Edgar Filing: TELENOR ASA

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

Date: 16^th February, 2006, for 4^th Quarter, 2005

TELENOR ASA
(Registrant’s Name)

Snarøyveien 30,
1331 Fornebu,
Norway
(Registrant’s Address)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.


Form 20-F þ		Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.


Yes o		No þ

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):

TABLE OF CONTENTS


SIGNATURES
	FOURTH QUARTER 2005
	TELENOR’S OPERATIONS
	MOBILE OPERATIONS
	DTAC
	FIXED
	OTHER UNITS
	OTHER PROFIT AND LOSS ITEMS FOR THE GROUP
	BUSINESS COMBINATIONS
	IMPLEMENTATION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

TELENOR ASA FOURTH QUARTER 2005 RESULTS

The fourth quarter 2005 showed revenues of NOK 19,474 million. EBITDA before other income and expenses was NOK 6,831 million. Profit after taxes and minority interests was NOK 1,001 million. The Board will propose a dividend of NOK 2.00 per share for 2005

The fourth quarter 2005 showed revenues of NOK 19,474 million. Profit after taxes and minority interests was NOK 1,001 million. Earnings per share in the fourth quarter of 2005 were NOK 0.59. The Board will propose a dividend of NOK 2.00 per share for 2005, an increase from NOK 1.50 per share for 2004.

EBITDA before other income and expenses was NOK 6,831 million. The increased EBITDA margin was primarily due to the increased proportion of the mobile operations.

At the end of the fourth quarter the number of subscriptions in the consolidated mobile operations was 42.2 million.

Capital expenditure amounted to NOK 6,432 million and increased due to strong customer growth in the international mobile operations and the purchase of a UMTS license in Denmark. On 26 October 2005 Telenor increased its ownership/economic exposure in Total Access Communications PCL (DTAC) by 16.6% to 56.9% for a cash consideration of NOK 1.5 billion. As of 31 December 2005, after the offers for DTAC and UCOM shares expired, Telenor’s ownership/economic exposure in DTAC increased by a further 12.4% to 69.3% for a total cash consideration of NOK 1.2 billion. As of 31 December 2005, net interest-bearing debt in the companies was NOK 7.3 billion. DTAC was consolidated from 1 November 2005, while the operations in UCOM were reported as discontinued operations in the financial statements.

Telenor’s mobile operations in Asia and Eastern/Central Europe are becoming increasingly important to the Group and dedicated Executive Vice Presidents have now been assigned to both regions. In addition, Telenor has also strengthened the co-ordination of operational and human resources across all countries in which it has operations, and two new Executive Vice Presidents have been appointed to the Group Management.

On 21 December 2005 a Norwegian Court of Appeal ruled in favour of Telenor in respect of Telenor’s intra group sale of its shares in Sonofon Holding A/S. This sale triggered a tax loss of approximately NOK 8.6 billion, with corresponding reduced tax charges of approximately NOK 2.4 billion for the fiscal year 2001. The taxes were paid in 2003. The tax authorities have since appealed the decision to the Norwegian Supreme Court, and Telenor has consequently not taken the tax reduction to income.

Vodafone Sweden was acquired for a consideration of EUR 1,035 million (NOK 8,170 million) including debt and will be consolidated from January 2006.

On 12 January 2006 Telenor disposed of 4.8% of the share capital in Inmarsat with a total sales proceeds of GBP 75.1 million (NOK 889 million) and a financial gain before taxes of GBP 74.4 million (NOK 880 million). Following the transaction, Telenor holds 4.6% of the shares in Inmarsat.

OUTLOOK FOR 2006
The strong growth in mobile subscriptions during 2005 gives Telenor a solid foundation for further growth in revenues. We expect a growth in reported revenues in the range of 25% to 30%, based upon the current Group structure. A continued high growth in EBITDA is expected, in particular driven by the international mobile operations. Telenor will continue previously introduced initiatives and identify new means of improving cost efficiency. Telenor expects an EBITDA margin before other income and expenses for 2006 of around 33%.

High capital expenditure is expected to continue, and capital expenditure as a proportion of revenues is expected to be above 20%. Capital expenditure is expected to continue to be driven by high subscription growth within Telenor’s mobile operations in emerging markets.

A growing share of Telenor’s revenues and profits is derived from operations outside Norway. Currency fluctuations may to an increasing extent influence the reported figures in Norwegian Krone. Political risk, including regulatory conditions, may also influence the profits. We expect seasonal variations between the quarters.

PRESENTATION MATERIAL

Please find attached the presentation material from Telenor
Presentation material is also available on: http://www.telenor.com/ir/presentations/4q05/ and on http://www.telenor.no/om/ir/presentasjon/4kv05/

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Telenor ASA
By:	/s/ Trond Westlie
	Name:	Trond Westlie
	Title:	CFO

Date: 16^th February, 2006

FOURTH QUARTER 2005

The fourth quarter of 2005 showed a growth in revenues for the Telenor Group of 26% to NOK 19.5 billion compared to the fourth quarter of 2004. Profit before taxes was NOK 2.7 billion.

Telenor Group fourth quarter 2005

KEY POINTS IN THE QUARTER ^*)

•		Revenue growth of 26% — underlying growth of 13% )**

•		EBITDA margin before other income and expenses increased from 33.0% to 35.1%

•		Record high mobile subscription growth

•		Ownership/economic exposure in DTAC in Thailand increased to 69.3%

•		Nordic position strengthened through acquisition of Vodafone Sweden

KEY FIGURES ^***)


	Fourth quarter					Year
(NOK in millions)	2005		2004			2005		2004

Revenues		19,474		15,512			68,927		60,591
Revenues — growth (%)		25.5		13.5			13.8		14.6
EBITDA before other income and expenses ¹⁾		6,831		5,114			24,078		21,383
EBITDA before other income and expenses/Revenues (%)		35.1		33.0			34.9		35.3
EBITDA		6,722		5,134			23,836		21,535
EBITDA/Revenues (%)		34.5		33.1			34.6		35.5
Adjusted operating profit ¹⁾		3,644		2,411			12,534		10,746
Adjusted operating profit/Revenues (%)		18.7		15.5			18.2		17.7
Operating profit		2,949		(1,055	)		11,705		7,367
Operating profit/Revenues (%)		15.1	nm				17.0		12.2
Associated companies		65		140			1,233		986
Profit before taxes		2,666		(1,130	)		12,591		9,874
Profit after taxes and minority interests		1,001		(430	)		6,952		6,093

Earnings per share in NOK		0.59		(0.25	)		4.06		3.49
Net interest-bearing liabilities							31,133		19,195

Investments:
— Capex ²⁾		6,436		4,122			16,439		12,745
— Investments in businesses ³⁾		2,720		1,122			8,858		5,809

•		Profit after taxes and minority interests was NOK 1,001 million. Earnings per share in the fourth quarter of 2005 were NOK 0.59.

•		The Board will propose a dividend of NOK 2.00 per share for 2005, an increase from NOK 1.50 per share for 2004.

•		EBITDA before other income and expenses was NOK 6,831 million. The increased EBITDA margin was primarily due to the increased proportion of the mobile operations.

•		At the end of the fourth quarter the number of subscriptions in the consolidated mobile operations was 42.2 million.

•		Capital expenditure amounted to NOK 6,432 million and increased due to strong customer growth in the international mobile operations and the purchase of a UMTS license in Denmark.

•		On 26 October 2005 Telenor increased its ownership/economic exposure in Total Access Communications PCL (DTAC) by 16.6% to 56.9% for a cash consideration of NOK 1.5 billion. As of 31 December 2005, after the offers for DTAC and UCOM shares expired, Telenor’s ownership/economic exposure in DTAC increased by a further 12.4% to 69.3% for a total cash consideration of NOK 1.2 billion. As of 31 December 2005, net interest-bearing debt in the companies was NOK 7.3 billion. DTAC was consolidated from 1 November 2005, while the operations in UCOM were reported as discontinued operations in the financial statements.

•		Telenor’s mobile operations in Asia and Eastern/Central Europe are becoming increasingly important to the Group and dedicated Executive Vice Presidents have now been assigned to both regions. In addition, Telenor has also strengthened the co-ordination of operational and human resources across all countries in which it has operations, and two new Executive Vice Presidents have been appointed to the Group Management.

•		On 21 December 2005 a Norwegian Court of Appeal ruled in favour of Telenor in respect of Telenor’s intra group sale of its shares in Sonofon Holding A/S. This sale triggered a tax loss of approximately NOK 8.6 billion, with corresponding reduced tax charges of approximately NOK 2.4 billion for the fiscal year 2001. The taxes were paid in 2003. The tax authorities have since appealed the decision to the Norwegian Supreme Court, and Telenor has consequently not taken the tax reduction to income.

•		Vodafone Sweden was acquired for a consideration of EUR 1,035 million (NOK 8,170 million) including debt and will be consolidated from January 2006.

•		On 12 January 2006 Telenor disposed of 4.8% of the share capital in Inmarsat with a total sales proceeds of GBP 75.1 million (NOK 889 million) and a financial gain before taxes of GBP 74.4 million (NOK 880 million). Following the transaction, Telenor holds 4.6% of the shares in Inmarsat.


¹⁾		For reconciliation of EBITDA before other income and expenses and adjusted operating profit, see the table “Reconciliations” on page 19.

²⁾		Capex is investments in tangible and intangible assets.

³⁾		Comprises acquisitions of shares and participations, including acquisitions of subsidiaries and businesses not organised as separate companies.

^*)		Compared to the fourth quarter of 2004, if not otherwise stated.

^**)		Underlying growth is defined as revenue growth adjusted for the effects of acquisition and disposal of operations, and currency effects.

^***)		Telenor has changed its accounting treatment under IFRS for its Mobile Virtual Network Operator (MVNO) agreements in Norway and Sweden, both of which were entered into with the same counterparty. The identical fixed prepayments in Norway and Sweden are now eliminated at Group level. As a result of the change in accounting treatment, revenues, traffic costs and the provision for a loss contract has been eliminated on Group level for the full year and the fourth quarter of 2004. This change also affected the full year and the fourth quarter of 2005.

KEY FIGURES OPERATIONS

Revenues


	Fourth quarter									Year
(NOK in millions)	2005			2004			Growth			2005			2004			Growth

Telenor Mobil — Norway		3,235			2,963			9.2	%		12,243			11,730			4.4	%
Sonofon — Denmark		1,334			1,243			7.3	%		5,191			4,404			17.9	%
Kyivstar — Ukraine		2,390			1,184			101.9	%		7,272			4,219			72.4	%
Pannon GSM — Hungary		1,565			1,510			3.6	%		6,061			5,907			2.6	%
DiGi.Com — Malaysia		1,452			1,004			44.6	%		4,932			3,946			25.0	%
GrameenPhone — Bangladesh		850			570			49.1	%		2,970			2,186			35.9	%
Other mobile operations		1,491			179			733.0	%		2,219			423			424.6	%
Fixed		5,025			4,781			5.1	%		19,313			19,256			0.3	%
Broadcast		1,466			1,375			6.6	%		5,649			5,346			5.7	%
Other operations		2,538			2,461			3.1	%		9,967			9,540			4.5	%
Eliminations		(1,872	)		(1,758	)	nm				(6,890	)		(6,366	)	nm
Total revenues		19,474			15,512			25.5	%		68,927			60,591			13.8	%

EBITDA


	Fourth quarter											Year
(NOK in millions)	2005		Margin ¹⁾			2004			Margin ¹⁾			2005			Margin ¹⁾			2004			Margin ¹⁾

Telenor Mobil — Norway		1,186		36.7	%		1,119			37.8	%		4,471			36.5	%		4,305			36.7	%
Sonofon — Denmark		308		23.1	%		16			1.3	%		1,176			22.7	%		681			15.5	%
Kyivstar — Ukraine		1,359		56.9	%		712			60.1	%		4,050			55.7	%		2,581			61.2	%
Pannon GSM — Hungary		534		34.1	%		420			27.8	%		2,185			36.1	%		2,093			35.4	%
DiGi.Com — Malaysia		632		43.5	%		443			44.1	%		2,142			43.4	%		1,732			43.9	%
GrameenPhone — Bangladesh		455		53.5	%		338			59.3	%		1,559			52.5	%		1,313			60.1	%
Other mobile operations		50		3.4	%		(618	)	nm				(343	)	nm				(712	)	nm
Fixed		1,543		30.7	%		1,560			32.6	%		5,885			30.5	%		6,338			32.9	%
Broadcast		331		22.6	%		332			24.1	%		1,516			26.8	%		1,498			28.0	%
Other operations		194		7.6	%		221			9.0	%		1,091			10.9	%		1,114			11.7	%
Eliminations		130	nm				591		nm				104		nm				592		nm
Total EBITDA		6,722		34.5	%		5,134			33.1	%		23,836			34.6	%		21,535			35.5	%


¹⁾		EBITDA as a percentage of revenues.

Operating profit


	Fourth quarter												Year
(NOK in millions)	2005			Margin ¹⁾			2004			Margin ¹⁾			2005			Margin ¹⁾			2004			Margin ¹⁾

Telenor Mobil — Norway		962			29.7	%		827			27.9	%		3,566			29.1	%		3,228			27.5	%
Sonofon — Denmark		12		nm				(3,551	)	nm				(109	)	nm				(3,799	)	nm
Kyivstar — Ukraine		1,019			42.6	%		555			46.9	%		2,826			38.9	%		2,026			48.0	%
Pannon GSM — Hungary		245			15.7	%		87			5.8	%		1,007			16.6	%		777			13.2	%
DiGi.Com — Malaysia		356			24.5	%		228			22.7	%		1,099			22.3	%		831			21.1	%
GrameenPhone — Bangladesh		289			34.0	%		263			46.1	%		1,120			37.7	%		1,095			50.1	%
Other mobile operations		(295	)	nm				(767	)	nm				(954	)	nm				(903	)	nm
Fixed		84			1.7	%		653			13.7	%		2,062			10.7	%		2,725			14.2	%
Broadcast		244			16.6	%		118			8.6	%		1,015			18.0	%		750			14.0	%
Other operations		(79	)		(3.1	%)		(24	)	nm				48			0.5	%		96			1.0	%
Eliminations		112		nm				556		nm				25		nm				541		nm
Total operating profit		2,949			15.1	%		(1,055	)	nm				11,705			17.0	%		7,367			12.2	%


¹⁾		Operating profit as a percentage of revenues.

As of 1 January 2005, Telenor’s unaudited interim consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS) and IAS 34 “Interim Financial Reporting”. As a consequence of the transition to IFRS, certain of Telenor’s accounting principles have been changed compared to Telenor’s financial statements for the year and quarters of 2004, which were prepared according to Norwegian Generally Accepted Accounting Principles (N GAAP). The figures for the comparable periods of 2004 have been restated to comply with IFRS. The main changes are discussed in the first quarter report for 2005. In addition Telenor has changed its accounting treatment under IFRS for its Mobile Virtual Network Operator (MVNO) agreements in Norway and Sweden as discussed above. Accounting figures and key figures for periods prior to 2004 have not been restated to comply with IFRS. Reference is made to Telenor’s reports for the first, second and third quarter of 2005 for statements related to these quarters.

TELENOR’S OPERATIONS

Unless otherwise stated, the statements below are related to Telenor’s development in the fourth quarter of 2005 compared to the fourth quarter of 2004.

MOBILE OPERATIONS

TELENOR MOBIL — NORWAY


	Fourth quarter				Year
(NOK in millions)	2005		2004		2005		2004

Subscription and traffic		2,120		2,021		8,148		7,879
Interconnection revenues		454		430		1,754		1,613
Mobile revenues company’s subscriptions		2,574		2,451		9,902		9,492

Other mobile revenues		526		370		1,825		1,513
Total mobile revenues		3,100		2,821		11,727		11,005

Non-mobile revenues		135		142		516		725
Total revenues ¹⁾		3,235		2,963		12,243		11,730

¹⁾ Of which internal revenues		281		289		1,171		1,226

EBITDA		1,186		1,119		4,471		4,305
Depreciation and amortization ¹⁾		222		281		889		1,062
Write-downs		2		11		16		15
Operating profit		962		827		3,566		3,228

¹⁾ Of which amortization of Telenor’s net excess values		1		1		4		1

EBITDA/Total revenues (%)		36.7		37.8		36.5		36.7
Operating profit/Total revenues (%)		29.7		27.9		29.1		27.5
Capex		461		172		1,218		973
Investments in businesses		—		52		—		52
ARPU — monthly (NOK)		317		318		309		323
No. of subscriptions (in thousands)						2,731		2,645

•		The number of contract subscriptions increased by 58,000, while the total number of subscriptions decreased by 5,000.

•		Telenor Mobil’s estimated market share was 56%, in line with the end of the third quarter of 2005.

•		ARPU remained stable. Price reductions were offset by increased average usage per subscription (AMPU).

•		“Mobile revenues company’s subscriptions” were positively affected by an increase in subscriptions. Other mobile revenues increased due to higher revenues from the sale of capacity on a wholesale basis. Total mobile revenues increased by approximately 10%. In the fourth quarter of 2004 and 2005 revenues were positively affected by accruals between the quarters.

•		The EBITDA margin decreased primarily due to higher costs related to sales and marketing activities.

•		The decrease in depreciation and amortization was partially due to an extension of the estimated useful life of certain assets from 1 January 2005.

•		One of Telenor’s GSM 900 licences has been renewed until 31 December 2017. This involves capital expenditure of NOK 186 million in the fourth quarter of 2005. The increase in capital expenditure, adjusted for the renewal of the GSM 900 licence, was primarily related to accelerated rollout of UMTS sites as specified in the licence requirements.

•		In September 2005, the Norwegian regulatory authorities decided to reduce interconnection charges in the Norwegian market for mobile telephony. Prior to the decision the interconnection charges consisted of a call set up charge of NOK 0.20 and a charge per minute of NOK 0.63. A maximum average minute charge, including set-up charges, of NOK 0.73 was also made applicable. From 1 November 2005, Telenor Mobil was instructed to reduce its interconnection charges, including the set-up charges, by NOK 0.05 to NOK 0.68. From 1 July 2006 a further adjustment of Telenor Mobil’s interconnection charges of NOK 0.03, would reduce the charges to NOK 0.65. Telenor Mobil has appealed the decision, and the implementation has been temporarily suspended until a final decision is made.

•		Due to TeliaSonera’s acquisition of Chess in 2005, Telenor Mobil has terminated its service provider contract with Chess.

SONOFON — DENMARK


	Fourth quarter					Year
(NOK in millions)	2005		2004			2005			2004

Subscription and traffic		595		502			2,361			1,813
Interconnection revenues		347		292			1,300			986
Mobile revenues company’s subscriptions		942		794			3,661			2,799

Other mobile revenues		156		143			638			571
Total mobile revenues		1,098		937			4,299			3,370

Non-mobile revenues		236		306			892			1,034
Total revenues ¹⁾		1,334		1,243			5,191			4,404

¹⁾ Of which internal revenues		34		20			132			53

EBITDA		308		16			1,176			681
Depreciation and amortization ¹⁾		296		277			1,285			1,190
Write-downs ²⁾		—		3,290			—			3,290
Operating profit		12		(3,551	)		(109	)		(3,799	)

¹⁾ Of which amortization of Telenor’s net excess values		133		156			555			551
²⁾ Of which write-downs of Telenor’s net excess values		—		3,075			—			3,075

EBITDA/Total revenues (%)		23.1		1.3			22.7			15.5
Operating profit/Total revenues (%)		0.9	nm			nm			nm
Capex		757		76			1,062			388
Investments in businesses		4		—			4			3,786
ARPU — monthly (NOK)		246		207			243			227
No. of subscriptions (in thousands)							1,284			1,275

Compared to the fourth quarter of 2004, the Norwegian Krone appreciated against the Danish Krone by approximately 4% in the fourth quarter of 2005. The preceding table, the column for the full year 2004 includes figures from the time of consolidation (12 February 2004).

•		The number of subscriptions increased by 23,000.

•		Sonofons estimated market share was 27%, in line with the third quarter of 2005.

•		ARPU in local currency increased by 24% primarily due to increased average usage (AMPU).

•		Measured in local currency, total mobile revenues increased by approximately 22%, primarily due to the increase in ARPU.

•		The decrease in non-mobile revenues was primarily due to lower revenues from the sale of customer equipment.

•		EBITDA increased considerably, primarily due to higher revenues and a decrease in operating expenses, including costs related to sales and marketing activities. The fourth quarter of 2004 included one-time items that effected EBITDA negatively.

•		The increase in depreciation and amortization was partially due to a reduction of the estimated useful life of certain assets from 1 January 2005. The fourth quarter of 2004 included items that decreased depreciations.

•		On 19 December 2005, Sonofon acquired a UMTS license for NOK 574 million, of which NOK 143 million was paid in 2005 and the remaining in ten annual instalments. The high capital expenditure was primarily due to the acquisition of the UMTS license, which was included with a discounted value of NOK 520 million.

•		In January 2006, the Danish regulatory authorities decided to reduce the interconnection charges in the Danish market for mobile telephony. From 1 May 2006, Sonofon is instructed to reduce its interconnection charges, including set-up charges, from the current DKK 0.94—0.96 to DKK 0.84. From 1 May 2007, the interconnection charges will be further reduced to DKK 0.72 and from 1 May 2008, to DKK 0.62.

KYIVSTAR — UKRAINE


	Fourth quarter				Year
(NOK in millions)	2005		2004		2005		2004

Subscription and traffic		1,720		810		5,122		2,961
Interconnection revenues		606		327		1,888		1,068
Mobile revenues company’s subscriptions		2,326		1,137		7,010		4,029

Other mobile revenues		33		25		158		122
Total mobile revenues		2,359		1,162		7,168		4,151

Non-mobile revenues		31		22		104		68
Total revenues ¹⁾		2,390		1,184		7,272		4,219

¹⁾ Of which internal revenues		1		1		6		2

EBITDA		1,359		712		4,050		2,581
Depreciation and amortization ¹⁾		325		157		1,209		555
Write-downs		15		—		15		—
Operating profit		1,019		555		2,826		2,026

¹⁾ Of which amortization of Telenor’s net excess values		24		21		93		93

EBITDA/Total revenues (%)		56.9		60.1		55.7		61.2
Operating profit/Total revenues (%)		42.6		46.9		38.9		48.0
Capex		890		1,024		3,650		2,608
Investments in businesses		—		—		—		35
ARPU — monthly (NOK)		64		68		61		85
No. of subscriptions (100% in thousands)						13,925		6,252

At the end of the fourth quarter of 2005, Telenor’s ownership interest in Kyivstar was 56.5%. Compared to the fourth quarter of 2004, the Norwegian Krone depreciated against the Ukrainian Hryvnia by approximately 11% in the fourth quarter of 2005.

•		Kyivstar had a record growth of 3 million subscriptions in the fourth quarter of 2005. Compared to the fourth quarter of 2004, the number of subscriptions more than doubled, with an increase of 7.7 million.

•		Kyivstar defended its position as market leader with an estimated market share of 46%.

•		The decrease in ARPU was primarily due to price reductions. Despite the strong subscription growth, AMPU increased by 13%.

•		Measured in local currency, revenues increased by 85% primarily due to the increased number of subscriptions. This was partially offset by a reduction in ARPU. ARPU was positively affected by approximately NOK 2 by accruals between the quarters.

•		EBITDA in local currency, increased by 74%. The decrease in the EBITDA margin was primarily due to a decrease in prices and a significant increase in costs associated with sales and marketing activities due to strong subscription growth. The EBITDA margin was positively affected by approximately 3 percentage points by accruals between the quarters.

•		Depreciation and amortization increased as a result of increased capital expenditure in the intervening quarters and a reduction of the estimated useful life of certain assets as from 1 January 2005.

•		In the fourth quarter of 2004 capital expenditure was very high as a result of Kyivstar being somewhat behind on capacity investments due to the high customer intake. In 2005, Kyivstar has been able to be in front of the development resulting in a more even distribution of investments throughout the year. Capital expenditure in the fourth quarter of 2005 therefore decreased compared to the fourth quarter of 2004.

•		Kyivstar along with other major mobile operators in Ukraine have disputes with the Ukrainian Tax Authority regarding a claim for VAT on the Pension Fund Duty charged on subscribers’ phone bills. Kyivstar considers this an invalid tax. A lower court decision 13 February 2006 was issued invalidating the tax claim concerning the same issues involving another mobile operator in the Ukraine. Telenor has not made provisions for this claim.

PANNON GSM — HUNGARY


	Fourth quarter				Year
(NOK in millions)	2005		2004		2005		2004

Subscription and traffic		960		920		3,768		3,669
Interconnection revenues		431		442		1,735		1,731
Mobile revenues company’s subscriptions		1,391		1,362		5,503		5,400

Other mobile revenues		20		32		144		142
Total mobile revenues		1,411		1,394		5,647		5,542

Non-mobile revenues		154		116		414		365
Total revenues ¹⁾		1,565		1,510		6,061		5,907

¹⁾ Of which internal revenues		4		3		10		6

EBITDA		534		420		2,185		2,093
Depreciation and amortization ¹⁾		285		312		1,171		1,295
Write-downs		4		21		7		21
Operating profit		245		87		1,007		777

¹⁾ Of which amortization of Telenor’s net excess values		84		89		345		358

EBITDA/Total revenues (%)		34.1		27.8		36.1		35.4
Operating profit/Total revenues (%)		15.7		5.8		16.6		13.2
Capex		261		820		763		1,166
ARPU — monthly (NOK)		162		171		162		173
No. of subscriptions (in thousands)						2,929		2,770

Compared to the fourth quarter of 2004, the Norwegian Krone appreciated against the Hungarian Forint by approximately 5% in the fourth quarter of 2005.

•		The number of subscriptions increased by 73,000. Compared to the fourth quarter of 2004, the number of contract subscriptions increased by 246,000.

•		Pannon GSM’s market share was 34%, in line with the third quarter of 2005.

•		ARPU in local currency was stable. Lower average prices were offset by increased average usage (AMPU) of 14%.

•		Measured in local currency, mobile revenues increased by 7%, primarily due to an increase in the number of subscriptions. Non-mobile revenues increased primarily due to higher revenues from the sale of handsets.

•		The improvement in the EBITDA margin was primarily due to growth in revenues and lower costs relating to sales and marketing activities. In addition, previously expensed Universal Service Obligations for 2004 were reversed following an authority decision. This reversal affected the EBITDA margin positively by approximately 2 percentage points. EBITDA, measured in local currency, increased by 34%.

•		Depreciation and amortization decreased due to certain fixed assets being fully depreciated and due to an extension of the estimated useful life of certain assets from 1 January 2005.

•		The decrease in capital expenditure was due to the acquisition of a UMTS license in the fourth quarter of 2004.

DIGI.COM — MALAYSIA


	Fourth quarter				Year
(NOK in millions)	2005		2004		2005		2004

Subscription and traffic		1,198		739		3,949		2,794
Interconnection revenues		159		143		594		571
Mobile revenues company’s subscriptions		1,357		882		4,543		3,365

Other mobile revenues		18		13		65		65
Total mobile revenues		1,375		895		4,608		3,430

Non-mobile revenues		77		109		324		516
Total revenues ¹⁾		1,452		1,004		4,932		3,946

¹⁾ Of which internal revenues		2		—		4		3

EBITDA		632		443		2,142		1,732
Depreciation and amortization ¹⁾		273		215		1,038		901
Write-downs		3		—		5		—
Operating profit		356		228		1,099		831

¹⁾ Of which amortization of Telenor’s net excess values		4		17		51		72

EBITDA/Total revenues (%)		43.5		44.1		43.4		43.9
Operating profit/Total revenues (%)		24.5		22.7		22.3		21.1
Capex		574		427		1,170		920
ARPU — monthly (NOK)		102		98		98		107
No. of subscriptions (100% in thousands)						4,795		3,239

At the end of the fourth quarter of 2005, Telenor’s ownership interest in DiGi was 61.0%. Compared to the fourth quarter of 2004, the Norwegian Krone depreciated against the Malayan Ringgit by approximately 6% in the fourth quarter of 2005.

•		DiGi experienced a strong growth in subscriptions in the fourth quarter of 2005, with a total of 608,000 net additions. The increase from the fourth quarter of 2004 was 1.6 million.

•		DiGi’s market share continued to increase and was estimated at 25% at the end of 2005.

•		ARPU in local currency decreased by 2% primarily as a result of dilution due to strong subscription growth.

•		Measured in local currency, total mobile revenues increased by 46%, while revenues from subscription and traffic increased by 54%, primarily due to the higher subscription base.

•		Non-mobile revenues, mainly coming from the international carrier business, decreased due to lower volumes and price reductions.

•		The EBITDA margin decreased slightly, while EBITDA in local currency increased by 35%.

•		Depreciation and amortization increased mainly as a result of a reduction of the estimated useful life of certain assets from 1 January 2005 and increased capital expenditure in the intervening quarters.

•		Increased capital expenditure was related to investments in the network due to increased usage, a higher subscription base and improved coverage.

GRAMEENPHONE — BANGLADESH


	Fourth quarter				Year
(NOK in millions)	2005		2004		2005		2004

Subscription and traffic		769		529		2,741		2,064
Interconnection revenues		63		35		188		90
Mobile revenues company’s subscriptions		832		564		2,929		2,154

Other mobile revenues		6		6		22		24
Total mobile revenues		838		570		2,951		2,178

Non-mobile revenues		12		—		19		8
Total revenues¹⁾		850		570		2,970		2,186

¹⁾ Of which internal revenues		1		—		1		—

EBITDA		455		338		1,559		1,313
Depreciation and amortization		166		72		439		215
Write-downs		—		3		—		3
Operating profit		289		263		1,120		1,095


EBITDA/Total revenues (%)		53.5		59.3		52.5		60.1
Operating profit/Total revenues (%)		34.0		46.1		37.7		50.1
Capex		1,153		482		2,596		1,318
Investments in businesses		—		298		—		298
ARPU — monthly (NOK)		56		87		68		104
No. of subscriptions (100% in thousands)						5,542		2,388

At the end of the fourth quarter of 2005, Telenor’s ownership interest in GrameenPhone was 62.0%. Compared to the fourth quarter of 2004, the Norwegian Krone appreciated against the Bangladeshi Taka by approximately 5% in the fourth quarter of 2005.

•		GrameenPhone had a record high subscription growth of 1.3 million in the fourth quarter of 2005. Compared to the fourth quarter of 2004, the number of subscriptions more than doubled, with an increase of 3.2 million subscriptions.

•		GrameenPhone’s estimated market share was 62%, in line with the previous quarter.

•		ARPU in local currency decreased by 33%, primarily due to decrease in average prices and dilution due to strong subscription growth.

•		Measured in local currency, total revenues increased by 56%, primarily due to the increased number of subscriptions. This was partially offset by a reduction in ARPU.

•		EBITDA in local currency increased by 13% primarily due to growth in revenues. The decrease in the EBITDA margin was primarily a result of increased sales and acquisition costs due to the strong subscription growth, as well as price reductions. In 2005, GrameenPhone partially subsidised

		royalty and license fees as well as a SIM-tax per new subscription. In the fourth quarter of 2005, a contract for the lease of fibre network previously recognised as an operating lease is now being recognised as a financial lease under IFRS. The fourth quarter includes the effect from 1 January 2005. This had a positive effect on EBITDA of NOK 87 million and operating profit of NOK 46 million.

•		Depreciation and amortization increased as a result of increased capital expenditure in the intervening quarters, the change in the accounting treatment of the lease mentioned above and a reduction of the estimated useful life of certain network components.

•		Increased capital expenditure was due to the extension of mobile coverage in new regions and increased mobile network capacity due to strong subscription growth. The reporting of the lease mentioned above increased capital expenditure by NOK 511 million.

•		In the second quarter of 2005, the Bangladeshi Telecommunication Regulatory Commission requested that GrameenPhone pay royalty and license fees on handsets according to the license requirements. The legitimacy and amounts payable have not yet been clarified. Telenor is of the opinion that necessary provisions have been made.

OTHER MOBILE OPERATIONS


	Fourth quarter						Year
(NOK in millions)	2005			2004			2005			2004

Revenues
DTAC — Thailand		1,191			—			1,191			—
Telenor Pakistan		140			—			265			—
ProMonte GSM — Montenegro		112			118			519			200
Telenor Mobile Sweden		48			61			244			223
Total revenues ¹⁾		1,491			179			2,219			423

¹⁾Of which internal revenues		33			26			143			88

EBITDA
DTAC — Thailand		445			—			445			—
Telenor Pakistan		(133	)		(45	)		(572	)		(78	)
ProMonte GSM — Montenegro		47			46			260			91
Telenor Mobile Sweden		(309	)		(619	)		(476	)		(725	)
Total EBITDA		50			(618	)		(343	)		(712	)

Depreciation and amortization ¹⁾		345			74			611			116
Write-downs		—			75			—			75
Operating profit		(295	)		(767	)		(954	)		(903	)

Of which:
DTAC — Thailand		225			—			225			—
Telenor Pakistan		(218	)		(45	)		(798	)		(78	)
ProMonte GSM — Montenegro		7			(2	)		95			24
Telenor Mobile Sweden		(309	)		(720	)		(476	)		(849	)
¹⁾Of which amortization of Telenor’s net excess values		55			25			115			32

Capex
DTAC — Thailand		146			—			146			—
Telenor Pakistan		496			153			1,843			1,993
ProMonte GSM — Montenegro		21			13			38			16
Telenor Mobile Sweden		—			6			—			17

Investments in businesses		2,664			1			2,664			541


	Fourth quarter		Year
(NOK in millions)	2005	2004	2005		2004

No. of subscriptions (in thousands)
DTAC — Thailand				8,677		—
Telenor Pakistan				1,868		—
ProMonte GSM				310		279
Telenor Mobile Sweden				95		105

Other mobile operations include DTAC (Total Access Communication PCL), Telenor Pakistan, ProMonte GSM and Telenor Mobile Sweden. DTAC is consolidated from 1 November 2005. The operation in Pakistan was established in the second quarter of 2004. ProMonte GSM was an associated company up until 12 August 2004, at which time Telenor acquired the remaining shares. Compared to the fourth quarter of 2004, the Norwegian Krone depreciated by approximately 6% against the Pakistani Rupi and appreciated by approximately 4% against the Euro, which is the functional currency of ProMonte GSM, and by approximately 8% against the Swedish Krone in the fourth quarter of 2005. The preceding table shows figures for DTAC and ProMonte from the time of consolidation.

DTAC

•		The number of subscriptions increased by 368,000 in the fourth quarter in 2005.

•		DTAC’s estimated market share was 28%, in line with the end of the third quarter of 2005.

•		Revenues and EBITDA margin for the fourth quarter of 2005 were NOK 1.9 billion and 38%, respectively.

•		Compared to the third quarter of 2005, ARPU in local currency increased by approximately 6%.

•		DTAC has a service concession arrangement whereby the Communication Authorities of Thailand (CAT Telecom) has granted DTAC the right to build, transfer and operate a mobile network in Thailand. The revenue share, which DTAC is required to pay on some of its services, to CAT Telecom, will increase from 20% to 25% in the fourth quarter of 2006.

•		Investments in businesses in the table above are related to the increased ownership/economic exposure in DTAC to 69.3%.

•		For the period from 1 November to 31 December 2005, UCOM’s profit after taxes has been recognised in Telenor’s profit and loss statement as Profit after taxes from discontinued operations. The corresponding assets and liabilities have been recognised in Telenor’s balance sheet as of 31 December 2005 as held for sale.

Telenor Pakistan

•		Telenor Pakistan experienced a strong growth in the fourth quarter of 2005, with net additions of 668,000 subscriptions. Telenor Pakistan’s estimated market share was 9%, an increase of 2 percentage points compared to the end of the third quarter of 2005.

•		Compared to the third quarter of 2005, revenues increased due to strong subscription growth and increase in ARPU.

•		Capital expenditure in the fourth quarter was mainly related to expansion of the mobile network into new regions.

ProMonte GSM — Montenegro

•		The number of subscriptions decreased by 84,000 during the fourth quarter of 2005 as Montenegro entered the low season for tourism.

•		ProMonte GSM’s estimated market share at the end of 2005 was 58% compared to 59% at the end of the third quarter of 2005.

Telenor Mobile Sweden

•

In the first quarter of 2006 Telenor Mobile Sweden will transfer its mobile traffic to Vodafone Sweden’s network. This resulted in a provision for loss on the MVNO agreement of NOK 291 million in the fourth quarter of 2005, of which NOK 116 million were related to prepayments.

FIXED


	Fourth quarter						Year
(NOK in millions)	2005			2004			2005			2004

Revenues
Norway		4,186			4,353			16,867			17,545
Other operations		887			467			2,581			1,829
Eliminations		(48	)		(39	)		(135	)		(118	)
Total revenues ¹⁾		5,025			4,781			19,313			19,256

¹⁾Of which internal revenues		602			507			2,173			1,823

EBITDA		1,543			1,560			5,885			6,338
Depreciation and amortization ¹⁾		850			867			3,236			3,573
Write-downs ²⁾		609			40			587			40
Operating profit		84			653			2,062			2,725

¹⁾Of which amortization of Telenor’s net excess values		(6	)		6			66			7
²⁾Of which write-downs of Telenor’s net excess values		10			(22	)		(24	)		(22	)

EBITDA/Total revenues (%)		30.7			32.6			30.5			32.9
Operating profit/
Total revenues (%)		1.7			13.7			10.7			14.2
Capex		1,237			609			2,776			1,791
Investments in businesses		(20	)		9			5,816			105

•		Bredbandsbolaget and Cybercity were consolidated with effect from 8 July and 5 July 2005, respectively.

•		In the fourth quarter of 2005 Fixed entered into an agreement to dispose of its operations in the Czech Republic and Slovakia with a loss of NOK 63 million.

•		In the fourth quarter of 2005 Telenor changed its accounting treatment under IFRS for transactions that provide the rights to use assets, such as local loop unbundling. Such transactions are now recognised as leases. Prepaid costs in such leases have been reclassified from operating costs to depreciation and amortization.

FIXED — NORWAY


	Fourth quarter				Year
(NOK in millions)	2005		2004		2005		2004

Revenues
Telephony		1,751		2,009		7,232		8,268
xDSL/Internet		536		466		2,039		1,753


	Fourth quarter					Year
(NOK in millions)	2005			2004		2005			2004

Data services		238			249		963			1,022
Other revenues		366			386		1,465			1,656
Total retail revenues		2,891			3,110		11,699			12,699

Wholesale revenues		1,295			1,243		5,168			4,846
Total revenues¹⁾		4,186			4,353		16,867			17,545

¹⁾Of which internal revenues		623			522		2,190			1,842

EBITDA		1,377			1,570		5,701			6,330
Depreciation and amortization ¹⁾		692			774		2,707			3,251
Write-downs ²⁾		(1	)		2		(25	)		2
Operating profit		686			794		3,019			3,077

¹⁾Of which amortization of Telenor’s net excess values		—			1		—			2
²⁾Of which write-downs of Telenor’s net excess values		(2	)		2		(36	)		2

EBITDA/Total revenues (%)		32.9			36.1		33.8			36.1
Operating profit/Total revenues (%)		16.4			18.2		17.9			17.5
Capex		917			457		2,169			1,473
Investments in businesses		—			1		44			2
No. of PSTN subscriptions (in thousands)							1,089			1,182
No. of ISDN subscriptions (lines in thousands)							1,227			1,449
No. of xDSL subscriptions (in thousands)							475			326

•		Compared to the third quarter of 2005 the trend from previous quarters continued in the fourth quarter, with an increase in the number of xDSL and broadband telephony (BBT) subscriptions and a decrease in the number of PSTN/ISDN subscriptions.

•		The number of xDSL subscriptions increased by 31,000 to 475,000 and the number of BBT subscriptions increased by 16,000 to 24,000, while the number of PSTN/ISDN subscriptions decreased by 52,000 to 1,604,000. Compared to the fourth quarter 2004 the number of PSTN/ISDN subscriptions decreased by 196,000.

•		Telenor’s estimated market share for xDSL was 58% compared to 59% at the end of the third quarter of 2005. Measured in traffic minutes Telenor’s estimated market share was 66%, in line with the end of the third quarter of 2005.

•		Total revenues decreased by 3.8%. The decrease in revenues from telephony and data services was partially offset by the increase in revenues from xDSL/Internet and wholesale.

•		Revenues from telephony decreased due to a reduction in the number of subscriptions and reduced traffic volumes. The number of subscriptions decreased primarily due to migration to BBT with other fixed network operators, as well as a decrease in the total market for fixed telephony subscriptions. The decrease in traffic volumes was due to a decrease in the number of voice minutes per subscription as a result of migration of voice traffic from fixed to mobile telephony.

•		Revenues from xDSL/Internet increased due to growth in the number of xDSL subscriptions. This was partially offset by reduced revenues from Internet traffic and Internet subscriptions.

•		The decrease in revenues from data services was due to price reductions and a shift towards products with lower prices.

•		Other revenues were in line with the fourth quarter of 2004. Increased revenues from sale of other retail products and sale of services to other operations within Telenor offset the decrease in revenues from operation of telephony solutions.

•		Wholesale revenues were in line with the fourth quarter of 2004. Increased revenues from telephony, broadband, local loop unbundled subscriptions and contractor services, offset decreased revenues from transit traffic.

•		Adjusted for one-time items and accruals between the quarters in 2004 and 2005 there was a reduction in the EBITDA margin of approximately 3 percentage points due to operational challenges mainly related to increased speed for xDSL subscriptions and increased distribution of corporate costs.

•		The change in accounting treatment of prepaid costs in leases mentioned above had a positive effect on EBITDA of NOK 105 million for the full year and the fourth quarter of 2005. Operating profit was not affected. Capital expenditure increased by NOK 463 million. The fourth quarter of 2004 included one time items that affected the EBITDA margin positively by approximately 3 percentage points.

•		The decrease in depreciation and amortization was primarily due to a reduction in capital expenditure in recent years.

FIXED — OTHER OPERATIONS


	Fourth quarter						Year
(NOK in millions)	2005			2004			2005			2004

Revenues
Fixed Sweden		676			422			2,096			1,654
Fixed Denmark		164			—			306			—
Other countries/eliminations *⁾		47			45			179			175
Total revenues ¹⁾		887			467			2,581			1,829

¹⁾Of which internal revenues		27			23			118			99

EBITDA
Fixed Sweden		183			(3	)		158			9
Fixed Denmark		49			—			97			—
Other countries/eliminations *⁾		(66	)		(4	)		(70	)		6
Total EBITDA		166			(7	)		185			15

Depreciation and amortization ¹⁾		158			93			528			322
Write-downs ²⁾		614			38			617			38
Operating profit		(606	)		(138	)		(960	)		(345	)

Of which:
Fixed Sweden		(549	)		(110	)		(866	)		(289	)
Fixed Denmark		27			—			29			—
Other countries/eliminations *⁾		(84	)		(28	)		(123	)		(56	)
¹⁾Of which amortization of Telenor’s net excess values		(6	)		5			66			5
²⁾Of which write-downs of Telenor’s net excess values		12			(24	)		12			(24	)

Capex
Fixed Sweden		255			134			485			279
Fixed Denmark		57			—			97			—
Other countries *⁾		8			18			25			39


*⁾		Other countries include operations in the Czech Republic and Slovakia. In the fourth quarter of 2005, Fixed entered into an agreement to dispose of these operations.

Fixed Sweden

•		Bredbandsbolaget’s revenues and EBITDA amounted to NOK 358 million and NOK 90 million, respectively. Capital expenditure amounted to NOK 109 million. The number of xDSL and LAN subscriptions increased by 18,000 to 369,000, while the number of broadband telephony subscriptions increased by 13,000 to 104,000.

•		The decrease in revenues in Telenor AB was primarily related to data services as a result of price reductions and a shift in the product portfolio towards products with lower prices. The fourth quarter of 2004 included items that affected revenues positively by NOK 56 million.

•		The change in accounting treatment of prepaid lease payments mentioned above, had a positive effect on EBITDA in Telenor AB of NOK 107 million and increased amortization by NOK 29 million and capital expenditure by NOK 80 million for the full year and the fourth quarter of 2005.

•		The write-downs are mainly related to write-downs of fixed assets in Telenor AB due to loss of contracts and price reductions.

•		On 8 February 2006 Telenor acquired 13.5% of the shareholding in Glocalnet AB for a total consideration of SEK 136 million (NOK 118 million) to secure a 50.1% ownership interest. The acquisition triggers a mandatory offer for all outstanding shares in Glocalnet AB. Telenor’s ownership interest as of 14 February 2006, was 84.4%.

Fixed Denmark

•

The number of xDSL subscriptions increased by 13,000 to 122,000, and the number of broadband telephony subscriptions rose by 8,000 to 26,000.

BROADCAST


	Fourth quarter						Year
(NOK in millions)	2005			2004			2005			2004

Revenues
Distribution		1,190			1,112			4,615			4,309
Transmission		313			295			1,207			1,211
Other		109			139			355			461
Eliminations		(146	)		(171	)		(528	)		(635	)
Total revenues ¹⁾		1,466			1,375			5,649			5,346

¹⁾ Of which internal revenues		35			34			131			135

EBITDA
Distribution		147			126			818			749
Transmission		183			191			713			688
Other/Eliminations		1			15			(15	)		61
Total EBITDA		331			332			1,516			1,498

Depreciation and amortization ¹⁾		144			170			554			704
Write-downs ²⁾		(57	)		44			(53	)		44
Operating profit		244			118			1,015			750

Of which:
Distribution		13			(4	)		494			302
Transmission		240			118			564			409
Other/Eliminations		(9	)		4			(43	)		39
¹⁾ Of which amortization of Telenor’s net excess values		14			16			56			63
²⁾ Of which write-downs of Telenor’s net excess values		75			25			75			25

EBITDA/Total revenues (%)		22.6			24.1			26.8			28.0
Operating profit/
Total revenues (%)		16.6			8.6			18.0			14.0
Capex		133			71			392			880
Investments in businesses		25			—			42			—
No. of DTH pay-TV subscribers (in thousands)								906			824
No. of Cable TV subscribers (in thousands)								681			624
No. of households in satellite master antenna TV-networks (in thousands)								1,160			1,212
No. of Cable TV Internet access (in thousands)								73			44

•		The number of DTH pay-TV subscribers increased by 30,000, compared to an increase of 24,000 in the fourth quarter of 2004. In the fourth quarter of 2005, the number of Cable TV (CATV) subscribers increased by 45,000 and the number of Cable TV Internet access subscribers increased by 20,000. This increase was mainly due to the acquisition of the cable TV operator OE Kabel TV in Denmark. At the date of acquisition, OE Kabel TV had 30,000 CATV subscribers and 12,000 Internet access subscribers. The remaining growth in Cable TV subscribers was largely a result of conversion of small antenna TV network households.

•		Total revenues increased primarily due to subscriber growth in Distribution and higher revenues from satellite- and terrestrial distribution in Transmission. This was partially offset by the effects of appreciation of the Norwegian Krone against the Swedish Krone and the Danish Krone.

•		The decrease in the EBITDA margin for Broadcast was primarily due to higher costs related to personnel and operations in Transmission, and higher content costs partially offset by lower acquisition costs per new DTH pay-TV subscriber in Distribution.

•		Depreciation and amortization decreased due to fully depreciated DTH decoders and fully depreciated fixed assets in the cable TV operation.

•		In the fourth quarter of 2005, Broadcast reversed a previous impairment loss of NOK 133 million in its satellite operation in 2001 to the recoverable amount. This was partially offset by write-down of goodwill of NOK 75 million due to recognition of not previously recognized deferred tax assets in a business combination. According to IFRS the acquirer shall write down the carrying amount of goodwill with the same amount as not previously recognised deferred tax assets are recognised as a tax income.

•		The increase in capital expenditure was mainly related to upgrades of the cable TV network in Norway.

OTHER UNITS


	Fourth quarter						Year
(NOK in millions)	2005			2004			2005			2004

Revenues
EDB Business Partner		1,258			1,154			4,991			4,287
Satellite Services		637			573			2,428			2,385
Venture		126			226			490			901
Corporate functions and Group activities		564			558			2,266			2,154
Other		(1	)		14			25			174
Eliminations		(46	)		(64	)		(233	)		(361	)
Total revenues ¹⁾		2,538			2,461			9,967			9,540

¹⁾ Of which internal revenues		669			768			2,907			2,929

EBITDA
EDB Business Partner		197			196			785			978
Satellite Services		120			97			393			409
Venture		(14	)		70			(2	)		130
Corporate functions and Group activities		(104	)		(168	)		(77	)		(417	)
Other/eliminations		(5	)		26			(8	)		14
Total EBITDA		194			221			1,091			1,114

Depreciation and amortization ¹⁾		263			243			1,033			975
Write-downs ²⁾		10			2			10			43
Operating profit		(79	)		(24	)		48			96

Of which:
EDB Business Partner		96			130			377			736
Satellite Services		47			25			125			133
Venture		(22	)		63			(23	)		97
Corporate functions and Group activities		(192	)		(268	)		(420	)		(809	)
Other/eliminations		(8	)		26			(11	)		(61	)
¹⁾ Of which amortization of Telenor’s net excess values		1			2			8			8
²⁾ Of which write-downs of Telenor’s net excess values		5			1			5			3

Capex		321			269			832			697
Investments in businesses		47			762			332			1,329

EDB BUSINESS PARTNER

•		Revenues increased by 9%. The growth was mainly related to acquisitions of operations from IBM and Capgemini, made at the end of the fourth quarter of 2004.

•		The EBITDA margin adjusted for other income and expenses in the fourth quarter of 2005 was in line with the fourth quarter of 2004.

•		In 2006, up until 15 February, EDB Business Partner had entered into agreements to acquire IT companies in Norway and Sweden for a total consideration of approximately NOK 660 million including interest-bearing debt assumed.

SATELLITE SERVICES

•

The increase in revenues and operating profit was primarily due to growth within satellite services and communication (VSAT) and the effect of acquired operations. Revenues and operating profit were positively affected by the stronger US Dollar against the Norwegian Krone in the fourth quarter of 2005 compared to the same period in 2004. Operating profit was also positively affected by a decrease in operating expenses. The volumes and prices within the Inmarsat division have been lower in 2005 compared to 2004. In the fourth quarter of 2004, revenues and operating profit were negatively affected by a downward adjustment of project revenues.

VENTURE

•		The decrease in revenues and operating profit was primarily due to the effects of disposal of operations in 2004.

•		In the fourth quarter of 2004, the operating profit included net gains on disposal of operations of NOK 72 million.

CORPORATE FUNCTIONS AND GROUP ACTIVITIES

•		The decrease in the EBITDA loss was mainly related to reduced pension costs due to a change in the accounting treatment of pensions in the Group in the fourth quarter of 2004. This was partially offset by increased costs related to international activities.

•		Depreciation and amortization decreased due to the disposal of certain buildings.

OTHER PROFIT AND LOSS ITEMS FOR THE GROUP

Depreciation, amortization and write-downs


	Fourth quarter				Year
(NOK in millions)	2005		2004		2005		2004

Depreciation *⁾		2,005		1,814		8,080		7,737
Amortization **⁾		1,182		889		3,464		2,900
Total depreciation and amortization		3,187		2,703		11,544		10,637

Write-downs of tangible assets		453		274		488		282
Write-downs of goodwill		80		3,127		46		3,129
Write-downs of other intangible assets		53		85		53		120
Total write-downs		586		3,486		587		3,531

Total depreciation, amortization and write-downs		3,773		6,189		12,131		14,168


*⁾		Tangible assets (property, plant and equipment).

**⁾		Other intangible assets and prepaid lease payments.

See page 20 for more specifications.

•		In general, depreciation and amortization is affected by changes in exchange rates and investment levels in the previous quarters.

•		The increase in total depreciation and amortization was primarily due to acquired businesses and increased capital expenditure, partially offset by fully depreciated assets.

•		In the fourth quarter of 2005, Telenor changed its accounting treatment under IFRS for transactions that provide the rights to use assets, such as local loop unbundling. Such transactions are now recognised as leases. Prepaid costs for such leases have been reclassified from operating costs to depreciation and amortization. This change increased depreciation and amortization in the fourth quarter of 2005 by NOK 175 million.

•		Write-downs of tangible and other intangible assets are mainly related to Telenor AB, partially offset by reversal of write-downs in the satellite operation in Broadcast. Write-downs of goodwill were due to recognition of deferred tax assets originated prior to the acquisition of Canal Digital.

Associated companies


	Fourth quarter						Year
(NOK in millions)	2005			2004			2005			2004

Telenor’s share of ¹⁾
Profit after taxes		238			140			1,452			1,055
Amortization of Telenor’s net excess values		(4	)		(15	)		(46	)		(101	)
Write-downs of Telenor’s net excess values		(172	)		—			(172	)		—
Gains (losses) on disposal of ownership interests		3			15			(1	)		32
Net result from associated companies		65			140			1,233			986


¹⁾		For certain associated companies, financial statements as of the Group’s balance sheet date are not available. In such instances, the most recent financial statements (as of a date not more than three months prior to the Group’s balance sheet date) are used, and estimates for the last period are made based on publicly available information. Actual figures may deviate from the preliminary figures. The consolidated profit and loss statement contains only the line “Net result from associated companies”. The preceding table includes Telenor’s share of profit after taxes from Sonofon until 12 February 2004 and ProMonte GSM until 12 August 2004. Thereafter, these companies are consolidated as subsidiaries. DTAC and UCOM are included until 1 November 2005. Thereafter DTAC is consolidated, while UCOM is treated as a discontinued operation.

•

At the end of 2005, Telenor’s ownership interest in VimpelCom in Russia was 29.9%. The value of Telenor’s share of the company based on the quoted share price as at 31 December 2005 was NOK 18.4 billion. According to telecom analysts, VimpelCom had approximately 45 million mobile subscriptions at the end of 2005. The write-downs were related to the listed company Golden Telecom Inc. to the quoted market price as of 31 December 2005.

Financial items


	Fourth quarter						Year
(NOK in millions)	2005			2004			2005			2004

Financial income		148			161			447			496
Financial expenses		(566	)		(337	)		(1,639	)		(1,561	)
Net foreign currency gains (losses)		(118	)		(60	)		84			(87	)
Change in fair value of financial instruments *⁾		157			—			243			—
Net gains (losses) and write-downs		31			21			518			2,673
Net financial items		(348	)		(215	)		(347	)		1,521


Gross interest expenses		(490	)		(360	)		(1,594	)		1,665
Net interest expenses		(396	)		(270	)		(1,309	)		1,378


*⁾		The comparative figures for 2004 are not restated to the principles in IAS 39.

•		Increased financial expenses were primarily due to the acquisition of DTAC.

•		Net foreign currency loss was primarily due to losses on an embedded derivative related to the acquisition of Vodafone Sweden.

•		Change in fair value of financial instruments was primarily related to interest rate derivatives used for economic hedge of interest-bearing liabilities that do not fulfil the requirements for hedge accounting.

Taxes

•		The nominal Norwegian corporate income tax rate is 28%. The effective tax rate for the Telenor Group for the fiscal year 2005 is estimated at 33% of profit before taxes and minority interests. The estimated effective tax rate is affected by taxes related to companies outside Norway and non-deductible expenses.

•		During the regular tax assessment of Dansk Mobil Holding II AS in the fourth quarter of 2005, the tax authorities challenged the company’s tax return for the fiscal year 2004 by disallowing a tax loss derived from the liquidation of its wholly owned subsidiary, Dansk Mobil Holding AS. The tax authorities disagreed with our position, that the loss is tax deductible according to the transition rules for the exemption tax rules (“Fritaksmodellen”) that were enacted in 2004. See note 13 to the annual report for 2004 for more information about this transaction and the transition rules. Telenor is of the opinion that we have a strong case and has appealed the decision. However, according to our accounting policies the related tax of approximately NOK 440 million was expensed in the fourth quarter of 2005.

•		Following a conversion of intercompany debt, Telenor ASA recognised a tax loss and corresponding reduced tax charges of approximately NOK 250 million in the fourth quarter of 2005. There are strong conditions to be met for such losses to be tax deductible.

•		On 21 December 2005 a Norwegian Court of Appeal ruled in favour of Telenor in respect of Telenor’s intra group sale of its shares in Sonofon Holding A/S. This sale triggered a tax loss of approximately NOK 8.6 billion, with corresponding reduced tax charges of approximately NOK 2.4 billion for the fiscal year 2001. The taxes were paid in 2003. The tax authorities have appealed the decision to the Norwegian Supreme Court, and Telenor has consequently not taken the tax reduction to income.

•		The actual effective tax rate for 2005 may deviate from the estimated rate.

Balance sheet and cash flow

•		Total assets as of 31 December 2005 increased by NOK 18.5 billion compared to 30 September 2005, primarily due to the acquisitions of UCOM and DTAC. See “Business Combinations” on page 22 for more information about net assets and goodwill related to these acquisitions.

•		Increased property, plant and equipment were primarily due to capital expenditure on mobile networks.

•		Net interest-bearing liabilities increased by NOK 9.3 billion in the quarter to NOK 31.1 billion as of 31 December 2005, of which the effect of the purchase and consolidation of UCOM and DTAC contributed with NOK 10.0 billion.

•		Changes in translation differences to equity in the fourth quarter of 2005 were primarily due to the depreciation of the Norwegian Krone as of 31 December compared to 30 September 2005.

•		During the fourth quarter of 2005, Telenor did not purchase any own shares in the market. For the year 2005 Telenor purchased own shares for NOK 2.3 billion. If Telenor’s Annual General Meeting in 2006 approves redemption of shares owned by the Kingdom of Norway corresponding to Telenor’s

		repurchase of own shares in the market in the second and third quarter of 2005, in such a way that the Kingdom of Norway’s ownership interest remains unchanged, shareholders equity will be reduced by an additional NOK 0.9 billion at the time of the Annual General Meeting.

•		If Telenor’s Annual General Meeting in 2006 approves the suggested dividend of NOK 2.00 per share, shareholders equity will be reduced by an additional NOK 3.4 billion at the time of the Annual General Meeting.

US GAAP

•

Net income and equity according to United States Generally Accepted Accounting Principles (US GAAP) will be published in the annual report for 2005.

OUTLOOK FOR 2006

•		The strong growth in mobile subscriptions during 2005 gives Telenor a solid foundation for further growth in revenues. We expect a growth in reported revenues in the range of 25% to 30%, based upon the current Group structure.

•		A continued high growth in EBITDA is expected, in particular driven by the international mobile operations. Telenor will continue previously introduced initiatives and identify new means of improving cost efficiency. Telenor expects an EBITDA margin before other income and expenses for 2006 of around 33%.

•		High capital expenditure is expected to continue, and capital expenditure as a proportion of revenues is expected to be above 20%. Capital expenditure is expected to continue to be driven by high subscription growth within Telenor’s mobile operations in emerging markets.

•		A growing share of Telenor’s revenues and profits is derived from operations outside Norway. Currency fluctuations may to an increasing extent influence the reported figures in Norwegian Krone. Political risk, including regulatory conditions, may also influence the profits. We expect seasonal variations between the quarters.

The accounts submitted with the report have not been audited. This report contains statements regarding the future in connection with Telenor’s growth initiatives, profit figures, outlook, strategies and objectives. In particular, the section “Outlook for 2006” contains forward-looking statements regarding the group’s expectations. All statements regarding the future are subject to inherent risks and uncertainties, and many factors can lead to actual profits and developments deviating substantially from what has been expressed or implied in such statements. These factors include the risk factors relating to Telenor’s activities described in Telenor’s 2004 Annual Report on Form 20-F filed with the Securities and Exchange Commission in the USA under the headings “Cautionary Statement Regarding Forward-Looking Statements” and “Risk Factors” (available at www.telenor.com/ir/).

Oslo, 15 February 2006
The Board of Directors of Telenor ASA

BUSINESS COMBINATIONS

On 26 October 2005 Telenor increased its ownership/economic exposure in Total Access Communications PCL (DTAC) by 16.6% to 56.9% for a cash consideration of NOK 1.5 billion. As of 31 December 2005, after the tender offers for DTAC and UCOM shares expired, Telenor’s ownership/economic exposure in DTAC increased by a further 12.4% to 69.3% for a total cash consideration of NOK 1.2 billion. As of 31 December 2005 net interest-bearing debt in the companies was NOK 7.3 billion. DTAC was consolidated from 1 November 2005, while the operations in UCOM were reported as a discontinued operation in the financial statements.

The result of operations has been included in the consolidated financial statements from 1 November 2005. DTAC is one of the leading mobile operators in Thailand and offers high quality GSM mobile services. The value was set both based on a fair value after negotiations between the parties and a mandatory offer.

The initial purchase price allocation has been determined only provisionally due to not completed valuation of the fair values of assets acquired and liabilities assumed. The preliminary net assets acquired in the transaction, and the goodwill arising, are as follows:


	DTAC’s carrying			Estimated
	amount before			fair value			Estimated
(NOK in millions)	transaction			adjustments			fair value

Property, Plant & Equipment		740			(14	)		726
Software/Other intangible assets		10,980			(3,968	)		7,012
Customer Base		—			1,259			1,259
Trademarks		—			1,015			1,015
Long-term financial assets		184			(39	)		145
Deferred tax assets		212			575			787
Currents Assets excl. Cash		2,138			—			2,138
Bank and cash balances		197			—			197
Deferred tax liability		(42	)		—			(42	)
Long-term liabilities		(5,656	)		(10	)		(5,666	)
Short term liabilities		(3,702	)		—			(3,702	)
Net assets		5,051			(1,182	)		3,869


Goodwill								2,210
Total								6,079


Total consideration, satisfied by cash								2,664
Book value as an associated company at the date of consolidation								884
Increased excess value in business combination recorded against equity								1,258
Minority fair values								1,273
Total								6,079

The goodwill arising on the acquisition of DTAC/UCOM is attributable to the anticipated profitability of its operations.

DTAC/UCOM contributed NOK 1,191 million in revenues and NOK 29 million to the Telenor Group’s profit after tax and minority interest for the period between the date of consolidation and 31 December 2005. This includes the results from the company and amortization of fair value adjustments, but does not include Telenor’s interest expenses related to the financing of the acquisition.

In the period 1 January to 1 November DTAC/UCOM contributed to a net profit after taxes from associate companies of NOK 94 million.

Vodafone, Sweden

On 5 January 2006, Telenor acquired 100% of the issued share capital of Vodafone AB, Sweden for a cash consideration of NOK 7.5 billion. The value was set based on fair value after negotiations between the parties. The transaction is not included in the financial statement of 2005. The transaction will be accounted for by the acquisition method of accounting.

Vodafone offers high quality mobile services to residential and business customers in Sweden.

The initial purchase price allocation, which is performed by independent financial experts, has not been completed as of 15 February 2006 and it is impracticable to provide figures of the fair values of assets acquired and liabilities assumed.

Glocalnet, Sweden

In the period 8—14 February 2006, Telenor acquired 47.8% of the issued share capital of Glocalnet AB, Sweden for a cash consideration of approximately NOK 419 million. The total ownership as of 14 February was 84.4%. Telenor has made an offer for all remaining shares in the company. The offer will be closed 23 March 2006. The transaction is not included in the financial statement for 2005. The transaction will be accounted for by the acquisition method of accounting.

Glocalnet provides both fixed and mobile telephony in addition to Internet access through both broadband and dial-up.

The purchase price allocation will be performed by independent financial experts, but has not yet started.

IMPLEMENTATION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

Regulations of the European Union (EU) require that publicly listed companies within the EU prepare their consolidated financial statements in accordance with “International Financial Reporting Standards” (IFRS) by 2005. Due to the European Economic Area (EEA) agreement, Norwegian listed companies will also be required to follow IFRS. Telenor’s first IFRS financial statements will be for the year ending 31 December 2005 and will include the comparative period for 2004. Starting in the first quarter of 2005, Telenor provides unaudited financial information in accordance with IFRS including comparable figures for 2004.

Telenor has made an evaluation of the differences between Telenor’s accounting principles according to Norwegian Generally Accepted Accounting Principles (N GAAP) and IFRS principles based on management’s current understanding of these standards. There is inherent uncertainty around the interpretation and implementation of IFRS. Accordingly, new pronouncements and interpretations may be issued during 2005, which could affect the final IFRS figures for 2004 and the interim figures for 2005. Consequently, changes in the company’s understanding of IFRS may result in revisions or other differences than those identified below. The figures are not audited. Audited figures will be reported in the financial statements for the year ended 31 December 2005.

The tables below show the estimated effects on net income and equity of implementing IFRS as from 1 January 2004. The accounting principles according to N GAAP are found in the annual report for 2004. The main changes in accounting principles when preparing Telenor’s financial statements according to IFRS and Comments to the various effects on net income and equity are provided in Telenor’s first quarter report for 2005.

Profit and loss 2004


	First			Second			Third			Fourth			Year
(NOK in millions)	quarter			quarter			quarter			quarter			2004

Net income (loss) — N GAAP		2,801			1,410			1,399			(252	)		5,358
Amortization of goodwill, negative goodwill		213			245			247			234			939
Depreciation and amortization — other		13			(7	)		4			53			63
Write-down of goodwill		—			—			—			(935	)		(935	)
Pensions		24			24			23			24			95
Asset Retirement Obligations		(10	)		(11	)		(12	)		(13	)		(46	)
Share-based compensation		(4	)		(5	)		(5	)		(5	)		(19	)
Sale of software		11			2			23			15			51
Associated companies		92			79			39			58			268
Adjusted gains		20			(6	)		5			15			34
MVNO *⁾		—			—			—			578			578
Tax on IFRS adjustments *⁾		(21	)		(6	)		(20	)		(170	)		(217	)
Minority interests		(9	)		(16	)		(20	)		(32	)		(76	)
Total adjustments		330			299			284			(178	)		735

Net income (loss) — IFRS		3,131			1,709			1,683			(430	)		6,093

Equity


(NOK in millions)	01.01.2004			31.03.2004			30.06.2004			30.09.2004			31.12.2004

Shareholders equity — N GAAP		37,237			40,083			40,130			41,248			37,594

Amortization of goodwill, negative goodwill		343			556			801			1,048			1,282
Depreciation and amortization — other		—			13			6			10			63
Write-down of goodwill		—			—			—			—			(935	)
Business Combinations		—			622			622			786			622
Pensions		(1,809	)		(1,785	)		(1,761	)		(1,738	)		(1,714	)
Asset Retirement Obligations		(296	)		(306	)		(317	)		(329	)		(342	)
Share-based compensation		—			—			—			—			—
Sale of software		(267	)		(256	)		(254	)		(231	)		(216	)
Associated companies		(139	)		(47	)		32			71			129
Adjusted gains and translation differences		—			(57	)		(49	)		(93	)		(66	)
MVNO *⁾		—			—			—			—			578
Tax on IFRS adjustments *⁾		592			571			565			545			375
Dividends		1,776			1,776			—			—			2,602
Minority interests		226			218			202			182			150
Total adjustments *⁾		426			1,305			(153	)		251			2,528

Shareholders equity — IFRS *⁾		37,663			41,388			39,977			41,499			40,122

Reconciliation of shareholders’ equity for the Telenor Group from 31 December 2004 to 1 January 2005 due to the implementation of IAS 39.

IAS 39 “Financial Instruments: Recognition and Measurement” was implemented as of 1 January 2005. Up to and including 31 December 2004, Telenor accounted for Financial Instruments according to N GAAP.


(NOK in millions)

Shareholders’ equity 31 December 2004 *⁾	40,122

Derivative instruments at fair value
— cash flow hedges	13
— derivatives not qualifying as hedges	(289	)
Shares available-for-sale at estimated fair value **⁾	753
Tax on the changes	(16	)
Minority’s share	(8	)
Total adjustments	453

Shareholders’ equity 1 January 2005 **⁾	40,575


*⁾		Due to new interpretation of IFRS the figures for the full year and the fourth quarter of 2004 have been restated compared to the reconciliations presented in Telenor’s first quarter report for 2005. This resulted in eliminations on group level of prepayments in the two MVNO agreements in Norway and Sweden.

**⁾		Estimated fair value of shares available-for-sale is increased by NOK 295 million compared to the equity reconciliation presented in Telenor’s first quarter report for 2005 due to new information about conditions as of 1 January 2005.

PROFIT AND LOSS STATEMENT

Telenor Group



	Fourth quarter						Year
(NOK in millions except net income per share)	2005			2004			2005			2004

Revenues		19,474			15,512			68,927			60,591
Costs of materials and traffic charges		4,812			4,173			17,724			15,924
Own work capitalized		(255	)		(166	)		(704	)		(557	)
Salaries and personnel costs		2,726			2,738			10,236			9,970
Other operating expenses		5,360			3,653			17,593			13,871
Other (income) and expenses		109			(20	)		242			(152	)
Depreciation and amortization		3,187			2,703			11,544			10,637
Write-downs		586			3,486			587			3,531

Operating profit		2,949			(1,055	)		11,705			7,367

Associated companies		65			140			1,233			986
Net financial items		(348	)		(215	)		(347	)		1,521
Profit before taxes		2,666			(1,130	)		12,591			9,874

Taxes		(1,161	)		986			(4,139	)		(2,461	)
Profit after taxes from continuing operations		1,505			(144	)		8,452			7,413

Profit after taxes from discontinued operations		(4	)		—			(4	)		—
Profit after taxes		1,501			(144	)		8,448			7,413


Attributable to:
Non-controlling interests (Minority interests)		500			286			1,496			1,320
Equity holders of the parent company		1,001			(430	)		6,952			6,093


Earnings per share in NOK
From continuing and discontinued operations:
Basic		0.59			(0.25	)		4.06			3.49
Diluted		0.59			(0.25	)		4.06			3.48


																																			Profit (loss)
																																			before taxes
THE OPERATIONS FOURTH QUARTER	Total																	Operating profit						Associated					Net financial						and minority
	revenues						of which external						EBITDA					(loss)						companies					items						interests
(NOK in millions)	2005			2004			2005			2004			2005		2004			2005			2004			2005			2004		2005			2004			2005			2004

Telenor Mobil — Norway		3,235			2,963			2,954			2,674			1,186		1,119			962			827			13			7		19			13			994			847
Sonofon — Denmark		1,334			1,243			1,300			1,223			308		16			12			(3,551	)		1			—		(50	)		(39	)		(37	)		(3,590	)
Kyivstar — Ukraine		2,390			1,184			2,389			1,183			1,359		712			1,019			555			—			—		(64	)		(25	)		955			530
Pannon GSM — Hungary		1,565			1,510			1,561			1,507			534		420			245			87			—			—		48			32			293			119
DiGi.Com — Malaysia		1,452			1,004			1,450			1,004			632		443			356			228			—			—		5			(19	)		361			209
GrameenPhone — Bangladesh		850			570			849			570			455		338			289			263			—			—		(80	)		(1	)		209			262
Other mobile operations		1,491			179			1,458			153			50		(618	)		(295	)		(767	)		229			48		(84	)		(22	)		(150	)		(741	)
Fixed		5,025			4,781			4,423			4,274			1,543		1,560			84			653			(167	)		7		(154	)		(48	)		(237	)		612
Broadcast		1,466			1,375			1,431			1,341			331		332			244			118			13			9		(20	)		(93	)		237			34
Other operations		2,538			2,461			1,869			1,693			194		221			(79	)		(24	)		(24	)		69		33			566			(70	)		611
Eliminations		(1,872	)		(1,758	)		(210	)		(110	)		130		591			112			556			—			—		(1	)		(579	)		111			(23	)

Total		19,474			15,512			19,474			15,512			6,722		5,134			2,949			(1,055	)		65			140		(348	)		(215	)		2,666			(1,130	)


																																				Profit (loss)
																																				before taxes
THE OPERATIONS FOR THE YEAR	Total																		Operating profit						Associated					Net financial						and minority
	revenues						of which external						EBITDA						(loss)						companies					items						interests
(NOK in millions)	2005			2004			2005			2004			2005			2004			2005			2004			2005			2004		2005			2004			2005			2004

Telenor Mobil — Norway		12,243			11,730			11,072			10,504			4,471			4,305			3,566			3,228			32			10		65			64			3,663			3,302
Sonofon — Denmark		5,191			4,404			5,059			4,351			1,176			681			(109	)		(3,799	)		1			—		(175	)		(164	)		(283	)		(3,963	)
Kyivstar — Ukraine		7,272			4,219			7,266			4,217			4,050			2,581			2,826			2,026			—			—		(144	)		(159	)		2,682			1,867
Pannon GSM — Hungary		6,061			5,907			6,051			5,901			2,185			2,093			1,007			777			—			—		107			50			1,114			827
DiGi.Com — Malaysia		4,932			3,946			4,928			3,943			2,142			1,732			1,099			831			—			—		(24	)		(110	)		1,075			721
GrameenPhone — Bangladesh		2,970			2,186			2,969			2,186			1,559			1,313			1,120			1,095			—			—		(109	)		1			1,011			1,096
Other mobile operations		2,219			423			2,076			335			(343	)		(712	)		(954	)		(903	)		1,355			789		(68	)		(61	)		333			(175	)
Fixed		19,313			19,256			17,140			17,433			5,885			6,338			2,062			2,725			(142	)		69		(517	)		(442	)		1,403			2,352
Broadcast		5,649			5,346			5,518			5,211			1,516			1,498			1,015			750			73			46		190			(475	)		1,278			321
Other operations		9,967			9,540			7,060			6,611			1,091			1,114			48			96			(87	)		70		123			4,084			84			4,250
Eliminations		(6,890	)		(6,366	)		(212	)		(101	)		104			592			25			541			1			2		205			(1,267	)		231			(724	)

Total		68,927			60,591			68,927			60,591			23,836			21,535			11,705			7,367			1,233			986		(347	)		1,521			12,591			9,874

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY


	Attributable to equity holders of the parent company
										Cumulative
	Total paid			Other			Retained			translation						Minority
(NOK in millions)	capital			reserves			earnings			differences			Total			interest			Total equity

Balance as of 1 January 2004 - Restated according to IFRS		29,311			(732	)		9,084			—			37,663			3,420			41,083
Translation differences		—			—			—			(768	)		(768	)		(419	)		(1,187	)
Business combinations and increased ownership interests in subsidiaries		—			618			—			—			618			—			618
Equity adjustments in associated companies		—			62			—			—			62			—			62
Tax on items taken directly to or transferred from equity		—			—			—			163			163			—			163
Net income (loss) recognized directly in equity		—			680			—			(605	)		75			(419	)		(344	)

Profit for the year 2004		—			—			6,093			—			6,093			1,320			7,413
Total recognized income and expense for the period		—			680			6,093			(605	)		6,168			901			7,069

Dividends		—			—			(1,764	)		—			(1,764	)		(373	)		(2,137	)
Share buy back		(2,020	)		—			—			—			(2,020	)		—			(2,020	)
Sale of shares, share issue, and share options to employees		59			16			—			—			75			3			78
Transactions with shareholders in subsidiaries		—			—			—			—			—			(5	)		(5	)
Balance as of 31 December 2004		27,350			(36	)		13,413			(605	)		40,122			3,946			44,068

Total changes in accounting policy (IAS 39)		—			661			(208	)		—			453			8			461
Adjusted equity as of 1 January 2005		27,350			625			13,205			(605	)		40,575			3,954			44,529

Translation differences		—			—			—			547			547			441			988
Business combinations and increased ownership interests in subsidiaries					1,477									1,477						1,477
Available-for-sale investments:
- Valuation gains (losses) taken to equity		—			1,440			—			—			1,440			20			1,460
- Transferred to profit or loss on sale		—			(388	)		—			—			(388	)		(24	)		(412	)
Cash flow hedges:
- Valuation gains (losses) taken to equity		—			(172	)		—			—			(172	)		2			(170	)
- Transferred to profit or loss for the period		—			(13	)		—			—			(13	)		—			(13	)
- Transferred to initial carrying amount of hedged items		—			209			—			—			209			—			209
Equity adjustments in associated companies		—			1			—			—			1			—			1
Tax on items taken directly to or transferred from equity		—			(119	)		—			(22	)		(141	)		—			(141	)
Net income (loss) recognized directly in equity		—			2,435			—			525			2,960			439			3,399

Profit for the period		—			—			6,952			—			6,952			1,496			8,448
Total recognized income and expenses for the period		27,350			3,060			20,157			(80	)		50,487			5,889			56,376

Dividends		—			—			(2,595	)		—			(2,595	)		(171	)		(2,766	)
Share buy back		(2,267	)		—			—			—			(2,267	)		—			(2,267	)
Sale of shares, share issue, and share options to employees		74			6			—			—			80			5			85
Transactions with shareholders in subsidiaries		—			—			—			—			—			1,419			1,419
Balance as of 31 December 2005		25,157			3,066			17,562			(80	)		45,705			7,142			52,847

BALANCE SHEET

Telenor group



(NOK in millions)	12/31/2005		9/30/2005		31.12.2004

Deferred tax assets		2,435		1,482		3,520
Goodwill		20,722		18,273		13,355
Intangible assets		21,264		11,389		11,076
Tangible assets		43,757		40,688		37,543
Associated companies		7,424		8,320		6,602
Other financial assets		2,214		3,277		1,250

Total fixed assets		97,816		83,429		73,346

Accounts receivable		7,778		7,146		6,104
Other current assets		10,833		8,780		7,288
Assets held for sale		730
Liquid assets		7,191		6,444		5,398

Total current assets		26,532		22,370		18,790

Total assets		124,348		105,799		92,136

Shareholders equity		45,705		42,714		40,122
Minority interests		7,142		5,198		3,946

Total equity and minority interests		52,847		47,912		44,068

Pension obligations		2,440		2,403		2,297
Deferred tax liabilities		2,744		2,452		2,454
Other provisions		928		903		891

Provisions		6,112		5,758		5,642

Long-term interest-bearing liabilities		27,471		22,406		20,602
Long-term non-interest-bearing liabilities		1,088		542		573

Total long-term liabilities		28,559		22,948		21,175

Short-term interest-bearing liabilities		11,850		6,592		3,991
Accounts payable		6,214		5,402		3,806
Short-term non-interest-bearing liabilities		18,479		17,187		13,454
Short-term non interest-bearing liabilities (held for sale)		287

Total short-term liabilities		36,830		29,181		21,251

Total equity and liabilities		124,348		105,799		92,136

CASH FLOW STATEMENT

Telenor group



	4th quarter						Year			Year
(NOK in millions)	2005			2004			2005			2004

Profit before taxes and minority interests		2,666			(1,130	)		12,591			9,874
Taxes paid		(641	)		(274	)		(1,369	)		(1,516	)
Net (gains) losses, including write-downs and change in fair value of financial items		(191	)		(147	)		(929	)		(3,161	)
Depreciation, amortization and write-downs		3,773			6,189			12,131			14,168
Associated companies		(65	)		(140	)		(1,233	)		(986	)
Difference between expensed and paid pensions		8			(82	)		211			267
Currency (gains) losses not related to operating activities		185			34			(18	)		57
Change in other accruals		424			542			956			288
Net cash flow from operating activities		6,159			4,992			22,340			18,991


Payments on purchase of tangible and intangible assets		(5,135	)		(3,398	)		(14,213	)		(11,613	)
Payments on purchase of subsidiaries and associated companies, net of cash received		(2,475	)		(1,046	)		(8,128	)		(6,281	)
Proceeds from sale of tangible and intangible assets and businesses, net of cash transferred		118			395			1,279			1,112
Proceeds from sale of and payments for other investments		64			697			1,064			3,751
Net cash flow from investment activities		(7,428	)		(3,352	)		(19,998	)		(13,031	)


Proceeds from and payments of interest-bearing liabilities		1,965			(485	)		4,175			(4,311	)
Issuance of shares and repayment of equity		27			7			74			33
Share buy back		—			—			(2,267	)		(2,020	)
Dividends paid to minority interests		(10	)		(4	)		(219	)		(193	)
Dividends paid to Telenor’s shareholders		—			—			(2,595	)		(1,764	)
Net cash flow from financing activities		1,982			(482	)		(832	)		(8,255	)


Effect on cash and cash equivalents of changes in foreign exchange rates		60			(174	)		215			(268	)
Net change in cash and cash equivalents		773			984			1,725			(2,563	)


Cash and cash equivalents at the beginning of the period		6,033			4,097			5,081			7,644
Cash and cash equivalents at the end of the period		6,806			5,081			6,806			5,081

ANALYTICAL INFORMATION

Revenues (NOK in millions)
EBITDA (NOK in millions)
Operating profit (loss) (NOK in millions)
Profit (loss) before taxes (NOK in millions)
Equity ratio including minority interests (%)
Net interest-bearing liabilities (NOK in millions)
Net interest-bearing liabilities/EBITDA before other income and losses last 12 months
Capex (NOK in millions)
Investments in businesses (NOK in millions)
No. of man-years
- of which outside Norway

MOBILE OPERATIONS*)

Telenor Mobil — Norway
No. of mobile subscriptions (NMT + GSM) (in thousands)
No. of GSM subscriptions (in thousands)
  - of which prepaid
Average traffic minutes per subscription per month (AMPU) in the quarter
Average revenue per subscription per month (ARPU) in the quarter
  - of which contract
  - of which prepaid
No. of SMS/MMS and content messages (in millions)
Sonofon — Denmark
No. of mobile subscriptions (in thousands)
  - of which prepaid
Average traffic minutes per subscription per month (AMPU) in the quarter
Average revenue per subscription per month (ARPU) in the quarter
  - of which contract
  - of which prepaid
No. of SMS/MMS and content messages (in millions)
Telenor Mobile Sweden
No. of mobile subscriptions (in thousands)
  - of which prepaid
Average traffic minutes per subscription per month (AMPU) in the quarter
Average revenue per subscription per month (ARPU) in the quarter
  - of which contract
  - of which prepaid
Kyivstar — Ukraine
No. of mobile subscriptions (100% in thousands)

  - of which prepaid
Average traffic minutes per subscription per month (AMPU) in the quarter
Average revenue per subscription per month (ARPU) in the quarter
  - of which contract
  - of which prepaid
Pannon — Hungary
No. of mobile subscriptions (in thousands)
  - of which prepaid
Average traffic minutes per subscription per month (AMPU) in the quarter
Average revenue per subscription per month (ARPU) in the quarter
  - of which contract
  - of which prepaid
DTAC — Thailand
No. of mobile subscriptions (100% in thousands)
  - of which prepaid
Average traffic minutes per subscription per month (AMPU) in the quarter
Average revenue per subscription per month (ARPU) in the quarter
  - of which contract
  - of which prepaid
DiGi.Com — Malaysia
No. of mobile subscriptions (100% in thousands)
  - of which prepaid
Average traffic minutes per subscription per month (AMPU) in the quarter
Average revenue per subscription per month (ARPU) in the quarter
  - of which contract
  - of which prepaid
GrameenPhone — Bangladesh
No. of mobile subscriptions (100% in thousands)
  - of which prepaid
Average traffic minutes per subscription per month (AMPU) in the quarter
Average revenue per subscription per month (ARPU) in the quarter
  - of which contract
  - of which prepaid
Telenor Pakistan
No. of mobile subscriptions (in thousands)
ProMonte GSM — Montenegro
No. of mobile subscriptions (in thousands)
  - of which prepaid
Average traffic minutes per subscription per month (AMPU) in the quarter
Average revenue per subscription per month (ARPU) in the quarter
  - of which contract
  - of which prepaid
Associated companies
No. of mobile subscriptions (100% in thousands)

FIXED — Norway

Retail market

No. of PSTN subscriptions (in thousands)
No. of ISDN subscriptions (lines in thousands)
PSTN/ISDN/BBT generated traffic (million minutes)
Market share of PSTN/ISDN/BBT generated traffic (%)
No. of Online subscriptions residential market (in thousands)
No. of xDSL subscriptions residential market (in thousands)
No. of xDSL subscriptions business market Norway (in thousands)
Wholesale market
No. of PSTN subscriptions (in thousands)
No. of ISDN subscriptions (lines in thousands)
No. of xDSL subscriptions (in thousands)
No. of LLUB (in thousands)

BROADCAST

No. of television subscribers in the Nordic region
  - DTH pay-TV subscribers (in thousands)
  - Cable TV subscribers (in thousands)
  - Households in satellite master antenna TV-networks (in thousands)
  - Cable TV Internet access (in thousands)

*) ARPU for 2003 has not been restated to comply with IFRS


2003
Q1		Q2		Q3		Q4		Q1		Q2

	—		—		—		—		14,245		15,226
	—		—		—		—		5,048		5,698
	—		—		—		—		2,537		2,990
	—		—		—		—		5,033		2,983
	—		—		—		—		46.8		46.3
	26,139		25,317		21,584		17,817		19,297		21,973
	1.8		1.6		1.3		1.0		1.0		1.1
	1,230		1,314		1,460		2,450		1,471		4,012
	23		268		9		263		3,749		294
	21,200		21,150		20,300		19,450		20,600		20,200
	8,700		8,700		8,100		7,450		8,650		8,750


	2,342		2,330		2,364		2,364		2,378		2,451
	2,294		2,285		2,324		2,327		2,346		2,422
	1,093		1,091		1,120		1,099		1,091		1,118
	168		179		182		176		179		187
	317		330		335		310		315		332
	459		476		489		452		464		491
	158		166		167		155		147		146
	566		594		619		630		611		656

	—		—		—		—		987		1,203
	—		—		—		—		250		451
	—		—		—		—		147		157
	—		—		—		—		250		233
	—		—		—		—		287		291
	—		—		—		—		135		111
	—		—		—		—		479		545

	52		59		65		81		84		92
	26		23		28		44		48		55
	28		38		49		69		73		96
	120		155		172		175		169		181
	195		239		252		248		252		262
	45		49		56		103		106		122

	2,012		2,205		2,512		3,037		3,221		3,610


2003
Q1		Q2		Q3		Q4		Q1		Q2

	1,614		1,768		2,037		2,503		2,675		3,031
	42		51		57		72		68		74
	77		87		98		93		84		93
	168		176		203		200		191		213
	55		65		73		70		62		69

	2,514		2,514		2,564		2,618		2,596		2,588
	1,989		1,981		2,019		2,023		1,977		1,935
	104		110		113		116		111		121
	151		161		165		170		165		170
	388		414		416		412		399		389
	86		92		97		99		92		96

	—		—		—		—		—		—
	—		—		—		—		—		—
	—		—		—		—		—		—
	—		—		—		—		—		—
	—		—		—		—		—		—
	—		—		—		—		—		—

	1,802		1,944		2,053		2,205		2,413		2,583
	1,709		1,850		1,953		2,101		2,301		2,453
	174		173		177		175		167		164
	121		110		115		115		113		107
	294		309		326		318		312		312
	111		99		105		105		104		97

	835		928		1,047		1,141		1,520		1,795
	631		725		820		899		1,258		1,501
	221		225		233		230		239		246
	133		132		141		128		120		106
	274		282		332		319		331		287
	86		87		88		76		71		69

	—		—		—		—		—		—

	—		—		—		—		—		—
	—		—		—		—		—		—
	—		—		—		—		—		—
	—		—		—		—		—		—
	—		—		—		—		—		—
	—		—		—		—		—		—

	17,158		15,105		17,035		19,478		21,028		24,594


2003
	Q1		Q2		Q3		Q4		Q1		Q2

		1,449		1,427		1,381		1,308		1,248		1,219
		1,816		1,800		1,755		1,682		1,600		1,548
		4,268		3,876		3,454		3,787		3,725		3,279
		68		68		68		68		67		68
		315		304		301		294		286		276
		114		124		139		163		191		214
		7		10		11		14		17		21

		11		12		42		104		151		170
		14		17		52		126		188		215
		21		31		41		56		76		86
		53		59		68		80		96		108


		713		708		726		763		778		782
		575		590		594		604		605		611
		1,130		1,049		1,100		1,098		1,132		1,161
		24		26		28		31		34		35


2004					2005
Q3		Q4			Q1		Q2		Q3		Q4

	15,608		15,512			15,270		16,542		17,641		19,474
	5,655		5,134			5,106		5,630		6,378		6,722
	2,895		(1,055	)		2,425		2,859		3,472		2,949
	2,988		(1,130	)		2,815		3,325		3,785		2,666
	48.8		47.8			47.2		44.5		45.3		42.3
	20,596		19,195			15,933		17,814		21,838		31,133
	1.0		0.9			0.8		0.9		1.0		1.3
	3,140		4,122			3,360		2,923		3,720		6,436
	644		1,122			50		264		5,824		2,720
	20,700		20,900			21,900		22,400		23,400		27,600
	9,450		9,500			10,600		11,100		12,400		16,700


	2,562		2,645			2,635		2,687		2,736		2,731
	2,536		2,623			2,635		2,687		2,736		2,731
	1,178		1,228			1,218		1,267		1,285		1,222
	187		182			175		191		186		184
	328		318			297		308		314		317
	499		491			453		465		475		472
	129		119			117		129		133		136
	726		792			818		838		881		922

	1,253		1,275			1,232		1,250		1,261		1,284
	485		462			413		420		420		425
	139		151			153		182		183		195
	219		207			229		253		243		246
	281		267			284		306		292		285
	120		111			126		146		146		166
	588		687			722		716		747		875

	96		105			107		99		97		95
	56		57			56		51		50		48
	104		108			113		141		144		129
	182		169			164		167		164		136
	265		241			215		216		215		183
	125		117			121		121		115		90

	4,856		6,252			7,662		9,335		10,943		13,925


2004				2005
Q3		Q4		Q1		Q2		Q3		Q4

	4,211		5,532		6,892		8,500		10,021		12,901
	95		95		91		90		103		108
	95		68		53		62		66		64
	223		184		165		187		200		197
	72		52		40		49		53		53

	2,595		2,770		2,792		2,824		2,856		2,929
	1,886		1,991		1,955		1,915		1,894		1,904
	127		131		125		143		145		149
	184		171		157		162		166		162
	400		356		327		316		314		299
	103		96		84		89		89		86

	—		—		—		—		—		8,677
	—		—		—		—		—		7,212
	—		—		—		—		—		231
	—		—		—		—		—		71
	—		—		—		—		—		161
	—		—		—		—		—		54

	2,804		3,239		3,461		3,765		4,187		4,795
	2,653		3,067		3,259		3,525		3,880		4,441
	170		165		163		170		175		169
	110		98		92		99		100		102
	297		238		233		216		192		174
	100		90		84		93		93		97

	2,024		2,388		2,928		3,704		4,215		5,542
	1,730		2,092		2,625		3,375		3,860		5,159
	249		241		237		223		223		250
	103		87		81		69		65		56
	302		257		288		284		282		258
	67		60		54		47		45		39

	—		—		344		836		1,200		1,868

	340		279		279		303		394		310
	297		234		235		263		352		265
	113		87		91		105		109		92
	139		107		115		129		126		95
	309		284		288		338		339		269
	111		79		82		97		103		71

	28,662		33,763		38,645		42,328		46,615		40,593


2004				2005
Q3		Q4		Q1		Q2		Q3		Q4

	1,196		1,182		1,165		1,139		1,118		1,089
	1,498		1,449		1,394		1,335		1,276		1,227
	2,851		3,171		2,848		2,644		2,289		2,502
	67		67		67		67		66		66
	263		241		215		197		182		165
	245		286		339		364		388		414
	25		40		46		51		56		61

	180		188		192		200		202		202
	234		250		256		259		256		251
	90		91		77		87		97		109
	123		145		172		192		209		235


	800		824		851		853		876		906
	614		624		616		619		636		681
	1,190		1,212		1,197		1,205		1,184		1,160
	38		44		48		50		53		73