INTERVIEW: TORE JOHNSEN, CEO TELENOR PAKISTAN

TELECOM CONTRIBUTES 35 PERCENT OF THE TOTAL FDI IN PAKISTAN

AMANULLAH BASHAR
Mar 03 - 09, 2008

PAGE: Do you think Pakistan market still offers an opportunity for FDI in cellular industry especially in the face of growing teledensity?

TORE: Pakistan is one of the fastest growing telecom markets in the world. The growth numbers have been remarkable. Consider this: According to PTA, the current size of the Pakistani telecom market is 77 million subscribers, 48% tele-density with an annual growth rate of 100% over the fiscal year 2006-2007. The contribution of Telecom FDI is placed at 35% of the total FDI and the telecom sector is reported to make up to 2% of the GDP. And the investment is not drying up. With mobile telecom operators penetrating the largely un-connected rural market, urban customers starting to increase usage of data services and advanced voice features, a widely young customer base and the government sustaining its policy of telecom sector support, Telenor Pakistan sees a very promising future for the customer and those operators that can demonstrate responsible growth. So, yes there is still considerable scope of FDI in the Pakistani market.

PAGE: It generally felt Telenor has attracted the younger generation more than elders who have more potential to spend? Why most of your ads in media are addressing to the youngsters most of the time?

TORE: Telenor Pakistan has offers for all segments in the market, young and not so young. The youth makes up an important and huge part of the Pakistani market and therefore a lot of communications is directed towards them. On the other hand, we are also spending considerable energy on our postpaid brand such as Persona, which is more directed to business people. Our recent advertising on easy and fast internet connectivity is also very much age neutral.

PAGE: How can Telenor be described different from rest of the lots in the industry?

TORE: Telenor Pakistan has a holistic outlook that is rather unique in the industry. Thanks to our excellent people, Telenor Pakistanís corporate reputation has many dimensions:

SUCCESS WITH THE CUSTOMER: Telenor Pakistan now has more than 15 million customers that is a landmark it has achieved in less than 3 years of operations. As an evidence of our brand strength in the market, last year we won both the awards for Most Innovative Mobile Operator and Mobile Operator with the Most Consumer Pull at the 6th SAARC Communication Industry Conference 2007. As an innovation leader in the market, we have one of the most diverse ranges of products & services to meet all type of customer needs.

SUCCESS WITH EMPLOYEES: We have been able to promote a culture focused on talent, performance, and values and attract the top human resource in the market. 99%-plus of our employees are Pakistanis. Our company remains dynamic and fast because we are one of the youngest mobile companies people-wise, our average employee age is 27. The attractiveness of the company can be gauged from the fact that has been recognized by the Pakistan Society of Human Resource Management as the Most Preferred Telecommunications Company 2007.

SUCCESS WITH SHAREHOLDERS: In FY06-07, the company grew nearly 200% in terms of customers, experiencing the highest growth in the industry by a wide margin as compared to its competitors. We have just announced excellent financial results for Q4 2007, with 2 million subscriptions added to its base within the 3-month period. The company also grew its revenue by 18% in local currency from Q3 2007 and improved its EBITDA by 17 % from Q3 2007. The company crossed 15 million subscribers in mid January 2008 within less than three years of operation.

SUCCESS WITH COMMUNITY: Last year, Telenor Pakistan came out with the first-ever Corporate Responsibility report in the mobile industry, setting new standards of transparency and responsibility. Going a step further than conventional corporate documents, the report proposes a specific principle of corporate responsibility efforts in the Pakistani market: the principle of shared value. Shared Value is the name given to the mutual benefit that businesses and societies derive from their constructive interactions. Our community development programs run in the areas of emergency communications and education, empowerment, enterprise and environment with a focus on bringing the telecom promise within the grasp of the most disadvantaged sections of the society.

SUCCESS WITH PUBLIC SECTOR: Telenor Pakistan won the first Universal Service Fund project to provide communication services to the un-served villages of the Malakand division. The company has also achieved great success in attracting additional customers after the launch of Mobile Number Portability.

INTERNATIONAL SUCCESS: Telenor ASA, Telenor Pakistanís parent company has now become the 7th largest mobile operator in the world with 143 million subscribers. As compared to the previous year, Telenor's revenues increased by 15 per cent in 2007 to NOK 105 billion. Profit after taxes and minority interests increased by 13 per cent in 2007 as compared to 2006, reaching NOK 18 billion. Telenor ASA is recognized on prestigious international Corporate Responsibility indexes such as Dow Jones Sustainability Indexes, FTSE4 Good, Storebrand's Best in Class distinction. It ranks at no. 25 overall and no.5 in Europe in Business Week's global ranking of the top 100 performers in the technology industry.

PAGE: What are the future plans of Telenor to expand business operations in Pakistan?

TORE: We have signed major investment contracts for network expansion and maintenance within the last15 months. We extended our frame agreements with Nokia and Siemens on network expansion and services until 2009. The agreements, with a potential to result in 750 million USD worth of orders from Telenor Pakistan, are some of the largest of their kinds in the industry.

In addition, last year Telenor Pakistan won the first Universal Service Fund (USF) project and is working tirelessly at providing connectivity to the yet unconnected Malakand division. Telenor Pakistan will continuously expand our network to address the needs for mobile communication for the urban and rural populations in Pakistan.

PAGE: In what ways the Telenor has contributed towards the economic growth in this part of the world?

TORE: Telenor Pakistan is the fastest growing network in Pakistan and in mid-January 2008 announced acquiring more than 15 million customers within less than three years. Many of these customers belong to the remote areas of Pakistan, who are using mobile services for the first time in their lives. Each such connected customer means greater potential for increased economic productivity in the local economies.

We have provided to our customers an advanced mobile network with 95% EDGE capability for faster data services. In that way we are acting as the fastest and the largest mobile Internet Service Provider (ISP) for communities which might never have the facility of fixed-line connectivity to the internet.

On the access front, we are constantly expanding our network and Telenor Pakistan is the largest network in AJK and Northern Areas already.

By the end of 2007, we had already invested some USD 1.8 billion of FDI in Pakistan. As we intend to connect the unconnected in the remotest corners of Pakistan with valuable services we understand the need for constant investments in the network, capacity, and services.

PAGE: What is the Telenor's share in providing employment and in social responsibility for uplifting the living standards in this country>

TORE: Telenor Pakistan has created 2500 direct and more than 20,000 indirect employment opportunities to date, while we have also created direct business opportunities for 200-plus franchisees and more than 100,000 retailers across Pakistan. We have been able to promote a culture focused on talent, performance, and values and attract the top human resource in the market. We are one of the youngest mobile companies people-wise that bring a lot of energy and dynamism to the organization.

TELENOR'S PERFORMANCE AT A GLANCE

BRINGING INTERNATIONAL EXPERTISE:

The Telenor group is an international provider of high quality telecommunications, data and media communication services Telenor has 150-plus years of experience in the communication business.

Telenor Pakistan is 100% owned by Telenor ASA and adds on to its operations in Asia together with Thailand, Malaysia and Bangladesh.

CONTRIBUTING TO LOCAL ECONOMY:

Telenor has made the largest European direct investment in Pakistan as yet Telenor purchased license at a cost of 291 million dollars in April 2004 and started operations in March 2005 Telenor Pakistan received FPCCI Telecom Excellence award in Foreign Direct Investment in June 2006 for one of the largest FDI investments in recent years

Telenor has already invested USD 1 billion in Pakistan

Telenor Pakistan received High Tax Payer Award 2004-5 in January 2006 from CBR for paying highest customs duties in 2005

Recently, Telenor Pakistan has won the PSHRM Preferred Graduate Employer Award for Most Preferred Telecommunications Company for 2007

Raising standards in the market:

Telenor ranks at no. 25 overall and no.5 in Europe in Business Week's global ranking of the top 100 performers in the technology industry

Recently, Telenor Pakistan won the Telenor Global Brand Award for the year 2007 from among the 12 mobile companies in the Telenor Group portfolio.

Early this year, Telenor Pakistan won in three of five nominated categories at the All Pakistan Dawn Aurora Advertising Awards.

* Telenor Pakistan has announced excellent financial results for the company for the Q3 2007 period. Telenor Pakistan achieved 1.9 million subscribers, 19% higher than the previous quarter. This way Telenor Pakistan contributed some 48% of the group's total subscription additions worldwide in the 3-month period. Telenor Pakistan reported to PTA 13.9 million subscribers at the end of November 2007.

* In FY 2006-2007 Telenor Pakistan grew its subscriber base by 200%, well ahead of competition in the market.

* Telenor Pakistan has the second largest mobile network in Pakistan

* Telenor Pakistan has the fastest growing mobile network in the country

* Telenor Pakistan provides the widest EDGE connectivity in the country

* Telenor Pakistan has the largest data network (GPRS) in the country.

* Telenor Pakistan has one of the most diverse range of products in the market with Persona, djuice, and TalkShawk

* Telenor Pakistan has innovated several industry-first services/promotions, including but not limited to Easyload, Unlimited Validity, 2nd minute low pricing, prepaid international roaming, GPRS roaming, Smart Share, Bubble Message, international MMS, SMS timer, Aik Paisa SMS, Tele Kissan, Akhbaar service, Islamic portal, and Mobile TV among others. Recently, Telenor Web Self Service, Persona bill payment at more than 100 000 retail outlets, International Recharge, Telenor Pic Share, and Talk Shawk Har Second package have created differentiation in the market.

* Telenor Pakistan has won the first USF project and will provide connectivity to the yet unconnected Malakand division.

SERVING THE COMMUNITY:

* Telenor is recognized on prestigious international Corporate Responsibility indexes such as Dow Jones Sustainability Indexes, FTSE4 Good, Storebrand's Best in Class distinction

* Telenor has been named the No.1 mobile operator on the Dow Jones Sustainability Indexes (DJSI) 2007, ahead of 13 leading mobile communications companies worldwide.

* Telenor Pakistan is establishing international corporate responsibility standards, including Codes of Conduct and good governance principles

* Telenor contributed Rs. 65 million to the President Earthquake Relief Fund and International Red Cross after the 8 Oct 2005 earthquake. Also, provided crisis communication support to Edhi, National Crisis Management Cell, press and relief organizations. Group employees contributed more than 30 million worth of relief goods

* Telenor Pakistan currently runs a number of community support initiatives aimed at helping communities help themselves:

(1) DUA: The DUA project with the SOS Children Villages of Pakistan aims at providing support (sustenance, education, shelter) for one hundred earthquake orphans and offering free communication services for the children to talk to their distant relatives in Azad Kashmir and NWFP. Telenor Pakistan has also equipped SOS emergency Search and Rescue staff with free connections and works with SOS Children Villages of Pakistan at specific projects to raise funds for the innocent victims of the devastating earthquake of 8th October, 2005.

Telecom Futures: Telecom Futures is Telenor Pakistan's project with Nokia-Siemens Networks and Punjab's largest diploma-awarding institution, Technical Education & Vocational Training Authority (TEVTA). The Telecom Futures program aims at building on TEVTA's Higher National Diploma in Telecom by aligning curriculum with industry expectations, providing advanced trainings and rewards to teachers, sharing specialized equipment with students, and offering internships or jobs to suitable diploma holders. TEVTA is managing 402 technical Institutions

(2) spread all over Punjab and providing technical, vocational and commerce education to approximately 100,000 students both male and female in Pakistan. Telecom Future's target is to deliver a scalable model for large-scale implementation, an education and training model that improves the level of young human resource created locally, and increases the employability of vocational diploma holders. Telecom Futures has been launched in Lahore, Attock and DG Khan.

(3) APNAPCO: The project was set up with support from the Development Fund of the GSM Association (GSMA), the global trade association for mobile phone operators. apnaPCO is the only GSMA-supported shared access to voice project in Pakistan, and by that account has tremendous positive implications for the local market and for Pakistan internationally. Telenor Pakistan has entered into an alliance with the National Rural Support Program (NRSP) for the roll-out of the project in the most impoverished rural areas of southern Punjab and rural Sindh. The project seeks to bring socio-economic benefits of telecommunication to select rural communities.

(4) NAYA QADAM: Telenor Pakistan has initiated a project, called Naya Qadam, with one of the country's foremost welfare organization for the disabled to help empower persons with physical disabilities by making them partners in trade. As part of the Naya Qadam project, Telenor Pakistan's Karachi-based partner organization, Disabled Welfare Association (DWA), will loan out specially designed motorcycle-cum-shops to select physically disabled individuals. These shops-on-wheels are designed so that people with disabilities can easily use them, and display and sell their sale items on the move. In an attempt yet unprecedented in the telecommunications sector, Telenor Pakistan has arranged for the physically disabled entrepreneurs to become retailers for its most popular product, EasyLoad, in order for the entrepreneurs to earn a respectable living. To boost their income further, they will also be able to sell small snack items from the built-in tuck boxes on the motorcycles.

(5) RELIEF EFFORTS: Telenor Pakistan aims to provide emergency communications wherever the need be as fast as possible and has done so in the past.