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Telenor switches focus to digital ads

News, 23 August 2016
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OSLO/LONDON: Telenor, the Norwegian mobile telecoms group, is ramping up its digital operations as it sees opportunities in the mobile advertising market, especially among its substantial base of subscribers in Asia.

Like other telecom operators, Telenor is facing increased competition from the messaging services provided by the likes of Facebook as well as from digital content providers, such as Netflix.

"A lot of digital players are coming in and taking parts of the value chain," said Sigve Brekke, CEO of Telenor, in an interview with Reuters.

"It's a very demanding situation for mobile players right now and we are forced to make a decision on what we want to do going forward," he explained.

Telenor's planned response to the challenge involves the establishment of a separate business unit to tap into Asia's rapidly growing mobile advertising market.

It is a logical move because more than 90% of its 211m worldwide subscribers come from the six markets it operates in Asia, including Pakistan and Thailand.

Tapad, a New York-based startup that Telenor acquired earlier this year for $360m, has developed technology for cross-device advertising, and Brekke said that it would play a key role in Telenor's digital strategy.

"We will try to use Tapad as an entry into mobile advertising as a separate business unit in our Asian growth markets," he said, adding that Telenor "needs to be able to do business in a different way going forward".

With digital expected to deliver annual growth of between 20% to 30%, he said: "You can choose to be a 'dumb pipe', a network provider or you can try to take a larger digital position."

The company is expected to reveal more details about its future digital strategy at an investors' meeting in London in September.

Data sourced from Reuters; additional content by Warc staff

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