Download PDF

1. Company Snapshot

1.a. Company Description

Telenor ASA, together with its subsidiaries, operates as a telecommunication company worldwide.Its principal products and services include mobile communication, fixed line communication, and broadcasting services.The company's mobile communication services comprise voice, data, Internet, and content services, as well as customer equipment and messaging.


Its fixed line services consist of telephony, Internet and TV, and leased lines, as well as data and managed services; and broadcasting and data communication services through satellite, terrestrial radio, and TV transmission.The company also provides machine-to-machine communication, as well as internet based services and financial services.Telenor ASA was founded in 1855 and is headquartered in Fornebu, Norway.

Show Full description

1.b. Last Insights on TEL

Telenor's recent performance has been impacted by several negative factors. The company's quarterly core earnings fell short of market expectations, with a negative adjustment of $49.8 million related to rising 5G costs in Malaysia. Additionally, Telenor's adjusted EBITDA growth was modest, increasing by 5.4% year-over-year. The company also warned of increased risk of cyberattacks, sabotage, and disinformation in its Nordic security report. Furthermore, Telenor's valuation has come under scrutiny following a recent share price pullback.

1.c. Company Highlights

2. Telenor's Q3 Earnings: A Mixed Bag with Nordics Driving Growth

Telenor reported a mixed quarterly performance, with group service revenues reaching NOK 16.3 billion, up 2.7% year-over-year, and adjusted EBITDA of NOK 9.5 billion, up 5.4%. The EPS came in at 1.85, below estimates of 2.22. The strong performance in the Nordics was a highlight, with EBITDA growth of 8% driven by a 2.1% rise in organic service revenues and a similar decline in OpEx. As Benedicte Fasmer noted, "our commercial strategy and transformation efforts continue to pay off, with EBITDA in the Nordics up 8% and 50,000 new mobile customers added." The free cash flow before M&A was NOK 4.2 billion, representing a 50% year-on-year increase.

Publication Date: Oct -30

📋 Highlights
  • EBITDA Growth & Free Cash Flow:: Group EBITDA rose 5.4% (NOK 9.5B), with free cash flow before M&A surging 50% YoY to NOK 4.2B.
  • Nordics Performance:: Nordics drove 8% EBITDA growth, adding 50,000 mobile customers, with Norway (9.2% EBITDA up), Sweden (7.5%), and Finland (5%) outperforming.
  • Asia Challenges & Pakistan Success:: Asia grew service revenues by 4%, led by Pakistan’s 17% EBITDA growth, despite macroeconomic hurdles in Bangladesh and Malaysia.
  • GlobalConnect Acquisition Impact:: Deal to boost market share by 7pp, reducing overbuild and enhancing customer relationships, though offset by Pakistan transaction costs.
  • Outlook Adjustments:: Group EBITDA guidance narrowed to 5-6% for 2025, with Nordics targeting 8-9% growth and CapEx-to-sales at ~14%.

Regional Performance

The Nordics continued to drive growth, with Norway, Sweden, Finland, and Denmark all reporting positive EBITDA growth. In contrast, Asia presented a mixed picture, with Grameenphone delivering growth in service revenues and EBITDA, while facing a tough external backdrop. Telenor Pakistan reported 17% year-over-year EBITDA growth. The company's strategic procurement partnership with Vodafone is expected to unlock significant value.

Outlook and Valuation

Telenor's full-year '25 outlook remains unchanged, with a tightening of the ranges based on year-to-date execution. The company expects 2% to 3% service revenue growth, 8% to 9% EBITDA growth, and CapEx to sales confirmed around 14% for the Nordics. For the group, adjusted EBITDA growth is expected to be between 5% to 6%. With a P/E Ratio of 19.05 and an EV/EBITDA of 8.11, the market appears to be pricing in a moderate growth trajectory. The Dividend Yield of 6.32% is attractive, and the Free Cash Flow Yield of 8.23% suggests a decent return on investment.

Challenges Ahead

The company faces challenges in Asia, particularly in Malaysia and Bangladesh, where macroeconomic conditions and data price competition are expected to persist. The 5G JV issue in Malaysia and the voice-to-data transition in Bangladesh are key risks. Additionally, the GlobalConnect transaction is expected to increase market share, but also poses integration risks. With a Net Debt / EBITDA of 2.52, the company's leverage is manageable, but investors will be watching the execution of the transaction and the performance in Asia closely.

3. NewsRoom

Card image cap

Telenor Marks 25 Years on the Oslo Stock Exchange

Dec -04

Source:

Card image cap

How Investors Are Reacting To Telenor (OB:TEL) Consolidating Nordic IoT Operations Under Telenor Connexion

Nov -15

Source:

Card image cap

Telenor Consolidates IoT Operations to Launch Global IoT Powerhouse

Nov -13

Source:

Card image cap

Telenor targets low-to-mid single-digit growth in Nordic core earnings until 2030

Nov -11

Source:

Card image cap

Telenor Targets Further Growth in Nordics

Nov -11

Source:

Card image cap

Nokia readies TNN Denmark for AI-powered 5G future

Nov -10

Source:

Card image cap

Telenor (OB:TEL): Assessing Valuation After Recent Share Price Pullback

Nov -03

Source:

Card image cap

Telenor warns in new Nordic security report: Increased risk of cyberattacks, sabotage and disinformation

Oct -30

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.31%)

6. Segments

Nordics

Expected Growth: 2.5%

Nordics' 2.5% growth in Telenor ASA is driven by increasing mobile data consumption, 5G adoption, and rising demand for digital services. Additionally, the region's high smartphone penetration, growing e-commerce, and investments in IoT and smart cities contribute to the growth. Furthermore, Telenor's focus on cost savings, network modernization, and customer experience enhancements also support the segment's growth.

Asia

Expected Growth: 1.8%

Telenor ASA's 1.8% growth in Asia is driven by increasing mobile penetration, particularly in rural areas, and rising demand for data services. Additionally, the region's growing middle class and urbanization are contributing to increased mobile adoption and usage, further fueling growth.

Amp

Expected Growth: 2.2%

Amp's 2.2% growth is driven by increasing demand for digital services, Telenor's strong brand presence, and strategic investments in 5G network expansion. Additionally, growing adoption of IoT and cloud services, as well as cost savings from operational efficiency initiatives, contribute to the segment's growth.

Infrastructure

Expected Growth: 1.9%

Telenor ASA's 1.9% infrastructure growth is driven by increasing demand for 5G network upgrades, expansion into new markets, and growing adoption of IoT devices. Additionally, the company's focus on modernizing its network infrastructure and investing in fiber-optic cables has contributed to this growth.

Other

Expected Growth: 1.5%

Telenor ASA's 'Other' segment growth of 1.5% is driven by increasing demand for digital services, expansion into new markets, and strategic partnerships. Additionally, the company's focus on cost optimization and operational efficiency has contributed to the growth. Furthermore, the rise of IoT and 5G technologies has created new revenue streams, supporting the segment's growth.

7. Detailed Products

Mobile Services

Telenor ASA provides mobile services including voice, data, and SMS to individual and business customers.

Fixed Line Services

Telenor ASA offers fixed line services including broadband, TV, and telephony to residential and business customers.

IoT Services

Telenor ASA provides IoT services including device management, data analytics, and connectivity solutions for businesses.

Cloud Services

Telenor ASA offers cloud services including infrastructure, platform, and software as a service for businesses.

Cyber Security Services

Telenor ASA provides cyber security services including threat detection, incident response, and security consulting for businesses.

Data Analytics Services

Telenor ASA offers data analytics services including data management, analytics, and insights for businesses.

8. Telenor ASA's Porter Forces

Forces Ranking

Threat Of Substitutes

Telenor ASA operates in a highly competitive industry, and there are several substitutes available to customers. However, the company's strong brand presence and wide range of services help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Telenor ASA has a large customer base, but individual customers do not have significant bargaining power. The company's services are essential for many customers, which reduces their bargaining power.

Bargaining Power Of Suppliers

Telenor ASA relies on a few large suppliers for network equipment and services. While these suppliers have some bargaining power, the company's size and scale help to mitigate this threat.

Threat Of New Entrants

The telecommunications industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to challenge Telenor ASA's market position.

Intensity Of Rivalry

The telecommunications industry is highly competitive, with several large players competing for market share. Telenor ASA faces intense competition from rivals such as Telia Company and Tele2 AB.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 61.31%
Debt Cost 3.95%
Equity Weight 38.69%
Equity Cost 4.45%
WACC 4.14%
Leverage 158.50%

11. Quality Control: Telenor ASA passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Telenor

A-Score: 6.9/10

Value: 4.8

Growth: 3.3

Quality: 5.7

Yield: 8.8

Momentum: 9.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Proximus

A-Score: 6.9/10

Value: 9.3

Growth: 3.4

Quality: 5.2

Yield: 9.4

Momentum: 7.5

Volatility: 6.3

1-Year Total Return ->

View Full Report
Stock-Card
Telekom Austria

A-Score: 6.8/10

Value: 8.1

Growth: 4.7

Quality: 6.5

Yield: 6.9

Momentum: 6.5

Volatility: 8.3

1-Year Total Return ->

View Full Report
Stock-Card
Orange Polska

A-Score: 6.5/10

Value: 7.3

Growth: 4.1

Quality: 4.5

Yield: 8.1

Momentum: 7.0

Volatility: 8.0

1-Year Total Return ->

View Full Report
Stock-Card
KPN

A-Score: 6.4/10

Value: 4.1

Growth: 4.1

Quality: 5.9

Yield: 7.5

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

View Full Report
Stock-Card
Tele2

A-Score: 5.5/10

Value: 3.0

Growth: 3.2

Quality: 5.8

Yield: 8.8

Momentum: 9.5

Volatility: 3.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

145.0$

Current Price

145$

Potential

-0.00%

Expected Cash-Flows