25 June, 2015

ETNO ThinkDigital interview - Transforming Europe into a Digital Economy by giving businesses the tools to invest in the future

Kjell-Morten Johnsen, Executive Vice President and Head of Telenor’s European operations : “I think there is no other power that can save so much time and energy as the internet services whether broadband or mobile” #ThinkDigital

Evolving Internet technologies have an impact on all sectors of society including healthcare, education, transportation, energy and security to name a few. How is Telenor empowering this connected society and economy?

I think a starting point to answer this question, is the fact that we at Telenor have been and will continue to be enablers in terms of connected services. We facilitate the networks over which such services can be delivered.  

What we are seeing today, is that value chains are being decomposed and rearranged and thus the middleman is disappearing so to speak and there is a more direct delivery relationship between consumers and sellers – for example this is the case with AirBnB or Uber. We will see a similar evolution in the value chain in other sectors too, such as healthcare and financial services. The inefficiencies of the old value chain are being broken down.

Sometimes we deliver these intermediary services ourselves – HR, online financial services, IoT services – and in other cases it is others who make use of our infrastructure to deliver their own services. The impact this evolution has on people is visible in our daily lives, be it at home or at the office and such changes really show how the new digital society is empowering the economy.

GeSI recently (9 June) launched its SMARTer2030 report highlighting the central role of ICT in driving a sustainable future. Can you name some concrete projects in which Telenor is involved?

I think there is no other power that can save so much time and energy as the internet services whether broadband or mobile – in particular mobile as this gives people access wherever they are. Internet services can avoid transport costs, reduce emissions and circumvent a lot of time-consuming activities like queuing for a simple transaction or physically moving from one location to another. It is also thanks to these possibilities that people are able to carry out vital international money transfers to developing countries. In these markets, ICT can have a life-changing impact on people’s quality of life.

In developed markets too, Internet services increase efficiency - whether you deliver manufacturing services or are a distributor using IoT services. The examples are numerous.

To give you some concrete examples of what Telenor is doing, I would mention Easypaisa in Pakistan, which makes it easy for the unbanked to send and receive money and Telenor Banka in Serbia, which is a completely new interface that allows people to manage their financial transactions online. These examples are geared towards saving people’s time. 

Telenor also offers innovative IoT location based services, which allow people to track their parcels just as one would with Amazon or another delivery company. And of course, thanks to our networks, other companies are also able to develop similar innovative solutions.

With the Digital Single Market strategy, the EC has highlighted the vital role of networks in Digitalising Society. What is Telenor’s view on how to move from the policy paper to actual results in markets?

I think the industry has gradually moved to a common view on this. We have seen over time that Europe has gone from being a leader to lagging behind. The USA and China are moving forward at gigantic speed, leaving us behind.

A clear example of what is happening in Europe, is our proposed transaction in Denmark. Our ability to invest is reduced year by year and we are trying to compensate with network co-operations to achieve more scale. We are coming to a point where profitability is basically negative for some players which affects their ability to invest. Consolidation gives businesses more opportunities to invest in the future.

The industry in Europe has a big handicap compared to several other areas in the world and this is a serious issue. Do we want Europe to be a modern, dynamic economy that can compete at a global level with China, South East Asia and the USA? Or do we want to stick to the current environment in which each country has its own small market and maintain the way of thinking of the 80s?

This is an important issue that must be looked into. There are a lot of documents floating around, but these seem to mainly focus on roaming or whether or not to enable companies like Netflix to use our networks in Europe, instead of taking up the real challenge and truly driving a strategy that could make Europe competitive again. To me, this is scary and I think last week’s initiative by several CEO’s, including the CEO of Telenor, to send a letter to Donald Tusk just shows that there is a need for action.

Over the past few years, Europe has indeed seen a number of M&A deals that have changed telecom markets. What impact do you think this type of consolidation has on consumers? 

I think the impact for consumers will be that their companies will be able to lead the transitional changes to upgrade their capabilities and thus offer better services.

I think the current transition towards 4G is an example of the times we live in. Europe was way ahead ten years ago when we started developing 3G. This gave European companies the ability to operate on an equal – or maybe even better – footing to their competition across the globe.

However 4G has been a bit of a disaster for Europe you could say. And this has repercussions way beyond the telecom sector. Europe needs to make sure it has the capacity to fight this problem and the ability to invest in a profitable business is fundamental. If we don’t make sure we have these capabilities in Europe, we’ll remain behind on the road to 5G as well.

The impact of M&A needs to take into account the whole picture, not just the effect within the telecom industry. The reality is that whatever we do today, customers will still get more gigabits for the same money in the future – there is no doubt about that - prices will go down regardless of whether we have M&A or not. What we need to ask ourselves is how fast do we want Europe to transform itself into a Digital Economy.

By ETNO #ThinkDigital, Brussels, 25.06.2015


Kjell-Morten Johnsen, Executive Vice President and Head of Telenor’s European operations

Kjell-Morten Johnsen comes from the position of CEO of Telenor Serbia, a position he held for three years. While working in Serbia, Kjell Johnsen served as the President of the Foreign Investors Council of Serbia from December 2009 to December 2011. Prior to moving to Serbia, Kjell-Morten Johnsen held a number of senior positions in Telenor, including Senior Vice President of Telenor Central and Eastern Europe (CEE) and Head of Telenor Russia. Until February 2008 he was Member of the Board of Directors of Golden Telecom and until June 2015, he was Member of the Board of Directors of VimpelCom Ltd.

Education: MBA in Strategic Management from the Norwegian School of Economics and Business Administration in cooperation with HEC, France.

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