Telenor CEO Looking to Monetize Growing Data Demand

TL;DR

Telenor CEO discusses monetizing data demand and strategic market exits.

Transcript

all things challenges to your industry first of all Mr. Brea because you were with the GSMA leading group yesterday and you're saying look don't think about 5G yet think about the issues of here and now what are those issues? Well, we are thinking about 5G as well, but commercially 5G is probably 3 4 years into the future. And what we see now is th... Read More

Key Insights

• Telenor is focusing on digitalizing its core business and monetizing the growing data demand, which poses a significant challenge due to free messaging services like WhatsApp.
• The company is exiting the Indian market due to unsustainable positions and is redirecting resources to other Asian markets like Malaysia, Thailand, Myanmar, Bangladesh, and Pakistan.
• Telenor is exploring new verticals such as financial and medical services in Asia to capture a share of the growing digital market.
• The company is reviewing its portfolio to focus on its main strategy of digitalization and maintaining relevance in the digital future.
• Telenor is committed to year-on-year dividend growth, maintaining a good balance sheet, and a prudent M&A approach, focusing on existing investments.
• In Denmark, Telenor faces unsustainable competition and is seeking long-term solutions to improve market conditions.
• Telenor is collaborating with tech giants like Google to enhance its messaging services and remain relevant in the digital communication space.
• The company is leveraging its unique position in Asian markets, where it can directly charge customers, unlike in European markets where fixed networks and Wi-Fi are prevalent.

Questions & Answers

Q: What challenges does Telenor face in monetizing data demand?

Telenor faces significant challenges in monetizing data demand due to the prevalence of free messaging services like WhatsApp. As these services offer free communication, Telenor must find innovative pricing solutions and introduce new services to justify the investments in data networks and infrastructure. This challenge is compounded by the need to cater to both advanced markets in the Nordics and emerging markets in Asia.

Q: Why is Telenor exiting the Indian market?

Telenor is exiting the Indian market because its position there was deemed unsustainable due to the growing data demand in the mass market. The company decided to transfer its operations to Bharti Airtel, which is considered the best solution for both customers and employees. This exit allows Telenor to focus on other more strategic markets in Asia, where it sees significant opportunities for growth.

Q: What new verticals is Telenor exploring in Asia?

In Asia, Telenor is exploring new verticals such as financial services, medical services, and classified services. By diversifying into these areas, Telenor aims to capture a larger share of the growing digital market. These verticals offer opportunities for Telenor to expand its service offerings and increase its relevance in the rapidly evolving digital landscape of Asian markets.

Q: How is Telenor planning to ensure dividend growth?

Telenor plans to ensure dividend growth by maintaining a strong balance sheet and adopting a prudent M&A approach. The company is committed to providing year-on-year dividend increases, as it has done in previous years. This strategy involves focusing on existing investments, particularly in building data networks in both advanced and emerging markets, while also exploring new growth opportunities.

Q: What is Telenor's strategy for the Danish market?

In Denmark, Telenor faces intense competition that has led to unsustainable market conditions. The company is actively seeking long-term solutions to address these challenges. This may involve strategic adjustments to improve profitability and market share, as the current level of competition makes it difficult for any player to generate significant profits in the Danish telecommunications market.

Q: How is Telenor enhancing its messaging services?

Telenor is enhancing its messaging services by collaborating with tech giants like Google. For example, the company has signed a frame agreement with Google to test rich communication services in Norway. This collaboration aims to improve Telenor's messaging offerings and make them more competitive against popular services like Facebook Messenger and WhatsApp, particularly among millennials and Gen X users.

Q: What advantage does Telenor have in Asian markets?

In Asian markets, Telenor has a unique advantage due to the absence of fixed networks and Wi-Fi, allowing it to directly charge millions of mass market customers for services. This direct connection with customers makes Telenor more relevant to digital players in Asia compared to Europe, where fixed networks and Wi-Fi are more prevalent, limiting the company's ability to charge for services.

Q: How does Telenor view its relationship with digital players like Google and Facebook?

Telenor views its relationship with digital players like Google and Facebook as one that requires a balanced business model. While there is no active conflict, Telenor acknowledges the need to find mutually beneficial arrangements. In different regions, Telenor adopts varied approaches, leveraging its strong customer connections in Asian markets to maintain relevance and negotiate favorable terms with these tech giants.

Summary & Key Takeaways

• Telenor CEO Sigve Brekke discusses the company's focus on digitalizing its core business and monetizing the increasing data demand. The company is shifting its strategy to address challenges posed by free messaging services and is exploring new verticals in Asia to tap into the growing digital market.

• Telenor is exiting the Indian market due to unsustainable positions and is reallocating resources to other Asian markets. The company is reviewing its portfolio to focus on its main strategy of digitalization and maintaining relevance in the digital future while ensuring year-on-year dividend growth.

• Telenor is enhancing its messaging services through collaborations with tech giants like Google and is leveraging its unique position in Asian markets to directly charge mass market customers. The company is also seeking long-term solutions for unsustainable competition in Denmark.