Telia Company AB (publ) (TELIA) Earnings Call Transcript & Summary

[Presentation] Good morning, everyone, and welcome to quite a snowy Friday morning here in the Telia company head office in Solna. We will today not only take you through the Q4 report and the full year results but also take you through an updated strategy and the financial ambitions that we have for the coming years. And of course, maybe needless to say, we would have really liked to have you here with us, but as you know, unfortunately, we can't, but we really hope to see you here next time. And meanwhile, we hope that you're all [ wealthy ], both you and your near and dear ones. So here is the agenda for the day. It will be 2 -- or 3 different sort of sections. We will have some leg stretchers and breathing in-between. The times are preliminary, so bear with me. I hope that they are more correct than the working capital guidance I have given you throughout 2020. We have -- I have with me on proper social distance our President and CEO, Allison Kirkby. I have our CFO, Per Christian Morland; and our COO, Rainer Deutschmann. And they will walk you through this like a relay basically, and we start with Allison that will take you through the Q4 numbers. So I hand over to you, Allison.

Thank you, Andreas. And good morning, everyone, and let's get started. So thanks for joining today. We'll, as Andreas said, first focus on the fourth quarter results, which as you saw was slightly better than expected with a somewhat better trend on service revenues, especially within our enterprise segment and also within our TV/Media business. Reported service revenues grew by 4%. As -- if you recall, we only closed the Bonnier transaction in December last year, but on a like-for-like basis we saw service revenues decline just over 2.1% but sequentially better than the 4.8% drop we saw in the last quarter. And if you now exclude COVID, we were basically flat in the quarter. Within revenue, mobile subscription revenues fell by 1.1% and, excluding the roaming impacts, were actually up 2.1%; and again a sequential improvement versus Q3, when we were up around 1.5%. EBITDA declined, minus 6.6%, very much driven by the COVID impacts, of which that was around SEK 200 million. We also had no positive benefits from pension this year. And as we said already, in the third quarter, we made some deliberate investments into marketing and call center staffing in the quarter. So excluding COVID and pension impacts, EBITDA declined 3%. EBITDA less CapEx fell 18.6%, driven by the lower EBITDA and to some extent also CapEx growing as we now start to invest in 5G rollout and in the modernization of our networks. We've clearly already preannounced the operational free cash flow of SEK 12.1 billion driven by the aforementioned results but also by working capital. So net-net, considering the headwinds we faced at the beginning of this year, I'm proud of the resilience and the recovery that we've seen since then. However, since our last update, the second wave of the pandemic has clearly accelerated, with increased restrictions and lockdowns, and we are also seeing that impact our footprint. We now have around 85% to 90% of our workforce now working from home again with store closures in Denmark, Lithuania and the Oslo area since last week, but considering this context, our business is still very solid and strong. And as I said, I was particularly happy with the strong performance in the enterprise segment, especially in Sweden, Finland and Norway. Our customers are rewarding us for offering a broad range of digital services, everything from connectivity to IT services and IoT. And although we're not out of the woods and we have the deepest respect for how the ongoing pandemic may impact especially smaller enterprises, we are encouraged that our convergence strategy underpinned by our trusted, secure, safe and reliable infrastructure is in demand for enterprises large and small. TV and Media continued to show real sequential improvement as our superior reach and range of content drove both our linear and SVOD revenues. We added 142,000 SVOD customers in the quarter as they increasingly become part of our bundled offers. And on the linear TV side, the TV4 group in Sweden saw an all-time-high share of viewing. At above 35%, we're at the highest level since statistics started to be published back in 1994. And our Head of TV/Media, Casten, probably had hair back then as well. When looking at the commercial share of viewing, TV4 also increased its share by 4 percentage points year-on-year to above 51%. And we also increased commercial share of voice in Finland by 1.4 percentage points year-on-year. Very encouragingly, for the long term, this is also the case for the AVOD side, where stream time increased by 32%, clearly outperforming the market-leading digital play service. A key reason for the resilience we've shown in the quarter and the full year is the importance of delivering secure, reliable and high-performing connectivity solutions. We are very proud to once again, for the fourth consecutive year, come out top in Sweden when it comes to mobile network quality. And as we just last week also secured the largest block in the most attractive part of the 5G spectrum band, we look forward to further leveraging our leading position by rapidly offering high-speed, high-capacity and low-latency 5G services for our customers. And more to come on that later. We're also progressing very well in rollout of 5G in Finland, reaching population coverage of around 40%. And in Norway we've added the City of Bergen in the quarter and now have around 70% to 80% population coverage in the centers of all the largest cities in Norway. However, it's perhaps Finland is the country where we've had the most experience from 5G, and as such, it's encouraging that we do see customers migrating up to 5G tariffs and willing to pay a premium of around EUR 3 per month versus average levels. We have high ambitions to be much better when it comes to customer experience. The pandemic has, however, put pressure on our call centers, as well as reducing traffic to our stores. And we do not yet have the online or digital user experiences our customers deserve. This has resulted in, and as we expected, higher costs for customer support in the quarter, but this is a key area that will be addressed in our customer experience-led transformation that we will share details with you later. So having closed the year and with a better outlook for the coming years, our Board will propose a dividend of SEK 2 per share for 2020, a level that is consistent with the structural elements of our cash generation during the past year and the proposed new minimum level or floor for the coming years. So let's go briefly look at the countries. First, Sweden. Service revenues improved sequentially, supported by a slightly lower impact from COVID but also a better development in both mobile and fixed and, as I said, especially the public and key enterprise segment from both connectivity and great progress in combining that connectivity with IT services. Yes, EBITDA is down versus a very tough comp last year. I've already touched on the reasons, higher marketing, higher customer support costs. From an operational perspective, yes, the development was slightly mixed with good intake on mobile and TV but a deterioration of broadband subscriptions, as we didn't quite manage to offset the underlying legacy copper line losses with fiber in this quarter, but we've got plans for that going forward. Finland. Also in Finland, revenue development did improve this quarter, driven rather equally by improved performance in consumer and enterprise, with the enterprise segment showing growth, even including COVID effects. Continuous steady growth in IT but also a more stable telco business were the drivers. The lack of roaming overall and lower revenues from TV and fiber installations explain why service revenues, though, still declined. EBITDA declined due to a weaker revenue mix. As we all know, IT revenues do come with a lower margin, and we did have a higher equipment margin in this same period last year. Subscriber development does look poor, but it's partly explained by a cleanout in the B2B segment. The situation in consumer is more stable, which is really highly encouraging, as is the growing ARPU from what I said, migrations to 5G. And that is also really happening in the consumer segment, which is offsetting some price pressure in the B2B segment but still allowing average and blended ARPUs to grow during the quarter. TV KPIs are impacted by the move of Liga to the TV and Media unit, as is the ARPU, but we also have a higher share of lower-ARPU contracts such as collective agreements in the base. In Norway, service revenues fell by 2%, which was clearly better than in the third quarter due to our solid mobile improvement which fell by 0.6% versus almost the 5% that we saw in the third quarter. On the fixed side, we do continue to struggle as TV revenues decline more than our broadband revenues grow, but broadband had good subscriber base development as well as increased traction for fixed wireless access where we reached 14,000 customers in the quarter. And with the recent price increase, we do have a good runway into 2021 on our broadband business. The TV ARPU is diluted there from having a larger share of subscriber base from MDUs rather than SDUS. Finally, on the B2B segment, I'm happy that we, in addition to showing a 0.6% growth for the quarter, also secured several new good contracts, including one with the Norwegian police, just showing the real quality perception that we're starting to build with one of the most challenging customers you can have in any market. On EBITDA, we grew by 12% from strong efficiency realization and partly also from having an easy comp last year. We now have 5G coverage in Oslo, Trondheim and Bergen; and a clear plan where to roll out additional coverage during 2021. Roughly, we now cover 90% of the population in Central Oslo and are very happy to actually be the daring challenger when it comes to rolling out 5G faster than our competition. The mobile subscriber reduction shown here is explained by impacts from an earlier loss of a large public sector customer. Underlying, the development was supported by a continued good traction for the Telia X unlimited offering that now exceeds 100,000 subscriptions, with the churn on these customers also at just over 10%. The LED markets, our smaller markets, had a solid end to the year, particularly in the Baltics, with Lithuania and Estonia showing relatively stable service revenue. Both countries also managed to grow EBITDA, despite their lower revenues, through continued excellent cost control. In Denmark, the revenue pressure remained especially from loss of roaming but also good cost control as we start to refocus that business into becoming a much more lean, mean, digital, agile mobile operator. And the cost control was good at mitigating a large part of the revenue decline. We've covered most of TV/Media already, but I just want to highlight the sequential improvement that we're seeing on service revenues. Yes, ad revenues were still down by 7% in the quarter but is an improvement from 32% in Q2 and 13% in Q3. We also saw a sequential improvement within the quarter, ending the year down by 5% in December. The EBITDA reduction is driven partly by content phasing from previous quarters, such as Formula 1; and from investing in new content, which has clearly helped drive the record-high viewership, consumption and the growth in C More, our SVOD service. With the recovery from COVID starting, all-time-high viewership and streaming, all major sports rights secured all the way through to 2023 and all major distribution agreements secured all the way through to 2023, we can really now focus on realizing our original ambitions of the Bonnier acquisition: to drive convergence; and to build a deeper, more engaging and experiential relationship with our customers so that we can become the hub for all their entertainment and connectivity needs going forward. Very quickly on the financials. Flattish revenues ex COVID, with mobile and broadband revenues actually even showing a slight growth. On EBITDA, as I said, we saw a 6.6% decline, as our strong performance in Norway was more than offset by lower EBITDA in mainly Sweden and in TV/Media, but they were very tough comps last year. And that decline is shared equally between Sweden and TV and Media. On cash flow, we've touched on this a lot over the last 10 days, but clearly the outperformance was predominantly driven by a SEK 2.3 billion contribution from working capital. And having spoken too much about working capital last quarter, I have now delegated the working capital conversation to PC going forward. And he will give you some more perspectives on where we see working capital as we go into our midterm plan and outlook. And just to say: It will still be a contribution in 2021. In terms of debt and leverage, unchanged financial leverage and a slight decline in net debt. The strong cash flow generation and Turkcell proceeds funded our increased CapEx and the dividend distributions that we made in the quarter. Pro forma leverage now is expected to be around 2.32x, if you include the proceeds from the carrier transaction, which we are on track to close during the second quarter of 2021. So closing out the year and looking back at my first 8 months at Telia, I'm proud to say that, despite challenging times, we have as a group shown our operational and financial resilience and made good progress on much of the immediate priorities that I set out. As well as exiting Turkey and the global carrier business, finally allowing us to focus on the Nordics and the Baltics, we have delivered on our financial ambitions for the year and even delivered a little bit more than we dared to imagine at the start of the pandemic, especially in our most impacted TV and Media business. Throughout the pandemic, we've been supporting the very core of our societies by keeping people, businesses and societies connected, informed, entertained and something I and my colleagues throughout Telia take great pride in. On connectivity, we've taken major leaps forward during the year into a world of 5G having both secured important spectrum and strategic vendors that cater for us staying at the very forefront of the technological developments that will arise and ensure the Nordics and the Baltics have the highest-quality, the safest and most trusted networks. On convergence, we've made gradual progress, and we're seeing a continued growing share of customers on converged offerings. On the costs side, yes, we have made some progress, but there is much more to do in terms of customer experience, process and product simplification, IT modernization and in rightsizing the structure of Telia to be competitive for the future. By that, myself, PC and Rainer are happy to take you through how we the new leadership of Telia are about to do just that in the coming years, but since we are both a communications provider and an entertainment company, we're going to have a brief commercial break so that you can top up your coffee cups. [Break]

Welcome back. So during the last 8 months, we've undertaken a deep review of Telia's strengths, weaknesses, opportunities, threats and full potential. At the same time, we've engaged all of our employees and our most important stakeholders in our purpose, why we exist and how our unique character and spirit can drive and define the next decade for Telia. What we've seen is that the most successful modern, innovative communication providers have clarity in purpose and strategy. They have highly engaged employees who are deeply passionate about their customers. They are service, not just product, oriented. They've become true digital telcos in their operations and at every touch point. They're highly analytical and data-driven. They have built a lean and agile delivery machine. They have strategy to execution as a muscle that allows them to deliver consistently and sustainably. They recognize the untapped value in their critical national infrastructure. And they are taking advantage of the massive disruption that surrounds them, whether it be from new technologies or new competition but also from the acceleration of digitalization that is occurring as a result of the pandemic. And they're embracing all of that to reinvent themselves. It's with these insights that I've gathered a new leadership team to take Telia forward in this new chapter; and why today, alongside the usual me, PC and Andreas, we have in particular Rainer Deutschmann, our COO, presenting. Because if anyone understands disruption, data, automation, digitalization and digital telcos led by purpose, it's Rainer. So a big welcome to Rainer. Clearly would have loved for you to meet the whole team today, but until we can meet in person, I decided the three of us, for 3 hours on a Friday afternoon, was more than enough for now. Let me start by saying what a privilege it is to lead a business like Telia in what is one of the most digitally advanced regions on the planet. As you heard in the video, we like to call it the cradle of digital given the unique history in this region. The people here have embraced mobile telephony. In fact, we at Telia launched the world's first mobile network, 1G, in 1956. They have consistently embraced fixed and mobile broadband, streamed music and video, shopped online. Even my husband's Swedish 103-year-old grandmother in Gothenburg learned to shop online at the start of the pandemic. They have embraced connected transport, smart homes. All of the smart city, connected stuff you can imagine is all being embraced here faster than other parts of Europe and faster than many other parts of the world. The pace of change means that we are now living highly connected lives. Connectivity has become part of the very fiber of life. This is clear in the fact that the traffic on our networks is doubling every 2 years. The high standard of living with a focus on health, well-being and sustainability, combined with our leadership in connectivity and digitalization, has been a part of making our region resilient and able to weather the various economic cycles better than other parts of the world. And already, it's predicted that our region will recover from the pandemic faster than others. Ease of doing business gives us confidence that all industries and enterprises, whether they be public or private, will be able to accelerate their digitalization journeys coming out of the pandemic, but not only do we operate in a great part of the world. We also live in exciting times. Here are some of the current trends we observe, which reinforces the opportunities ahead for Telia. With new technologies becoming more established, whether it be 5G, IoT, cloud and combination, with the pandemic drastically accelerating the need for digital transformation, enterprises and consumers alike want a trusted partner to help them embrace the possibilities new technologies offer, be it for a smart home, a smart building or storage in the cloud. We believe that we are the trusted partner that can help our customers digitalize. Businesses and consumers alike are now, more than ever before, establishing new ways of working, interacting, socializing through a combination of digital and physical forums from a variety of locations. And the way we can see media is clearly changing dramatically toward streaming. Ecosystem development from Google, Microsoft, [ Amazon ] and others are playing an increasing role. Never before have sector and value chain borders been more diluted; and we now operate in an increasingly open and diverse ecosystem, creating an [ abundance ] of choice for our customers. We believe that customers want a one-stop shop, an aggregator that simplifies and provides services they want and needed in a trusted, secure and customer-based manner. Security concerns, increased digitalization clearly brings increased cybersecurity, data privacy risks. Only Telia can provide certain integrated security services based on our infrastructure and our heritage. Finally, customer experience and personalization is increasingly the differentiator that allows you to retain, grow and gain customers, so for Telia to become a digital telco via a customer experience-led transformation is a huge opportunity to create value. We believe, therefore, that we are uniquely placed to become the leading purpose-driven digital telco in Europe. As a regional pioneer, we've been shaping the way society functions over 2 centuries. And we've done so with a deep conscience to ensure digital inclusion in all its forms and with a drive to help society realize a more sustainable future. And moving forward, Telia will continue to lead from the front, becoming an active orchestrator of connected living, from thinking product first to thinking customer first, from leading the past to being a model for the future, from incumbent comfort to an agility to execute, from invisible to iconic. A lot of this comes down to us being much more customer focused, thinking and acting like a modern digital company: fast, agile, nimble, easy to deal with and with the access point to everything a digital world can offer. It requires us to be much better for all our stakeholders. It requires us to reinvent ourselves, and this is what's going to be different about Telia going forward. It starts with our new purpose, to reinvent better connected living. This means better connected customers empowered to live fuller lives, better connected businesses working smarter, better connected teams working all towards the same one goal and a better connected society in which people and the planet prosper together. Living, as you can see and we know, comes in many forms; our impact, across entertainment, health care, transportation, education and more. Reinventing is how we will deliver better connected living: innovating constantly, challenging ourselves to do better for ourselves, for our customers, for our owners and for the societies of our region. And at the core of our purpose is the need to be more customer focused, to understand what better connected really means to people and then ensuring we deliver on this in our services. So our purpose is our new North Star, and our strategy the road map to deliver on it. This is our strategy. And today is about unpacking that strategy for you so that you can all understand how our customers and our shareholders in particular will be rewarded by Telia's plan to reinvent better connected living. Our strategy starts with the where we will reinvent better connected living through the combination of our digital connectivity, our digital experiences and our digital infrastructure. Underpinning the digital lives our customers want to live is clearly connectivity. In connectivity, we do have a clear position of strength. We have the largest and the most multi-award-winning networks across our footprint. Connectivity is our core business. And even in COVID times, when losing around SEK 1 billion in roaming revenues, it has been exceptionally resilient from both a customer experience and a financial perspective. And it has proven itself more than ever to be the fiber of life. And as we look forward, we intend to remain at the forefront of new technologies; and the new innovations that will be enabled through 5G, fiber and whatever comes next. And Rainer will explain more on this later. Beyond connectivity, we can uniquely become the hub, the curator, the orchestrator of all the digital experiences an individual or a household needs to live a better connected life. Investments in recent years really have given us a relevant portfolio of experiences to help people connect; be entertained, be informed, safe and organized. And here is a few examples: Smart family is our fast-growing mobile app for families to manage their busy lives in a [ privacy ] safe way. We even have a high usage among our competitors' subscribers. The dot is our digital-only subscription in Finland delivering a superior user experience. Esports, we've now launched Telia esports league across the Nordic countries and, last year, saw a sixfold growth in watched minutes. And smart WiFi is building on the strong base of managed routers and is a great enabler for everybody working from home these days. We are also increasingly the digitalization partner of choice for better connected enterprises, helping businesses operate securely, become more data-driven and serve their customers in a smarter way. A few ways we are doing this include the ACE contact center solution which includes our AI-driven chatbot that can be trained to support each customer's unique requirements. Telia now boasts a comprehensive suite of security services, from identity management to denial of service protection, and has unique services to block scam calls on our mobile networks. And as you know, I've been extremely proud to see the value of Telia's Crowd Insights during the pandemic, which has helped health authorities and municipalities assess and access mobility patterns. The service uses aggregated and irreversibly anonymized movement data from our mobile networks and supports better data-driven decision making, with multiple uses, for example, by cities, retailers, public transport, out-of-home media and more, a clear opportunity for further monetization going forward. Now as those of you who have followed us for a while know, we today have a significant footprint of towers, sites and fiber across our markets. And we have just today also confirmed the expansion of our partnership with DNA in Finland for further shared network coverage in Finland. To crystallize and grow the value of our infrastructure assets, we have today announced the plan to create a new business unit, Telia Asset Management, that will own and manage selected assets, opening up the opportunity to bring in external investors and accelerate infrastructure development further. We have for some time been preparing for this and identifying such assets within our portfolio and where a special focus has been on towers, in particular in the markets where we act as a challenger, Finland and Norway. And we are now proactively identifying the relevant partners that could join us in this journey, and we'll be coming back to you on that very soon. It's the intention for Andreas Ekström, who I -- who you all know well, to oversee this unit alongside his M&A responsibilities. So, so far, we've talked about our purpose and where our growth will come from. Now let's look at the how. Enabling our growth strategy are 4 key pillars where we will excel relative to our peers. They are inspiring our customers, connecting everyone, transforming to digital and delivering sustainably. So let's take a quick look at each one in turn. Our first pillar is all about inspiring our customers. And we start from a clear position of strength to grow beyond connectivity with the leading customer base of 24 million subscribers across the high-value and still growing Nordic and Baltic markets. We're also the leading Nordic media house with a recovery path post COVID which is faster than we expected back in March and April last year. Our investments in ICT have made us the market leader in Baltics, Sweden and Finland. And we're already NPS leaders in several segments and markets in Sweden and Baltics. This foundation, together with the technology shifts, is a great platform for growth. Combining engaging services and best-in-class customer experience will give us several growth and value levers. Listening to and providing for all customer needs will cement our convergence leadership, allowing us to further differentiate our brands and support premium pricing. And unquestionably, there are opportunities to develop the TV and Media business to its full potential. So the key takeaway you should note is that we will drive a strong, value-accretive commercial agenda enabling growth across all of our markets in the coming years. And as I said, we're starting from a strong position, market leadership in multiple segments through our focused footprint and opportunity for growth in our challenger markets and in our markets with structural opportunity going forward, an excellent basis for value creation through cross-selling, but it all starts with the customer and a great experience based on a great portfolio of relevant products. That's the basis for quality positioning and price premium. Customers now expect seamless and digital journeys with personalization. And we can do that as we further digitalize the information that we have throughout Telia to bring individual needs to the fore even better. And while stating the obvious, it's worth repeating that there is a clear relation between user experience, loyalty and value creation. The most successful global brands are our example for using a quality positioning to increase customer lifetime value. In short, we plan to monetize our network leadership and strong customer base by accessing and using deeper consumer insights to deliver the most relevant portfolio to each and every customer across mobile, media, broadband and the further applications that are developing. We are already making good progress here. Swedish convergence offer, for example, is clearly resonating. We've now got more than 300,000 Telia Life customers. Also, our Baltics Telia One propositions are proving our loyalty and cross-sell beliefs. So going forward, we will continue to monetize 5G. For example, we're already seeing it in Finland through speed tiering. And we'll continue to expand our value-added services following a clear more-for-more approach. And we will leverage our own fiber footprint and access others' networks to drive enhanced quality and premium pricing. So let's pick up on a key priority area of convergence. And I must say it's getting a little bit hot in here, so I'll just take a drink of water. Convergence. Yes, we have launched convergence across nearly all our markets, and we're already seeing positive effects such as reduced churn and increased NPS. In Sweden, we've seen 70% growth in convergent households, and that's translated into 60% lower churn compared to mobile-only customers, but we've not done enough yet. And I know we've been talking about this for a while, but clearly we haven't done enough to exploit the full opportunity, as we are still lagging our peers in other markets that have driven convergence in a more-for-more value-accretive way. We now see significant cross-sell possibilities across connectivity products together with content and are starting to act on them. And we're redesigning our sales processes towards growing at a steady and, as I said, value-accretive pace towards our European peers. Moving over to enterprise now. This is a segment where we believe in longer-term growth on the back of 5G, fiber and digitalization. We are very well positioned through our network leadership, coupled with our ICT services. And we're increasingly the trusted digitalization partner of choice, particularly for the public and key sectors. On top of connectivity, we push horizontal ICT solutions, protecting and enhancing our core business, and I'll say more about that in a second. Moreover, our footprint and international credibility give us a great opportunity to serve multinational customers based here in the Nordics and the Baltics. That same footprint and market access also allows us to build strong partnerships with globally scaling players. We're also taking a different approach to truly leverage our strong international commercial agenda, building a setup where we align our countries to speak with one voice to utilize group synergies. And as I said, in the B2B segment the direction is towards ICT. Our strong market position allows us to benefit from continuous market growth in cloud, security and unified communication and collaboration. Going forward, we aim to be the leading aggregator, a hub that curates ICT services for customers with professional service management across the entire portfolio. Not all of our ICT services are produced in house but rather integrated from strategic partners, allowing us to continuously benefit from their global scale and rapid development. And by being the curator or the trusted ICT adviser for all segments, we become more relevant to our customers, thereby increasing our share of wallet, reducing churn and price pressure and establishing customer longevity and customer lifetime value. And finally, media. Beside the convergence benefits from owning media assets, we will also develop TV and Media standalone to its full potential. We see both a solid business with a strong ad segment recovering quickly from COVID and an SVOD segment with substantial growth, and we have multiple growth levers for both. Within ad, by maintaining our market-leading reach by combining linear with the rapidly growing digital ad inventory, our plan is to more than double digital ad sales by 2025 by leveraging our strong and digital consumption growth and adding new analytics-based advertising concepts, growing faster than the market. In SVOD, we will continue growing our subscriber base both organically and through attractive content with access offerings. We really do have a unique position in the market with great SVOD content and services; and the only player with an ability to cross-sell them to their mobile, broadband and TV customer base. And we're thrilled to have secured both the Swedish hockey and UEFA Champions League, which gives us 2 of the 3 most popular rights in Sweden. And we have 3 of the top 4 most popular rights in Finland. We already know that bundling access with content brings benefits, based on the experience we had in the summer with our Swedish bundles. So on that note, I'm going to pass over to PC because I've spoken a lot about what we're going to do for our customers and our business in the pillar of inspiring customers, but I'm sure you want to see some numbers behind this strategy. So PC is going to take you through the multiple levers for growth that we see by better inspiring our customers so that you can start to get a feel for where we see that potential for growth going forward. PC, over to you.

Thank you, Allison. Let me see. I'll quickly summarize the revenue implication of the agenda that Allison just presented to you. Very briefly: We will leverage our 5G rollout, our digital services, including our media assets, but also an improved customer experience with a more-for-more approach to lift up ARPU across mobile and fixed and across our consumers and enterprises. We will leverage our convergence agenda to further reduce churn, improve net add through cross-sell and upsell and also improve the revenue per account by adding more services to the households and to the businesses. On the third pillar, we will also add revenues from new offerings, especially within the enterprise segment, both adding specific new revenue streams but also a very important part of supporting our overall enterprise connectivity business. In addition, we have over the last few years faced quite heavy headwinds. In 2016, 14% of our total revenues were linked to fiber OTC; telephony, fixed telephony; interconnect; and roaming. In 2020, that percentage is reduced to 7%. And as we can see in the middle of this slide is that, going forward, we expect these revenues to gradually come down. From SEK 1 billion in 2019 to around SEK 200 million is what we expects in 2023. In addition, COVID really is accelerating the sort of the digital and online piece, where Telia is really well positioned. At the same time, Allison has alluded to, we have a big service revenue impact in 2020 where we saw a SEK 2 billion negative impact from roaming, advertising revenues and also pay TV revenues. We expect this to gradually improve during the period. And if the effects fully recover by 2023, that alone will be 1 percentage point annual growth on our revenues. So putting these things together. Easening legacy and regulatory pressure, recovering COVID revenues, kind of neutralizing each other; and then we're going to get some growth from monetizing our 5G rollout and improved customer experience to increase ARPU, reduce churn by leveraging the convergence agenda but also add some new revenues from the enterprise services that we talked about. All in all, that should give you comfort that we should be able to grow low to mid -- low single-digit growth every year in this period. So with that, I'm wrapping up the inspired part of our strategy. We will now move over to connect and to transform, where we cover our network capabilities and our agenda to really transform Telia into a true digital company. And by that, I hand over to you, Rainer, to take us through.

Thank you, PC. So now we go into the second pillar of our strategy, how we connect everyone with the most reliable, trusted and efficient modern networks. So let's look at our starting point. We have a clear leadership in our network position in network quality, which is the coverage, which is the speed, the latency. We have launched 5G across all our countries. We have been first with fixed wireless access. We have the best 4G networks in Sweden, Lithuania, Estonia; and we are in par in the other markets. And we have close to 3 million homes connected today with fiber and high-speed Internet. 5G rollout is in full motion based on a fully standardized set of type -- site types, which I'm coming to in a second. That is, of course, with our strong partnerships, Nokia and Ericsson, that we have communicated earlier on. This all is based on a common virtualized core network, which we have already implemented, and again I will be coming to this in a while. And we look at the legacy shutdown, which is well underway, and again I'll be detailing more on this in the next slides. So what we are going to be doing is -- on the connectivity pillar here is we look at the value creation levers from the access part, where we are looking at the further rollout of the gigabit networks that we have today. Second, we look at the underlying software-based networks, what we call. What is the future of the transport? What is the future of the core networks? And how does it benefit our customers and our economics? And third, we are going to be looking a bit deeper into the legacy drive-out, which again unlocks potential in terms of efficiencies and also customer experience; the partner approach, where we want to further strengthen our investments and crystallize the value Allison has already alluded to, which I'm not going to be touching on again. So let's look at the access part and start with the mobile networks. As you can see and as you may know, we have a very, very strong position today. Looking at 4G: Close to the entire population in our footprint is covered with strong 4G networks. And we have both from the customers as well as from the independent certifications a clear mirror that we are having the best networks. Sweden, not only fourth time in a row best in Sweden but even across Europe, the Swedish network is considered to be the best. Also, we are in a very good position even in our challenger markets where, of course, the investments are diligently steered. Now on top of the 4G network, we are in full motion and drive the 5G rollout. And as you can see the numbers here, we are looking at "90-ish and above" population coverage in our markets in 2023. And across the markets, we already are, of course, in full motion on the 700 (sic) [ 700 megahertz ] as well as on the 3.5 gigahertz frequencies. And I think the unique position that we have as Telia, which may be a bit different from other telco groups that you may know, we have for the first time fully standardized the 5G network that we are rolling out. That means we have really reduced the number of different variants that are there into actually 3 for the urban, for the suburban and for the rural coverage. This gives us scale, and this gives us also the efficiency and the operational benefits of managing a much less-complex network. In addition, the way how we do this is that we can dynamically steer the traffic and the way how we serve the customers between 4G and 5G because our modernization is touching the 4G and the 5G network at the same time, giving us an adaptability according to the traffic demands that we see in our markets, which is extremely efficient and helps to get down the cost per GB which is the core KPI that we look at in terms of production cost. On these mobile networks, I wanted to point out a specific set of installations, which you may have heard of, fueling the Industry 4.0 economy that we have in our markets where industries like manufacturing and others are completely transformed and put on a new level. So what you can see here is an example of Boliden, which is I think the world's leading mining company in terms of productivity. And we have been quite honored to support Boliden as a customer as some quite other customers that we have in the market with an enterprise mobile network. Now what is this? This is a dedicated installation of our network covering the RAN, the access part; as well as covering the core; and the transport part. And the benefits of such an installation is that you have a further increased quality of service, redundancy; resiliency; capacity; 24/7 monitoring, of course; extra security in terms of enterprise-specific APNs. And as a customer, I'm gaining the platform for further use cases such as IoT, such as connected to the edge cloud and any of the industry 4.0 use cases, especially in connection with AI. So we have designed, we have deployed and we are operating commercially multiple -- a number of these enterprise mobile networks. And we have in fact industrialized one part. You have the core and the access dedicated. The second product that we have is the access is dedicated and the core is shared, and this is a great platform for growth for our enterprise customers. Talking about IoT as another major growth area and an area of significant attention from our enterprise customers. We see not only a healthy growth on the connectivity side, where we see the active SIMs growing by 14% year-on-year, but we see, especially interesting for us and for our customers, the value-added services on top of the connectivity. And here the growth is even much larger with 62% year-on-year, which has brought us already to a position where 40% of the revenue mix that we have in the IoT space is beyond connectivity, to the point of experiences that Allison made before. Now switching from the mobile to the broadband, the high-speed broadband side, here we have a stronghold in our fixed broadband networks. We're connecting today 2.9 million households in a very, very high-speed manner across our markets. And we, of course, drive further growth in a very value-driven rollout. Where we see the demand, we will look at the rollout. In addition to the fixed fiber, we have seen a quite outstanding growth on the fixed wireless side. Fixed wireless means fixed experience on our mobile network. This is deployed in 4G across the markets, and we have started to deploy across the markets also in 5G. And we have today a situation where we connect 250,000 households already with a high-speed fixed wireless access. And we see significant growth going forward both on 4G and now especially also in 5G use cases where you really get a true and quality of service, a fixed asset -- fixed connectivity for all home or the office and the office applications that our customers want to use. Now below the surface of the access networks, the mobile and the fixed access networks, we have a significant transformation going on, on the transport, on the core and on the service orchestration. Just to highlight a few of these elements: We have already virtualized our core completely. Across Telia, there is one single core network, which is with our partner VMware, virtualized. And we are completing by the end of the year to complete migration of all the traffic to the virtualized core, which will unlock significant potential for the drive-out of legacy platforms, which I'm coming to in a second. In addition to the core, we have also quite on the -- we have been on the forefront of changing the way how transport aggregation and services are connected, where we have actually separated service from transport, which gives a lot more efficiency and which gives us a way to much faster deploy services and run the workloads in our network. And all of this is connected through a service orchestration, which allows us to much faster deploy certain network functions and, as we say on the benefit side, also deploy customer installations in a lot faster way. So what is the output of the softwarization of networks here? Even better quality, less downtime because we can apply software methodology here, less defects, much faster speed of deployment for network functions as well as for customer installations. We also get new features because we are looking at software now. We are looking at APIs. We have the opportunity to open APIs to partners and customers, and that is a complete new way of how we can monetize our networks in an open way; last but not least, of course, cost savings from automation and from driving out legacy, which is my next point. As you know, if you look at legacy, we have been talking about the copper takedown in Sweden. We are well underway with the copper takedown. We have converted and driven out more than half of the areas today. We are looking at a complete drive-out by 2026. We are looking at a good migration of customers from the legacy product into fiber, from the legacy product into also the fixed wireless, giving a better experience and giving us an opportunity for better monetization. In addition, of course needless to say, the copper legacy takeout will lead to cost savings. We are looking at above a SEK 100 million per-year drive-out of costs and terminal once we have taken it down completely and another about SEK 0.5 billion coming from the legacy drive-out on the legacy fixed side. Legacy also is on mobile. Generations come after generations. Once, 3G was new. Now it's the legacy. We are driving out 3G significantly. And I'm happy to share today, I think, for the first time that we have further accelerated our 3G shutdown plans. Originally looking at '24 and '25, now we have the clear ambition to drive out 3G off our networks across the footprint by the end of 2023. And what you see here is the proof point, the VoLTE traffic, which is the voice over LTE. New voice-generated traffic is increasing and taking the full share, while the 3G traffic is significantly going down, giving the customer a lot better voice quality and experience and giving us the opportunity to finally take down the 3G networks and realize the savings and especially also be able to re-farm the spectrum into 4G as well. And last but not least, on the right side you see how we are driving the legacy takeout on the network service nodes. This is now enabled and connected to the softwarization of the core network and the transport network that I was alluding to earlier. We have already taken out about 30% of the nodes, and we are clearly determined to take out the entire legacy on the network side by the end of '23 as well. And you'll see that acceleration, which is again fueled by the fact that we have the softwarization of our network now in place, and we can do that. That completes the connectivity part.

So before Rainer continues with his session, we will again go for a short break, so get up. Stretch your legs. Get a cup of coffee. Or look at this short little movie, short little film that shows exactly how connectivity that Rainer just talked about has helped to improve the work-life balance of the good people of Norway. [Presentation] [Break]

Welcome back. Let's go to the third pillar of our strategy, transforming our company to digital. Now the digital telco is at the heart of what we want to become as the new Telia. What is a digital telco? It is driven by customer experience. It is delivering digital and highly valued products by our customers. It is based on simple, automated, smart processes. It is based on insights and value from data which can be used for customer experience for commercial benefit. And it is based on a lean and an efficient IT which supports the customer experiences and the commercial agenda, and that is exactly what we are looking at to transform into. When we started our transformation program in the Q4 last year, we have started with a fairly radical assessment of our starting point. Transparency always is the precondition for improvement, so we have been fairly transparent to ourselves, and I want to be transparent to all of you as well. First, we've seen that past initiatives which have been communicated about have been in part unsuccessful and, we believe, because they have been too narrow in focus. And they have been, in part, too technology oriented, while we are now, as Allison was saying, driving our transformation coming from the customer experience. That practically means we are saying what do we need to deliver, enticing experiences along the customer journey. What are the technology capabilities that are required in order to deliver those experiences? And what does it mean for the processes? What does it mean for the analytics? And what does it mean for the IT? We also have seen that we have a number of legacy products that actually don't -- hardly deliver any economic benefit, but they are implying a lot of legacy costs in the IT in our systems, and that needs to be checked. We have complex and manual processes today, very little digitization, which is a big opportunity for process simplification, digitization, automation and scaling across the group. We haven't yet really unlocked the value from data and from insights today, which again leads us to implementation of what we call a pervasive data-driven organization where we can take decisions based on data that are right and that are real time. And last but not least, we have seen a highly complex IT landscape today which has accumulated a fair amount of technical debt over time with acquisitions and with organic growth. This kind of complexity has started to drag us down, so we have embarked already on a massive IT transformation program across Telia which will deliver a future-proof and lean IT as a business enabler. And I'm going to be now spending a few minutes on going through the 4 key value levers that we have defined: products, processes, analytics and IT. I start with the product portfolio. Now where we are today, we have a number of legacy products. Actually, we are looking at multiple thousands of legacy products. We have an overlapping product portfolio today, which is confusing to the customer and which obviously means that we are not leveraging the scale of a single product which is then delivered to the markets. What we are doing here is we are running now a radical product portfolio cleansing exercise. We are decommissioning at least 50% of our products. And this will unlock massive IT efficiencies because, as I said, all the products need to be supported by IT systems and even also people and those ones we can redeploy for the future product portfolio. We have defined the future product portfolio. Largely, there is a connectivity and there is an experience part. There's a B2C. There's a B2B part, so we are very focused on the future product portfolio. And we will deliver on this product portfolio a high NPS, a market-leading NPS. We are committed to this. We also have quite many bespoke product implementations today which are not scalable. And we are massively changing now the architecture of how we are building and deploying products into what I call product as a platform, which means the commercial leadership in the countries can take the product as a platform and just configure the price, configure the promotion and sell it standalone or sell it as a bundle. And this will enable a much faster time to market and a lot more opportunity for monetization. And last but not least, we do have gaps in the customer journey today. We have also in some of the products not even the full visibility of the customer experience on these products. And we will change this so that we get market-leading products, again measured by the NPS. And we will install and we are well underway of our customer-centric service management. It doesn't look at systems but looks at the customer journey and looks at the customer conversion from the awareness to the buy, to the pay, to the use and to getting help. We have confidence to deliver the transformation targets by 2023, and we are well underway because we have proof points. We have started the cleansing already quite radically. We have already taken out 15% of the products as of today. And we have already started to scale some of the core products that we have, and we mentioned a few of them earlier in the presentation, where we have today 15% of the product portfolio already scalable. So we are taking this across the markets and therefore we get more scale. We get more, of course, cost benefit which we can pass on also to an extent to our customers. This is the first value lever in our transformation. Now looking at the second value lever, which is the processes. Again we started with a quite radical and transparent assessment where we are today: complex processes, process gaps. When I talk processes, I talk customer facing as well as what we call back-office facing. Both of these sides do have those complexities in place today. And what we are doing about it is a radical process simplification, which is already underway, where we look at a cycle time reduction from the start [ of the ] end of the product process by at least 20%. And we look at a reduction of error rates by at least half, error rates coming mainly because humans involved typically are not 100% reliable. So therefore, when we automate the processes, we will also achieve a reduction in error rate and a better quality process end to end. Second, we have a low degree of digitization, automation in the processes, relating to the manual component that I just mentioned, which will be taken into 100% digitization and 0 touch wherever possible. This again leads to a much, much better quality process and obviously to efficiencies. Then we have also today a lack of process standardization, which again, as in the product side, different processes for the same thing leads to different IT supporting that lead to more IT costs. So therefore, we are looking at harmonizing the processes. We will do this very diligently. There is no big bang going on, but over time, we are converging towards harmonized processes for the customer-facing side as well as for the internal back-office side, which then again leads to a lot better IT support and less cost. And then we are looking at currently our processes not really being adaptive or smart because we don't use data and analytics in the processes today, which will be changed by what we call intelligent automation which is based on the analytics and the data so we can have personal, for example, recommendations to the customer. Or we can have specific process variance depending upon what is the need in this very moment. Last but not least, we are also not looking at doing this as a one-off exercise. We will change the way how we are looking at the processes as a continuous improvement culture. Therefore, we are implementing Lean Six Sigma across Telia, which gives us that continuous mindset of, wherever we are not good enough, we will improve. And that will never stop. Again here we are confident to deliver. We have seen good first results. For example, we have transformed the processes on the B2B side in Sweden and we have seen an uptick of the sales efficiency by 10%. We have seen the customers -- the response times to customer queries going significantly down because we have been able to retrieve the information and resolve much faster. So we see already today good signs of the success, which will be taken to other segments as well as other markets. We also have already established now a center of excellence for automation, where we have RPA experts in the group, quite a good group now, which we are deploying across the company to really actually implement the process automation as we speak. We have already standardized processes. It is a hard work, of course, but we have started, for example, on the service assurance side, which is a very, very strong team across Telia already established, 90% of those processes standardized. So we are already, domain by domain, looking at the first successes here. And for the insights and for the automation part, I'm very happy to share today that we have closed a strategic partnership with what I think is the leader in the domain of workflow automation service now, with ServiceNow, which is already a good partner but we are widening the partnership to really cover customer-facing as well as operations-facing workflows so that we have an end-to-end closure of any issue that is coming from the customer or that is triggered by any of our network and IT nodes. Now let's look at the third value lever, which is the very important element of real-time analytics. The digital telco cannot exist without using data and insights. Again here we start with an assessment. We see we do have today gaps in actually utilizing data both for customer experience as well as for commercial opportunities. And we will change this by really using data, unlocking the value of data for brilliant customer experiences as well as for monetizing customer value or customers from one product to a next product or to any other service with what we call NBA, next best action, or next best offer, which is basically whatever is the most relevant product, we will recommend, rather than just the next promotion that is a cookie-cutter for all. And this will be rolled out 100% across Telia by the end of the transformation time, which is 2023. Secondly, also beyond the fact that we're not using the insights for value creation enough, we have lags in the technology and we have lags in the actually organizational enablement today. We are still relying heavily on traditional tools such as Excel and PowerPoint. And we do see that actually the demand from use case implementation is more than the capacity of experts we have in place today, so we are actually further increasing the team. And if anyone wants to recommend anyone to ask for analytics experts, we are very open to hire more into our team. And we are not fully complete with our technical analytics foundation today, so therefore we are looking at a completion of the analytics foundation which is fully cloud-based as well as on prem. So there's a hybrid cloud which has all sources integrated, which has a common data lake and which enables real-time use cases such as real-time recommendations to our customers. Again here proof points make us very confident we can deliver. For example, on the TV side we have already recommendations in place, be it the next movie or be it a more personalized, relevant advertising that is shown to individual users as it comes. We have already launched personalization, what we call at scale, in the B2C in the consumer segment in Sweden, also in Finland and other markets, where we have seen almost a doubling of the conversion by having a relevant offer as compared to a standard offer to everyone. We already have converted 20% of our staff to using online and real-time dashboards. And they are actively used, which is good, but of course we want to go to 100%, as I said. And we have onboarded already more than 300 analytics experts, which is a fair amount of people if you think about it, but still it is not enough, so we are further increasing that number. And we have already a good data foundation with our strong partner AWS and some others, where we are seeing the value coming today, but we are, as I said, rolling out the data foundation across all our markets in the next years to come. Now I come to the fourth and maybe somewhat boring to some but, I feel, most important value creation lever because it is underpinning the products. It is underpinning the processes and it is underpinning the analytics part that I was explaining, and that is the IT. We are seeing the IT as the enabler for the true digital telco and as an enabler for delivering excellent customer experiences. Here again we have taken extremely deep assessment in a very dedicated project which we started in the middle of last year, and we are looking at a couple of issues that we are tackling. We do have seen an insufficient market and customer focus and link between IT and business, which we are now drastically changing by changing into a SAFe, agile setup where we are connecting the teams together into value streams tackling the same objectives along the key results which we are measuring so we are closing the gap between IT and business and deliver what we need to do on the customer experiences on -- and on other use cases such as the internal process automation. We have, as many other companies, I think, also an organically grown IT both from the growth as well as from acquisitions over time. And we see vertical integrated solutions which make it very hard to maintain going forward. We have accumulated technical debt, what I said before, and that has dragged a lot of our funds into maintaining the lights rather than being able to innovate, so we are now drastically changing into an open and API-driven architecture. And I'm very happy to also share today that we have also signed the TM Forum manifesto that really commits us towards ourselves as well as towards our partners and likewise our partners to us to work in a much more modular, into a much more API-driven way, which makes it easier to configure, which makes it easier to partner, which makes it a lot faster to deploy. And this is the target architecture that we have defined and we are going to be converging to in the next years to come. We have many legacy systems, which are due to the fact that we have installed the vertically integrated products and services. So we have identified those and we are going to be commissioning almost all of them by the end of 2023. We have a high degree of customization we did not really implement in a modular way, which is again changing into the target architecture where we talk about configuration rather than customization. We talk about modularization, and we are talking about API-driven working internally as well as with our partners. Also we have a quite fragmented supplier landscape today, which we will change into a much more focused supplier and strategic partner oriented way of working which we are going to be scaling across the group. So there is an opportunity to just gain more scale also for our partners. And we will look at reducing the long tail of our suppliers by at least 50% in the next 3 years. And last but not least, we have today a quite high dependency on external workforce in the IT, which we consider a risk. As we are becoming a software company, we need to own the IP. We need to own the capabilities from user experience design to the implementation, to the integration, to our core business domains and the IT. And therefore, we are looking at a strategic workforce planning which looks at the rightsizing of the external share. It's not going down to 0, but we are looking at something between, I will say, 15% and 20%. And we are maximizing further our strong nearshoring location in Lithuania, where we already employ today 600 IT experts and another 300 other shared services. And this will grow further at good cost and efficiency, very good quality; and will deliver the IP and the competencies that we need to have in the company in-house rather than depending on externals. Again here I think we have high confidence to deliver. It is not easy, but we will do it. And the proof points that we have are we have already converted a large part of our IT projects into agile today. We see that those projects result in a much higher efficiency, which is the output as compared to the input, what we put. So it's a lot better to work like this. We are getting the time to market. We are getting also the delivery in the -- much lesser investments. We have already completed a very significant target IT implementation in the consumer segment in Sweden, which is obviously extremely important to us. And we have almost completed even the migration of the customers from all the legacy systems onto the target system. And that has been a great success and, I think, delivers a lot of more use cases, monetization and also customer experience. We have identified the legacy systems, almost all of them. Some are depending upon a few decisions on the target architecture. And we have decommissioned already quite a number of those systems, and this will go on, as I said, in the next years to come. We have limited the customization. And we have driven already the implementation of common APIs across the group, which is also important for our partners to work with us because then they don't have to go to each and every country but they can plug in, so to speak, to Telia as one Telia and work with us much easier. With this, I would like to close and hand back to Andreas -- actually, not right. I'm handing to PC, sorry for this, to detail now the financial impacts of the connectivity part and the financial impacts of our transformation initiative that I was detailing. Over to you...

Thank you, Rainer. We clearly have an ambitious and broader agenda ahead of us. And I'm going to try to summarize it in financial terms in both the cost side and also on the investment side. So what we have done. As you know, we conducted a very comprehensive benchmark last year where we identified several large gaps of inefficiencies. The plan and initiatives that now Rainer has presented is addressing those gaps. We are also now setting up a very clear program structure where all of this is sort of closely monitored, follow up; has clear initiatives, time line and KPIs. I will quickly now touch on some of the sort of key levers that Rainer just have gone through on a very high level and then try to show how that relate into the financial and cost development. The automated work definitely, going from manual to automatic, will help us to reduce cost, simplify our product landscape, modernize and simplify our IT architecture; has several implications on our costs not just on the IT side, as Rainer mentioned, but also on other parts of the organization. Increased number of digital customer interactions have good effects on reducing costs in customer care and also to reduce the sales and marketing costs. Moving further to more targeted marketing communication can be more -- make us more relevant, have more impact and increase the return on our marketing investments. We will also embark on a quite ambitious agenda to reduce support and overhead costs both by improving our systems, our processes but also to redeploy our resources closer to the customer. And last but not least, a lot of our plans, prioritizations and decisions in Telia today is made on experience and gut feel. And as Rainer has talked about, we have to move much more into being fact-based and data-driven in our work. So all in all, this translates into what you already have seen, a concrete net cost reduction of SEK 2 billion by 2023. And this is including price increases, inflations and so on, so this is a net cost reduction. And as you can also see on the slide, that a big part of this is coming from reduced resource costs both on people but also external consultants. And also as we have commented on is that, already in '21, our target is to reduce by 1,000 resources. We also see good effects from these levers to be more efficient in both our sales and marketing costs and also other costs like IT costs, as I mentioned, bad debt, energy, et cetera. This whole program, we expect, will increase restructuring costs by about SEK 0.5 billion per year, but as I said, this is now a very comprehensive program with a clear governance structure in place, with a clear plan, initiatives and KPIs that we follow up on a regular basis. So let me move into the CapEx efficiencies because the benchmark that we have performed also shows that we have inefficiencies when it comes to our investments. There are many levers again. Let me just highlight a few. The standardization and simplification -- also as Rainer has mentioned, big effects that we can reduce our investments and achieve the same number of activities. Leveraging insight and analytics in how we work, where we can better predict and time where we should roll out new sites, when we should do capacity enhancements both on the IT side and on the network side, can both improve our customer experience but also reduce the costs and investments. Improve our planning capabilities and processes can lead us to have better terms with our vendors, can make us increase reuse and recycling of our equipment. And lastly, really focus and have tough governance in terms of prioritization, making sure that we only invest in the activities that give us good return on your money. So on top of the net SEK 2 billion OpEx reduction in the period, our target is to increase SEK 1 billion in CapEx efficiencies so totally the transformation program to deliver SEK 3 billion of savings. So let me move then into the CapEx plan for the period. The agenda on inspire, connect and transform is underpinned by a very concrete and comprehensive investment agenda. There's 3 main parts. Very quickly: On the mobile side, we will, as mentioned, invest into modernizing our mobile networks. We will roll out 5G to most of our customers in the period, but note that these investments is not just coming on top because we can replace a lot of planned capacity, coverage and end-of-life investments with this modernization program. And the benefit is obvious, get the coverage, 5G rollout, enable us to upsell to our customers based on a better customer experience and also reduce churn. The fixed network investments are expected to be quite flattish in the period, but we expect to get more out of the investments. We will terminate our legacy, as Rainer mentioned. We will expand our fixed network footprint both on our own, utilizing fiber and fixed wireless access, but also as Allison mentioned in the beginning, we will be open to work together with existing and new partners to get more expansion on our fixed network. On product development and IT, which is very much around the transform pillar that Rainer just talked about, we will invest into building capabilities on convergence, analytics, common product platforms, modernizing our IT, simplifying our product portfolio, et cetera. And the benefit is quite obvious in terms of supporting our journey to improve customer experience, at the same time radically reduce our costs over a period of time. So if we translate that over to the investment levels, we expect CapEx, as you have seen, to go up in 2021 to 17% of net sales. This is driven by 2 factors. One is the sort of step-up that we're now doing on our mobile networks. And the other one is some increases on product and IT investments, but the increase in product and IT is not that big. And that's because Rainer and myself is working really, really hard with all the country organization to really prioritize investments to enable us to sort of use more of our investments funds into building the future Telia. In 2022, we expect the investment levels to remain around the same level before dropping in 2023 to around 15% of net sales. The drop in '23 is coming from 2 factors. The first one is the efficiencies I talked about a minute ago, and the second one is that high investments into our mobile network is expected to fade out a bit. So as I said, this is a very comprehensive, clear investment program for the period, but of course, we will follow up. We will benchmark. We will improve and adjust along the way to ensure that we get good return on these investments. So that was the financial summary, so far, and now we will move into how we're going to deliver and execute on this agenda. And to do that, I hand back to you, Allison.

Thank you, PC. And thank you, Rainer, as well. So now the fourth and final pillar are -- of how we are going to deliver on our ambitions. As I said earlier, the most successful modern, innovative telcos are those that lead with customer experience and have a strategy to execution muscle that allows them to deliver consistently and sustainably. So the fourth and final enabler of our strategy is all about execution and how we will deliver on our promises going forward. Great execution starts with clarity of purpose so that everyone is clear in the ambition. It also starts with recognizing what needs to be done differently this time around. And since arriving at Telia, as you're well aware, I've identified a number of areas where doing better can only strengthen our execution muscle, and you can see some of these on this slide. Telia is a big organization. And I don't underestimate for a moment what it takes to bring about change, but I do believe we now have the right ingredients in place to drive that change and deliver sustainably for a long time to come: a strategy enabled with clear and cascaded operational plans and performance management systems, motivated employees, an integrated sustainability agenda, a bold transformation plan and a refreshed leadership team. For me, change and a first step is to put the right people on the bus because it all starts with leadership and it all starts about complementing me as the CEO. As you know, I have strengthened the leadership team to complement me and to ensure that we have the experience and the knowledge to achieve the ambitions that we're now setting out for. The ones in purple are the new members of our leadership team. And no, that isn't our Chairman in the corner, but it is a well-known observer cheering us on from the sidelines. Now we have a Finn on our leadership team for the first time in many years. We have deep Baltics experience. And our team more fully reflects the diversity in our home markets, as well as reflects international and deep TMT experience. Importantly, we have deep experience from individuals who have created and operated agile digital telcos, having first worked in incumbents. We have individuals that have worked in e-commerce who have commercial execution and in how to reinvent iconic brands. After having the right people on the bus, it's then all about how we figure out where we want to go and where the bus is supposed to go and developing a clear strategy to take us in the right direction forward. Coming from P&G, I know what it takes to implement a strategy and to consistently operationalize that with clear accountability and a sense of urgency tied to performance management. This strategy is enabled by a very strong transformation program, not only a technical program but a cross-functional one that is fully owned by all of us and fully integrated into the plans and the operations that we run in the countries and in the functions. And talking about fully integrated: Just as transformation is fully integrated, we've also updated our sustainability strategy to be fully integrated into our business strategy. You can see here some select examples of our expanded and daring agenda across all of the strategic pillars incorporating a broad set of values that we ourselves and our stakeholders increasingly expect from us across the environmental, social and governance fields. Within this, climate and circularity, contributing to a cleaner and healthier planet; digital inclusion so as to leave no one behind in the digital world; and privacy and security, to gain and maintain the trust of our stakeholders, will be priority areas underpinned by strong ethics, human rights and inclusive policies and ways of working. We are embedding sustainability in all material processes and work with clear targets and responsibilities integrated in everything we do while making strong contributions towards the SDGs. I don't have time to go through all of this today, clearly, but I'd love to have a separate session with all of you and your ESG teams and our ESG teams to take you through these bold and daring ESG agenda separately. A clear message from me today is the full team leadership are totally behind this plan and that our strategy is fully linked to our financial ambitions. PC has showed you this before. And I hope you're hearing from both PC and Rainer just how close they are to the development of the plans and what it's going to take to deliver on our ambitions going forward. Our various initiatives are set up to enable our structural part of our cash flow to grow on a sustainable level from a number of different directions. First, by reinventing a better customer experience and through less legacy burden, we will revitalize top line growth. Second, a modern and future-proof infrastructure is vital for us to be able to reinvent a better experience for our customers. This requires CapEx, but we will make sure that we deploy CapEx in a more efficient way where it matters. Third, our transformation program will lead to real OpEx and CapEx reductions. OpEx will be reduced by SEK 2 billion in 2023, and we'll build to that by 2023. And on top of that, transformation will yield another SEK 1 billion from reduced CapEx, so in total, SEK 3 billion by 2023, but the story doesn't end in 2023. Beyond 2023, OpEx will be further reduced by SEK 2 billion, so we'll be on a run rate above SEK 2 billion by the end of '23. So total OpEx reduction of SEK 4 billion in 2025, leading to a total transformation effect of SEK 5 billion by 2025. Finally, all of this leads to our ambition for the coming period '21 to '23. And this is a framework for how we as a team look at Telia's financial targets over the medium term and specifically the outlook until 2023. So here is our outlook for the coming years. For the top line, we expect low single-digit growth each year driven by a reduced burden from legacy, regulation and the gradual COVID-19 recovery, in addition to growth from upselling convergence and new revenue streams. We expect adjusted EBITDA to grow by low to mid-single digits each year, explained by the service revenue growth just mentioned as well as positive effects from the SEK 2 billion cost reduction during the period. CapEx is expected to return to 15% of net sales by '23, thanks to the efficiencies that you've heard about and reduced investment in our mobile network as we come off of the peak investment period. For this coming year, we expect service revenues to show flat to low single-digit growth, as we are still held back by legacy pressure. We only expect gradual recovery from COVID. And the commercial turnaround will take some time before we have a full effect on a year-on-year basis. For EBITDA, we also forecast flat to single-digit growth, as we have limited service revenue growth during the year while the cost reduction program is still ramping up. CapEx, as you heard already, is expected to be in the range of SEK 14.5 billion to SEK 15.5 billion, yes, an increase versus 2020 related to higher investments in mobile network modernization, 5G rollout as well as increased transformational investments. And with that, I'm going to give the floor back to PC for a bit to take us through the cash flow development, balance sheet targets and our new dividend policy as well.

Thank you, Allison. And as mentioned, the EBITDA is expected to be flat to slightly improving in '21 before returning to growth in '22 and '23, in line with our midterm ambitions. CapEx is expected to increase to SEK 14.5 billion to SEK 15.5 billion in '21, staying around that level before then going back towards 15% of net sales in '23. Other elements of the cash flow, including interest rates, interest payments, tax payments, pension contributions, restructuring costs, et cetera, in totality is expected to be quite neutral during the period. If you look at the structural part of cash flow. That was around SEK 9 billion in 2020. We expect that to come down in '21 due to the higher CapEx but then start to increase from the EBITDA growth and then in '23 increase from combination of EBITDA growth and reduced CapEx. Working capital, as has been mentioned, has been a key driver of cash flow growth over the last few years and in 2020 alone contributed more than SEK 3 billion on our cash flow generation. As we have talked about before, we believe that we will still have positive contribution from cash flow going forward, but they will gradually go down during the period. And the reason we will still have positive contributions is that the initiatives that have given us the initial -- the effects, so far, continue in terms of vendor financing, terminal financing, inventory management and also on the billing cycles. So if you look at total operational free cash flow, we'll go down in '21 and then recover. If you look at the sort of the dividend cover: Operational free cash flow will cover the minimum dividend floor in the entire period. And from '22 onwards, we will be able to cover the minimum from the structural part of cash flow, meaning no contribution from working capital. So that is just to provide the safety net. It's not necessarily what we're aiming to do. Over to the balance sheet. Our ambition is to have a very strong balance sheet. It provides us with low financing costs, easy access to capital; and also secure flexibility. I know you like us to be more specific on what leverage we are targeting, and therefore we are now reinstating a target on net debt-to-EBITDA of 2.0x to 2.5x. In addition, we will maintain our target of a solid investment-grade rating of A- to BBB+. We will continue on our journey that was started a couple of years back to continue the sustainability effort also on the financing side, and we have several proof points on that already. Moving to the dividend side. Our ambition is to provide a predictable, sustainable and well-funded dividend. In addition, we would like the dividend to be closer tied to the improvement in our operational performance. Therefore, the Board has decided to propose to the AGM to revise the dividend policy for Telia Company. So the updated policy is to have a floor of SEK 2.00 but with an ambition to grow low to mid-single digit per year. This means that the shareholders of Telia will take part in the targeted growth in our profitability. The dividend policy is fully compatible with the cash flow outlook but also the leverage targets that we now have just commented on. And just to repeat: The cash flow is expected to cover the minimum level of the dividend policy, and from '22 onwards, the structural part of cash flow be -- will at least cover the minimum part. To summarize. We have a framework to create substantial shareholder value. We have a solid, strong and ambition (sic) [ ambitious ] strategic agenda that we have presented today. We have clear financial ambitions on service revenue, EBITDA and CapEx. And we have a clear ambition to maintain a strong balance sheet and also provide attractive shareholder remuneration. And with that, we are going towards the end. I will hand back to you, Allison, to wrap it all up.

Thank you very much, PC. So you've all heard a lot today about our plans, the measures we're taking. And let me just summarize the core components before we open up for Q&A. First of all, we believe we have a great opportunity on our doorstep because we're in a highly attractive region. The team is in place, colleagues that complement me, have great relevant experiences, people I trust and are totally motivated as a team to deliver on the plan ahead. We've got multiple levers of growth at our [ disposable ], 5G, ICT, convergence and more. And we will have less headwinds going forward as well. We also have infrastructure assets that are highly valuable. And they will be there to deliver on our growth plans, with the intention to crystallize some of those even further. And our bold transformation program will make us more agile, more efficient; and we have a very clear road map to deliver on it. We therefore have the foundations to provide very attractive shareholder returns going forward. And as you saw earlier, our purpose will be our North Star. Our strategy will be our road map, resulting in Telia being rewarded by having the most loyal customers, the most engaged employees, the most satisfied shareholders and the most empowered societies. Because that's our ultimate goal. So in summary, a very clear road map to enable growth, develop our assets and reset our cost base, allowing us to reinvent better for our customers, our employees, our owners and the societies of the Nordics and the Baltics. And I hope you see how committed, energized and passionate we are about delivering a new, better Telia for all. So on that note, you probably all would love to get some Q&A in, so are we going straight to that, Andreas? We are. Good. Let's go. And PC and Rainer are now joining, and Andreas is here for questions as well. So let's open the line.

[Operator Instructions] Your first question today comes from the line of Maurice Patrick from Barclays.

If I can ask a bit about the digital transformation plan. You've given a lot of color today, very, very helpful. I guess, very cynically, one would say that we've heard it all before, different companies and Telia. So perhaps if you could -- and I know you've been through a big sort of benchmarking exercise you've talked about as well, but perhaps where are you today compared to your peer group? Is Telia behind other European telcos, global telcos? And I guess, once you've been through this plan, where will you be? I mean whether it's 2 years, 3 years, 5 years. Some more insight than that would be great.

[indiscernible], Maurice, and thank you for the question. Great question. Every telco in the world is going through a digital transformation at the moment. I'll let -- I will hand over to Rainer in a minute, but what's different about us is -- I specifically targeted Rainer and some of the individuals that he's brought into his team because they have seen and operated real digital telcos in Asia and are now bringing that experience to Telia. And while we've made some progress over recent years -- and I think Rainer can touch on that. He has a very comprehensive view on what it's going to take for an ex-incumbent like Telia in a way that we've not been able to do comprehensively before because we've just not had the talent that have operated in these digital telcos that are much more lean and agile as you see out in Asia. Rainer, do you want to take the rest?

Yes. Thank you for the question, and it's the right question. So I think there is, if you look at the benchmarks, the risk to always run after the short-term benefits, and that doesn't deliver the longer-term sustainable growth and the sustainable efficiencies. So I think a -- kind of a learning that we have seen -- and that was what I tried to allude to in the transform part. We are looking at a much more sustainable customer experience-driven transformation which will be a lot more pervasive. So we are looking not just a cost-cutting exercise which can be done easily but will not sustainably change the system. That is why the transformation program now really has, if you look at it in more detail, a complete transformation of the customer experience; a complete transformation even of the people experience that we didn't talk today; a complete transformation of the back-office automation, which then drives the cost takeout on the OpEx side; a complete transformation also on the connectivity side, which is what I tried to explain, on the softwarization side and the efficiencies and also the further opportunities; a complete transformation of the IT side, which is the basis for a sustainable delivery of the customer experiences and the automation; and also a transformation towards the data-driven organization that we tried to explain. So I think the notion is that, yes, we are looking, of course, at benchmarks. We have done the benchmarking. We are not top notch and we are aiming at getting to benchmark level, but we will do this not in a short-term cost-cutting way. We are doing in which -- with a longer-term perspective of sustainably delivering the efficiencies and the top line growth. Of course, we will have in practice always a short-term and a long-term view. We have the 2021 deliveries. We have agreed on the plans. We are delivering on the plans this year, no question. So there is a lot of work going on, but we are not stopping there. I think the point is, that we make today, we are looking at '21 and beyond. And this transformation program, maybe last comment on this one, is nothing that actually will stop. We are going to be transforming the company into a continuously improving organization where there is no end to improvement. We will never be perfect enough. We want to improve. And we put into the system that continuous improving, continuous improvement mindset and structure. I hope that answers the question a bit.

And Maurice, the other thing that we've got a benefit of now is, now that we're -- we have focused into our Baltics and Nordic footprint, we can now reassess the overhead and the governance that we've had at Telia when we had a much broader footprint. So a lot of benefits that we'd already be able to get this year is reducing overhead and simplifying and better aligning line of sight all the way from group through to the countries. And that's why you'll see OpEx reduction of around -- are we disclosing how much for this year? No, okay. That's why you'll already see some OpEx reduction this year.

And your next question comes from the line of Nick Lyall from Societe Generale.

Yes, just a quick question, please, Allison, on the convergence points you made at the start. I'm still struggling to see how you're going to drive convergence in Sweden without price cuts and discounted content, so can you just maybe talk us through that given your price position is quite a bit higher than some of the -- your competitors, including your old business? And secondly, does the broadband position in Sweden stand in the way of that? Your market share is quite a bit weaker than it is on the mobile side and gets weaker as you move more and more towards fiber, so is that something you have to attack as well to get convergence moving?

I think, as I said there, we have not had all of the tools, systems, customer transparency in place, cascaded all down the organization to really drive convergence. So we can do this in a more-for-more value-accretive way by -- without disrupting the market because we've only just, post summer, been able to start seeing our customers through the lens of one view with their mobile and broadband. We're only now changing our sales procedures and our call center procedures to be able to do the cross-sell and upsell. Yes, it's slower than one would expect, but we're only actually putting those actions in place now. In terms of -- and we also -- we are -- yes, we have Telia, the premium brand. We also have Halebop and we also have Fello, so we play in all of the segments of the market, allowing us to ensure that we don't dilute the Telia brand but stay very competitive using our whole brand portfolio. And through some of the data and analytics that we're getting, we're going to be much smarter at how we target the different brands for the different type of customer we're trying to attract. In terms of broadband, you're right. It's a lower market share versus what we have in mobile, but with fiber, with fixed wireless access, with us going into open city networks and with us using the full range of products we have, we have the potential to grow our broadband market share. We've a great example recently where we just won one of the big housing associations in Sweden with 20,000 dwelling units. And we were able to combine our mobile with our broadband, with our TV, with our smart WiFi and with our IoT for smart homes, all together. And that was a great win for us that gave us new broadband customers but also gave us new TV customers and added-value services on top. So we do believe we've got a full range of tools, and we've got 5G. We'll be rolling out very rapidly. We've got a strategic partnership with Ericsson that allows us to get off to a fast start with the new spectrum. And it's our ambition to monetize 5G in all segments of the market.

And your next question comes from the line of Lena Osterberg from Carnegie.

I just wanted to first start with confirming that the savings are definitely net, that you expect to get these money out to 100%. And then I'm just wondering how we'll be -- we'd be able to track sort of progress of your transformation, not just the money but where you're going. That's been the problem in the past, that you have not released KPIs, and I think you have not tracked them internally either. So I think, will we be able to follow you on this path? And in that case, how often will you disclose?

Absolutely, Lena. The savings are net. And we will be sharing -- we have -- now we've got a German on the team, let me tell you. We've got OKRs for everything. So he -- we have developed a whole monitoring system to really monitor the progress not just of the financial outcome but the leading indicators and all of the drivers of the transformation program. And it's definitely our intention to be transparent with you. And I don't know whether you want to build on that, PC or Rainer, to just give Lena the comfort that this is a very comprehensive monitoring machine that we're planning to build and be able to be very transparent with you going forward.

Yes. I think I can just start by saying -- it's a little bit reiterating what you said. I mean it starts internally, first, of us sort of getting the structures, the governance and the follow-up mechanisms in place. And we're working very integrated here across functions and group and countries. So that's step one. The next step is that we will keep you updated on our progress both on initiatives and the results on those initiatives and not just the pure financials. We will come back on that.

And Rainer has already set that up with the transformation team so that he gets the visibility of it, and it's all online increasingly.

Yes, but maybe just to add to Allison and PC again what we are going to be communicating outside, I think, exactly. I have shown some KPIs in the transform part today. There's, of course, a whole pyramid of KPIs behind. And we are looking at essentially 2 parts, if you go one level deeper. One is the operations KPIs underpinning the financials. The other one is the delivery of our initiatives, and I think both of these things are quite important because they are also kind of trailing KPIs. And we want to be early so that inside in our teams we can also detect if any of those initiatives that we have defined -- and Allison showed that kind of a chart where you have seen a bit of the glimpse of how pervasive are we going. If any of those go into a what we call blocking or major issue, we can step in and immediately try to resolve rather than finding out a trailing KPI later, which then of course typically loses a lot of time. So I think we feel fairly confident that, with the transformation setup which is really pervasive across the markets and across the functions, we have that kind of what I call early-warning system in place. And again, what we are going to be exactly communicating outside, we will see, but inside we can clearly give the confidence that we have now a transparency in place which will help us to deliver.

So you will be able to hold us to account this time, Lena.

Looking forward to that.

Your next question comes from the line of Stefan Gauffin from DNB.

A couple of clarification questions. There was earlier a target by the former management team of reducing OpEx by 2% in 2021, and that included some synergies. Does these new targets replace the old target? And just a follow-up: You have earlier said that the inefficiencies were mainly visible in the incumbent markets, and I interpret that to be Sweden and Finland. So is that correct? Should we see the cost savings primarily in these 2 markets?

No, the cost savings are everywhere, Stefan. Trust me. There is opportunity everywhere. And do you want to take the first question, PC?

Yes, I can do that, Allison, yes, just to also support on the second question. I mean there are, of course, different cost-saving opportunities, different places in the footprint, but we see significant opportunities in all markets, both big and small. Then the new targets that we now are communicating is the total, all right? So there's no addition on top of that. So the targets that earlier management have communicated is now embedded in, some of it already delivered. And the remaining part is part of our SEK 2 billion cost reduction by 2023. And we also -- as mentioned, we will have a significant portion of that already in '21.

And your next question comes from the line of Ulrich Rathe from Jefferies.

I have 2 questions, please. The first one is on the service revenue growth, the return to service revenue growth. Could you outline how you see the market backdrop to that ultimately? You say there is a COVID unwind, which presumably impacts everyone, but I'm wondering whether you have sort of a specific target here of share increase; or whether you think Telia will grow with the market or take most of the market growth, for that matter. The second question is on the restructuring costs. There was a comment on one slide that this will increase by SEK 500 million. What's the baseline here? Is that roughly SEK 500 million baseline, so together SEK 1 billion? And in this context also, there was another comment then on the free cash flow discussion saying that the other items of free cash flow, which includes the restructuring would be about flat year-on-year. So how does it sit together if there's SEK 500 million more coming in the P&L? Why is that flat, the free cash flow? Is it because you're simply provisioning for longer-term cash outflows that will just drag down the numbers for longer, and therefore, you don't see it in '21? Or is there anything else going on?

Hi, Ulrich. Always great to hear from you. So I'll take the service revenue question, and then I'll pass over to PC on the restructuring and the cash flow. On the service revenue, where we're the market leader, clearly, it's our ambition to grow the market and for us to grow with the market. But we're not always the market leader in every segment of the market. So within some markets, so for example, in Sweden, there is room for us to grow our share of the TV market and to grow the total pie for everyone of mobile when we aim to monetize 5G going forward. Where we're challengers, clearly, there is still room for us to take market share because we're coming from behind in a number of our markets. But again, we will aim to do it in a way that is good for the market and is sensible for us as a company. So it varies by segment and market but assume market leader, our role is to grow the market. that everybody benefits, but particularly our customers benefit from higher-value products and services. And where we're coming from behind, we will aim to take some market share.

Then I can take the last 2 questions. Yes, you are correct. There is an increase of restructuring cost of SEK 0.5 billion. The last few years, we've been averaging around SEK 0.5 billion, so that means that the total restructuring cost in the period is around SEK 1 billion per year. This increase is included in the guidance on the other components staying flat. But keep in mind here that this is a combination of interest payments, taxes, restructuring costs, lease payments and pension contribution. So there are different moving parts, and there are other factors that kind of compensate that increase in restructuring costs.

Great. Just to confirm, there is no big provisioning for longer-term free cash outflows like earlier time, which then weigh on free cash flow for years to come?

No.

And your next question comes from the line of Johanna Ahlqvist from SEB.

I have 2 questions, if I may. The first one relates to the infrastructure -- I don't know what you call it. It's not a company you formed, but it's a division, as I understand it. I'm just wondering what type of infrastructure do you include in that? Is it the fiber, the towers and everything? And how much potentially would you consider divesting? Is a minority 49%? Or is it 10%? And then how far have you come in those discussions? I mean is it very early days, so we should not foresee anything happen here until 1, 2 years ahead? Or how do you look upon that? So any details on that would be very helpful. And then the second question relates to the entire IT transformation you're going through or will go through. I'm just wondering where do you see sort of the biggest risk in a sense. What's the -- where do we need to keep a closest eye on? Where in this whole transformation lies the biggest risk?

Thanks, Johanna. So we wouldn't be announcing the Telia Asset Management division today if we weren't very much well prepared to start a deep dialogue with partners that have been approaching us for quite some time. So -- and that's why we're already announcing that Andreas Ekstrom will head that up because he's having -- we've been preparing this for a while. We've already identified the tower assets that would be interesting and attractive for us to partner with others. So immediately, we put our Latvian assets in that division, and we'll put our CapMan fiber finish asset in there. Towers are the first priority. And as we said today, focusing on our challenger markets first, Norway and Finland, in particular. And we are ready to launch a process there very, very soon. How far might we take it? We do see that vehicle as possibly being a vehicle we can use for further fiber infrastructure investment in the future as well. So beyond towers, there will be fiber opportunity in there, too, and we'll seek to find the right partners to work with. How far are we prepared to go? It really depends on the value creation potential of the partnership. We start from a point of view that we want to own and operate and share a -- and sell a minority stake up to 49%. But it really depends what we're being offered at the end of the day, Johanna, because when you look at these assets, you've got to look at how much value do you get upfront versus what are the implications of the longer-term MSA agreement. So we're very open-minded. We've been approached by multiple people, and we'll be back soon once we've got specific transactions to dialogue with you. Does that answer your question on that piece?

Yes, definitely.

Thank you. And then on IT, Rainer.

Yes. Thank you for the question. Excellent. So let me start by saying that I think we have already started to derisk quite a bit. And why I'm saying this is I mentioned the strong delivery integration that we have put in place on the network side. I didn't mention the strong delivery capacity we have put in place on the IT side. And I just want to say that over the past year in 2020, we have completed a full IT integration operationally on the ground, which is to say that now as Telia, we actually have one integrated IT, which gives us a platform to go into what we are seeing in the future, which is a much more scalable IT infrastructure and a much more integrated IT delivery. So I think we have done a fairly significant step towards derisking, which would otherwise be a risk if you have a very fragmented situation across the countries. That isn't to say that we have already, of course, integrated all the IT systems. And I was alluding to the target architecture conversion as well as the legacy takeout, which is, of course, what we are doing as we speak. But as a precondition to do that, we have done, I think, a significant step of integrating and implementing, in fact, a common delivery model, which allows us now to have that scalability of products and services and systems across all markets. In terms of risk, I think the other element that can be a risk in an IT transformation, which, again, we will not see, I think, in our case, is if you wanted to do a huge big bang. So we are not looking at an approach where we are saying there's a one size fits all that has to be basically ripped out and then implemented across all the markets. We are seeing a much more organic transformation, but we are very clear on our target. And I just had not much time to detail too much the target, but we are looking at a modularization, and we are looking at a much more flexible setup so that I can actually say that we are, so to speak, repairing the IT rather than doing a big bang, which would be a risk. So I think that part also is derisked to a large extent. If you look at remaining risks, I mean, there are, of course, risks around do we have the right and sufficient capability in all places. We are looking at user experience focus. Do we have enough people that are really up to delivering great user experiences? We are hiring, so we are certainly looking at strengthening that part. We are going massively into the cloud, from on-premise to the cloud. Again, I've talked about this on the network side. Of course, the same will happen on the IT side, new software skills, DevOps skills, [ desktop op ] skills, CI/CD. There's a lot of methodology, state-of-the-art methodology, which we will have to build further. We have it, but we need to build further. So there is a certain, I think, skills augmentation that is required. And of course, if you look at the strengthening of the near-shoring location, I was mentioning, we have currently about 600 very excellent IT experts in Lithuania. We are strengthening that location. We see there is enough capacity in the market. And of course, there is a shift that is going on from the onshore to the nearshore in terms of overall headcount. So there will be a certain number of, I would say, watchouts that we need to see, again, relating to capability and capacity. But I think overall, we have, like I said, derisked so far we can do in the last year, the overall IT transformation, which, as I was trying to say, is really the core foundation of our digital transformation that we have planned for the next 3 years.

We will now take our next question, and the question comes from the line of Andrew Lee from Goldman Sachs.

I had 3 questions. So if you don't want to answer the last one, that's fine. The first one was on the Swedish growth outlook. I guess the most questions we've had -- I've had in from investors today have been, can you grow your Swedish service revenues in 2021 or 2022. You laid out really helpfully the legacy regulation and COVID color and how those improve. But can you just talk about the rest, say, consumer and B2B trends? Second question was on your [ Asus ] towers, just a follow-up from your answer to the previous question. Just wondering, would you sacrifice control to work with an experienced partner in [ A-We ] to gear up like BT did recently in the Netherlands? And if not, why not? Why keep control of your towers? And then the third question was a broader one. Strong presentation today on how telco networks are more important than ever in a COVID world. So do you get a sense that the regulators or the EU competition authorities may be becoming more supportive in terms of regulation or approach to consolidation that will enable you to generate high returns and incentivize those network investments?

So why don't I take telco towers and you can talk Swedish revenue growth, yes? Yes. So first of all, on the regulation, I think certainly, the dialogue that we have locally, we are getting full support for how important our networks are going forward. And I do think governments, both locally and at a European level, are recognizing just how important we are to keeping societies up and running. We can only hope that changes the regulatory framework going forward. But as you know, the Nordics and Baltics have a much more corporate-friendly approach to regulation anyway. And I think we work in some of the best markets when it comes to regulation. In terms of the towers, we're open-minded. We will assess the value potential based on what the third parties could bring to us beyond just capital. So yes, for the right deal, we might be willing to sacrifice control, particularly in our challenger markets where we need to improve our return on capital. We could bring in new operational excellence if we have parties that bring something new to the table. So we're open-minded. We'll do what is in the best interest for the company. Over the long run though, we won't just do a crazy deal, which is basically then just a sale and leaseback where we end up driving up our operational expenses over the long term. So it's striking that right balance between the value upfront and the hidden value in the MSA that transfers to the partner or the new owner over time. On Swedish growth, and I'll let PC build on it, as I said, over the time frame, we do believe that the headwinds will decline. And there is scope for us to grow across the footprint, low single digits. For Sweden, we're not giving any guidance in particular, but Sweden is kind of similar to the rest of the footprint, flat to slightly up in the coming year, with Sweden probably at the lower end. Flattish is probably a better target for Sweden, but it will start to grow beyond 2021.

Yes. I can maybe add a couple of things. I think with the spectrum auction behind us with the sort of rollout now of 5G, with the strong momentum that we have on B2B towards the end of 2020 and also on B2C, we think we're holding up pretty well. But of course, that Allison alluded to, Sweden is the one where we have the biggest legacy and it will take time before that goes away. So -- but we are working hard, and we believe we have some good momentum as we speak. And then over time, we believe also the improvements on experience and leveraging more on our media assets will contribute and make it an -- and convergent agenda will make it sort of possible for us to maintain our shares and slightly grow them and also, therefore, have a positive revenue growth also in Sweden.

And your next question comes from the line of Paul Sidney, Credit Suisse.

I had a couple of questions, please. You set up multiple drivers and initiatives of revenue growth and efficiency gains over the next 3 years. I was just wondering, in your opinion, what are the 3 areas that represent the most radical changes in Telia's strategy going forward compared to what Telia was doing over 2020 and in previous years? And then secondly, just sort of building on the pricing questions we've had. What is the general pricing strategy in Telia's core markets going forward? Is Telia assuming any price increases in the financial targets that you set out to '23 in any of your core markets like here?

So first of all, one of the biggest drivers is coming out of -- on the top line is definitely coming out of COVID and the recovery that will come from both roaming and advertising revenues over time, but that's not going to come back in 2021. That will come over the period. Big driver is convergence and us being able, using our digital transformation program, to have a much better line of sight for our customers so that we can provide that cross-selling and upselling opportunity based on deep insight of our customers. So that's the second piece. And then clearly then is the whole digital transformation, having much fewer processes, much fewer products, getting out of legacy. And that would just dramatically change the cost structure of the company going forward as well. And I'll leave you to build on that if you want to. In terms of our pricing strategy, we will aim to monetize 5G. That is our ambition. And we will aim to -- where we're the market leader, we will aim to do that in all of the segments that we operate in. We do see that as a significant opportunity in mobile. We also believe we can better monetize broadband. As everybody's experiencing during these times from work-from-home, we all need high-speed, highly reliable networks, and that's a great opportunity for us to continue to trade our customers up to higher speeds, to migrate them from copper and legacy into fiber or fixed wireless access. And so those are the key drivers of just straight pricing. But actually, what we want to do is cross-sell more into our customer base. When we have such a large customer base and they might be buying just a mobile product from us, we need to get broadband into their hands, we need to get content into their hands. And we do believe in the consumer segment, we've got opportunity with content in the Swedish and Finnish businesses, in particular, in the coming years. And you've seen the position we've got in ICT and being that orchestrator of digitalization in the enterprise segment. As you see this dramatic digitalization of the private and public sector, we're very well placed there to start selling them a range of value-added services that protect the ARPU declining in the core connectivity products and extend the range of revenue, services and profitability and lifetime value of that customer base.

I can...

I just have a quick follow-up? Sorry.

Yes, Paul.

Yes. Sorry, I was just wondering in terms of the convergence strategy, the cross-selling strategy, is that an opportunity not just in Sweden, but in your other core markets as well?

Yes, absolutely. Absolutely. We only merged the GET and Telia brand in Norway in September. We haven't yet achieved the revenue synergy potential of that combination. It's like an -- definitely an opportunity in Finland, more in the consumer segment than the B2B segment because we've already got a good position of a wide range of digitalization services on top of our connectivity. So I think there's convergence benefits possible everywhere, probably except from Denmark because for now, we really want to focus Denmark to be much more mobile-focused. That's where we do have a position of strength there, and we want to really reduce the cost base of that business, make it much more lean and agile to be prepared for consolidation opportunities in the future. So Denmark will be the only one that we probably won't be pushing any major convergence in the coming years.

We will now take our next question, and the question comes from the line of Fredrik Lithell from Danske Bank.

Thank you all for a very good presentation, a lot of details to digest. Just a follow-up, Allison, on your comments on pricing strategy. Finland, we've seen, and you also made a point about that 5G is driving ARPU uplift there. They also do have other structure on tariffs with speed-based tariffs. Would you consider that in any of the other markets as a solution to better monetize 5G? That's one question. The second one is you haven't really mentioned M&A. You did that just now on Denmark maybe, but is M&A part of your strategy here? Or is it just the focus that you have laid out right now today? And finally, Rainer, very good presentation. Thank you for that. Can you elaborate a little bit on the differences and the similarities? I mean, you've been at Reliance Jio and so on. But they're very different markets and very different aspects to do these kind of transformations between your experience here. So could you just elaborate a little bit? And that would be exciting to hear.

Yes. So yes, delighted that we are now seeing the migration up to 5G tariffs in Finland. More than half of the new handsets that are being sold in Finland now are 5G-enabled. So that's allowing us to do that upgrade. And Finland has been a speed-based market for many years now. And great to see the market leader really trying to monetize 5G. We are looking at Finland. We're looking at what's happening in Norway. We might adopt slightly different monetization strategies by market depending on where we're starting from. But clearly, we are following the Finnish market closely to see how much of that can be replicated in our other markets. In terms of M&A, look, we're now Nordics, Baltics focused. And a part -- and I -- as you saw in the presentation, we've got very strong converged positions in Sweden, Lithuania, Estonia and now Norway and Finland as well. Where we still see structural opportunity is Denmark and Latvia. We're not planning to go out of the Nordics and the Baltics. But what we see is we've spoken about it for a long time that having those 2 separate businesses in Latvia, we don't believe makes sense over the long term. And so we see that as an opportunity at some point in time when our fellow partners in that business are ready to make a move. And then in terms of -- Denmark, I think, will consolidate at some point. Our focus at the moment, however, is to make our asset a great business, that we can then take advantage of consolidation when it comes along. And then in terms of the Telia asset management vehicle, that will be used to allow us to really build out where we might have infrastructure gaps across the region as well. And it will be a great vehicle for us to go into infrastructure assets, perhaps together with others, considering the valuations and multiples on infrastructure is very different from our average multiple. So it will be very focused if we do M&A around our existing core markets and strengthening our positions in those core markets.

Actually...

Yes. Go ahead, Rainer.

Thank you for the question on the differences between even the, let's say, Asian markets and European markets. I've been working in both now. And also reflecting what does it mean for such a quite massive transformation. So if I look at some of the differences, I would say there's at least like 3 main components between the markets and the way how things are approached. One is I think there's a sense of customer intimacy, which is different between prepaid markets and more postpaid markets. If you are in a prepaid market like in India or in any of the Southeast Asian markets, typically prepaid are focused. You have to fight for the customer every single day. You have to fight for the reload every single day. Whereas in postpaid markets, sometimes there's a slight complacency. After the acquisition of a customer, you kind of have the feeling that customer is there for 24 months. And I think there is a change of mindset that we need overall in our industry that we say we have to be close to the customer every single moment. We actually are because we have the handset with us the entire day, sometimes in the night. But I think that kind of mindset of being really with the customer and looking at the insights that I was trying to explain earlier, early signs of is the activity going down, is the usage going down, is there some problem that maybe the customer has, I think that is one core difference between what you may have in Asia and here. The second point would be around scale. If I look at what we have done in Reliance Jio, you mentioned the company. When we designed Reliance Jio from a basically business operation and technical operation point of view, we designed the company to acquire 100 million customers in 100 days. And that has completely changed the way how you would build such an organization. You can't do this in an incremental way. And I think that's the second learning that we are taking now also to say we need to get systems that are scalable so that we can leverage also cost efficiencies. And so this part is a bit of the design principle for our network transformation as well as the design principle for the IT transformation that I was alluding to. And the third element, I think, is around the agility, which is more to say the way how we work. Where typically -- I think you mentioned I'm German. So typically, as German, European people, we are extremely structured. But downside of being very structured and having like 2-, 3-year plans is that sometimes, things change and then we have to react to it. And I think the agility that we are now implementing in, again, what I pointed out only briefly between the IT and the business is set up to say, I have, of course, a north star in the blueprint, but exactly how I get there may depend on competitive reaction, may depend on maybe even regulation, may depend on some other things, which I can't foresee. So that agility to be able to also adapt quickly to changes from external is something that we're building into the system. Again, something that we learn and will be part of the transformation programs. I think these are 3 elements. There is more, but these are 3 elements that I think, as a learning, we take and I think will help us a lot going forward.

And your next question comes from Keval Khiroya, Deutsche Bank.

You've announced a clear plan on net OpEx reduction, but I guess you also have some upward pressure on OpEx from pushing convergence more content, more -- and sometimes just investing in processes to then take cost out. So within this net SEK 2 billion OpEx reduction, can you talk a bit about what you've allowed for just any upward pressures on OpEx within the base? And then secondly, just a bit more of a technical question, but obviously, historically, your cash tax has been low. You've seen a bit of a increase this year. Can you help us understand how we should think about tax over the next couple of years? That would be helpful.

So the net OpEx number is net-net. You mentioned some of the -- you mentioned content cost there. That goes into COGS. And clearly, as we plan to grow our TV media business, that will come at a different margin from some of our existing mobile or broadband businesses. So you will see COGS particularly go up in the content area in 2021 as we have Champions League and as we have the Euros that phased from last year into this year. So there will be a COGS uplift in the TV media unit going into this year. But we're expecting to drive revenue development on the back of it and also through convergence, actually, drive some new access revenue streams as well. I don't know whether that answered your question on that piece, and whether PC can then take cash tax? Or is there anything else you want to add to that question?

Yes. Allison, I understood that, that does get within COGS, but my point was just for that. I guess, we'll be spending a lot more money just trying to push these new products as well. Just wanting to understand what you've allowed for the need to perhaps spend more within the overall OpEx reduction just to get back to revenue growth and just to push these products as well.

Yes. I can maybe just quickly comment. The line wasn't really good, but I think I understood your question. I think within the total OpEx, we will, of course, also invest into areas where we want growth. So this is a net number. That means that we need to have gross savings, which is much larger than the SEK 2 billion to be able to offset both, I mean inflation in cost increases and some others. So this is the totality. And it hangs together with our commercial agenda and also the transformation piece. On taxes, we will not guide specifically on taxes. It is a part of the other category on our cash flow. And it varies a little bit around from time to time. But when we're looking at the totality of the period, we don't expect any big movements on these items.

Your next question comes from the line of Steve Malcolm from Redburn.

Yes. I'll go for 2 if I can. Very interesting. I mean, first of all, just on IT spend. Can you maybe help us understand the overall OpEx and CapEx envelope for the next 2 or 3 years because I was a little confused? So the OpEx is going down and CapEx is going up. So maybe just help us understand the overall IT spending envelope as you kind of move towards greater digitization. Secondly, just on working capital. Can you just help us understand how reliant you are on top line growth to keep the working capital going? If you weren't able to grow revenues, would we expect that to unwind because you've generated a lot more than you expected 2 or 3 years ago for working capital? So can you just share your thoughts on how much more support and potential downside if the revenues don't grow? And finally, just on to the asset management. I have to admit that I find the whole infrastructure space quite confusing. And I guess, I look at it very simple arbitrage against your cost of debt, which is incredibly low. So can you just help us understand, from a Telia shareholder perspective, what this might allow you to do to create value that you couldn't do on your own because I see no major constraints on capital. I see a very low cost of borrowing. Yes. And when I look at other transactions in the sector, by and large, the only ones that demonstrably worked is where companies have proper liquidity issues like [ Altice ] selling fiber or for the likes of tech in Telefónica Deutschland, no great value has been created for shareholders.

So why don't I take the last question, and then you can do the other 2, PC. Clearly, we will only do a transaction that will create shareholder value. And that's why we're prioritizing the challenger markets where we do believe bringing in a partner that has real deep operational experience of running towers will bring benefit for our Finnish and Norwegian businesses, in particular. So it's -- you're right, we don't need the access to capital. This is about bringing in expertise, operational excellence and preparing us for a world of 5G and beyond, where more and more micro sites will be required, and we'll be in a strong position with another partner to be able to do that in the most efficient way possible for Telia and to crystallize some value to improve the underlying return on capital of those businesses in the short to medium term as well. So we're not -- we don't need it just to get cash. We're doing it to improve the efficiency and get some scale benefits for those businesses going forward.

Do you think you might be able to reduce your OpEx cost in those markets with an outside partner?

I would hope so. Let's see. It depends what the deal is.

Would they require you to [ load these price hikes more ] to get these cost savings or...

Steve, it's very -- it's quite difficult to hear you.

Okay. So I was just saying, what's the price that you would expect the investor to expect? I mean more loading at the site or something with competition or...

I think it's better that -- why don't we wait until we've got a proper transaction to bring to you, and then we'll take you through what we see the real benefits are. But you're right, there's going to be an arbitrage between cash upfront and what the partner brings in terms of operational excellence and then what is possible in the market in terms of getting more tenants onto those towers as well.

And then moving to your first 2 questions. I think on your second question on working capital, it is not so reliant on the revenue development. It is reliant on us executing on the initiatives that we have been doing for some time, and it is the driver of the positive contributions we have had in working capital. The biggest ones are our vendor financing initiative where we get significantly better payment terms. It is our terminal findings initiatives where we can offload the balance that we have used to have on our own books but also to continue work on inventory management and also the billing cycles. On your first question is on IT. IT spend is an important part of our cost structure. But as also Rainer has said, I mean, the important part is not just to look at the IT cost. It's actually the -- how IT complexity drives out costs elsewhere. And what we're trying to address within the IT costs, we will have some increases where you see a shift maybe from some investments into the cost side. If you change the model, we will see significant savings over time. Some will come already now in '21 with some of the initiatives that Rainer talked about in terms of internal-external resources in terms of utilizing our Lithuanian near-shoring capabilities and so on. Other savings will be more reliant on us modernizing the IT stack and take so much time. So there's different phasing of some of the initiatives during the period. An increase in CapEx is just that. I think you saw from Rainer's presentation, the amount of changes we are now going to do during the next 3 years will require restructuring costs on one side, but it will also require us to invest to do these changes. So that's the reason why you see some increase on the product and IT. But if you're looking at the total, I think you -- depending on how do we finance around SEK 3 billion to SEK 4 billion per year, and our ambition is to mostly redeploy our investments within that frame to enable the transformation. And this is based on the benchmarks that we've done. It is based on the insight that we now have gotten after Rainer have helped us to look into this. You see the opportunities. So that was at least some reflections on your first question.

But a lot of the investment into IT also allows us to drive our operational efficiency in other parts of our business. So you can see dramatic cost reduction potential in call centers if we have a much more dynamic digitalized and simpler set of products and services in the background. So it's a real enabler to both revenue growth and cost takeout in other parts of the company.

Yes, I think we would all agree with that. It's just -- should we think about the spend, having stopped for a couple of years overall, to facilitate [ active ] savings or -- which would be logical? Or should we think about it just the envelope being flat for a couple of years before the step-down?

It's within the CapEx frame that we've just explained. I think the IT productivity and efficiency comes towards the end of the plan, but what you start to get now is productivity efficiency in other parts of the operations.

Your next question comes from the line of Siyi He from Citigroup.

My first question is actually on your legacy services. I think in your Page 9, you mentioned that legacy services is about 7% of your service revenues. And if I calculate correctly, that's around SEK 5 billion. But I think you suggest that the legacy decline is only going to be SEK 0.8 billion in absolute terms during 2021 to '23. I just wanted to check whether I'm reading it correctly. And if so, could you share us how you plan to safeguard the remaining of the legacy revenues? And my second question is really on the other items. I understand that you group the rest of the cash items to other. But we believe that we have visibility -- seems suggest that restructuring cost is going to be higher, cash tax is higher, as there is no contribution from our carrier business. I'm just wondering if you can give us some indication, where do you see the positive contribution come from so that we can be confident that this line won't move higher?

Yes. I think I can comment on your second questions on other items. I think we're going to stick with our guidance that the combination of these components will be flat during the period. On your first question on legacy, I think that the reduction in -- when we talk about legacy, look at the definition. We talked then about fixed telephony. We talk about fiber OTC. We talk about interconnect, and we talk about roaming. And those combined is around 7% of our 2020 revenues. And then the decline of them will go down from around SEK 1 billion to SEK 200 million by 2023.

And in terms of proactively managing the drag from legacy, it's about migrating them to fiber. It's migrating them to open access, open city networks. It's about migrating to fixed wireless access. That is all part of our plan.

And your next question comes from the line of Ondrej Cabejšek from UBS.

Ondrej here from UBS. I've got 2 questions, please. On the leverage target is my first one. So last time you presented Allison, you said that the range would be 2.25 to 2.5. And now you're saying the new targets are between 2 and 2.5x net debt-to-EBITDA. So I just wanted to understand this better. Is that just your confidence in the newly announced kind of midterm, mid-single-digit EBITDA growth? Or does that already include some infrastructure disposal assumptions? And what does this mean for dividend progressions, i.e., is there -- should there be a windfall capital inflow from some of these transactions that you're potentially highlighting? Would you stick to a progressive dividend? Or is there a potential for some extraordinary dividends? And second question, sorry to be a bit repetitive on this. But on the top line midterm targets, you're saying that just from the base, the low base of TV and roaming, you could be getting all things constant close to 1% to applying CAGRs. So just to understand because if we look at your peers, the OpEx deliveries are usually not the problem. It's potentially the top line that is sometimes the problem to achieve. So what is your base case on the competitive environment and assumptions on the rest of the business? Is that kind of largely flat and driven by just the rebound from where we are today? Or how would we think about this going forward?

Okay. So first of all, when I was mentioning the 2.25 to 2.5, we were still very much in dialogue with our advisers and our Board on what were we going to feel comfortable with going forward. So nothing has really changed apart from us spending more time looking at the plan going forward, looking at our peers, looking at our structural cash flow potential and understanding what's right from the ratings agency's point of view. So I think we've just got clearer that actually, 2.25 to 2.5 is a very tight band and 2 to 2.5 is a much more sensible range on the leverage. And do you want to build on that, PC, with those additional questions?

Yes. There was a couple of other questions in your first one. I think that the framework that we now have outlined in the midterm guidance is already excluding any potential structural initiatives on infra or other M&A, so that hangs together. And then in the case that we will announce some structural initiatives either on the infra side or other, the Board will, of course, sort of then assess what does that mean in terms of dividend and leverage. But I think we will come back on that when and if we have something to announce.

Yes. And on the top line, you're right, we've shown a multiple set of levers today that if you add them up all individually could definitely deliver more than low single digits growth over the period. We recognize that there are some segments that continue to be under pricing pressure. And not everything always goes perfectly, but that's why we believe if you add up all of the different levers and consider the headwinds, low single digits is an achievable ambition that we've set out for. And of course, we'd like to get a bit more, but we're being sensible about some of the underlying pressures in the market.

And your next question comes from the line of Frederic Boulan from Bank of America.

A couple of questions, if I may. A couple of questions, if I may, 2 questions. First, on the cost side. So as usual, you guide on the indirect cost reduction. You touched on some drag on COGS in media. But on the more traditional telco side, how do you expect margins -- on gross margins to evolve, especially any considerations around the revenue mix in B2B towards IT or some impact from the legacy of, I assume, higher-margin revenue streams? And then secondly, if you can spend a moment on the embedded ambitions you have within the plan for TV and media, so versus a pro forma 2018 levels when the business was acquired '18 or 2019 for a second. Where do you think you can take the business in the medium term? And maybe comment on the impact of Champions League, Liga, et cetera?

Okay. I'll take TV media and then you take the cost side. So clearly, the TV media business, it was kind of throwing off between SEK 1 billion and SEK 1.5 billion a year before Telia acquired it. Just to be clear, TV4 itself, despite COVID this year, actually generated around SEK 1 billion in EBITDA. So we've got -- as I said earlier, we've got a very solid business to build from there. However, these economics, cyclical disruptions on advertising can take 2 years to get back to the previous run rate. So we're kind of assuming that it will take us a couple of years to get back to the previous levels, but then where do we take it from there? The whole objective of buying Bonnier was to retain that great leading Nordic -- leading European linear TV business and then to exploit the streaming business and getting into understanding how to use content to drive convergence and drive access. The bigger benefits will come not necessarily in the TV media unit, but it will also generate new revenues and new EBITDA development in our core businesses as well. In the short term, because we've got COVID headwinds and because we're investing in Champions League, that we won't see it recovering immediately. But once we're into '22, '23 onwards, you'll see the linear piece come back. You'll see the growth potential that we won in digital advertising, and you'll see it driving content with access and us building out that aggregator position for all of the streaming products that a home might want to have in the future, so it will change quite dramatically. But please remember, the core linear business, very solid, very profitable. The streaming business was never profitable, but now that we are driving it with access, we see economies of scale, and we see convergence and new revenue streams coming off of the back of that. So it will change very dramatically over the coming years but very positively.

Okay. I can comment on your first question. First of all, it's super important for us to reduce our indirect or what we call OpEx. That's a structural cost that we need to get down, and that's the EUR 2 billion ambition we have for the period. You are right. And in addition, we talked about OpEx now. Some of the initiatives that Rainer has laid out will also have a positive effect for our network COGS, which is not part of the OpEx. And this can offset price increases on content or other things that might go the other way around. Then you are correct that there are revenue mix effects here. The legacy business we have, have very high margin and some of the new revenue streams, for example, on the ICT and also on the media, have a lower margin than our, let's say, legacy and pure connectivity business. So we are depending on continued growth on the top line, continue to manage both equipment margin and also on the network COGS and then also making sure that we have a sustainable momentum on our connectivity business. If we don't have that, it's going to be very hard. So that is our key focus is to turn around that, combine then with the cost efficiencies and also with the additional revenues on top.

And that's all built into the guidance where EBITDA will develop low to mid-single digits over the period.

Your next question comes from the line of Adam Fox-Rumley from HSBC.

The first question I had was I wondered if you could talk about the current customer perception of the Telia brands in your consumer markets. Because you outlined your ambition to be the integrator of choice at the beginning, but that puts you up against some big names from outside of telecoms. So where are you now? Where do you want to be? And do you need more or different marketing to get there over time? And then my second question was on pricing in Swedish enterprise, both at the kind of larger and the smaller end. That -- it's been a really competitive space over the last few years. And I think it's probably one area where it's harder for you as the incumbent to necessarily fully steer the market. So I'd love your kind of view on that in the context of your business plan and also just how it's been developing recently.

Thank you. So our customer perception across the markets, yes, varies a lot. Extremely strong in the Baltics. So Lithuania, Estonia are probably -- we stand out as the best there. It varies by segment in Sweden but still very strong mobile perception in Sweden. Very -- and increasingly stronger in TV as well. Broadband is a little bit more volatile at times, particularly for those customers that are -- only have copper access. But I'd say our -- the brand perception, strong where we're the market leader. Where we're weaker is in Finland and Norway. Norway has grown through acquisition. Telia was not the strongest brand in the past. It was NetCom but what we've seen is great progress since we merged the GET brand and are really focusing on Telia becoming this alternative to the incumbent and being a daring challenger. And we saw brand consideration move from 32% to 39% in the quarter, actually. So we're getting some good momentum there. But Norway and Finland are probably the areas where we need to build and improve perception. Do we need to spend more money to do that? Not necessarily. We need to be much smarter, so our new head of brand arrived on January 1. Whereas we have got real -- we've built scale, skill and synergy across the group in the network area, in the IT area, we have never done that from a brand and a marketing perspective. So he's initially come in and said, "Oh, my goodness. You get so much opportunity here if you just leverage scale, skill from a sourcing point of view, from a thought leadership point of view." We've got multiple brands, so I don't believe we need to invest more to build the brand consideration. But we do need to do it in some of our key markets. And as you saw, we actually expect marketing to go down in absolute terms over the coming years by being much smarter at how we target and how we leverage some of these scale opportunities. In terms of pricing in the Swedish enterprise segment, we don't -- clearly, we will aim to monetize 5G on the back of enterprise mobile networks and some of the value-added services that bring -- but yes, that come with and on the back of 5G. But clearly, that's the area where us driving pricing up on core connectivity is more of a challenge. But where we do have a real differentiator is in the range of services that we have, and we're seeing, as more and more of our customers want access to all of those digital services, we can become that one-stop shop. And we can leverage our group scale to build the right partnerships with the Googles or the Microsofts, so that they come through us, we orchestrate their services, and we sell a one-stop shop with both our own services and third-party services as well. So I think our differentiator in the B2B segment will be in the scale of products we offer. But as the market leader, we will, of course, try to monetize 5G.

Your last question from the phone line comes from Russell Waller from New Street Research.

I had a question on CapEx, please. Could you tell us please what sort of fiber role is included in your CapEx guidance? So I guess there's an HFC overlay coming in Finland -- sorry, in Norway. There's potentially some fiber in Finland, but obviously, you've got JV. But what's included in the consolidated numbers? Maybe a bit of fiber spend in Baltics as well? So I'm sort of thinking what's the risk to the CapEx? Could it be that there's another fiber project that has to come? Or is the 15% CapEx to sales that you've targeted for 2023, should we think of that continuing into 2024, 2025? And then secondly, sort of related, what actually is the sort of maintenance CapEx level, would you say? Obviously, there's a lot of investment going into fiber and systems. But once that's all over, what -- where should we think of CapEx falling to?

Yes. I think I can try to answer that. I think we are not going to give you more specifics on the CapEx. But if you look at the presentation, you can see that in Rainer's piece, there is a growth on the sort of fixed connections that give you some indication because that is the level that we have now in our investments plan. If we're going to do any bigger fiber rollouts, we would then most likely view that together with partners, so we don't -- we'll have the full load on investments on our books. Also, I mean, in many markets, some of the sort of fiber opportunities and pockets are becoming smaller or less profitable. So we will also then use our mobile network to target it with fixed wireless access on 4G and 5G. We have guided now that 15% of net sales in '23. We are not giving any further guidance after that. We don't expect that to go up because we see the reason it goes up is 2 things. One is I mean we -- at the same time now, we are fully modernizing and rolling out 5G across our entire footprint. And that's not something that happens all the time. So that's the reason why we will see some increase in CapEx in '21 and '22. Yes. And I'm not -- I don't think I would give you a specific guidance on the maintenance CapEx. There is, of course, an underlying CapEx that is needed to maintain the customer base, to maintain the systems, keep up with, let's say, the traffic development and so on. So yes, I think I'll leave you with that.

But clearly, with less and less legacy and copper infrastructure, the maintenance CapEx in that area will go down over the period. So thank you and then there was one question, Andreas, that you've got.

Two questions, I think they will go pretty quickly, from Roman at JPMorgan. We mentioned the [ 3 and the 5 ]. But what about revenues, service revenues? Shouldn't that contribute on top of that?

Yes, it contributes on top. So the low single-digit revenue comes on top of the [ 3 and the 5 ].

And from Kristoffer at Handelsbanken, we have bought some, in his view, expensive TV rights. Could we consider sharing the financial burden with -- through partnerships? Or do we want to keep it exclusive?

Well, I think first and foremost, we want to ensure that it does what it was meant to do and really help Telia's overall convergence position in the market. But we will monitor how well that does, and we'd be open-minded to sharing it if we thought that was also an opportunity. But for now, no plans to do that.

Good.

Good.

That's it.

Thank you, everyone. Thank you for the questions. Thank you for being with us. And hopefully, the next time we have a session like this, it's actually back in person. And I'm sure we'll be very happy to take calls or whatever to explain more of any of the details we didn't get into today. So thank you for your time, and have a great weekend.