Strategic Audit of Telenor

Telenor Strategic Audit

Contents
1. 2. 3. Introduction .................................................................................................................................... 4 Historical Perspective of Telenor .................................................................................................... 4 Internal Analysis .............................................................................................................................. 4 3.1 3.2 3.3 4. Vision Analysis......................................................................................................................... 4 Mission Analysis ...................................................................................................................... 4 IFE Matrix ................................................................................................................................ 5

External Analysis ............................................................................................................................. 6 4.1 4.2 EFE Matrix ............................................................................................................................... 6 Porters Five Forces Model ...................................................................................................... 7

5.

Competitor Analysis ........................................................................................................................ 8 5.1 5.2 5.3 5.4 5.5 Warid....................................................................................................................................... 8 Zong......................................................................................................................................... 8 Ufone....................................................................................................................................... 8 Telenor .................................................................................................................................... 8 Mobilink .................................................................................................................................. 8

5.

Marketing Strategy Analysis ........................................................................................................... 9 5.1 BCG Matrix .............................................................................................................................. 9

6.

Strategy Analysis ............................................................................................................................. 9 6.1 TOWS Matrix ........................................................................................................................... 9 Strategy ........................................................................................................................... 9 Global Coordination Achieving Local Competitiveness ................................................. 10 Telenor Asian Operations .............................................................................................. 10

6.1.1 6.1.2 6.1.3 6.2 6.3 7.

SPACE Matrix......................................................................................................................... 11 IE Matrix ................................................................................................................................ 11

Recommendations ........................................................................................................................ 12 7.1 7.2 QSPM Matrix for Telenor ...................................................................................................... 12 Grand Strategy Matrix........................................................................................................... 13

8. 9. 10.

Conclusion ..................................................................................................................................... 14 Bibliography .................................................................................................................................. 15 Appendices ................................................................................................................................ 16 Global Presence .................................................................................................................... 16

10.1

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Telenor Strategic Audit 10.2 10.3 10.4 10.5 10.6 10.7 10.8 10.9 10.10 10.11 Profitability in Emerging Markets ......................................................................................... 16 CEO & Group Executive Management .................................................................................. 16 Board of Directors ................................................................................................................. 18 Telenor’s Portfolio ................................................................................................................ 19 Fact Sheet.............................................................................................................................. 19 Priorities of Telenor .............................................................................................................. 20 Core Values of Telenor .......................................................................................................... 20 Services in Pakistan ............................................................................................................... 21 Subscription Growth Rate Worldwide .............................................................................. 21 Porter’s Five Forces Model Questionnaire ....................................................................... 22

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Telenor Strategic Audit

List of Figures
Figure 1 – Porter's Five Forces Model ..................................................................................................... 7 Figure 2 – BCG Matrix ............................................................................................................................. 9 Figure 3 – SPACE Matrix ........................................................................................................................ 11 Figure 4 – Grand Strategy Matrix .......................................................................................................... 13

List of Tables
Table 1 – Mission Statement Evaluation Matrix ..................................................................................... 5 Table 2 – IFE Matrix................................................................................................................................. 5 Table 3 – EFE Matrix................................................................................................................................ 6 Table 4 – Competitor Profile Matrix ....................................................................................................... 8 Table 5 – IE Matrix ................................................................................................................................ 11

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Telenor Strategic Audit

1. Introduction
The telecom industry has witnessed remarkable growth over the last decade. This sector is highly proficient in the use of information technology as a means of management and therefore offers an opportunity to observe efficient management practices in action. Our project aims to take a closer look at the strategic management practices of Telenor. The telecom industry as a whole offers a plethora of challenges and opportunities and it is essential to understand these in order for any company to develop its areas of core strategic focus. We will examine these external factors and then evaluate the capabilities of the company in the face of the external environment. We will take our analysis further, comparing the external and internal environment and evaluating the most suitable course of action to pursue for the company. We will compare the results of our strategic management analysis against the current strategic management practices of Telenor and try to gauge the reasons for these differences. In the end, we will attempt to derive conclusions from our analysis and offer possible solutions, and recommendations.

2. Historical Perspective of Telenor
Telenor is an international provider of high quality telecommunications, data and media communication services. It ranks as world’s 7th largest mobile operator with a total of 164 million subscribers in its mobile operations. Telenor Pakistan is 100% owned by Telenor ASA and adds on to its operations in Asia together with Thailand, Malaysia and Bangladesh. Telenor Pakistan launched its operations in March 2005 as the single largest direct European investment in Pakistan, setting precedence for further foreign investments in the telecom sector. Telenor is keeping ahead by investing heavily in infrastructure expansion. With USD1 billion already invested, they have extended agreements with their vendors for network expansion and services until 2009. The agreements, with a potential to result in USD750 million worth of orders from Telenor Pakistan, are some of the biggest of their kind in the industry (Telenor, 2009).

3. Internal Analysis
3.1 Vision Analysis
We're here to help1 Their vision crystallizes their customer focus as the cornerstone of everything they do. Their values describe what behaviours are necessary to realize that vision. Their corporate responsibility mindset ensures that their vision and values nurture social concern and help them create shared value. The key to achieving this vision is a mindset where every one of Telenor’s employees works together.

3.2 Mission Analysis
“Telenor's primary goal is to create greater value for our shareholders, customers, employees and partners, and for society in general. We strive to be a driving force in creating, simplifying
1

http://www.telenor.com/about/

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Telenor Strategic Audit and introducing communication and content solutions to the marketplace. In order to achieve this goal, Telenor base its strategy on its customer oriented vision, ''Here to Help'' as well as its core values, ''Make it easy, Keep promises, Be inspiring' and Be respectful".2 Table 1 – Mission Statement Evaluation Matrix Customers Products or Services Markets Technology Concern For survival, growth& profitability Philosophy Self Concept Concern for Public Image Concern for Employees X X X X X X X

3.3 IFE Matrix
The IFE analysis shows that Telenor has more strengths than weaknesses. Telenor is stronger internally. Their major strengths are in the HR and R&D department. The overall total of the IFE is above average. Table 2 – IFE Matrix Telenor Strengths 150 Years Experience Distribution Network Financial Baking from Telenor Group Brand Equity Human Resources Growing Market Share Constant Increase in Subscriber Base Innovator in Telecom Industry (EDGE Technology) Strong R & D Capabilities Supported by HQ Diversified Product Line Strong Marketing & Advertising Capabilities Strong Culture Weaknesses Highest Investment Costs Low Profit Margins Association with Norway (Political Reasons) Distance From HQ (Time for Local Customizations) Total Weight .06 .06 .07 .07 .07 .07 .06 .07 .09 .06 .06 .06 Weight .07 .05 .04 .04 1 Score 4 3 4 4 3 3 3 4 4 3 3 4 Score 4 3 3 2 Weighted Score 0.24 0.18 0.28 0.28 0.21 0.21 0.18 0.28 0.36 0.18 0.18 0.24 Weighted Score 0.28 0.15 0.12 0.08 3.39

2

http://www.telenor.com/about/

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Telenor Strategic Audit

4. External Analysis
Telecom sector has emerged as the fastest growing sector in Pakistan. After moving at a snail’s pace, the domestic telecom sector took a turn for the better few years ago when it threw its doors open to private sector. Competition brought in lower tariffs and cheaper handsets, which saw Pakistani people jumping on to the mobile bandwagon with vengeance. From a mere 2.3 percent in 19992000, Pakistan has achieved a teledensity of 58%, which is the highest in South Asia (Technology Lahore, 2008). Realizing the growth potential of telecom sector in Pakistan, various international big players have already entered the country to take advantage of a rapidly growing use of cell phone. Realizing the benefits achieved from the telecom deregulation around the world, Pakistan has moved from the monopolized structure to the deregulated one. The year 2004 witnessed enormous growth in Pakistan telecom sector with huge investments, which brought momentous changes in socio-economic scenario of the country. This was, however, made possible with initiatives taken by the present government and the regulator – Pakistan Telecom Authority. The present government has accorded highest priority to the development of the telecom sector in Pakistan and declared telecom as priority area for the provision of employment and reduction in poverty. Realizing its importance, the Government has given number of incentives to telecom sector. This has resulted in tremendous growth of the telecom services in Pakistan.

4.1 EFE Matrix
Telenor’s score in the EFE matrix is 2.83 which is almost above average for the industry. Their biggest opportunities lie in related diversification and acquisitions in the local market. Their biggest threats are from new competitors with competing products and political instability and economic slow down is also one of the threats. Table 3 – EFE Matrix Telenor Opportunities Acquisitions in Telecom Sector Technological Solutions Staff & Support Functions Market Penetration Opportunities Internet & Cable Services Threats Political Instability Economic Slowdown Terrorism & Crime Religious Extremism Increasing Competition in Industry Financial Risks Low Customer Switching Cost Foreign Exchange Rate Total Weight 0.10 0.09 0.07 0.10 0.10 Weight 0.09 0.10 0.04 0.04 0.10 0.06 0.06 0.05 1 Score 3 3 3 3 3 Score 4 2 3 3 2 2 3 3 Weighted Score 0.30 0.27 0.21 0.30 0.30 Weighted Score 0.36 0.20 0.12 0.12 0.20 0.12 0.18 0.15 2.83

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Telenor Strategic Audit

4.2 Porters Five Forces Model
Figure 1 – Porter's Five Forces Model

Threat of New Enrants

Bargaining Power of Suppliers

Bargaining Power of Customers

Competitive Rivalry Within Industry

Threat of Substitue Products

Competitive Rivalry between Existing Players The rivalries between the firms are strong. Competitive moves and counter moves diminish the average profitability of the industry. Threat of New Entrants Telenor is continuously facing threat of new entrant which is inflating cost, pushing prices down and reducing profitability. Bargaining Power of Suppliers Concentration of supplier exert a competitive force on the corporation, as they have the power of raising prices, lowering the quality and curtailing the range of free service they can provide. In terms of Telenor, the supplier bargaining power is lower. The vendors located in Pakistan who provide Alkatel, ZTE and Huawai who provide infrastructure as well as installation services both to telecom players. Other foreign based vendors are Nokia Semen Networks (NSN), CISCO and JUNIPER. Integrators purchase the infrastructure equipments from them and provide installation services to the clients. Bargaining Power of Customers The bargaining power of customers is high as they can bargain for price cut; they can also induce rivalry among competitors. High customer bargain depress the profitability of the supplier industry. Threat of Substitutes Threat of substitution is high which limits the profit potential of companies by imposing a ceiling on the prices.

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Telenor Strategic Audit

5. Competitor Analysis
Table 4 – Competitor Profile Matrix
Telenor Rate Wt. Score 3 0.3 3 0.3 3 0.24 3 0.24 4 4 3 3 3 3 4 0.32 0.16 0.24 0.18 0.24 0.24 0.32 2.78 Warid Rate Wt. Score 2 0.2 2 0.2 3 0.24 2 0.16 2 2 2 3 2 3 2 0.16 0.08 0.16 0.18 0.16 0.18 0.16 1.88 Zong Wt. Score 0.2 0.2 0.16 0.16 0.16 0.08 0.32 0.12 0.16 0.24 0.16 1.96 Ufone Wt. Score 0.3 0.2 0.16 0.24 0.08 0.08 0.24 0.12 0.16 0.24 0.16 1.98 Mobilink Rate Wt. Score 4 4 4 4 4 4 2 4 4 2 4 0.4 0.4 0.32 0.32 0.32 0.16 0.16 0.24 0.32 0.16 0.32 3.12

Critical Success Factors Market Share Financial Position Product Quality Distribution Network R&D Capabilities Human Resources Price Competitive Market Experience Brand Equity Diversification Organizational Culture Total

Wt. .1 .1 .08 .08 .08 .04 .08 .06 .08 .08 .08 1

Rate 2 2 2 2 2 2 4 2 2 3 2

Rate 3 2 2 3 1 2 3 2 2 3 2

5.1

Warid

Warid made a good entry into Pakistan but it has failed to pick upon the huge entry. It performance and market share has deteriorated in the face of new competition that’s why it’s the weakest competitor among all.

5.2

Zong

After Warid comes Zong in the competitor analysis. Zong started its operations last year in April and comes almost near to Ufone in competition due to its competitive pricing strategy.

5.3

Ufone

Ufone had the second largest share in the market in 2008 but now the scenario is a little different. Ufone is almost beaten up by Telenor and Zong.

5.4

Telenor

Telenor is in its initial years in Pakistan faced loses and had a difficult time, however it has managed to recover very well and has the third largest market share in 2008. Now it has become the second largest in the industry. And according to the competitor analysis, it stood second in the matrix which shows its firm hold on the critical success factors other than its competitors. Plus, they are the innovators of EDGE Technology in Pakistan.

5.5

Mobilink

Mobilink is the still the strongest player in the market. It has the widest coverage and the biggest market share. They are the most experienced player because they started operations in year

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Telenor Strategic Audit 1994; from then on it has shown enormous growth. That is why they are still on the top in the competitor analysis.

5. Marketing Strategy Analysis
5.1 BCG Matrix
Telenor lies in the star region because the market growth rate in the telecom sector is high and is market share is also high. Its market share is now almost the second largest in the country. Plus they are receiving also substantial investments from their HQ to maintain and dominant their dominant position. Figure 2 – BCG Matrix

6. Strategy Analysis
6.1 TOWS Matrix
6.1.1 Strategy
Telenor's main strategy is to focus on subscriber growth in mobile operations and to increase overall profitability by combining Group industrialization with local drive and responsiveness. This strategy implies focus on strengthening the group’s position as an international mobile operator. Telenor intends to continue to do this by obtaining control over selected mobile companies. Management control is essential for the group to benefit from cross-borders synergies, such as scale in procurement, to develop new services and implement best practices, to improve operational efficiency and to increase overall profitability. Telenor intends to manage non-strategic investments as financial investments and to exit from international mobile operations where it cannot obtain control over time. Page 9 of 23

Telenor Strategic Audit

6.1.2 Global Coordination Achieving Local Competitiveness
Telenor has devised a global coordination program with the single goal of increasing the local competitiveness of its mobile operations by taking advantage of global joint competence and scale.

6.1.3 Telenor Asian Operations
2007 has been a year characterized by strong subscription growth, particularly in our Asian operations. Telenor experienced high customer growth reaching 143 million mobile subscribers worldwide, and is ranked as the world’s seventh largest mobile operator in terms of subscription numbers according to GSMA statistics. Customer growth was particularly strong in Telenor Pakistan, with an increase of 8 million subscriptions from 2006 to 2007 and reported an increase in operating revenues of 163% from 2006.
Strengths Expertise Distribution Network Financial Muscle Brand Identity Human Resources Growing Market Share Increase in Subscriber Base Innovator in Telecom Industry SO Strategies Use Brand Identity & Innovative Products to attract more Customers (S4, S8, O5) Acquire Weak Competitors (S1,S3,O2) Diversify into providing Support & Technical Services (S1,S3,O4) ST Strategies Political Instability Economic Slowdown Terrorism & Crime Religious Extremism Increasing Competition in Industry Financial Risks Low Customer Switching Cost Foreign Exchange Rate Hedge Financial & Foreign Exchange Risks (S1, S3, T7, T9) Promote Telenor as Norwegian Brand (Not Danish) (S3, S4, T5) Reduce Costs & maintain Efficiency Levels (S8, T2, T3) Continuously introduce Innovative Products and watch competitors closely (S3, S8, T3) Weaknesses High Investment Costs Low Profit Margins Association with Norway (Political Reasons) Distance From HQ (Time for Local Customizations)

Opportunities Acquiring of Market Share Acquisitions in Telecom Sector Technological Solutions Staff & Support Functions Consumer Base

WO Strategies Attract Consumers to Increase Revenues (W1, W2, O5) Diversify into other Technical Services (O3, O4, W3) Increase Resource Utilization to Reduce Fixed Costs (O5, W2) WT Strategies Diversify to Reduce Risk (W3, T7, T9) Consider Acquisitions of Weak Competitors (W1, T6) Further Reduce Costs (W2, T1, T3)

Threats

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Telenor Strategic Audit

6.2 SPACE Matrix
Telenor comes under competitive quadrant of SPACE Matrix which means that Telenor is using competitive strategies in terms of introducing new packages at affordable prices. Figure 3 – SPACE Matrix

6.3 IE Matrix
Telenor comes in Grow & Build quadrant in IE matrix which means it can use intensive strategies to grow and build more and more and make their position firm in this competitive industry.

Table 5 – IE Matrix

IFE Total Weighted Score Strong Average Weak (3.0 to 4.0) (2.0 to 2.99) (1.0 to 1.99) EFE Total Weighted Score High (3.0 to 4.0) Medium (2.0 to 2.99) Low (1.0 to 1.99)

X

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Telenor Strategic Audit

7. Recommendations
7.1 QSPM Matrix for Telenor
New Service Offering With Aeromobile Key Factors Opportunities Acquiring market share Acquisitions in the telecom sector Communication Solutions Staff and Support functions Customer base Threats Political instability (Pakistan) Economic slowdown Terrorism and crime Religious Extremism Competition in industry Financial Risks Low customer switching cost Foreign Exchange Rate Strengths Expertise Distribution Network Financial backing from Telenor Group Brand Identity Human Resource 14% and growing market share Subscriptions increased by 8 million Innovator in Telecom industry Weaknesses Losses In Pakistani Market Low Profit Margins Little Diversification Total Weight 0.04 0.05 0.07 0.04 0.06 0.02 0.03 0.03 0.02 0.04 0.02 0.02 0.02 0.08 0.06 0.05 0.04 0.03 0.04 0.06 0.08 AS 4 0 4 4 4 2 1 1 0 4 3 0 3 4 3 3 3 3 0 3 4 TAS 0.16 0 0.28 0.16 0.24 0.04 0.03 0.03 0 0.16 0.06 0 0.06 0.32 0.18 0.15 0.12 0.09 0 0.18 0.32 Diversify Into IT With EDB AS 4 0 4 4 3 2 1 1 0 3 3 0 3 4 3 4 4 4 2 2 4 Diversify In FixedLine Telecommunication Services TAS AS TAS 2 0 2 3 3 2 1 1 0 3 2 2 2 4 1 4 4 4 0 0 4 0.08 0 0.14 0.12 0.18 0.04 0.03 0.03 0 0.12 0.04 0.04 0.04 0.32 0.06 0.2 0.16 0.12 0 0 0.32 Communication Solutions

AS 2 0 3 3 3 2 1 1 0 2 2 0 2 4 0 3 4 3 0 0 0

TAS 0.08 0 0.21 0.12 0.18 0.04 0.03 0.03 0 0.08 0.04 0 0.04 0.32 0 0.15 0.16 0.09 0 0 0

0.16 0 0.28 0.16 0.18 0.04 0.03 0.03 0 0.12 0.06 0 0.06 0.32 0.18 0.2 0.16 0.12 0.08 0.12 0.32

0.03 0.03 0.04 1

3 3 3

0.09 0.09 0.12 2.88

4 3 3

0.12 0.09 0.12 2.95

3 2 3

0.09 0.06 0.12 2.31

3 3 3

0.09 0.09 0.12 1.87

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Telenor Strategic Audit According to the QSPM, diversifying into IT with Telenor Group’s subsidiary EDB is the most attractive alternative strategy. a) Diversify into IT with EDB in Pakistan EDB is a leading IT group in the Nordic region. Pakistan has a growing IT industry and Telenor Group could easily diversify into this industry to take advantage of its existence in Pakistan.

b) New Service offering with Aeromobile in Pakistan
Another innovative strategy is new product offering with Aeromobile (a subsidiary of Telenor Group) in Pakistan. Using Aeromobile aircraft passengers and crew can safely use their own mobile phones and PDAs whilst in-flight to keep in touch with colleagues, customers, friends and family. Aeromobile supports voice telephone, text messaging and data services using current and future aircraft communications technologies.

7.2 Grand Strategy Matrix
The grand strategy matrix is used to place an organization in one of the four quadrants according to their competitive position in the market and the growth rate in the industry.

Figure 4 – Grand Strategy Matrix

Telenor lies in the first quadrant. The market growth rate in the telecom sector is high and since the telecom penetration is also low there is a lot of room still for growth in the market. Telenor is second to Mobilink in the market in Pakistan thus it is rated relatively high on competitive position. The strategies available to Telenor are:

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Telenor Strategic Audit

Current Strategies
Market Penetration High Promotional Efforts Competitive Prices Product Development Djuice Tawk Shawk Persona Post Paid Concentric Diversification Telenor GSM 3G Technology Satellite TV

Strategies to be followed in Future
Forward Integration Backward Integration Horizontal Integration Market Development

8. Conclusion
Phenomenal growth of cellular industry in Pakistan besides strategic location of the country has convinced the investors to establish mobile phone industries within this country. So far the cell phones being used in Pakistan are imported from different countries. However, some mobile phone companies in collaboration with some leading software houses in Pakistan are on their way to set up mobile producing projects in Pakistan. Hopefully, this trend may open new doors for investment, employment, exports and development in Pakistan. The future of telecom is bright in Pakistan. International players like Telenor have improved industry standards in strategic planning and now companies are using strategic tools to counter competition.

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9. Bibliography
(2009). Retrieved May 1, 2009, from Telenor: http://www.telenor.com.pk/about/history.php Gloabal Presence. (2009). Retrieved May 2, 2009, from Telenor: http://www.telenor.com/en/global-presence/ Innovation. (2009). Retrieved May 4, 2009, from Telenor: http://www.telenor.com/en/innovation/research/ Technology Lahore. (2008, May 31). Retrieved May 1, 2009, from http://techlahore.wordpress.com/2008/05/31/pakistan-has-highest-tele-density-in-southasia-9bn-fdi-for-it-so-far-prime-minister/ Telenor EDGE. (2009). Retrieved May 4, 2009, from Telenor: http://www.telenor.com.pk/services/usb_Edgecard.php

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Telenor Strategic Audit

10.Appendices
10.1 Global Presence

10.2 Profitability in Emerging Markets
Telenor studies emerging markets to develop sustainable business models. We experiment with new concepts and positions through pilots and incubations in cooperation with Telenor operating companies or together with third parties. Disruptive approaches to reaching the unconnected are also being explored. In Pakistan, for example, Telenor has managed to run a profitable operation, keeping revenues high and costs low. Telenor Pakistan also has a wide range of new and innovative services that have proven successful (Innovation, 2009).

10.3 CEO & Group Executive Management
The Chief Executive Officer (CEO) is in charge of the day-to-day management of the Telenor Group. The Group Executive Management consists of heads of key business areas and functions at Telenor.

Jon Fredrik Baksaas
President and CEO Appointed: 21 June 2002 Stocks: 77 156 as of 18 March 2009

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Telenor Strategic Audit Options: 330 000 as of 4 August 2008

Sigve Brekke
Executive Vice President and Head of the Telenor Asia operations Appointed: 1 September 2008 Stocks: 10 862 as of 17 February 2009 Options: 40 000 as of 10 November 2008

Morten Karlsen Sørby
Executive Vice President and head of the Nordic mobile and fixed network operations of Telenor Appointed: January 2003 Stocks: 25 345 as of 17 February 2009 Options: 55 000 as of 4 August 2008

Jan Edvard Thygesen
Executive Vice President and Head of the Central/Eastern European Appointed: 1999 Stocks: 66 403 as of 17 February 2009 Options: 205 000 as of 4 August 2008

Trond O. Westlie
Executive Vice President and Chief Financial Officer (CFO) Appointed: 2006 Stocks: 28 530 as of 17 February 2009 Options: 55 000 as of 4 August 2008

Bjorn Magnus Kopperud
Executive Vice President and Head of Group Human Resources Appointed: January 2006. Since 2003 he has served as Head of Group Human Resources. Stocks: 13 014 as of 17 February 2009 Options: 90 000 as of 4 August 2008

Ragnar H. Korsæth
Executive Vice President and Head of Global Coordination Appointed: January 2006 Stocks: 8 349 as of 17 February 2009 Options: 83 333 as of 4 August 2008

Hilde M. Tonne
Executive Vice President and Head of Communications & Corporate Responsibility Appointed: 1 September 2007 Stocks: 8 007 as of 17 February 2009 Options: 0 as of 20 February 2009

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10.4 Board of Directors
The Board is responsible for the management of the Telenor Group and the proper organization of its operations.

Harald Norvik
Chairman Appointed: 31 May 2007 Stocks: 16 520 as of 10 November 2008

Bjørg Ven
Vice-Chairman Appointed: 1 October 2001 Stocks: 10 000 as of 31 December 2007

Burckhard Bergmann
Board member Appointed: 29 May 2008 Stocks: 0 as of 20 February 2009

John Giverholt
Board member Appointed: 8 May 2003 Stocks: 0 as of 20 February 2009

Kjersti Kleven
Board member Appointed: 31 May 2007 Stocks: 0 as of 20 February 2009

Olav Volldal
Board member Appointed: 31 May 2007 Stocks: 0 as of 20 February 2009

Liselott Kilaas
Board member Appointed: 8 May 2003 Stocks: 0 as of 20 February 2009

Paul Bergqvist
Board member Appointed: 7 April 2005 Stocks: 1 000 as of 15 February 2008

Harald Stavn
Board member, employee representative Page 18 of 23

Telenor Strategic Audit Appointed: 20 June 2000 Stocks: 4 970 as of 10 November 2008

10.5 Telenor’s Portfolio
Following are the main business of Telenor.

The Internet
UMTS and Turbo 3G are both relatively new products available in the markets. These services make it simple, fast and inexpensive for customers to use their mobile phones or PCs to surf the Internet when they are away from home. 3G brought valuable access to new fields in densely populated areas with less developed infrastructure – such as Bangladesh.

TV and Broadcast
At present, the Telenor satellites broadcast around 200 TV channels throughout the Nordic Region, Central and Eastern Europe. Satellite broadcasting has shaped events over the last two decades and looks set to continue to have a secure position in the Nordic countries, Central Europe and the Middle East.

Mobile Phone Services
By the year 2000, the mobile telephone service had become a prominent business area for Telenor and a basis for the international growth strategy. This strong position was the result of more than 30 years of evolution. Cooperation between the Nordic countries to create a common standard resulted in the Nordic Mobile Telephone (NMT) in 1969. This became the start of prolonged international collaboration to set the future standards for mobile networks.

10.6 Fact Sheet
The Telenor Group is currently ranked as the world’s seventh largest mobile operator in terms of subscriptions. The revenues were NOK 111 billion in 2008. The Telenor Group has 164 million mobile subscriptions worldwide (2008). Telecom operations in 13 countries. In one day at Telenor... 38,800 employees go to work in 13 countries. An average of 75,000 new customers joins.

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10.7 Priorities of Telenor

10.8 Core Values of Telenor

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10.9 Services in Pakistan
Apna PCO Teledoctor

10.10 Subscription Growth Rate Worldwide

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10.11 Porter’s Five Forces Model Questionnaire
A 1. 2. 3. 4. 5. 6. 7. 8. 9. THREAT OF NEW ENTRANT Do large firm have a cost or performance advantages in your segment of the industry? Are there any brand propriety product differences in the industry? Are they any established brand identities in your industry? Do the customers incur any significant cost in switching suppliers? Is a lot of capital needed to enter your industry? Is serviceable used equipment expensive? Does the newcomer to your industry face difficulty in accessing distribution channels? Does experience help you to continuously lower costs? √ √ √ √ √ √ √ √ √ √ YES (+) ~ √ √ NO (-)

Does the newcomer have any problems in obtaining the necessary skilled people, materials or suppliers Does your product/service have any proprietary feature that gives you 10. lower costs? Are there any license, insurance or qualifications that are difficult to 11. obtain? 12. Can the newcomer expect strong retaliation on entering the market?

B 1. 2. 3. 4. 5. 6. 7. 8. 9.

BARGAINING POWER OF BUYERS Are there large numbers of buyers’ relative to number of firms in the business? Do you have large number of customers, each with relatively small purchases? Does the customer face any significant cost in switching suppliers? Does the buyer need a lot of important information? Is there anything that prevents the customer from taking your function in house? The customers are not highly sensitive to price. The product is unique to some degree or has accepted branding. Your customers businesses are profitable. Are there any license, insurance or qualifications that are difficult to obtain? Page 22 of 23

YES (+) ~ √ √

NO (-)

√ √ √ √ √ √ √

Telenor Strategic Audit

C 1. 2. 3.

THREAT OF SUBTITUTES Does the customer will incur costs in switching to substitute? The customer has no real substitute. The customer has not likely to substitute.

YES (+) ~

NO (-) √ √

√

D 1. 2. 3. 4. 5. 6.

BARGAINING POWER OFSUPPLIERS The (material, labor, supplier, services etc) are standard rather then unique or differentiated The enterprise can switch between supplier quickly and cheaply My supplier would find it difficult to enter my business or my customers would find it difficult to perform my function in-house? The enterprise has many potential suppliers. My business is important to my suppliers. My cost of purchase has no significance influence on overall costs.

YES (+) ~ √ √ √ √ √ √

NO (-)

E 1. 2. 3. 4. 5. 6. 7. 8. 9.

DETERMINENTS OF RIVALARY AMONG EXISTING COMPETITION The industry is growing rapidly The industry is not cyclical with intermittent overcapacity The fixed cost of the business is relatively low to the total costs. There are significant brand differences and brand identities between the competitors. It would be hard to get out of the business because there are not specialized skills and facilities or long-term contract commitments etc. The customers incur significant cost in switching to a competitor. The product is unique to some degree or has accepted branding. The product is complex and requires detailed understanding on part of customers My competitors are all of approximately the same size as I am.

YES (+) ~ √ √

NO (-)

√ √ √ √ √ √ √

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