Telenor reported mixed financial results for the second quarter of 2026 as softer market conditions in Norway, continued competitive pressure in Finland, and macroeconomic challenges in Bangladesh weighed on revenue and profitability. However, the telecom operator accelerated investments in AI, digital infrastructure, network modernization, broadband expansion and organizational transformation to strengthen long-term growth.
Telenor Group revenue declined 5.1 percent year-on-year to NOK 18.1 billion, while service revenue fell 5.3 percent to NOK 14.7 billion. For the first half of 2026, Telenor’s revenue reached NOK 36.3 billion, while service revenue totaled NOK 29.5 billion, representing 0.4 percent organic growth.
Adjusted EBITDA declined 9.0 percent to NOK 8.0 billion, while organic EBITDA fell 4.8 percent. EBITDA stood at NOK 7.6 billion, down 18.1 percent. Free cash flow before mergers and acquisitions increased 12.6 percent to NOK 1.8 billion, while total free cash flow reached NOK 2.0 billion.
The quarter was affected by difficult comparisons, timing of initiatives, higher transformation costs, and a VAT dispute in Norway relating to TV news channels. The VAT provision reduced service revenue by NOK 135 million and adjusted EBITDA by NOK 162 million.
Operating Expenses Rise Amid Transformation
Operating expenses were NOK 6.1 billion, down 2.2 percent as Telenor grew spending on commercial activities and IT transformation. During the first half of 2026, operating expenses totaled NOK 12.3 billion, with 1.6 percent organic growth.
Telenor said 2026 remains a transition year as it continues operating dual IT systems while implementing large-scale digital transformation projects. These implementation costs are expected to decline toward the end of 2026 and through 2027.
A new organizational structure will become effective from August, creating a leaner operating model. The transformation is expected to deliver approximately NOK 375 million in annual cost savings from 2027, while supporting annual opex reductions of 0 to 2 percent during 2026-2028.
AI Factory and Digital Transformation Drive Capex
Capital expenditure excluding leases increased 3.7 percent to NOK 2.63 billion, lifting the capex-to-sales ratio to 14.5 percent from 13.3 percent a year earlier.
The increase was largely driven by NOK 150 million invested in GPUs for Telenor’s AI Factory, alongside continued investments in IT transformation and mobile network modernization across the Nordic region.
First-half capital expenditure reached NOK 4.91 billion, representing a 13.5 percent capex-to-sales ratio.
Telenor also continued expanding digital capabilities, with Telenor Sweden becoming the country’s first operator to launch a commercial 5G Standalone enterprise service, with Ericsson as its first customer.
Nordic Subscriber Base Grows Despite Competitive Pressure
Telenor added 42,000 mobile subscribers across the Nordics during the quarter despite increasing competition.
Sweden added 36,000 subscribers.
Finland added 23,000 subscribers.
Denmark added 1,000 subscribers.
Norway lost 19,000 subscribers, primarily in the consumer segment.
Fixed broadband subscriptions declined by 13,000, mainly due to migration toward higher-margin fixed wireless access services in Sweden.
Norway added 5,000 fibre subscribers during the quarter.
To strengthen its broadband position, Telenor completed or announced several strategic acquisitions, including GlobalConnect’s consumer broadband business with approximately 140,000 customers and Enivest with around 28,000 fibre subscribers. The Enivest acquisition is expected to increase Telenor’s Norwegian fibre market share from 22 percent to 30 percent.
The company also agreed to acquire Sweden’s Bahnhof, which serves more than 500,000 consumer customers and 15,000 business customers.
ARPU Performance Remains Mixed
Average revenue per user (ARPU) performance varied across Nordic markets.
In Norway, mobile ARPU increased 2 percent, while fixed broadband ARPU rose 4 percent.
Sweden maintained stable mobile ARPU, although fixed broadband ARPU declined because of a larger share of multi-dwelling unit customers.
Denmark recorded 2 percent growth in mobile ARPU, supported by pricing actions and an improved customer mix.
In Finland, DNA reported a 1 percent decline in mobile ARPU, while fixed broadband ARPU fell 4 percent due to subscriber mix changes.
Focus on Long-Term Growth
Telenor said commercial conditions remain challenging in Norway and Finland, while Bangladesh continues to face macroeconomic uncertainty. Nevertheless, Sweden, Denmark and Amp delivered solid financial progress during the quarter.
The company expects its digital transformation, AI investments, network modernization, broadband acquisitions and organizational restructuring to improve customer experience, operational efficiency, return on capital and long-term cash flow as implementation costs decline over the coming quarters.
BABURAJAN KIZHAKEDATH
