Earnings Call: Q1 2013

Apr 19, 2013

Right. Good morning all. Welcome to the presentation TD SG and A's Q1 results. I'm Jesper Bilgoth, Head of Investor Relations. Now we'll try to guide you through this session. With me today to present, I have the CEO, Perona Blomqvist and also the CFO, Christian Louwiga. And after that, we will have a Q and A session normally. So with no further delay, I would like to hand over to Peronnen, please. Thank you very much. As I've said this morning when I was interviewed by the radio that has actually you tend to forget something sometimes how time flies. And the Q1 has been a very turbulent quarter for us. It started with the Manheimr and Sattling report. We had then the resignation of Lars Seyvary. And then we also have got the new Board. So a lot of things will happen during this quarter. And that's why I am very proud of the result today. It's a solid result. We're satisfied with it. We deliver improved margin. We deliver improved cash flow. And you could see within the different entities, Mobility doing pretty well despite the fact that they have pressure on top line. Eurasia continue to grow and they also protect and even improve their margins. It's good. And I have a certain concern about broadband, which I will come back to later. At the same time, we have also, after years of discussion, launched a new price model, which I will come back to later on and explain what that is. And I think that's good. As one of the first operators in Europe, we have been able to do this. We continue, of course, to work with our efficiencies, which we have to do given the pressure on the top line there. And last but not least, we have to continue to work with the sustainability issues that has been under discussion for quite a while. And I will come back to that later on and also comment upon this. If I look at the EBITDA margin development, I don't know if you remember this, but we have had a slightly negative trend during the last four quarters. And this quarter now we managed actually to protect and even improve the margin. And I think that shows that we have a solid result during the quarter despite sort of the top line issues. And for me, the top line issues are very, very crucial right now. If you look at what I tend to look at on account mobility, the billed revenue, you could see here that voice is under a tremendous pressure right now. No volume growth and we are declining with 13%. Messaging is going down with 10% volume wise 7% on the revenue. And you could also see that mobile data is growing 80%. But the problem for us is that we can't really monetize on this. So I think when I look at this, I see 2 actually positive things. First of all, mobile data is growing. That means that we are a growth company. If we manage to monetize the mobile growth. And one of the answers that we have to this issue is then the new offering that we launched in Sweden, the 25th March, where we're after a couple of years discussion where we have said that we will probably have flat fee on voice and we will have to pay for data actually produce an offering that gives this answer. You can see here that for a fixed price you will have unlimited voice and text messages. You will pay for what you use on the mobile data. You could choose different buckets. Even better, you could add on different devices up to 7 different devices. You can add on also different mobile numbers. You could use it for your family and you get everything for one invoice. I think this is a very innovative way of taking care of the mobile data issue. And we are, I believe, the 1st bigger operator in Europe that actually comes out with this kind of model. And I think this might be the answer, I hope to see a future growth when it comes to the mobile data income as well. And this growth that we have today with the 20 percent, one third of the volumes are too low and we need to raise that. Proud of being the 1st operator out in Europe to have launched this model. It's also important for us when we look at this to take this experience from the Northern Europe side into also Eurasia. We now see that data growth is taking off also in mobile data growth is taking off in Eurasia. And roughly 1 third or even 40 percent of the growth or the 40% is today mobile data. Something is happening in Eurasia. And we are now trying to use the experience that we have from the Nordics to put interest to avoid that we get unlimited usage and too low pricing. Also good sign for the future when we talk about growth. The concern I have right now is also the transition we have in broadband services. We are leaving the old technology, the old PSTN voice moving into IP based services. What is very positive for us is that the fiber rollout starts to take off. I get a lot of positive comments about our fiber installations. Finally, when we learned how to do this, it took a year, 1.5 years, with I would say a bit lousy rollout of fiber. But now we have learned how to do this. I think that the demand is actually high enough because of fire right now, which means that we have taken the right decision to go on and invest in fiber. This will over time offset the decline of the old technology, but it will take time. What is also important here is the TV offering. The triple play, I think, is the trigger also for using not only the fiber as an access, but also to use our as a service provider. A concern that I have, but I expect changes to come during the coming quarter year. We have talked about the cost issue, especially within broadband. I think we have been pretty good over time to have a good balance between the top line development and our cost development. And we have seen now during the latter part of 2012 that we have had a shrinking range and gap between cost and also the net sales development. And that's why we then implemented a new efficiency program. And we started with that already after Q3. So what we have said and what we repeat to say is that we will save net €2,000,000,000 if we exclude Spain, we will go down from €27,000,000,000 to €25,000,000,000 during 2013 2014. And we're talking about this year around 1800 employees that have to leave the company. And Christian Loyager will go through the details later on what it actually means in numbers and also phasing. Sustainability has been a big issue for us. And I said at the AGM that this is not something that is a separate subject for us. This is something that should be a part of our day to day business. Now what we are focused on is privacy issue, freedom of speech and also anti corruption. And we continue to work with our industry, which I think is essential for us to do. We have to work with industry. We can't stand there alone. So we do that within the Industry Dialog and the Global Network Initiative, which is very, very important for us. What is perhaps even more important is the education that we are launching in April May internally in the company, where we go through via e learning tool, the anti corruption policy, etcetera. I've done it myself and it's a very, very good tool. So I'm optimistic that we will have a very ambitious but good launch of this coming month. So summarizing the quarter, as I said, a turbulent, but we managed to improve margin and cash flow. We had a stable margin in Mobility despite the pressure on top line. Good performance, solid performance in Eurasia, concerned about broadband, proud of the initiative when it comes to launching new offerings within the mobile data and mobility, focused on measurement efficiency measurements and we continue to work with our sustainability. Christian please. Thank you. Good morning, everyone. My name is Christian Luega. I'm the CFO. I'd like to start with there it is, I was looking for this. Start with saying I'm satisfied with the performance in this quarter. We have a slight decline in revenue, but we have sustained our EBITDA and we have improved our margin. The EPS is flat despite quite heavy currency effects and cash flow is positive. Let me first stop at the currency effects because they are quite severe. And on both top line and EBITDA, they impact 3%. And that means DKK 300,000,000 on the EBITDA line and DKK 800,000,000 on the revenue side. And without that, as I said, the EBITDA would have been flattish for the quarter. The revenue decline in quarter 1 is a little bit worse than it was in quarter 4 and that puts some question marks. All three business areas are declining. On top of that, in the Q1, we are impacted of 0.6% from Veykon Kone, a retail chain that we closed in July last year and that you tend to forget about. It's a Finnish electricity goods retail chain that we closed down. If we start with Mobility Services, the biggest impact comes from Interconnect. And it's SEK 500,000,000 on the top line and all countries contribute to this. If we compare to the Q4, it's Estonia, Denmark and Norway, which has the biggest increase in decline. We are satisfied with 14% in Eurasia. And of this 14%, 4.5 percentage of the growth is data revenue. And that is very promising and they come from the largest markets. K cell alone is increasing 40% and that is one reason why they can show a 4% growth in a very tough market right now. The data growth is also very visible in Astecel and in U Cell. In Atecell, which is the country where we have the only negative growth, we have a 2% impact from interconnect. Broadband finally. On the surface, it looks quite bad and we have challenges in broadband revenues. In the Q1, it's much lower than it has been in the previous quarters. The biggest impact comes from international carrier, low margin voice business and also interconnect. We also have an impact of the very cold weather. Actually, the soil has been very frozen in Sweden for the Q1, extreme, I would say. And that has impacted the revenue side and the build out. And also, I don't want to blame the calendar, but it has some impact and it's a little bit hypothetical, but we will come back and see in quarter 2 how much it was on the LEAP Day we had in 2012 and also the Eastern that ended up in March this year and it was in April last year. Leading revenue and looking at gross margin. You may remember in 2011, we talked a lot about the decline in gross margin. In 2012, we stabilized it. And this quarter, it was also stable. This is important for the profitability, of course. The impact, though, I would say, to start with Eurasia is actually increasing its share of the income statement and that has a positive impact. In addition, we have reduced margins on equipment sales and also interconnect impacts positively. To summarize the business areas, Eurasia has done a fantastic job. It's the highest EBITDA margin with 53% in 5 years. And it's a combination of the revenue growth and cost control. It's very positive to see the execution on cost in mobility. And that has had an impact on the profitability. So despite the decline in revenue, we can actually sustain the profitability level. The challenge remains in broadband with lower revenue and lower and higher cost. That is one reason, not the only reason, why we had to initiate the cost program in 2012. And in October, we launched that we would save 2,000 net over 2 years and that would have a consequence on about 2,000 employees in the company. This year, we have a plan to reduce 1800 employees. Up to today in April, we have notified 1,000 employees. The majority of those are actually notified in April. And that's the reason you see a quite small restructuring cost in Q1. The employees will leave during most of them during quarter 2 and the biggest impact or the full impact will come from quarter 3. We still believe and estimate that the full cost for the year will be SEK 1,700,000,000 As I said, EPS is flat. SEK 5 comes from the currency effects and we remain at SEK 0.95. CapEx to sale is 10.7%. That is lower than our full year forecast. We still believe we will reach the 14% at this point. One effect is in broadband in the Q1, the same as I said before. The extreme cold weather have put a pressure on the build out of fiber. Other than that, I would say that over the recent year, we have been more be better in controlling how we spend our CapEx. So we can decide a little bit more ourselves now. You maybe remember we talked about out pilots in the past. So we have control and we still believe in 14%. Free cash flow. The biggest impact here is the same as I talked just about, is the CapEx. With lower CapEx, we have better free cash flow and it has the biggest impact on the improved cash flow for the quarter. Net debt to EBITDA. We have a decrease from this 1.65 to 1.54, improving net debt to EBITDA based on operational cash flow. But if we consider also the dividend we just paid of €12,300,000,000 the net debt to EBITDA is 1.89 on the upper level of the range of €1,500,000,000 to €2,000,000,000 that we have guided on. Finally, considering the Q1, what I've said about the revenue and also the vacant corner impact, we still believe on the flattish revenue for the year. We believe that we will continue to have an increased EBITDA slightly increased EBITDA and a CapEx to sales of 14%. Thank you. I think then we will start and open up for questions. So let us start with a number of questions here in the audience and we can start with Stefan on the front. And please state your name and your company. Stefano Frontera. Three questions, if I may. First of all, starting with Mobility Services in the Nordic region, where sales development was weaker than consensus expected in all the markets. Can you give some information on how you see the competitive landscape if you see that the competitive landscape has changed in any of these markets? Secondly, the EBITA margin in Uzbekistan improved quite dramatically from Q4 to Q1. Is this a new more or less sustainable level? And then just if you could give some indication on how the new subscription model has been accepted in the market? Okay. If we start with the different markets in Nordisk, I think that we have had a, I would say, rather calm Q1. But we have pressure, especially on the voice side and that was we can see. I think the toughest market right now is to be Finland where we have more price competition than I see in other countries. But otherwise, I will say that the Q1 has been pretty calm. It talks about Uzbekistan. We have improved the margin due to the fact we actually changed management a year ago when they have taken out quite a lot of costs. So it went up dramatically. Whether we could keep the money on this level remains to be seen. But I think at least we have come up to more so average within the Eurasian business as we have not seen before. And the last question was? It was on the new subscription and I can take up that one. I mean we have had a quite good pickup ratio and roughly 20% on new sales since we launched in the consumer segment. Even 23% I checked. Yes. Yes. I think it's taken up in a very positive way. Thomas Seac with Handelsbanken. A few questions, if I may. On competitive pressure in Finland, it seems quite a lot that this is your own Telefinland brand and also SAMA Lattice. So are you what's the sort of pricing strategy from Tele Sonra's point of view in Finland given that it's just 3 players and the market is heating up? That's the first question. And then second on the cost cuts in or the lower cost in mobility, if you could shed some light on the components there, how much is staff, how much is lower handsets in Q1 and so forth? Thank you. If we start with Finland, it's I think we have introduced a new offering called Zopya, which has been pretty successful. To some extent, it might have been a bit even too aggressive on the price side and we try to adjust that. Otherwise, Finland as such has been a very it's a very competitive price market I would say and that has been for a couple of years. And I think we need to find ways there to actually increase especially the pricing for mobile data. And therefore this kind of new model that we've introduced in Sweden I hope we could also at some point in time we'll introduce to Finland to have a better connection between consumption and also what you pay for that. Then we had the costs, Kristian. Have you had any thoughts on the side here? Well, actually in Mobility Sweden, it was Mobility Sweden or Mobility Group you talked about? Most important. Well, it actually comes from both personnel expenses and marketing expenses and other expenses as well. So it's a combination of all three areas. And I would say it's not one that is bigger than the other one. And then we have I think that was it. That was it, yes. Okay, Liana? Liana Astebay, Carnegie. I was just wondering a little bit about Spain since you decided to keep your goal. The margins were weaker in the quarter. I was wondering how much of that is seasonality? Should we see that every year? Or is there any other costs in the margin in the quarter? Well, partly, I would say it's seasonality. And we also have some offerings at the beginning of the quarter. It also cost us a bit. Otherwise, I don't know what you say, Spain, the margin? Well, the margin improved year on year. And we have our seasonality effect in quarter 1 where the marketing campaigns are actually the Christmas campaigns are in January, not in December like here. And you'll see that from last year as well. Okay. One more here from the Stoltz. Andreas Jules on FCB. Follow-up on Spain. The subscriber intake was a little bit lower than usually and also churn higher. Is that also seasonal effect? And then on Turkcell, there is an AGM coming out 22nd May. What are your plans for that when it comes to trying to get the dividend out of Turkcell? What is your strategy? What do you believe the others are up to? If we start with Spain, I think it's important for us to make sure that we also get the right quality customers. Sometimes we have taken in too much and shown out too much. So that has been sort of one of the efforts that we have tried to do during the Q1. And will see going forward whether we can increase the intake or not. I think it has been also pretty aggressive on the price side. It's been a lot of MVNOs come up with new offerings, which also explains part of the churn. But I'm trying to we should try to resist ourselves from just having a high intake and then a high churn. So I'd rather go for higher quality on the customer base than the higher churn rate. Just to add there, you can see the churn is coming from the prepaid side. And then when it comes to Turkcell, it's difficult to comment upon this. I mean, we have an ADM at the 22nd May. And it remains to be seen what will happen there. But I mean I all for it when it comes to dividends and we would like to take out the dividends from 2010 2011. Whether that works or not that's another issue. All right. Should we open up for some questions from the conference call? Operator, please go ahead. Of course. No problem. Your first question comes from the line of Ulrich Raff. Please ask your question. Thanks very much. Yes, I have two questions. One is in Norway. I'm just wondering about sort of general strategy. Tele2 yesterday sort of reaffirmed these long standing targets about really taking up the number 2 slot and gaining share really on an ongoing basis. And isn't this now a time for Telia to really hit back more aggressively, maybe even sacrificing some margin rather than following the Finland playbook and essentially giving up the number 2 position and then starting to fight back more aggressively. Just wondering what you're thinking is sort of in the big picture here. The second question I have is on Spain. It looks to me as if the service revenues, the ARPU sort of driven revenues have actually deteriorated in local currency terms quite significantly in terms of trends. Is this is there a particular reason why this is sort of a lot weaker than it was in the Q4? Is it just general sort of price competition? Or what do you attribute that to? Thank you very much. The first question was about Norway, yes. But first of all, it depends on also how you measure your market share. I'm more for measuring revenue market share than SIM cards because that will actually generate the intake for you. We will never be able to compete until the 2 on price. They will always undercut. So that's not the strategy to go forward. We have to find our offerings that attract the customers in the Norwegian market. And I think that what we have thought about now with this kind of family package that we have in Sweden might be something that could be launched also in Norway. But to try to compete with Tele2 on price that will never work. Then we had Spain, the service revenue. Yes, what do you say? Well, you want to answer? No, just if you look at the numbers, we can see that the build revenue service revenues growth is approximately similar in this quarter versus previous quarters. I don't know if you want to add something about. No. We have seen BNOs coming in actually on the prepaid side and pushing the price down, but not so much on the postpaid side. And that's coming back to the quality of the customers we're trying to attract. And the minutes of use in Spain as a market is also declining. And we should also remember that the Q1 in Spain is also very weak after Christmas. So that's a normal trend. I'm not surprised to see this. Thank you. Thank you. Next question please. Thank you. Your next question comes from the line of Barry Zeyton. Please ask your question. Three questions. The first is on Uzbekistan. Clearly, it's now quite a big component of any growth that you have in Eurasia. And historically, we've heard about issues getting money out. I was wondering if you could expand on how easy it is to get money out of Uzbekistan and roughly how much it costs you to money out in terms of how we should think about valuing that growth? And my second question is on the business component of your Swedish mobile business. We've heard noises from TDC with their MVNO on Tele2 going for the SME segment in Sweden. And we've also heard a lot of noise from Tele2 themselves wanting to expand the business segment. So I was wondering whether you're seeing any evidence of that in terms of increased competition from them and whether you expect that to increase further going forward or whether there are risks to your business segment? And then my final question is really on your new pricing models. I was just wondering what the expected ARPU effect is going to be in terms of when we saw new pricing models from Telenor in Norway, initially we saw some dilution from high end customers and we started to see accretion as they moved more customers onto bundles. Are you expecting a similar kind of trend with the family packages in terms of increased subscriber take from the low end? Or is it going to be more of an impact initially with dilution coming from the high end? Thank you. Well, I think it's difficult to say. We have to judge now after a couple of weeks. And well, of course, it's always a risk that you might have some high ARPU customers coming into this kind of offering. But at the same time, what we have seen is also that when you create this kind of family package you take all your subscriptions into this independent whether they are from Thiele or whether they are from some other operator. So I would expect this to actually be a creative subscription perhaps from the very beginning. I might be a bit too optimistic, but I strongly believe in that this will work. But let's see in a couple of weeks' time. Then we had Uzbekistan. Yes, it's a problem to actually convert dollars or sumps into dollars. And I don't think there is sort of a fixed price. And for the time being, it's very, very difficult to roll to convert. So it's I can't give you a price on that right now. And the third question was? What's the small business segment fighting in Sweden? Yes. No, I think that we have seen a rather stable situation. It's pretty tough overall in the business when it comes to price, but I don't see that we have sort of changed the players have changed their attitude toward different segments so far. So it remains to be seen that if it comes up more than the Q2. But so far, I have not really seen a big change that you mentioned. Okay. Thank you. Good. Can we move on, please? Thank you. Your next question comes from the line of Peter Nielsen. Please ask your question. Yes. Good morning. Thank you. A couple of questions please. First one, in Perhane's presentation about broadband services, one of the slides it says on fiber rollout further extension of our footprint necessary. You didn't elaborate on it, Peyhrane, but could you perhaps tell us a bit more what you're thinking now on this further extension of footprint in Sweden I presume? And my second question, I don't know if you will answer this, but can you tell us whether you're involved in the license process in Myanmar? And my third question relates to the working capital the usual issue I think particularly at Q1 a huge negative working capital movement in this quarter which is obviously is seasonal. But could you level a bit on why we are seeing this every year? Thank you very much. No. We are not involved in the license deals in Myanmar, Working capital? The working capital as you are correct, the seasonality is always big in quarter 1 and then it's better in quarter 2. The difference between this year and last year is actually very much related to Spain and that's why we're also very careful balancing both profitability and cash flow and gross adds in Spain with terminal financing driving a lot of it. When it comes to the fiber, I think as I said here in my presentation, I'm very positive over the response that we have in the market for fiber. And after a very, like I said, dull start where we didn't really know how to drill this out, I think we have got this right. And which means right now that we are prepared to expand our footprint and we are looking also to buy municipality networks etcetera if they are up for sale. So that's what we are looking at. And I think we are we have already started that process actually with the smaller acquisitions that have been made. Okay. Thank you. Okay. Should we go back to the floor here and see if there are any further questions on the floor? No? Okay. 1 in the front here. Aurelio from the Finnish Business Daily, Kao Paletti. I read this morning somewhere that the Head of Huawei has said that it's getting to pick up in Europe. I mean the demand, how do you feel up here? You mean from our customers or from Well, that you are feeling more comfortable. Yes, that you are feeling more comfortable and so that they see it as well, companies like Huawei. Well, I think that we have been very sort of resistant even when it comes to continue to invest. And we have also declined even during our really tough times during the financial crisis. So I don't know if that's what he refers to. But of course, we need to continue to invest. We need to expand for capacity. We need to expand in coverage. And the good thing for us is that there is a price pressure and we usually talk about more Slovak that. You could say that the capacity sort of doubles every 18 months for the same price. So which means that we could we need to continue to invest and it might be that that he is looking at. At the same time, which I think is important to say is that we are if he has doing these things right with the pricing, we are a growth industry. If you look at the data volume growing with 80%, for us it's just a key question how to price this. And if you do it in the right way, we will turn into growth again. One more here, Thomas. Thank you. 2 more if I may. On broadband services in Sweden rolling out fiber, it seems a little bit from the numbers that part of the pressure on margins could be gross margins, high gross margins on fixed telephony. Just see if you could comment on that on the sort of margin impact of fixed gen telephony decreasing and fiber picking up both sort of short term and long term. And then secondly, if you could share with us roughly how much of your subscribers in Sweden and Norway are on some sort of bucket plan or committed payment plan? Thank you. If I start from more sort of a generic perspective when it comes to the old technology and the new one is of course it's like that that when you take the old PSN voice business we have much higher margins. So that would be a margin contraction during this year until we sort of get up and running with a more sort of well run operation when it comes to the IP solutions. So it's of course that that will happen during the coming years. That's why it's so important also for us to balance the cost side to take out costs for the old technology, close down product, etcetera, which we have started to do. That is the key for us to keep up also the profitability within broadband. And on the back half side, I don't think we have that right now. We can come back on that part of the year. And one more. Yes, Stefagoff Hain, Nordea. Follow-up on broadband Sweden. The top line development has fluctuated quite a lot between the quarters. Looking at this quarter, I think it's a slowdown on growth on broadband and also quite a pickup on decline on fixed telephony. You talked about the impact from slowdown on rollout of fiber. But could you elaborate a little bit more on the development in the different segments and what you expect going forward? Which segment was I talking about? On yes, on broadband services in Sweden and fixed telephony and IP based services. If I start with the fiber thing that I'm sort of deeply involved in. I mean the problem we have had that we have had a severe winter here. So it's that we haven't been able to start to dig. But then we also as I said, if we had a problem with sort of the whole rollout process. So what I expect to happen right now is that we should sort of produce as much as even less than the demand is actually. But for us, it's just a question to get up sort of the speed and perhaps even increase the production and the rollout of fiber, if that was your question. And then or? Yes. Just why the growth has fluctuated so much between the quarters? Yes. But once again, I mean, as I said, if we have a winter where you can't even work, That means that the whole rollout for fiber has stood still for weather conditions due to weather conditions. And that's thought actually to have an impact on our numbers for sure. Then if you look at the PSTN If we look at the as I said, I mean, one thing which is hard to estimate is this calendar effects in quarter And we know more about that when we get to quarter 2. And finally, we noticed just on your general question, it's more price pressure in IP services than it is on the traditional fixed. And that's something we have known for many years. So that's not a secret. That's on a general market point of view. Okay. Thank you. Okay. Let's move back to the conference call and see if there are some more questions there. Your next question comes from the line of Dominic Kleiman. Please ask your question. Yes. Thank you. Well, firstly, I'm just wondering if there is a strategic review ongoing currently as the new Board is appointed or whether that will only happen when the new CEO has been found? And I'm especially thinking on your commitment to Eurasia as a region. And then on your on the good fiber uptake, you see your fiber demand. I'm wondering what it is, why you can't satisfy demand? I mean, what's the bottleneck? Is that again just the bad weather conditions? Or is there anything in the value chain and the operations that's holding you back? And then maybe a third question on Denmark, just on your current thinking on the joint venture with Telenor, if you think, well, it makes potential consolidation actually more difficult to have that joint venture Or is that just not on the agenda at all at the moment? Thank you. Well, I think if I start with Denmark, I don't think that the joint venture such as block anything there. I think it was good for us to do this because being the number 3 player there we needed to do something. You could always see that the number 1 player is well off in the market. And if you are number 3 or number 4 player, you have to do something else. I don't see in market consolidation come up to speed unfortunately, but I think we would need that within the industry. But it's still very much a regulatory question. It's still a question for local regulators. It's still a question for Brussels to decide upon that it might be okay to have 2 operators in a country like Denmark or perhaps 2 operators in a country like Swedenborgs. We are small countries. We are talking about between 5000000, 6000000 up to 9000000 people. If you compare that I usually take the Denmark as big as Greater Hamburg in Germany and Sweden is as big as Bulgaria. So but this is a problem also for the whole industry that there is a lack of willingness to consolidate especially in the small markets and have in market consolidation. That was one thing. Then we talked about the fiber. I think one of the restrictions we have is actually to find construction workers that actually could do this. It's not that easy. We have found a couple of companies that are good in this And we have some companies that was less good in this and that was not very good for our brand. So I think the restriction is actually to find construction workers that could help us to roll out this physically. That was the third question as well. Strategic review. Yes. Well, I think it's we had our first real board meeting yesterday. And of course, we will start to look at this. And I mean there's no change on the strategy right now. I mean, Eurasia remains as a very, very important part of our business. And then it's up to the Board now to work with it. And we have enormous strategic review that starts anyway at the beginning of June and will continue for a couple of months during the autumn. But that will be done in the same way as before. Right. Next question please. Thank you. Your next question comes from the line of Jakob Bluestone. Please ask your question. Just mentioned you had the 1st board meeting yesterday. Could you maybe talk a little bit about the new board's priorities? We've obviously seen the announcement of the review of Eurasia and presumably the appointment of a permanent CEO is fairly high up that list. But are there any other sort of strategic priorities from the new board that you'd like to flag to investors and ourselves? And then secondly, on Spain, you've obviously decided to hold on to the assets. I was hoping you can maybe give a little bit of longer term guidance for where you think the business can head in terms of market share and margin. And maybe also just maybe talk a little bit about how you see the strategy for that business. And Fusion is obviously doing extremely well. You've got Vodafone and Orange are rolling out over spending €1,000,000,000 and rolling out fiber. There's price for the low end of the market. Where do you see YOYO fitting in with all that? What is sort of the market position that you believe this business can occupy? Thank you. I think the first question was around the Board's priorities. Well, I don't want to comment about it. I mean, we had the first meeting. And of course, very clear is that the first priority for the Board in Germany is to find a new CEO. And that's the main task for the Board. So that's what we have at the top of the agenda. That's not a secret. And then when it comes to other priorities, it's something that we do not comment upon. That will come out later when they have done that. When it comes to Spain, we decided not to sell. I said this morning when I was into you I think for Bloomberg's that this is we are not the 4th seller. And when we didn't get the right price and we couldn't really perhaps resolve the regulatory issues, then we decided not to sell. And then we will keep this asset. And the ambition is still to be a growth work for growth in Spain, but make sure that we also can improve margins and also that we can improve cash flow. So I still think that we have we should expect to see growth from the Spanish operations, but also with higher profitability going forward. If I can just ask 2 follow ups on each of those points. On Spain, do you think you need a fixed line offering of some sort or to get align yourselves with a fixed operator? And secondly, on the search for or the appointment of a permanent CEO, What is the process at this point? How advanced is it? Can you comment on that at this point? Or No, I can't comment on that. I mean that's a question for the Board, so that they have to work with that. To be honest, when it comes to Spain, I don't really know what you need to have a fixed combination there. I think we are a low price operator and we are attracting a certain segment of the market. And I think that is enough of customers there for us without going into the fixed network. So I think we will stick to that for the time being. That's great. Thank you. Thank you. Next question please. Thank you. Your next question I just wanted to ask a follow-up to your comment on Spain and the regulatory issues that was one of the reasons that we didn't see a deal. I mean, on the surface, you were a willing seller and we had statements from both Vodafone and Feet suggesting they were both willing buyers. So I was just wondering whether you can elaborate on what the regulatory issues were as you saw them and how that impacted the ability of you doing a deal in Spain? Thank you. No. I think for me, basically, it's a surprise issue. And then I don't want to go into the discussion we have had, but there are issues around commitments, etcetera, that you have connected to the licenses that are a bit complicated. And but I don't want to get into more of the details around that. We just decided not to go on with the process. And would you have expected similar remedies to the sort of remedies we saw in Austria? Difficult to say, but I think that is one of the risks you take when you looked at that and you try to judge what could happen in Spain, I think that makes this very, very tricky. And that makes it tricky not as I said before, not only in Spain, but in all the markets in Europe, we have to think is a pity for the whole telecom industry. Yes. Okay. Understood. Thank you very much. Thank you. Thank you. Your next question comes from the line of Andrew Lee. Please ask your question. Good morning, everyone. Just firstly a question on Turkcell and Megathon and your relationship with them and your co shareholders following Lars' departure. Could you just give us an update on your interactions with Turkcell and your involvement in that Pirani over and above the specifics surrounding the AGM? And also, who's the main contact between Telia and Megaphone now? And then just secondly, I guess, we're seeing, forgive me if this is overly harsh, we're seeing underperformance in Norway, Denmark and Finland at the moment. Does it make you rethink your pricing strategy, your attitude and desire to consolidate? And could you give us any thoughts around that please? Thank you. If we start with the connections with both Turkcell and also Megafone, I mean we have a group of people who are working within the Board. So we are a group of people here as well that have regular contacts with the Turks. So it's not just one person. Especially when it comes to the Turks, I mean, we also have they are all sort of heading the Eurasian business. So a lot of people are involved in those including Corie Liaison who's sitting at the Board. When it comes to Megaphone, I think I mean we have also broader contact area there. I mean I met pretty recently the both the Board and also the management of Megaphone. So we have a pretty close contact. So it's not just depending on one person if that's what your question indicates. I mean it's a group of people working with these different assets. And then about the question on performance outside Sweden in the Nordic region? Yes. I mean, yes, you're right. I mean, it is an issue and I will understand that. We have seen a weak performance in some of these countries. And that's for me, this is not only a question about capital costs. It's a combination of your offering, your customer offering to make sure that we become the growth company that we should be given the volume increases that we see. And I think but this is the issue for the whole industry. We are not alone here. Everyone is struggling with that. And when you're doing this, you also have to keep the control of the cost side to make sure that you can maintain both cash flow and also profitability. Just following up on that. You mentioned, I guess, around 9 to 12 months ago, looking into doing it across border efficiency drive across the Nordics. I think you mentioned a quarter or 2 ago that, that was more difficult than you'd originally thought. Have you had any progress further to that? Thank you. Yes. I think that actually mobility is moving forward, but they're doing it in a different way. Sometimes we can complicate things a bit much, which I think we did. Now we try to simplify it a bit and go for the things that could be done on a more sort of, you could say, regional basis and try to focus on that. I think we did too much at the same time. That was the problem. Thank you. I just also would like to add that in Norway, we have saved cost in the Q1 and there is hard work on that. And the decline is also related to Tele2 and interconnect situation. So on the surface, it may look more dramatic than it is. And in Denmark, build revenue has actually improved for the first time in quite a long time compared on the negative growth side. And yes to remind you what Christian said here before that we have SEK 500,000,000 top line coming from Interconnect in this quarter. If you sort of add on that then you're more or less back to more or less the growth we had in the previous quarter. Thank you. Right. Next question please. Thank you. Your next question comes from the line of Sasu Rustomaki. Please ask your question. Thanks. I had a very simple one. In Turkey, do you see that Turkcell Holdings will be able to participate in the Turkcell AGM next week? And do you foresee that Turkcell Holdings will be able to vote in the AGM provided it actually does participate? I don't want to comment upon this. This is the sort of work ongoing. So I don't want to make any comments around that. Despite being the principal shareholder of Trexel Holdings? Yes. Okay. Thanks. All right. Your next question comes from the line of Peter Nielsen. Please ask your question. Thank you. Two follow ups please. First one, thank you for answering my previous question, Perhan. But may I just guess why you are not involved in this in the Myanmar process? Given your commitment to Eurasia, it could be quite logical for Telia to be involved. Is this a political rather than an economic decision? And secondly, can I just ask about Norway? Obviously, the wholesale revenues continue to suffer as is of course expected for logical reason. But how do you see this progressing? Will the loss of wholesale revenues accelerate over the coming 12 months? Or will it celerate? Thank you. Could you repeat your first question? I didn't really get that. No. I'm just asking why you would not be involved in this Myanmar license process. It would be quite natural for Telia to be involved there. And my question is just is this a political rather than an economic decision not to participate? No, I would say I don't think we were prepared actually to go into that at that point in time. And it was a certain time line that we couldn't really follow. So that's I think the only simple answer. Okay. And then the second question was Yes. On Norway, I mean what you can see when you look at the reported EBITDA number and revenues that most of that comes from the Telenor, the drop we see year over year. And we continue to have impact to that during the course of the year. And the agreement is valid until the second half of twenty fourteen. Yes. Okay. Thank you. All right. We're moving on here. Next question please. Thank you. Next question comes from the line of Terence Wu. Please ask your question. Thanks very much. I wondered if you could give us a regulatory update on and how long do you expect the market to be characterized by a lack of a third operator? And my second question is just on a follow-up on Turkcell. Even if we were to get a positive outcome in May and maybe the resumption of dividends, does your view remain that special shareholder returns to Telia Sinara shareholders? Is that sort of question for 2013? And the earliest you could think about it will be in 2014? Thank you. If I start with Uzbekistan, I don't know so much what will happen on the regulatory side right now. I mean, we are still only 2 players there and the MTS is still out for the market and I had not heard anything new around that. When it comes to shareholder returns in Turkcell, we will see what happens now after the 22nd May. And let's come back after that. For me, it's very, very difficult to comment upon anything around this before this meeting has been done. Okay. I think we have 2 more questions on the conference call. So please move on. Your next question comes from the line of James Britton. Please ask your question. Thanks. Good morning. Could I just ask how long do you think it will be before you're ready to push shared data plans into all your other Nordic markets? And perhaps you could just help us understand the different levels of data usage now across those Nordic geographies. Can you give us any statistics that highlight the differentiation? Thanks. Yeah. Well, when it comes to the differentiation, let's come back on that. I think we should do it market by market. Although, I don't think this is if Jesper can ask that question later on to you so we can go through that. When it comes to the pricing in the other Nordic markets, I hope we could do that as quick as possible. But we will see. We will start also to evaluate what how it works in Sweden. And then I'm not really sure whether we will have exactly the same model in all countries. That remains to be seen. But I think if it works here then of course we should try to duplicate this as quick as we can. Do you think it's possible to introduce things introduce it elsewhere by the end of this year? Or are there longer lead times? A book like this. If it grows, I would like to do it tomorrow. But we have a reality as well as we have to relate to. So we will see. Let's look at this first and see how it works and not jump too quickly into the water here. So it's but if we can do it during the year, it will be great. Okay. Thanks. Good. I think we have one more final question on the call. So please. Yes. Your next question comes from the line of U. Rich Raff. Please ask your question. Yes. Thanks so much. This is a sort of follow-up as well. Two questions, please. The first one is you mentioned the weather related effect on the one hand and the Easter timing on the other as drivers of the top line downside. Is there any way you could quantify either of the 2 or both, particularly vis a vis the impact on B2B? I'm just trying to sort of extract the underlying trends there. The second question, and again, it's a bit of a follow-up on is on these shared data plans. To what extent do you think this really allows Telia Sinero to differentiate? I remember to the 2 saying yesterday that they would be looking to launch this if they see Telia gaining traction with these plans. Obviously, with something like that, you're saying you're hoping it to be accretive issues. Of course, if it's not a differentiating factor for you, then essentially it's something that's going to happen across the industry and it's going to be ultimately not changing trends. I'm just wondering how you think about that question. Thank you. I think if our competitors will then follow us then we have done the right thing. And it's always good to be the number 1 in these areas. And I think for us it's good to be early out. We haven't been doing that when it comes to the iPhone when it comes to Spotify etcetera. And that has always helped to be early out in these kind of questions. But if the competitors will cooperate, I mean, it's up to them. But then we have done something right. On the calendar effect, if we have one more day last year compared to this quarter, well, that's 1% on the revenue side. And then you have to calculate how much is fixed and how much is variable. And on the Eastern, typically people when they go to the ski slope or to their summerhouse, they don't call so much as they do in the office and when they are at home. So that's the big difference. Well, I mean, we have discussed this, the leap days and all these. And I mean, it's because I mean, we're on a sort of working on a pretty thin line when it comes to our decline and the 1% back of what means very much for us. So I think you always have these kind of issues. So let's see now what will happen in the Q2. I think that's more important than trying to figure out one day or another. I mean it's the general trends underlying trend that are more important than the Eastern. Good. So operator, do we have any more questions? We do have one last question from the line of Jack Jerruling. Please ask your question. Thank you. I have two questions. The first one, could you explain why the ARPU in Estonia is dropping so sharply in the last quarter? And second question regarding 4 gs in Sweden, could you give us a fair value of what percentage of your customer base currently is 4 gs? Thank you. On the first one, I can answer. It's mainly related to the big interconnection rate cut that we saw in Estonia in the quarter. On the 4 gs base, I do not know if we have the number right now. Let us come back and check that one. I think before we have that roughly what is the 100,000 to 150,000 customers for 4 gs, something like that. But I might be wrong here. So let's Let's check the share of the base and come back. Good. Do we have any more questions on the floor here? There don't appear to be any more questions at this time. Please continue. Thanks very much. And we'll see you next time on 17 July. Thank you. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.