Results for the first quarter 2005 - still strong customer growth

The reduction in the profit before taxes and minority interests compared to the first quarter of 2004 is mainly due to a gain of NOK 2.6 billion from the sale of Cosmote, posted in the first quarter of 2004. EBITDA (Earnings before profit before amortisation, depreciation and write-downs) in the first quarter of 2005 was NOK 5,106 million. This is an increase of NOK 58 million compared to the first quarter of 2004. The EBITDA margin was 33.4 per cent in the first quarter of 2005, compared to 35.4 per cent in the first quarter of 2004.

"Key points from Telenor's first quarter include strong customer growth in the international mobile operations, a successful launch in Pakistan, an EBITDA margin of more than 20 per cent at Sonofon, and increased pressure on revenues from Fixed," says CEO Jon Fredrik Baksaas.

Mobile operations

The number of mobile subscriptions in consolidated operations increased by 2.4 million in the first quarter, reaching a total of 21.4 million. The number of subscriptions in companies where Telenor has ownership interests increased by 7.4 million in the first quarter, reaching a total of 60.1 million. The number of GSM subscriptions in Norway increased by 12,000 during the quarter. The NMT network, which had 22,000 subscriptions at year-end, was closed down in January, in accordance with the expiration of Telenor's licence. Telenor's estimated market share in Norway at the end of the first quarter of 2005 was 56 per cent, measured in numbers of mobile subscriptions. This is approximately the same as at year-end 2004.

Internationally, subscription growth continued to be strong, particularly in Kyivstar in Ukraine and GrameenPhone in Bangladesh, which gained 1.4 million and 540,000 new subscriptions respectively. On 15 March, Telenor launched commercial mobile services in Pakistan. At the end of the first quarter of 2005, Telenor Pakistan had gained 344,000 subscriptions and an estimated market share of 4 per cent.

Fixed

Adjusted for the sale of Managed Services to EDB Business Partner, revenues from Fixed Norway were reduced by approximately 4.5 per cent, compared to the first quarter of 2004. Reduced revenues from telephony and data were only partly offset by the growth in ADSL/Internet, wholesale and other revenues. As a consequence of reduced revenues from fixed network activities in Norway, Telenor will step up current efforts to achieve cost reductions and improvements throughout the operation. The goal is to reduce the cost base in Fixed by NOK 1.5 billion with full effect from 2007.

During the first quarter of 2005 the number of ADSL subscribers (residential and business) in Norway increased by 59,000 to 385,000, including 19,000 subscribers from the acquisition of Tiscali. Telenor's estimated market share for ADSL was 60 per cent at the end of the first quarter of 2005. Telenor's estimated market share of fixed-network traffic, measured in traffic minutes, was 67 per cent at the end of the quarter, approximately the same as at year-end 2004. On 30 March 2005, Telenor launched broadband telephony in Norway.

Broadcast

At the end of the first quarter of 2005, Broadcast had 851,000 DTH subscribers in the Nordic region, an increase of 27,000 during the quarter. The number of cable TV subscribers was 616,000 at the end of the first quarter.

Continued positive development

"We are still seeing that an increasing share of Telenor's revenues and results is generated from our mobile operations outside Norway, and we expect this development to continue. We are also seeing a clear trend in the market for telecommunications services, where growth in mobile and broadband telephony comes at the expense of traditional fixed-line telephony. The expected reduction in revenues and profits at Fixed will be countered by cost-cutting measures and efficiency improvements. I am also satisfied that Broadcast continues to improve its operation and profitability. Overall, we expect a positive profit performance in 2005 compared with 2004," says Telenor CEO Jon Fredrik Baksaas.

Capital expenditure for the Telenor Group amounted to NOK 3,360 million in the first quarter of 2005, compared to NOK 1,471 million in the first quarter of 2004. The increase is mainly related to network investments in the mobile operations, particularly in Pakistan. Net interest-bearing debt was NOK 15.9 billion, a reduction of NOK 3.4 billion from the fourth quarter of 2004. In the first quarter of 2005, Telenor acquired 5,620,000 treasury shares in the market at a total price of NOK 329 million.

Contact:

Chief Press Spokesman Dag Melgaard - Tel: +47 67 89 26 71 or +47 901 92 000

To the editorial offices:

Press and analyst conference

In connection with the results presentation, a press and analyst conference will be held on Wednesday 27 April at 09:00 CET at Auditorium A in the Telenor Expo Visitors' Centre at Fornebu. Telenor CEO Jon Fredrik Baksaas will present the results. The presentation will be given in English.

Internet and mobile streaming

The press and analyst conference will be streamed over the Internet, both live and in a recorded version after the conference on www.telenor.com/ir . Written questions may be submitted during the live streaming. It will also be possible to follow the streaming live or through a recording on 3G, GPRS or EDGE mobile terminals. For more information, please refer to the Telenor website.

Conference call and Q&A session

You may also call in and listen to the presentation on the phone. This service also allows you to ask questions at the Q&A session at the end of the presentation. For details, see www.telenor.com/ir. To participate in the Conference Call, please register well before the conference starts by calling (+47) 800 80 119 (from Norway) or (+47) 23 00 04 00 (from Norway or abroad).

Materials

The full quarterly report and English versions of the presentations will be made available at www.telenor.com/ir.

Capital Markets Day