Telenor : Report on Corporate Governance 2023

Telenor

Annual Report

2023

Introduction	Strategy, performance	Sustainability	Corporate	Shareholder	Financial
	and risks	statements	governance	information	statements

Telenor at a glance

Telenor Group is a leading technology-driven communication services provider with presence in the Nordics and Asia. We put innovation at the heart of everything we do, whether we are enabling our customers to connect with family and friends or working to provide secure solutions for businesses in the public and private sector. We are passionate about sustainability and believe in social, environmental and economic value creation. We are driven by our ambition to exceed our customers' expectations and create value for all our stakeholders.

Telenor Nordics

10 million mobile subscribers

4 markets

Norway

Founded: 1855

Mobile subscribers: 2.7 million

Market position: 1

Finland

Part of Telenor since: 2019

Mobile subscribers: 2.8 million

Market position: 2

Sweden

Part of Telenor since: 2001

Mobile subscribers: 3.0 million

Market position: 3

Telenor Infrastructure

A leading Nordic infrastructure player.

26 000 telecommunication sites in the Nordics and fixed infrastructure that connects 500.000 homes across Norway. Data centres across the Nordic region.

Telenor Amp

Investments and partnerships adjacent to Telenor's core business. 15 companies within Internet of Things, maritime communication, entertainment distribution and online classifieds and more.

Telenor Asia

Denmark		Thailand
Part of Telenor since: 2004	199 million mobile subscribers
30.2% ownership
Mobile subscribers: 1.7 million	4 markets
Established: 2023
Market position: 2
	Mobile subscribers: 51.9 million
		Market position: 1
	Pakistan*	Malaysia
	33.1% ownership

Part of Telenor since: 2004

Established: 2022

Mobile subscribers: 44.4 million

Mobile subscribers: 20.5 million

Market position: 3

Market position: 1

Bangladesh

Part of Telenor since: 1996

Mobile subscribers: 82.0 million

Market position: 1

80.5	209	11,000
billion NOK revenues	million mobile	employees
	subscribers (including
	True and CelcomDigi)

* Telenor announced the disposal of its telecom operation in Pakistan to PTCL, the sale is expected to be completed in 2024. Telenor Pakistan is included throughout this report.

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Introduction	Strategy, performance	Sustainability	Corporate	Shareholder	Financial
	and risks	statements	governance	information	statements

Contents

01 Introduction

	Letter from the Chair and CEO	4
	About Telenor	6
	Highlights of the year	9
	How Telenor creates value	11

02 Strategy, performance and risks

Telenor's strategy	14
Group performance	19
Business area performance	22
Risks and risk management	31

03 Sustainability statements

General information	41
Environmental	49
Social	64
Governance	84

04 Corporate governance

Corporate governance in Telenor	96
The Board and governing bodies	100
The Executive Management	107
Executive compensation	110

05 Shareholder information

Shareholders and dividend	112
The Telenor shares	114

Board of Directors' report

06 Financial statements

	Consolidated financial statements	120
	Parent company (Telenor ASA)
	financial statements	192
	Responsibility statements	210
	Auditor's report	212
	Definitions and alternative performance
	measures	218

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Introduction	Strategy, performance	Sustainability	Corporate	Shareholder	Financial
	and risks	statements	governance	information	statements

Letter from the Chair and CEO

Our digital lives are becoming richer and more advanced. Irrespective of where we find ourselves in the world, we are likely to encounter fascinating examples of how connectivity drives societies forward and improves people's lives.

Telenor's services and infrastructure are playing an important role as an enabler in this development. This is why our purpose of empowering societies and connecting you to what matters most remains a source of inspiration for everyone working in Telenor. We draw on that inspiration to ensure that the customer remains at the heart of everything we do. And as we move forward, we will continue to embrace new technologies to make operations more digital and more efficient - and thereby simplify and improve the customer journey and experience.

2023 has been a year of delivering on the strategy presented at our Capital Markets Day in 2022. Our focus has been on executing on the strategic and operational agenda, and on achieving financial results in line with our ambitions. We are pleased to deliver an organic service revenue growth of 4 per cent for the group and a total free cash flow of NOK 15 billion, in a challenging macroeconomic environment.

In the Nordics, we were able to drive revenue growth while at the same time building on our execution capabilities to drive further transformation of our operations. We have set an ambitious agenda for our One Nordic approach to improve products and services to the benefit of our customers.

In Asia, we are very pleased to have closed two large-scale mergers, which have given us number one positions in both Malaysia and Thailand. Grameenphone remains the market leader in Bangladesh and has seen good subscriber and revenue growth during the year. In December, we announced the sale of Telenor Pakistan to Pakistan Telecommunications Company Ltd. We expect the sales process to be completed during 2024.

In Telenor Infrastructure, we have seen positive development in both the Towers and Fiber segments. There are also new and exciting opportunities within Data Centres, where we are partnering to build secure, and energy- efficient data centers in the Oslo area in Norway.

We established Telenor Amp to ensure active management of the companies in the Telenor portfolio that are closely related to our core business. We aim to continue to develop new and innovative digital services on top of connectivity, either within our established independent companies, or with external partners. During 2023 we sold Working Group Two and announced the sale of Telenor Satellite, to ensure that these two companies can continue their development with strong partners.

Connectivity will continue to be important to address challenges we are facing as a global community, with climate change as the most urgent threat. It is important to us to increase the robustness of our network to better withstand extreme weather events.

Ensuring that we are able to operate sustainably is key. In 2023, we took several steps towards delivering on our science-based climate targets, including reducing scope 1 and 2 emissions in the Nordics, and tackling lack of renewable energy in Asia by engaging with relevant authorities and stakeholders, and advocating for increased availability of renewable energy. To further our climate agenda, we committed to reaching net zero emissions by 2045 in accordance with the Science Based Targets initiative's standards and published our first ever climate transition plan.

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Jens Petter Olsen, Chair of the Board and Sigve Brekke, President and CEO

Introduction	Strategy, performance	Sustainability	Corporate	Shareholder	Financial
	and risks	statements	governance	information	statements

Digital services are developing at an incredible pace - and at Telenor we are committed to doing our part in making the digital world secure, greener and for all. We operate in increasingly digital societies, and we will be stepping up our efforts to provide internet connectivity and digital payment solutions in rural Bangladesh, as well as advanced 5G services to the Nordic business market.

During 2023 we have seen generative AI take huge strides forward - and become available to a global audience. The opportunities are breathtaking. However, as technologies become more sophisticated, we are also reminded that our customers, in both the business and

consumer markets, are likely to face a growing threat from various forms of cybercrime. At Telenor, we want our customers to be safe in the digital world. This is why we are actively developing products and services for their protection. Our ambition, in the Nordics and beyond, is to be recognised as a leader in cybersecurity.

We want to thank Telenor's people who put in an extraordinary effort during 2023, ensuring that our company

is well-positioned for continued growth and value creation in the Nordic region, and for building long-term value in Asia. Together, we will continue our efforts to explore new ways of working, develop our skillsets, and deploy new technologies to ensure Telenor's continued success. We also want to thank our customers for putting their trust in us. As we move forward, we continue to be guided by our shared Purpose: Empowering societies. Connecting you to what matters most.

Jens Petter Olsen,	Sigve Brekke,
Chair of the Board	President and CEO Telenor Group

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Introduction	Strategy, performance	Sustainability	Corporate	Shareholder	Financial
	and risks	statements	governance	information	statements

About Telenor

Telenor's history

We have gone from providing telegraphs, switchboards and phone booths to developing the innovative technologies that empower today's societies. It's a long way from where we started in 1855. A more detailed overview of Telenor's history is available on Telenor.com.

First Norwegian telegraph		Norway is one of the
line opened by the	The telegraph	countries in the	The telephone
Norwegian Telegraph	cable connection	world with the	connection is	The first mobile
Administration, connection	between Norway	highest density of	opened between	phone is
Christiania (Oslo) and the	and Great Britain	telephones per	Norway and the	launched in
city of Drammen.	is opened.	capita.	US.	Norway.
1855	1869	1893	1928	1966

Telenor lists on the Oslo	Telenor acquires	Telenor enters Asia	Televerket becomes	The GSM-system
Stock Exchange and state	33 per cent of	(initially Bangladesh) and	a public corporation	is launched -
ownership is decreased.	Digi, Malaysia in	in 1997 Grameenphone	and change its name	setting a new
Telenor enters Thailand	1999 and a	opens its mobile network	to Telenor the	international
and Denmark.	majority in 2001.	in Dhaka.	following year.	standard (2G).
2000	1999	1996	1994	1993

	Telenor enters		Telenor reshapes its organization to take a position as
	Sweden and	Telenor acquires	a leading telecom operator and infrastructure player in
	Telenor Group	the Finnish	the Nordics. In Asia, Telenor will work with partners to
	reaches 100 million	telecom	build scale and take number one positions in several
	subscriptions.	operator DNA.	markets.
2006	2019	2022

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Introduction	Strategy, performance	Sustainability	Corporate	Shareholder	Financial
	and risks	statements	governance	information	statements

Purpose and

identity

Empowering Societies.

Connecting you to what matters most.

Include

Enabling participation for all

Include means that Telenor is committed to equality, by enabling connectivity for all and driving greater societal inclusion through it.

Advance

Advancing connectivity to accelerate the digital future

Advance means that Telenor is at the forefront of technological development, constantly innovating and exploring for the benefit of customers, businesses and

society.

Safeguard

Safeguarding planet, people and data in the digital world and beyond

Safeguard means that Telenor constantly raises the bar for the safety, security and privacy of our customers, partners and

employees, as well as the

health of our planet to drive positive, long-term change.

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Introduction	Strategy, performance	Sustainability	Corporate	Shareholder	Financial
	and risks	statements	governance	information	statements

Ambitions

"The Telenor you see today is not the Telenor you will see in the future. We are taking a big step forward to ensure more value for our customers in an increasingly digital world in need of secure, stable, and sustainable solutions. We are building a smarter and more flexible Telenor - a company that creates value for customers, society, and shareholders," says Sigve Brekke, CEO of Telenor Group.

At the Capital Markets Day in September 2022, we announced the 'Reshaped Telenor' strategy and outlined new ambitions for sustainability and financial agendas and reorganised the group into four business areas.

"We are building an organisation that is competitive, with focused investments, profitable growth, and new partnerships. This strategy will create optionality and increased opportunities for value creation" says Tone Hegland Bachke, CFO of Telenor Group.

Our four business areas all have their individual value creation approach: profitable growth for Telenor Nordics, long term value creation and cash flow focus for Telenor Asia, industrialisation for Telenor Infrastructure and asset-by-asset approach for Telenor Amp.

Our financial ambitions reflect this strategy. We aim to drive shareholder remuneration and return on capital through growing the core business in a capital-efficient, sustainable, and responsible way, while maintaining a solid balance sheet.

The mid-term financial ambitions for 2023-2025:

Group:

• Year-on-yeargrowth in dividend per share
• Free cash flow before M&A to cover dividend in 2025
• Net debt/EBITDA of 1.8x-2.3x

Nordics:

• Low-to-midsingle digit growth in service revenues
• Mid-single-digitgrowth EBITDA
• NOK 2 billion reduction in capex before leases in 2025 versus 2022

Environmental, Social and Governance (ESG) ambitions until 2025:

Delivering on our science-based climate targets and be an environmental enabler for our partners and customers.

Upholding high standards in governance across and be the preferred partner for digitalisation and corporate cybersecurity.

Driving social and digital inclusion by promoting skills for the future and workplace diversity.

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Introduction	Strategy, performance	Sustainability	Corporate	Shareholder	Financial
	and risks	statements	governance	information	statements

Highlights of the year

Key events

In January, Telenor sold 30 per cent of Telenor Fiber AS in Norway sold to KKR generating proceeds of NOK 10.8 billion.

In March, the largest telco merger ever in Southeast Asia (by combined enterprise value) between dtac and True in Thailand was completed.

In July, Telenor signed a 10-year power purchase agreement for DNA, to be sourced from a new windfarm in Finland.

In August, Telenor's 48 per cent share in Working Group Two was sold to Cisco, generating proceeds of NOK 0.7 billion.

In September, Telenor secured Swedish 5G frequencies valid until 2048/2050 through Telenor's and Tele2's network joint venture.

In October, Grameenphone in Bangladesh launched a digital safety training program with UNICEF for children and teachers.

In November, the favourable outcome in the tax dispute regarding deductibility of India losses became final and Norwegian state repaid NOK 2.4 billion.

In November, Telenor agreed to sell Telenor Satellite to Space Norway for NOK 2.4 billion, transaction was closed in January 2024.

In December, Telenor committed to become a net-zero company by 2045.

In December, Telenor announced the sale of its telecom operation in Pakistan to PTCL, closing of transaction expected in 2024.

By year end, Telenor had returned to 82 million mobile subscribers in Bangladesh after the SIM sales ban was lifted.

Throughout the year, significant investments in mobile network modernisation including 5G rollout in all Nordic markets.

In 2023, Telenor delivered 5 per cent organic growth in mobile service revenue in the Nordics.

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Introduction	Strategy, performance	Sustainability	Corporate	Shareholder	Financial
	and risks	statements	governance	information	statements

Service revenues

Service revenues includes mobile, broadband and

TV subscriptions in addition to other service revenues which represent the core business of Telenor.

Organic growth of services revenues in 2023 was

4.0%

compared to 2.8% in 2022.

Free cash flow

The free cashflow reflecting the cash generated by

Telenor's operations was NOK

15.0

billion in 2023,

compared to NOK 10.6 billion in 2022.

Scope 3 GHG emissions

51%

of Telenor's suppliers have committed to science-

based targets for the reduction of their GHG emissions, compared to 36% in the prior year.

Telenor is on track to reach the 66% target by 2025.

Digital inclusion

Target is to train 6 million people in digital skills by

2025.

Telenor trained

1.1

million people in 2023, which brings the total

number of people trained since 2021 up to 4.1 million.

EBITDA

EBITDA (earnings before interest, tax, depreciation and amortisation) was NOK 34.6 billion in 2023 compared to NOK 33.8 billion the year before.

The EBITDA growth was

2.2%

compared to -0.9% in 2022.

Dividends

Dividends proposed for 2023 was NOK

9.50

per share, compared to 9.40 in 2022.

Net-zero

In 2023, Telenor set a target to reach net-zero in

scope 1, 2 and 3 by

2045

Diversity

Target is to have 40% senior women leaders by

2025.

By end of 2023, Telenor had

34%

senior women leaders, compared to 33% the year

before.

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