INTERNATIONAL STRENGTH THROUGH SIMPLIFICATION

Telenor’s vision is “Telenor - Ideas that simplify”. Simplification is in demand in an increasingly complex world, and a simplified Telenor enhances our strength in a demanding home market as well as in our rapidly growing international activities.

Jon Fredrik Baksaas
CEO

Our industry is characterised by clear developments that we need to address and utilise to the optimal benefit of the Group: The largest potential for growth is in mobile communications. The competition for customers is hardening in the more mature markets, and the competition in telecommunications now resembles what has characterised the consumer goods industry for years. We still see growth in emerging markets, and it is important that Telenor is organised and directed to meet challenges in markets of different levels of maturity. The financial results to which the Group can refer – over years, but mainly during the last year – testify to the success of our strategic choices and the implementation of them.

When I, in the summer of 2002, took over as CEO of Telenor, we immediately started the job of bringing the various operations of Telenor closer together. Simplification along these lines presented clear financial improvements. Equally important was the strengthening of Telenor’s commitment to our customers and the involvement of all of Telenor in improving customer-satisfaction levels. In the future, we will further continue the simplification of Telenor’s services and our strong commitment to our mobile activities. This will be based on three strategic pillars: A strengthening of the domestic market, international growth, and the pursuit of synergies and continuous renewal. The following pages of our Annual Report set out in greater detail what we aim at.

I want to highlight the main operational activities which will ensure our aim of creating a more simplified Telenor for customers and stakeholders alike. We will concentrate our main efforts in winning customers. This means that customer satisfaction will be given high priority in all markets which are served by Telenor. We see that some operators are able to establish a certain customer growth in a relatively short time. We also see, however, that lasting strength and customer satisfaction is coming only to those thinking long-term in their customer relations.

The telecommunications industry has traditionally been closely tied in with technological innovation, and we must all the time remain in the vanguard of technological development. It should be noted, however, that technological know-how is no longer the only requisite for a company like Telenor, wishing to be a leader in launching new products and services. It is essential that innovation be at the core of all activities that are vital to our customers. Here, the telecommunications sector has much to learn from industries that have been exposed to competition over longer periods of time.

Equally important is that we run our operations efficiently. In 2002, we introduced our programme for operational efficiency Delta4, with the aim of reducing our cost base from 2001 by NOK 4 billion within 2004. Being ahead of this substantial cost-efficiency schedule, we estimate that we, within the same time horizon, will be able to reduce our cost base by an additional NOK 0.5 billion before the expire of the year. It is even more important that we, through this programme, have established a permanent system for efficiency and a new awareness of our application of resources.

Additional to our focus on strategy and operative strength, our value-based management will have priority in order to take Telenor into the future. Our employees’ job-satisfaction shall be furthered through good leadership. Internal surveys show that employee-satisfaction levels are high, but we will still maintain and further develop our performance on these levels. We have therefore presented our managers with binding leadership expectations for the future, and introduced a leadership development programme to secure continuous development of our management.

Strategic focus, operative strength and a value-based leadership will characterise Telenor in the future. We want our customers to feel this. To me, customer satisfaction will be the most important yardstick in an international group such as Telenor. This is the platform for our continued development – a platform that will be built through creating a simpler Telenor.