Telenor Earnings: Guidance Fractionally Raised; Maintain Fair Value Estimate

Narrow-moat Telenor reported service revenue of NOK 16.3 billion, which represents a 4.5% organic increase year over year. The increase in service revenue continues to be driven by mobile service revenue growth on the back of increasing average revenue per user in all Nordic markets except Finland. In Finland, the improvement came from an increase in the subscriber base. These results support our belief that Telenor can gradually increase prices without losing significant market share, especially in Norway, where it is the incumbent with a very high market share. In Asia, organic service revenue increased by 6.4%, primarily attributed to the continued positive development in data usage and data users in Grameenphone, Telenor's Bangladesh business, and growth in average revenue per user in Pakistan. For the group, first-half 2024 organic service revenue increased 5.1%. Group EBITDA was NOK 8.8 billion, up 3.8% year over year on an organic basis. Management took the opportunity to raise its 2024 organic revenue guidance from a low single digit to low- to mid-single digit, but maintained its goal of mid-single-digit EBITDA growth. We continue to believe Telenor is well positioned to reach these ambitions and make no changes to our estimates. We maintain our NOK 130 fair value estimate.