Our overall ambitions are straightforward; we shall create growth by being preferred by customers, and we shall deliver the services required in a highly cost effective manner.
Preferred by customers and cost-effective
Telenor is a well positioned company in a thriving industry. We are achieving revenue growth above peers, while simultaneously building profit margins and cash flow.
With a talented and empowered workforce as a solid foundation, we will deliver even better experiences to our customers in the years ahead and continue to grow Telenor to the benefit of our customers and shareholders.
Our key ambitions for 2012-2014
1. Create top-line growth through being preferred by customers
Competition for existing customers is increasing in many of our markets with higher market penetration levels. In addition, new ecosystem players are challenging core service revenues and customer relationships.
It is increasingly important for us to win and retain existing mobile subscribers, and to strengthen the ties we have with customers. The telecom industry has in general a significant value potential in improving how they interact with customers.
Making Telenor into a more customer focused company should allow us to grow market share, take premium price positions in the market, and also improve margins by employing lean, efficient customer processes. As part of this, we will focus on strengthening our brand perception and customer satisfaction levels.
2. Be a highly cost efficient operator
Continuing business success depends on our ability to provide services in a highly cost effective manner.
Becoming highly cost efficient represents an opportunity to provide competitive market offerings, as well as to improve capacity for structural growth. A combination of business unit (country operations) specific operational excellence programs and cross border initiatives will be vital in this area.
3. Create value and growth from financial and asset management
In addition to manage current operations for growth and cost effectiveness, we aim to optimize the portfolio and create value both from acquisitions and divestments. We will do this while making sure to provide attractive remuneration to our shareholders.
Strategic initiatives to further develop operations
To deliver on our strategic,, financial and non-financial ambitions, we have identified six initiatives that will be given high priority in the strategy period.
The initiatives represent areas that are of high importance, and where Telenor is considered to have significant improvement potential.
- Industry leader in customer centricity
- Create growth through ecosystem changes and new services
- Operational Excellence
- Cross border standardization and operations
- Regulatory Management
- People development
1. Industry leader in customer centricity
As the telecom markets mature, it is increasingly important to reduce churn and generate more value from existing customers. Compared to other industries, like consumer goods and bank/finance, the telecom industry is relatively immature in this realm. Hence, there is significant value creation potential in strengthening customer relationships and improving customer experience. Creation of lean and flawless customer processes should also imply cost reductions.
A number of initiatives in various customer-related areas are presently being conducted across the organization. These include implementation of best practice sales tracking systems, improvement of customer insight methodology and implementation of improved segmentation models.
There is a potential for real improvements to customer loyalty, churn, customer lifetime value and ultimately profitability.
Telenor management has set the ambition of becoming a customer centric industry leader in each of our markets by 2014.
2. Create growth through ecosystem changes and new services
The emergence of smart phones and tablets, and the increased usage and uptake of Internet and application based communications are changing the industry for selected segments. Some of these changes may be disruptive to the existing business model over time, while new opportunities also emerge from new and revised positions in the ecosystem. It is highly uncertain how the industry changes will play out, and Telenor’s strategy must be robust to multiple outcomes.
Our current services strategy comprises three key pillars:
- Intelligent pricing of voice and data connectivity
- Offering communication and content services to our customers
- Grow revenue from new services that are adjacent to our current business
3. Operational Excellence
Operational excellence is an imperative part of all Telenor Group business units (country organizations) strategies, and focus on improved operational performance will be strong throughout the strategy period.
An extensive operational excellence agenda amounting to more than NOK 5 billion in gross savings is currently being implemented in the business units.
To realize the savings ambitions, structural improvements, simplification of product portfolio and offerings, lean transformation and outsourcing must be implemented.
There will be closer cooperation between Group and business units to support them in implementation of identified improvement measures.
Group will put specific emphasis on domains with high savings potentials:
- marketing efficiency
- customer service
- working capital
The customer centric initiative and the operational excellence initiative are closely linked as they both address efficiency potentials across the value chain.
4. Cross border standardization and operations
In addition to realizing business unit-specific efficiency improvements, cross border standardization and operations will be a key lever for our future competitiveness.
We will work for reduction of complexity and standardization of products. Best practice processes, technology and platforms shall provide scalable solutions and enable efficient cross border operations, and improve our ability to competitively develop and deliver new services.
With the current development in our industry, including increased cost pressure in most markets, we believe the timing now is right for Telenor to step up our cross border standardization efforts in order to increasingly benefit from economies of scale and replication of best practices.
On this path we will build on initiatives over the last years to leverage group scale, with group-wide sourcing being the area with the most tangible results.
5. Regulatory Management
Regulatory pressure is increasing in the telecom industry. Examples are industry specific taxes, revenue sharing models with Governments and high spectrum license fees. Regulatory challenges represent some of the biggest risk factors for telecom operators like Telenor, but also opportunities to create value, for example by securing favorable spectrum positions.
To maximize our value and reduce uncertainty, Telenor needs to continue strengthening how we influence our regulatory environment. Securing strong regulatory management requires the right organizational structure, skills, processes, stakeholder approach as well as strong top management involvement both at Group level and at national level.
Going forward, Telenor will strive to develop best practice Regulatory Management capabilities and processes both at Group level and business unit level. Telenor will strengthen our analytical approach to understand key regulatory levers and value at stake, perform best practice stakeholder management, and develop fact-based argumentations and creative solutions to create win-win opportunities for key stakeholders and Telenor.
6. People development
Our employees are the key enablers for Telenor to deliver on strategic ambitions and initiatives. Our company must have leaders and experts that are both capable and available. We need a strong performance management culture, processes, and a common understanding of how we do business, based on our people development programme the “Telenor Way”.
The “Telenor Way” is about strong ethics and customer orientation, enabled by leaders relying on passion and empowerment. The “Telenor Way” shall be firmly established as an anchor for all decision-making across Telenor. We will encourage dilemma training and HSSE awareness programs to all business units, and ensure that all top management teams complete a “Telenor Way” development program aimed to develop their performance as a team.
Important contribution to people development will come from increased mobility amongst managers and experts by improving leadership and expert pipeline processes, and by establishing talent positions for non-locals in all business units.