perrigo, Head of Investor Relations. And with me today to present, as usual, I have our CEO, Johan Dennerlein and our CFO, Christian Loehge. We hope to close this session within 1 hour. And after their presentations, there will be plenty of time for Q and A within this hour, we hope. So please go ahead, Johan. Thank you, Jesper, and good morning, everyone. Also good morning to you on online. To you, I can say it's a gray and windy misty morning here in Stockholm. Looking at the Q4 and the yearly numbers, we thought about starting off with one number. And the one number we'd like to talk about today is 4, and it's all related to Sweden because Sweden is in the report, as you may have already seen, quite a solid quarter. First of all, 4 gs population coverage is now exceeding 99%, which has been a target set early on for us, which we achieved in Q4. That's great. We also saw 4 gs traffic overtake 3 gs traffic for the first time, also a sign of the data boom and the Internet boom that we see in our networks. And on the fixed side, we are now connecting 1 villa every 15 minutes. So 4 villas per hour last year, moving up to 5 villas per hour this coming year, 15. So a EUR 4 for Sweden, maybe EUR 4 out of 5 for Sweden as a rating as well. And then moving on, some of the highlight or highlights for the year at least. We label the year 2014 as the year where we laid out a good foundation and started to execute on our new strategy and the new generation telco that we presented in the Capital Markets Day earlier in the fall of 2014. We have, as you know, implemented a country based model, a new strategy, a new operating model. And also, I think you're one slide ahead of me, Lars Scholke, back up. I think this is technology. There you go. Remembering the Capital Markets Day, we committed to invest to save and invest to grow, and we'll come back to how we're doing on that. Also a lot of work to strengthen our governance and compliance and sustainability in Eurasia and our other markets. And then we have been quite active on the M and A side in the Nordics with results in the Nordic, I should say. Hopefully, also shortly announcing the Norwegian deal to be completed. We're expecting the results of that next week. We've also been very active on other M and As and other business development, but maybe not with the same results yet. We have talked a lot about Spain last year and Turkey. And the latest news, by the way, on Turkey, as you saw yesterday, the CEO of Turkcell is stepping down, and I'll come back to that a little bit later. Now we can move on and talk about Q4. We have some let's see if this can also move. It is moving slowly. Here we go. Some highlights and lowlights for the quarter. The Swedish operations is strong, especially on the mobile service revenue, and I'll show you a bit of those numbers later. We talked about the execution on our 4 gs and fiber, which are highlights. And then to mention, one of the Eurasian countries that are managing to stay clear of the macro turbulence is Nepal, which is delivering strong performance in the Q4. On the weaker side, we see Finland for the quarter, especially on the cost side, also having some headwind, as you know, on the interconnect and regulatory side in Q4. We are seeing quite heavy pressure on the service revenue and the revenue in Kazakhstan and Azerbaijan, which we'll cover separately as well. And then you know already our over SEK 2,000,000,000 write downs mainly related to impairment of our operations in Q4. So those would be our key messages for the quarter. Then taking a look at the key numbers then. You have them, you've gone through them. But just to recap, there is a net sales decrease in 2.2%. We are keeping the margins for the year, but declining slightly in Q4. And as usual, if you look to the right, our CapEx goes up in Q4. It tends to do that in this industry, ending on a high with the CapEx delivery and also this year that goes for TeliaSonra. Moving in then to Sweden being the part of the highlights for the quarter, a very steady performance, mainly driven by the mobility side, but also the fiber side is delivering steady results. We have a slight decline on the margin side, but overall, a fairly solid set of numbers. If you take a closer look at Sweden going into mobile service revenue, we are coming into positive territory in Q4, 1.5%. And if you take a look beyond that number, you have consumer service revenue, mobile service revenue around 5% growth for the quarter, but the enterprise mobile service revenue then still in negative territory. We see also the mobile data revenue growth picking up, 16.4% for the quarter. And as I said, strong execution on the fiber rollout in Sweden and reaching the announced target of SEK 1,100,000 reached homes passed. Out of that, around 750,000 are connected. Then moving into Norway and Denmark. We'll see if this can also move or I will have to go back to this old fashioned way of presenting, which still seems to be the preferred. I'll do one here then. Stable development in Norway, Denmark. Norway has stayed focused on their performance in spite of all other activities going on, on trying to get the Tele2 deal through, they have delivered a strong set of numbers or a steady set of numbers, I should say. Also in Denmark, we're keeping up high commercial activity in Denmark with good new propositions to the consumer and also to the enterprise segments with a new launch of Soho propositions that are picking up. So quite pleased with also Denmark. And as you know, we are moving into a deal hopefully also in Denmark announced last year with Telenor And that process will take some time. But hopefully, we will be able to get approval for that during the year. To remind you, that deal is the fifty-fifty JV with Telenor generating over DKK 800,000,000 in synergies yearly and creating a very, very strong mobile player in the Danish market. On the Norwegian side, 5th February, the NCA is expected to come with their verdict on our proposed deal with Tele2. We are still, as you say, hopeful that this deal will go through. And we will revert hopefully then next week with those positive news. Then we move from good, steady into slightly worse in Eurasia. For the first time in a long time, I think forever, we're in negative service revenue growth and in the Eurasia portfolio as a whole. In also net sales, we are negative. We are keeping up margins on levels that are, as I've said before, very high and they're coming down, but still above 50% for the quarter. CapEx, which have been lagging during the year, also picked up in Eurasia, investing in our Internet networks, 4 gs in some countries, but also 3 gs, taking up on the data demand that also is picking up in Eurasia. We have a couple of big drags on Eurasia relating to the big companies and countries unfortunately, and it's Kazakhstan and Azerbaijan. In Kazakhstan, there is you could say that the decrease in service revenue relates to 3 main things. One is regulatory effects, which is about a third. One is competitive and macro dynamics. And the last third is a one off effect that shouldn't be recurring into next year, adjusting some accounting. So then moving to Azerbaijan, you have similar effects of interconnect and regulatory, but also campaign market campaigns in order to regain market share in some regional parts of Azerbaijan. So a very heavy or rough quarter, both commercially, competitively, but notably, of course, also the economy, which is under pressure from the ruble and the oil prices, which are spilling over to many of these countries that are dependent not just on the Russian trade, but as an energy economy, they are affected. So this is our main focus now, and we'll come back to that a little bit, I'm sure, in the Q and A. I mentioned that the initially that the year has been a strong focus on our corporate governance, the sustainability activities. We have been talking about this throughout the year, and we will keep talking about this. And we're making strong progress in moving from words to action, upgrading our framework, our policies, our people throughout the region and also spreading to the other parts of TeliaSonra. In this coming week, we will also publish our 2nd Transparency Report, which now includes more countries, talking about our freedom of expression, where you know that we are standing up strongly and taking a point of challenge every time we are forced to comply with local laws that are violating our policies. But I have to say that I'm very pleased with our progress. At the same time, I'm always stressing the fact that we're still operating with quite high risk in many of these markets that are very difficult. Then we are looking at the dividend and we are proposing or the Board is proposing SEK 3 per share to the AGM for approval, which is in line with last year's absolute dividend and also in line with our capital markets promise to be at least SEK 3 per share. Then we move on, and this is a slide reminding us again about where we are on this journey. This is a year where we are investing heavily in our transformation, both invest to save and invest to grow, in order to come out on into 2017 with a SEK 2,000,000,000 lower cost base. But to do that, we need to invest SEK 2,000,000,000 per year sorry, for the 2 years and about SEK 4,000,000,000 to SEK 5,000,000,000 to grow in order to ensure that we get a growth platform for the coming years. For this year, 2015, it then means that we are looking at an EBITDA that's going to be around 2014 level, and we're looking at a CapEx around SEK 17,000,000,000 including the Invest TO Save and Invest TO Grow investments, which then leads us to our Capital Markets promise or ambition to deliver at least SEK 3 per share also for 2015. So those are our key parameters for our outlook. And as we have noted, we have removed revenue. We will also remove relative numbers from this guidance And protecting EBITDA and ensuring around the same level as 14% is important for us. At the same time, we need to stay firm on our investment plans in order to transform TeliaSonra into the new generation telco. With that, I will leave it to Christian to talk about some more details and the numbers. Thank you. I'll take the liberty to use the old fashioned technology here instead. Good morning, everyone. I'd like to take us back 1 year first and remind us where we started. We started with an outlook for the year with a flattish revenue and stable EBITDA margin and also a CapEx to sales around 15%. In the mid of the year, we came back due to equipment sales in Spain and said that we will have to leave the guidance on revenue to be slightly below. And this is how it has come out also on the revenue, minus 1.8%, which is directly related to Spain in this sense. If we look at the net sales for the year, this is for the full year, not for the quarter, It's 2.2 percentage point that relates to the decrease in Spain, 1.8% in equipment. The picture is very similar for the Q4, where 2.4% relates to Spain or the decrease of 2.2%. The Spanish company still has done quite well and achieved an increase of 4% in customers and reached above 4,000,000 customers and therefore protected its market share, which has been important, and then stabilizing the profitability meanwhile. Other than that, over the year, we can see that interconnect has had a slight impact. And then the build revenues in mobile have been going up and the fixed going down as we have seen so many times before. Net sales growth has been lower than 0 the full year. We have compensated that on the OpEx side throughout the year. This has not been enough to keep the margin stable, so there's a slight improvement on gross margin as well. And we can see it went up a little bit. The OpEx levels or the decrease was less in quarter 3 and now down again in quarter 4 year on year comparison. CapEx is important. I think we have talked about it before, and we work much more strategic with our CapEx today, I would say. We think about it more at least in the group management and discuss how we're going to reprioritize and work with it. This has been the case also throughout the year. Eurasia is below last year, and it started slow, has catched up in the end of the year. Meanwhile, we have taken the opportunity to think about how we need to invest and reprioritized. We have prioritized very much on fiber, 4 gs, The 2 gs, 3 gs rollout in Finland to make sure we are on par has also been important for the year. I'm very impressed with the Norwegian and the group team that has rolled out 4 gs during the second half year after we went out to the market and promised a better coverage in Norway after the Tele2 deal. That has been a very good example of where we can very quickly and swiftly make a commitment and deliver on that. The Swedish CapEx is up and it's fiber and it's 4 gs. Gs. The 4 gs and fiber together is about 60% of this year CapEx, and it was about 40% last year on average over the year. If we look then at cash flow, it's down from SEK 16,000,000,000 pretty much last year to SEK 13,000,000,000. And that difference is coming from CapEx. CapEx is high this year. So part of it is that we have a higher cash CapEx in the CapEx part, but also we have higher CapEx per se in 2014 compared to 2013. On the working capital, we are working on different elements. We're still lagging a little bit on the comparisons. I would say there's 2 positive drivers and there's 2 negative drivers looking forward. The positive is the handset setup we are building now for Spain and the Nordics. That will have positive impacts. The vendor side will also have positive impacts. The negative side will be the CapEx, and it also will be the Eurasian handset sales when we start launching that. Those will be the drivers in the future on the free cash flow, on working capital and cash CapEx. This is an interesting picture. Currencies, 4th quarter. You've all seen that it turned around and gave us a positive effect. I have highlighted here on the picture to the left some of the main currency impacting us in the quarter. We can see both Azerbaijan, Nepal, very positive. Euron is also a positive impact. We have a big euro contribution from both Finland and Baltics, etcetera. It gave us 2% plus on revenue and pretty much the same on service revenue in the quarter. And what we can say, it's very hard to predict going into next year where this will go. And of course, the risk for devaluation in the Eurasian countries is high at this moment. Where? We don't know, but it is high. So we should expect volatility in the currencies, I think, next year as well. On the profitability side, we have maybe a little bit different view that we are used to. Eurasia is down. We are used to see a positive development in Eurasia. And Johan described before that Azerbaijan and Kazakhstan, the biggest countries still are behind on their revenue, and that impacts profitability. The cost side also is slightly up in Eurasia. Salary cost is something that goes up with like the devaluation in Kazakhstan. And energy cost has been, for the year in total, higher than last year, much higher, both from capacity build out but also from the pricing. Now of course, with the oil price going down, we'll see how it develops next year in this region. But it has a high impact on the profitability in Eurasia. In Finland, we have a decrease in profitability, and I'll come back to that in a second. But that has also impacted Europe. And Sweden, I'm fairly happy with. I think it's a quite stable picture. Those who remember, we had a storm cost in quarter 4 last year, which impacts the comparison. But still without that, it's a positive development in Sweden, and it's a stable situation. And I think we will do a good job on working with the cost side that we will see more of going forward. I'd like to say that, of course, going into next year, the pace right now puts high risk on quarter 1. And I wouldn't be I would see that there's a risk for quarter 1 being lower than the average for the year on EBITDA margin development. And of course, if needed, we will act on cost to protect EBITDA for the full year. If we then take a look at Finland. Finland had higher costs than I wish they would have in quarter 4. It's a result though partly of customer activities. We have been driving a customer operation activity called Always Open during the 4th quarter that have been driving cost in Customer Care. It's where we try to increase the reachability. But it's also been other kind of resource cost for driving the invest to grow and invest to save activities. And of course, we will have to manage this and work with this going into the Q1. On the service revenue side, we maybe remember from last quarter that in September, we had a regulatory change on the interconnect, and we can see the sharp decline then into quarter 4 of the service revenue graph. And I have here service revenue with and without Interconnect. I think the positive picture service revenue in Finland still is that for the last 8 quarter, it has been improving. It's still positive or flattish. We are gaining customers in Finland. It's a positive net on total in the Q4. And on the mobile side, it's up around 20,000 customers. So I'm quite happy with this side of the equation in Finland on the revenue side. And we will continue to look at that. There is a slight indication that ARPU is stabilizing also in Finland. And we'll see. We'll follow that. It's too early to say if this if it's there to stay. EPS, SEK 0.51 last year, SEK 0.68 this year. It's a very low number. Both year, it has been reduced pretty much with 50% from nonrecurring items. These items are a little bit different between the years. And therefore, the difference is coming from nonrecurring items and minority interest. And it's the write down nonrecurring write downs on the goodwill, but also, if you remember last year, IT systems that impacts these two lines. Otherwise, it's quite flattish between the year. The interest cost has gone down on average, which helps us on the financial net, And it's very visible here in this picture. Net debt between where we ended quarter 3 and going out now quarter 4, it's remained on the same level. We have funded ourselves in the Q4 with another SEK 4,000,000,000 at a 5 year deal around 1.1 percent 1.2 percent and making sure we are having a good liquidity position and strong balance sheet also going into 2015. That's my presentation. Thank you. Good. Thank you, Christian. And I think we should open up for some questions. And I think we'll start here with the audience. So should we start with Thomas? Thank you. Thomas Heek with Handelsbanken. A few questions, if I may. Firstly, on Sweden, you continue to add a lot of fiber connected fiber households. And you've spoken before a little bit about take up rates and so forth. So any sort of trend shifts or what's sort of happening in the financials of Sweden fiber would be very interesting. Secondly, on Eurasia and Uzbekistan, you had a new competitor enter. And I just wanted to see if you could update us on a little bit what getting out cash out of Uzbekistan, if anything, changing there and how much you have restricted in the country today as it is. I'll start I'll stop there for now. Okay, Thomas. Thank you. I'll start with the Uspek question and Christian can cover the fiber. So the new entrant MTS came in during Q4. No major impact in the market in terms of dynamics or visibility on any on our numbers or our intake, etcetera. So I think that remains to be for 2015, where, of course, the 3rd entrant will have an impact. And unfortunately, with regards to the repatriation, no good news that we can report on. But we are continuing our efforts to resolve that. Okay. On the fiber side, the if you look at the onetime charges, they are remaining at the same level. There's a shift upwards a little bit between 2013,000,000 and 2014,000,000, but the trend in 2014,000,000 is pretty much flat. And you want say something? Yes. If you look on the SDU side or the Villa side where we have been talking about that Johan mentioned on the weather, took in roughly 36,000 for the full year last year, as is mentioned, for a new house for new wheelhouse per hour and that roughly a third of that came in the 4th quarter. Yes, Gelo? Sorry, Gelo Astorbe for Keneggi. If you could say something about the you've been a little bit in between efficiency programs as you ended the last one a little bit ahead of time and you have embarked on the new one. And now you're flagging that maybe Q1 will be a little bit weaker. Is that mainly related to efficiencies? So when do you expect to see an effect of the new program? And then the second question also relates to fiber. Is there sort of a timing between getting the revenues in and getting the households connected as you had a big chunk connected in the Q4, but still your broadband revenues were the growth there was a little bit weaker in the quarter? Thanks, Lena. Let me take then the efficiency program. As the SEK 2,000,000,000 investment to invest to save will not generate savings until after the investments in 2 years. Of course, we will maintain a cost focus and efficiency focus during these times to protect EBITDA for 2015. So I think with regards to Q1, your question, that's more related to what we see also the macro impacts in Eurasia. The growth is negative in Q4. And Christian mentioned that we see that Q1 may be weaker than average, and that also has an impact on the margin. So protecting EBITDA is also important for Eurasia. But no new earmarked efficiency or cost program beyond the SEK 2,000,000,000 that we have announced, but a strong focus on all costs. Yes. And on the fiber side, I think you've asked about fiber revenue trend. And we had a better more positive impact from the onetime payments in the Q3 if you look year over year than we had in the Q4. That's what we can say. But the growth rate on that is lower in the Q4 because we had a quite high pickup also in the Q4 last year. So it's still growing but at a lower pace. Okay. Stefan? Yes. Stefan Gauffin, Nordea. I'd like to start on Eurasia and particularly Kazakhstan. You had a negative subscriber intake and quite a big ARPU pressure. Can you say anything about the competitive situation? Has this changed with the launch of Autel? There's also for both Kazakhstan and Azerbaijan, you state 1 off items. What is this? And what type of magnitude did this have on the revenue side? And then also, why are you just talking about softness in Q1 given the weakness we see in Q4? Shouldn't this spill over to the other quarters as well? Finally, on the guidance, given you talk about flat organic EBITDA, given the recent development on the top line, this would imply improved margins. So where do you see improved margins to come from? Thank you, Stefan. Let me start to tick off a few and then you will take what's remaining. The CapEx situation, CapEx plant situation, as we have talked about throughout the year, we have had initiatives to regain market share, especially in some of the regions where we have been weak. Those campaigns have been quite aggressive and have still not generated the revenue uplift, but have stabilized market share in some of the regions. So it's positive effect on market share, but not yet on the revenue side. And I think just on your point there on Eurasia and weakness, yes, it may continue on top line beyond Q1, but then we have had time to adjust on cost side to protect the EBITDA. So that's what we're referring to. Guidance, improved margins, Christian? Well, I should make it easy for myself when we don't comment on margins. We comment on the flat EBITDA in absolute number. And actually, I will stay there. But on the onetime charges or effects in Eurasia, in Kazakhstan, it is actually just accounting around how we take in the buckets that we have, the 3 buckets and the data buckets you have outside and how we handle those. And you could put it on nonrecurring or other items, but we think it's more just fair to have it in revenue. And just explain it's 1 third. And these items are actually not changing the picture. So if it's 8% or 11% down in Kazakhstan, it gives us the same pattern that we need to be working with. Okay. A question over here in the front. We now look out Paletti, Finland. You said that cost in Finland is going up, but that must be taken care of. What do you mean? Which way? Well, the cost cannot continue to go up in Finland, of course. We need to have a sustainable EBITDA development also in Finland. It's a big part of our company. It's 10%, and therefore, we need to work with it. And we did some bet on the customer side, which have been positive and it's been easy to reach, but we need to find other ways to balance the cost. Which ways? Well, as Johan said, we work all over the place. Actually 3 days, I went through all the travel in Sweden, and I will do that probably in Finland. We work quite closely with procurement, working both on the CapEx side and the OpEx side. And it's been a slow implementation, but an implementation first in Sweden and now in Finland on the procurement side. We have a new head of procurement starting actually just this week. And those are the type of activities we will work with. And it will go all over the place. All right. I think we should open up for some questions from the telephone line. So please, operator, can you open up? And your first question comes from the line of Maurice Patrick. Please ask your question. Yes. Hi, guys. It's Maurice here from Barclays. So a question really relates to the dividend and the guidance and then some of the FX risks. You talk about the FX volatility and clearly there's a risk of I think some downgrade to the FX currencies. Your guidance for EBITDA is based upon I think, average 2014 FX, if you could confirm that. And on the flat dividend for 2015, if you do see a material change to the Eurasian FX rates, would that impact that dividend? Or is that your pay regardless of what happens on the foreign exchange? Thank you so much. Let me take the last one and then Christian can confirm the FX. The dividend is, as we say, at least SEK 3 per share. And that is an ambition and a very strong commitment that we have. So it should not be FX impacted. So if that happens, that will be, of course, an announcement and a completely different discussion than we've had so far. So on the FX rate, yes, of course, we stand now today. The latest one we know is the 2014 rates. But in the end, it shouldn't matter so much as long as you use the same FX rates. When you recalculate that, we have been about the same level on both 2015 2014 EBITDA in absolute numbers. Just coming from that last point. So is the EUR 35,300,000 based upon the sort of the current spot FX though? Or is it the average rates you had during the year? Rates during the year. It's the average rates. Okay. Thank you so much. Thank you very much. Your next question comes from the line of Barry Simitone. Please ask your question. Hi. Yes, I've got 3 questions please. The first is on the 3 d broadband and TV ARPUs, which were both negative this quarter. I understand that you have had a 6 month free TV promotion for fiber customers, which is partly impacting the TV ARPU. I was just wondering whether you can give any comments in terms of what kind of stickiness you're seeing on those TV customers. Are you typically keeping most of them after the 6 month repromotion expires? Or are many dropping away? Secondly, I was wondering whether you could talk more generally about the OTT threat in the Swedish market and whether you see it actually as an opportunity for Telia or more as a threat? And then finally, in your CMD, you mentioned the opportunity to invest in adjacencies close to your core. I was wondering whether you see content that's fitting into that profile. And do you see content providing a good complement to your current fiber rollout? Thank you. Let me start on that. First of all, we have campaigns both on broadband and TV, slightly different propositions, but some are discounted to get on our broadband, fiber or DSL, where you have a lower monthly fee the 1st 3 months. And some are, as you mentioned, the try TV and then pay later basically if you want to stay. And we see stickiness on that. But then it actually relates to your second question to OTT, which from that perspective may be seen as a threat, but from an overall perspective is seen more as an opportunity because as I pointed out in my presentation, data revenues are growing strongly. And of course, OTT is part of that strong data growth. So here it's a balance about having good propositions out in the relevant households or consumer segments. We do invest in adjacencies. I'm glad you mentioned that. We have launched a couple of strong initiatives in here in Sweden around health, for instance. We're stepping up our Internet proper machine to machine, Internet of Things, where we are a leading player in the Nordics. With regards to content, I think we're still on or we are still on partnership discussions and not acquiring content level. But it is an important component of the consumer demand. So we need to have it one way or another. Right now, we have a good proposition TV and it's growing, and we're launching it in more markets. We also have our own OTT TV product that has been launched in Finland and Denmark and in the Baltics as learnings from the Swedish success. So yes, we're very active on OTT and traditional business models here. If I can just ask one follow-up. On the TV ARPU point, do you expect that to stabilize soon? Or do you think it stays negative? I think it's a little bit in our hands how aggressive we are now on the try and buy propositions. We're still in kind of building up a base, securing the base. So we'll come back to that specifically as we move along. Okay. Thank you very much. Thank you. Thank you very much. Your next question comes from the line of Georgios Tsarakis. Please ask your question. Thank you for taking the questions. I've got a couple. The first one is around the associates. And I think Maurice earlier asked about the impact of ForEx potentially on your midterm dividends. I was just wondering if you see any risk of potentially megaphone dividends given where we are today and whether that could impact your medium term dividend policy? And I think at the start, you mentioned you commented a bit on Turkcell. I'd be interested to see if you are a bit more optimistic around the Turkcell dividends resuming. And then my second question is around Finland. You mentioned the customer care costs. I think during the quarter, you had a network outage that lasted a day or 2. Is there a negative impact you've already seen in the Q4 related to this? And is it on the top line or on the cost side? Or is it something we may see in the Q1? Thank you. Okay. Let's start with our associates related questions. I think Megaphone, we as you know, 25 percent to Board seats and following the company closely, which is well positioned in Russia, even if the macro and the impacts in Russia is getting very, very tougher, very much tougher. But there are no indications at this point of time that that should be in any danger. If so, then of course, then Megaphone would have to update on that. With regards to Turkcell, a lot of things are going on. We're approaching a deadline. We have talked about as a deadline, but it's actually more of a date in March where we have some pressure to resolve our shareholder matters before the Capital Markets Board in Turkcell has the potential or the opportunity to take control of the AGM, and we don't want that to happen. So we're working very hard to find solutions to a very complex situation. And as usual, we will have to come back if we have any updates regarding corporate governance, regarding dividend or any other resolutions to the matter. And then just noting then that the CEO resigned yesterday. And on a personal note, I think he has done a good job for Turkcell, and we are looking forward to getting a new strong CEO on board. And then can you repeat the last question on finished cost? Yes. I mean if I could just follow-up on that. If the megafone dividend for some reason is no longer recurring, will that affect your own dividend policy? Or you think you can't sustain a dividend without it? In our dividend policy, we have taken into consideration various risks obviously. And we are sticking to our at least DKK 3 per share. And then if there are material developments, then we have to talk about them as we go along. But there is not at this point in time any risk to the SEK 3 that we have mentioned. And on the Finnish side, the outage did not impact the top line or the cost side. And actually, we have seen a positive development on our customer satisfaction measures and the NPS that we measure in Finland. Even if the outage was, of course, unfortunate, it didn't have a material impact on the quarterly financials. Perfect. Thank you. Thank you very much. Your next question comes from the line of Terence Hsu. Please ask your question. Hi, good morning everyone. It's Terence from Morgan Stanley. I just had a couple of questions. Firstly, on the Swedish mobile markets. You posted quite solid top line mobile service revenue growth. I was just wondering if you can share a bit more data behind that in terms of things like data usage. What's the average? What's the median data consumption that you're seeing? How many customers are beginning to exhaust their data package? And whether you're seeing a material change in data usage from the new iPhone 6 or whether it's too early to say? And then secondly, maybe you can just give us a bit more of an update on Denmark. I know you hosted a conference call not so long ago, but maybe you can share with us maybe what some of the discussions have been with regard to remedies such as potentially setting a spectrum, giving MVNO access? Just a bit more update on that would be much appreciated. Thank you. Thank you. We'll come back on the data points in more detail if you want later. But generally speaking, 4 gs now 100% pretty much of the handset sales. And I said 4 gs traffic overtaking 3 gs traffic, stronger growth in Q4 on data revenues, more people, we are not specifying, topping up, reaching their limits, more people and customer upgrading to larger buckets. And of course, then we are reviewing our propositions here if we need to adjust them. And the market is fairly rational in this space in Sweden right now. So I feel that we don't have to rock the boat in the Swedish data pricing for the moment. And for you? On Denmark and potential remedies, there's no possibilities for us to comment on the remedies right now. As you say, there is a lot of spectrum portfolio, both in Telenor and Telia. They are with different dates and different wavelengths. So it's a little bit complicated story there. We have to wait to see the discussion with the regulator and then come back later with an answer. Great. Thank you. Thank you very much. Your next question comes from the line of Henrik Horst. Please ask your question. Yes, thanks very much. I had two questions on Swedish mobile as well. I guess looking at the data usage, you're seeing a bit of an acceleration. I guess a lot of that is continued adoption of 4 gs. Can you maybe talk a little bit about the customers who've now had 4 gs for a year or 2? Do you see data usage continue to grow after that kind of initial uptick? And then secondly, in terms of competition, we saw Combiq, obviously, in the lower end, doubling the amount of data in the bundles. And maybe if you have any view, do you view that as quite an aggressive move? Do you think it's not going to change very much? Or any initial thoughts on that? Thanks very much. Thank you. In terms of the competitive dynamics in Sweden, obviously, we are there are many brands out there, premium brands, fighter brands that are launching various propositions. We are very careful by doubling or throwing away giving away too much data. We're taking step by step, Telia brand specifically. And our fighter brand Hale Bopp is a little bit more aggressive, a little bit more up against the price players out there, which we are of course reviewing. But I note the Q4 as a 5% service revenue growth in consumer is very solid from and picking up to for highest in a long time. And that is on the back of this increased data demand and people and our customers starting to like the propositions that we allow. So we shouldn't change radically, but we need to fine tune to make sure that we stay relevant. And I think the question on kind of 4 gs, if the traffic is picking up, and of course, the answer is yes. And then we're monitoring the one off effect of going from 3 gs to 4 gs and how it develops from there onwards, but we're not sharing that externally for the moment. We may review that going forward. And we can say that if you look at the share of 4 gs subscribers in our network now is up to roughly onethree. So it's from around 25% last quarter. So it's increasing quite rapidly. And the 4 gs traffic has passed the 3 gs, as we said earlier. And the total traffic in our network has gone up around 50% in 1 year. So it gives you a view that it is increasing. Okay. Thanks very much. Thank you very much. Your next question comes from the line of Peter Nelson. Please ask your question. Thank you. A couple of questions please. Firstly, the last 12 months we've obviously spoken a lot about the B2B market, particularly in Sweden. I believe obviously you've made some investments, some new products were supposed to be introduced in November and Johan was mentioning you're seeing improvements in the Danish B2B market. Could you talk a bit about what you're seeing in Sweden? Have the new products arrived? And are you seeing a tangible positive impact on this please? And secondly, I appreciate there probably is limitations to how much you can tell us Johan. But you sound pretty optimistic about the Norwegian transaction here for approval next week. Do you see any risk if you can comment on this at all that the remedies might involve a potential worsening of the market conditions overall? Do you think there's a risk here? And thirdly, if I can just ask a question related to Turks and I guess I appreciate perhaps there's a limit to what you can tell us. But the solutions you are seeking in Turkcell and the negotiations, could this involve sort of a broader solution which also involves not only corporate governance, but also economic ownership potentially related to the Eurasian businesses as well? Thank you. Good morning, Peter. Thanks. B2B first, I gave you a little bit of a hint on the Soho in Denmark looking promising. With regards to Sweden, as rightly pointed out, Peter, we launched a couple of things late last year and taking them further early this year with new campaigns. Even if the numbers look slightly better, it's too early to say whether we have turned corners. So I still and that's SME I'm talking about mainly. We'll keep our focus and keep monitoring that, see if we can call it a trend shift soon, but it's a bit too early. On the larger segment, still strong price erosion, mainly on the fixed. But on mobile side, still in negative territory, as I mentioned. The mobile service revenue for enterprise is still in negative territory, bringing down the overall mobile service revenue growth. So but it's looking better even if it's not seen in the numbers. That's how I would summarize B2B. For Tele2, acquisition in Norway, yes, I have been optimistic all along, so it hasn't changed. And now we're getting very close to the date. I think we have a very strong proposal that keeps a competitive dynamics that is desired and required. And we have listened and have a very constructive dialogue with the NCA. And I hope that we have done enough to please both the NCA and the consumers. So we will revert hopefully next week, Peter, with some news on that. In Turkcell, I can't go into the root of speculating on the various options. And I can only say what I've said throughout last year that we have a different approach in the way we talk to stakeholders where we are not locked into one corner. And that means that we're looking at many options how to resolve the situation in Turkcell. Very good. Thank you. Thank you very much. Your next question comes from the line of Nick Lyle. Please ask your question. It's Nick Lyle from SocGen. Can I ask 2, please? On the Swedish side, again, on mobile, could you just talk about any impact you may have seen from the November changes in Tele2 tariffs? So that was the move to 0 contract length and some of the cut in mobile only tariffs. It doesn't look as if your churn has gone up. So any impact at all? And was that your reference, Johan, to rocking the boat? You don't see the need to change anything and rock the boat on Swedish pricing. Also, you talked about temporary B2B effect. Could you just detail what that is this quarter and whether it's significant? And the final one was on Spain. What are your options now? The rest of the market is consolidating fast. So what are the options? And how long do you think you'll have to wait to sort things out? Okay. Swedish well, let's start with Spain. It took some time to get that question. We as you recall from last year, we wanted to find a level where we both maintain or increase customer base and at the same time protect profitability. And I think the team has done a tremendous job in delivering that balance, that delicate balance in a market that is going to converge. We still have that mindset to not lose share, to stay strong, to be a challenger in the market. And there is definitely a space for Joergov to make impact. At the same time, we are open and talking to various people about solutions that are good for us and our shareholders. On the B2B side, as I said, there are no positive signals in the numbers. What is positive is that it's high activity, a lot of launches and propositions and good spirit in keeping and gaining new customers. So that's what I referred to. So still in negative service revenue growth, both on mobile and fixed for Sweden B2B. Swedish mobile, you were referring to can you just repeat that? Tele2 campaign. Yes. Yes. Tele2 campaign, right, right. Well, actually, it was a Tele2. The cuts, if you remember, the cut, the raised handset prices back in November maybe not the best timing into Christmas but lower the SIM only. Yes. But introduced a few sort of weird and wonderful things like no contract length. So has that made any changes at all to the way your customers react? You don't seem to have seen extra churn. So I wanted to see if you'd seen the effect or not. All I can say, it's been high traffic in our stores. We have a positive customer development. We have a strong revenue growth on service mobile. And that we can only speculate what that comes from right now. But we are pleased with the Swedish mobile development. Okay. Thank you. Thank you very much. Your next question is from the line of Alan Nicholas. Please ask your question. Hi. Alan Nicholas from Morningstar. Thanks for taking my questions. Couple of them first. Tajikistan and Moldova, your EBITDA margins dropped quite a bit. I was wondering what happened there? Is that temporary or is that going to continue? And in Nepal, your subscriber growth in the 4th quarter slowed dramatically. Is are you approaching saturation in that market? Or is it just something temporary? Thank you. I'll start with Moldova and Tajikistan and say that one big impact we have in both these countries is the incoming traffic from abroad. And there's high dependencies on these two countries and also Georgia on incoming calls from workers outside the country. That has a big impact. Also on Nepal, I would say we haven't done any we don't see a trend shift in the overall long term growth. It's going down from 20%, forty percent a couple of years ago to 17% right now. And that trend will continue slowly, but it's going to be very positive. We still think into next year. Thank you. Thank you very much. Your next question comes from the line of Dominic Clermans. Please ask your question. Thank you. Just two left, really. On Nepal again, what's the of a new entrant? Is there any news there you can share? Is that still a 2016 risk at the earliest? And then on convergence, you're not really talking about your family plan initiatives in Sweden anymore. Is that just not a focus anymore? Has anything changed there? And then how important is being able to offer fixed line in other Scandinavian markets you feel at this stage? Thank you. So Nepal, we repeat what we said last year and hope maybe it will take as long as it has taken, but it will be a new entrant. And we monitor and see what happens, but expect it during 2015 is our cautious advice. And then with regards to convergence, the family plan is still there. It's called Complet for mobile. We're working hard to find the right proposition here also for the full portfolio of converged offer that makes sense and has the right balance of customer loyalty and price proposition. But we are very, as you know, well positioned in Sweden to drive that and we will do it responsibly. And then we have opportunities for convergence in other markets, Finland, Baltics, which are which is also very high activity and finding the right balance of those launches. So I think expect more of that during 2015. And in markets like Denmark and Norway? Sorry in terms of In terms of being able to offer convergence. Well, we'll take it step by step then. Let's see how we do with the JV proposal in Denmark, and then we'll have to see what that means. In Norway, we are creating a true strong alternative to Telenor, and then we'll see what we need in order to take that to the next level. But let's see and complete this transaction first. Sure. Thank you. Thank you. Thank you very much. Your next question comes from the line of Andrew Lee. Please ask your question. Good morning, guys. Just a question on Swedish mobile. Clearly, all the questions have indicated that you've delivered very strong growth in consumer again, and you're monetizing that data is great execution. But what do you think could see this growth faltering? Does the slowdown of smartphone take up mean a reduced ability to upsell those data packages? Do you see any competitive risks to the monetization in the near to medium term? Or is there anything else we should think about in terms of the opportunity in mobile data monetization? Thank you. I think we don't view that as a kind of threat that people are now getting 4 gs, getting fully penetrated on 4 gs handsets to our customer. That's the starting point as we see it. And how we then monetize is a lot up to how smart we are, and it's a lot in our own hands to understand how we deliver to the customers what they need, and that's ongoing. And I expect I have high expectations Swedish mobile how to monetize data going forward because that's where we need to be excellent. And the level of customers on data centric models is now around 56%. So still some to go before we are have all our customers there. Yes. I think leading on that is Norway around SEK 85,000,000 on our data plans, data buckets. Thank you. Thank you. All right. I think we have time for one final question actually. Thank you very much. Your final question comes from the line of Joora Grace. Please ask your question. Thank you very much. 2 maybe if I'm allowed. In Kazakhstan, would you just be willing to give a bit more color on your expectations with regards to Autel, for example, or your strategy, either what you've baked into assumptions here, whether there's room to simply make a bit of room for them or whether you want sort of a tough to the bone sort of competition in Kazakhstan to keep them as small as possible. I'm just wondering how you think this is going to unfold in 2015. The second question is sort of the several references in the debate so far about this Q1 revenue risk that you will address with cost measures if it happens. Could you just explain what costs you would cut only if revenues come down? I mean it sounds a bit I'm not entirely sure what exactly this could be because if there are costs you could take out, why not take them out anyway? Why would you wait for a revenue shortfall to do so? So what sort of costs and measures are you actually talking about there? Thank you. Thank you. The Kazakh stand situation then, there's a new entrant that's going national. But I also think in terms of challenger proposition, we already have a strong challenger that has gained a lot of share and is the price leader. And that's to which to whom we have reacted a lot during the year in regaining share. So I don't think the introduction of Altell and going more national is going to change the dynamics that much, to be honest. We are already reacting and acting on the market share loss that we've had due to the challenge during the market. But of course, we are staying very close. We have a new CEO in K cell, Arty. He has a new team building and they seem to be on a good path in delivering here in tough environments as Christian also touched upon. On the cost side, it's more cautious measures making sure that we stay efficient and maybe some of the efficiencies can be accelerated. And also to protect our EBITDA guidance for the group on a full year basis, everybody needs to contribute if worse comes to worst. I understand. Can I just follow-up on this? I mean are you simply talking about taking market investments, commercial investments out of the market if revenue goes down? Or are you talking about more structured things? That's really what I'm after. We're starting on structural things, of course, and ending with the growth investments, if need be. Thank you. Okay. Then that's 1 hour.