Comments by the ceo

On the eve of
the Gigabit society

Telia Company is a company with strong values and we want digitalization and our services to be used to help overcome the challenges of our time. I am more convinced than ever that a commitment to digitalization is the way to effectively underpin our customers’ changing reality, our societies increasing awareness and to create value for our shareholders.

Our customers will be the pioneer users of the new generation mobile technology, 5G; Stockholm, Tallinn and Helsinki will be first out and we thus enable our home markets to be the world’s testing ground for connected cars, medical care and other services that we today can barely imagine. Our ambition is that the Nordic and Baltic countries will take the first steps into the Gigabit society and that Telia Company leads the way.

To be something more

Digitalization is not an event but a series of components that together create a pattern. Our customers are the drivers of ingenuity and change and in the same way, Telia Company is changing. There are days when I think that the pace of change is too slow, and then it is good to stop and look back. In this perspective, it becomes clear that we really have changed since we embarked on the path that is gradually bringing us closer to being the New Generation Telco. This does not mean that we want to be anything different but that we want to be something more.

We have now reached the stage in our development where we have been able to manifest the change with a new name and updated visual style. In more and more countries Telia signs are put up with the aim of creating a cohesive and strong brand in all our core markets. Norway was the success case earlier in 2016 as they rebranded to Telia from Netcom. Our mobile and fixed operations in Lithuania which have merged, now also meet the customers as Telia.

Leading on the customers’ terms

We are broadening our offerings step by step and invite consumers, as well as small and large companies to cooperate with us. Our TV service is growing steadily and is now one of the most attractive reasons for customers to choose our connections. We adapt continuously to our customers’ changing habits in order to meet their present and future needs. In line with this ambition we offer free roaming in the Nordic and Baltic countries as part of our core mobile bundles, and in some countries, we are offering the ability for our customers to use their favorite social media services without worry and without limits. Across the group, we now extend our hands to small and large companies for more and deeper cooperation. This is driven from our new Division X, where we are taking advantage of the entrepreneurial spirit and passion for discovery in the company, and where we aim to find new solutions and business opportunities at the edge of the core business.

Development stems from cooperation

The power of Nordic-Baltic digitalization is huge. It is done in collaboration between the public and private sectors with the goal that development should benefit everyone. We will continue to do our job and enable this kind of development and hope we can continue to make a positive contribution to our customers and society.

Sustainable business and commitments

In order to be a responsible company we work hard on sustainability, which is aligned with the UN SDG’s, Global Compact principles and our compliance framework. One initiative during the year was that we decided to be committed to Children’s rights. We recognize our obligation to empower and protect children according to children’s rights, as they are set forth in the UN Global Compact Children’s Rights and Business Principles, by advancing our processes and educating our employees to be able to respect and support children’s rights in our daily operations.

2016 a challenging and interesting year

When I look back on 2016 it was a challenging and interesting year. We continued to work in our strategic direction by investing in infrastructure to secure future demand and to deliver a superior customer experience. We are also executing on our reshaping of the company from 17 countries to focus on the Nordic and Baltic countries. We have divested Ncell in Nepal and Yoigo in Spain, signed an agreement to divest Tcell in Tajikistan as well as divesting the credit management services and debt purchase busness Sergel. We see it highly probable that the remaining assets in Eurasia will be disposed during 2017. As for acquisitions, we signed an agreement to buy Phonero in Norway. Closing of the transaction has unfortunately been disrupted as Norwegian competition authorities recently announced that they at this stage would not approve the transaction. Next step is to present additional arguments for approving the transaction to them which they will reply to and base their final decision on no later than April 10.

In December 2016, we announced a new organizational structure with more country exposure to enhance our business and enable us to ramp up execution across our markets even further.

I am very pleased that we were able to fulfill our financial targets to uphold or improve our EBTIDA versus 2015 and that the board proposes an ordinary dividend of SEK 2 per share to be distributed to our shareholders.

Capture opportunities to create value

Change is hard and takes time. We are on a historic change mission in times of massive transformation around us. We are not happy with a slightly negative total shareholder return for our over 500,000 shareholders in 2016. But to stop changing is not an option. It gives us even more energy and determination to speed up execution on our great journey. Persistency is a virtue and I strongly believe in our simple formula that engaged employees create loyal and happy customers that will enable growth and will also make our stakeholders, notably shareholders, happy. That is why we are here – our purpose is clear “bringing the world closer – on the customer’s terms”.

More humble than ever – more determined than ever – thank you for your support.

Stockholm, March 8, 2017

Johan Dennelind
President and CEO