##### Table of Contents









SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 20-F




|  |                                                                                                   
|- | --------------------------------------------------------------------------------------------------
|o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR
    (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR




|  |                                                                                         
|- | ----------------------------------------------------------------------------------------
|x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
    EXCHANGE ACT OF 1934



OR




|  |                                                                                             
|- | --------------------------------------------------------------------------------------------
|o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934





Telenor ASA


(Exact name of Registrant as specified in its charter)


Norway


(Jurisdiction of incorporation or organization)


Snarøyveien 30, N-1331 Fornebu, Norway


(Address of principal executive offices)





















X




X












---










TABLE OF CONTENTS


|                                                              |  |                                                                                  |   |      |     | 
|------------------------------------------------------------- |  | -------------------------------------------------------------------------------- | - | ---- | --- | 
|                                                              |  |                                                                                  |   | Page |    
|                                                              |  |                                                                                  |   |      |    
|PRESENTATION OF FINANCIAL AND OTHER
    INFORMATION           |  |                                                                                  | 3 |     
|CAUTIONARY STATEMENT REGARDING
    FORWARD-LOOKING STATEMENTS |  |                                                                                  | 3 |     
|PART I                                                       
|ITEM 1:                                                       |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
    AND ADVISERS                        |   |      | 4   | 
|ITEM 2:                                                       |  | OFFER STATISTICS AND EXPECTED TIMETABLE                                          |   |      | 4   | 
|ITEM 3:                                                       |  | KEY INFORMATION                                                                  |   |      | 4   | 
|ITEM 4:                                                       |  | INFORMATION ON THE COMPANY                                                       |   |      | 15  | 
|ITEM 5:                                                       |  | OPERATING AND FINANCIAL REVIEW AND
    PROSPECTS                                 |   |      | 84  | 
|ITEM 6:                                                       |  | DIRECTORS, SENIOR MANAGEMENT AND
    EMPLOYEES                                   |   |      | 157 | 
|ITEM 7:                                                       |  | MAJOR SHAREHOLDERS AND RELATED PARTY
    TRANSACTIONS                            |   |      | 168 | 
|ITEM 8:                                                       |  | FINANCIAL INFORMATION                                                            |   |      | 171 | 
|ITEM 9:                                                       |  | THE OFFER AND LISTING                                                            |   |      | 172 | 
|ITEM 10:                                                      |  | ADDITIONAL INFORMATION                                                           |   |      | 173 | 
|ITEM 11:                                                      |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES
    ABOUT MARKET RISK                   |   |      | 184 | 
|ITEM 12:                                                      |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY
    SECURITIES                       |   |      | 185 | 
|PART II                                                      
|ITEM 13:                                                      |  | DEFAULTS, DIVIDEND ARREARAGES AND
    DELINQUENCIES                              |   |      | 185 | 
|ITEM 14:                                                      |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF
    SECURITY HOLDERS AND USE OF PROCEEDS |   |      | 185 | 
|ITEM 15:                                                      |  | CONTROLS AND PROCEDURES                                                          |   |      | 185 | 
|ITEM 16A:                                                     |  | AUDIT COMMITTEE FINANCIAL EXPERT                                                 |   |      | 186 | 
|ITEM 16B:                                                     |  | CODE OF ETHICS                                                                   |   |      | 186 | 
|ITEM 16C:                                                     |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                           |   |      | 187 | 
|ITEM 16D:                                                     |  | EXEMPTIONS FROM THE LISTING STANDARDS FOR
    AUDIT COMMITTEES                   |   |      | 188 | 
|ITEM 16E:                                                     |  | PURCHASES OF EQUITY SECURITIES BY ISSUER
    AND AFFILIATED PURCHASERS           |   |      | 188 | 
|PART III                                                     
|ITEM 17:                                                      |  | FINANCIAL STATEMENTS                                                             |   |      | 189 | 
|ITEM 18:                                                      |  | FINANCIAL STATEMENTS                                                             |   |      | 189 | 
|ITEM 19:                                                      |  | EXHIBITS                                                                         |   |      | 190 | 
|EX-1                                                         
|EX-8                                                         
|EX-12                                                        
|EX-13                                                        



2



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##### Table of Contents






PRESENTATION OF FINANCIAL AND OTHER INFORMATION











CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS








| |   |                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the level of demand for our services, particularly with regard
    to mobile communications services, fixed telephony, Internet,
    pay television services, and other newer products and services;
|
| |  | actions of our competitors;                                                                                                                                                                         
|
| |  | regulatory developments, including changes to our permitted
    tariffs, the terms of access to our network, the terms of
    interconnection and other issues; and                                 
|
| |  | the success of our international investments and expansion
    programs.                                                                                                                            



3



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##### Table of Contents



PART I




|        |                                                      
|------- | -----------------------------------------------------
|ITEM 1: | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS





|        |                                        
|------- | ---------------------------------------
|ITEM 2: | OFFER STATISTICS AND EXPECTED TIMETABLE





|        |                
|------- | ---------------
|ITEM 3: | KEY INFORMATION

SELECTED CONSOLIDATED FINANCIAL AND STATISTICAL DATA






|                                                                                 |  |                                         |        |   |       |  |        |       |  |  |        |   |  |       |        |  |       |  |        |  |  |  |        | 
|-------------------------------------------------------------------------------- |  | --------------------------------------- | ------ | - | ----- |  | ------ | ----- |  |  | ------ | - |  | ----- | ------ |  | ----- |  | ------ |  |  |  | ------ | 
|                                                                                 |  | Year ended December 31,                 |       
|                                                                                 |  |                                         |       
|                                                                                 |  | 2000                                    |        |   | 2001  |  |        | 2002  |  |  | 2003   |   |  | 2004  |        |  | 2004  | 
|                                                                                 |  |                                         |        |   |       |  |        |       |  |  |        |   |  |       |        |  |       | 
|                                                                                 |  | (NOK)                                   |        |   | (NOK) |  |        | (NOK) |  |  | (NOK)  |   |  | (NOK) |        |  | (USD) | 
|                                                                                 |  | (in millions, except per share amounts) |       
|Income Statement Data                                                            |  |                                         |        |   |       |  |        |       |  |  |        |   |  |       |        |  |       |  |        |  |  |  |        | 
|Norwegian GAAP                                                                   |  |                                         |        |   |       |  |        |       |  |  |        |   |  |       |        |  |       |  |        |  |  |  |        | 
|Revenues                                                                         |  |                                         | 36,530 |   |       |  | 40,604 |       |  |  | 48,668 |   |  |       | 52,889 |  |       |  | 60,752 |  |  |  | 9,993  | 
|Gain on disposal of fixed assets and Operations                                  |  |                                         | 1,042  |   |       |  | 5,436  |       |  |  | 158    |   |  |       | 232    |  |       |  | 550    |  |  |  | 91     | 
|                                                                                 |  |                                         |        |   |       |  |        |       |  |  |        |   |  |       |        |  |       | 
|Total revenues                                                                   |  |                                         | 37,572 |   |       |  | 46,040 |       |  |  | 48,826 |   |  |       | 53,121 |  |       |  | 61,302 |  |  |  | 10,084 | 
|Operating expenses                                                               |  |                                         | 33,943 |   |       |  | 42,863 |       |  |  | 49,146 |   |  |       | 45,561 |  |       |  | 54,700 |  |  |  | 8,998  | 
|                                                                                 |  |                                         |        |   |       |  |        |       |  |  |        |   |  |       |        |  |       | 
|Operating profit (loss)                                                          |  |                                         | 3,629  |   |       |  | 3,177  |       |  |  | (320   | ) |  |       | 7,560  |  |       |  | 6,602  |  |  |  | 1,086  | 
|Share of profit (loss) in associated Companies                                   |  |                                         | (692   | ) |       |  | 8,237  |       |  |  | (2,450 | ) |  |       | 1,231  |  |       |  | 718    |  |  |  | 118    | 
|Net income (loss)                                                                |  |                                         | 1,076  |   |       |  | 7,079  |       |  |  | (4,298 | ) |  |       | 4,560  |  |       |  | 5,358  |  |  |  | 881    | 
|Net income (loss) per share  primary (excluding
    treasury shares)            |  |                                         | 0.754  |   |       |  | 3.994  |       |  |  | (2.422 | ) |  |       | 2.569  |  |       |  | 3.065  |  |  |  | 0.504  | 
|Net income (loss) per share  diluted (excluding
    treasury shares)            |  |                                         | 0.754  |   |       |  | 3.990  |       |  |  | (2.422 | ) |  |       | 2.568  |  |       |  | 3.063  |  |  |  | 0.504  | 
|Dividends per share(1)                                                           |  |                                         | 0.300  |   |       |  | 0.350  |       |  |  | 0.450  |   |  |       | 1.00   |  |       |  | 1.50   |  |  |  | 0.247  | 
|Weighted average number of shares (in millions of
    shares)  primary          |  |                                         | 1,427  |   |       |  | 1,772  |       |  |  | 1,775  |   |  |       | 1,775  |  |       |  | 1,748  |  |  |  |       | 
|Weighted average number of shares (in millions of
    shares)  diluted          |  |                                         | 1,427  |   |       |  | 1,774  |       |  |  | 1,775  |   |  |       | 1,776  |  |       |  | 1,749  |  |  |  |       | 
|Net income per share from discontinued operations (Telenor
    Media)(2)         |  |                                         | 0.594  |   |       |  | 1.108  |       |  |  |       |   |  |       |       |  |       |  |       |  |  |  |       | 
|Net income per share from continuing operations (excluding
    Telenor Media)(2) |  |                                         | 0.160  |   |       |  | 2.886  |       |  |  |       |   |  |       |       |  |       |  |       |  |  |  |       | 

4



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##### Table of Contents



|                                                                                                                          |  |                                         |        |  |       |  |        |       |  |  |        |   |  |       |        |   |       |  |        |  |  |  |        | 
|------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------- | ------ |  | ----- |  | ------ | ----- |  |  | ------ | - |  | ----- | ------ | - | ----- |  | ------ |  |  |  | ------ | 
|                                                                                                                          |  | Year ended December 31,                 |       
|                                                                                                                          |  |                                         |       
|                                                                                                                          |  | 2000                                    |        |  | 2001  |  |        | 2002  |  |  | 2003   |   |  | 2004  |        |   | 2004  | 
|                                                                                                                          |  |                                         |        |  |       |  |        |       |  |  |        |   |  |       |        |   |       | 
|                                                                                                                          |  | (NOK)                                   |        |  | (NOK) |  |        | (NOK) |  |  | (NOK)  |   |  | (NOK) |        |   | (USD) | 
|                                                                                                                          |  | (in millions, except per share amounts) |       
|U.S. GAAP                                                                                                                 |  |                                         |        |  |       |  |        |       |  |  |        |   |  |       |        |   |       |  |        |  |  |  |        | 
|Revenues                                                                                                                  |  |                                         | 36,481 |  |       |  | 40,581 |       |  |  | 47,879 |   |  |       | 52,826 |   |       |  | 67,801 |  |  |  | 11,153 | 
|Net income from continuing operations (excluding Telenor Media)                                                           |  |                                         | 854    |  |       |  | 1,889  |       |  |  |       |   |  |       |       |   |       |  |       |  |  |  |       | 
|Net income                                                                                                                |  |                                         | 1,082  |  |       |  | 7,004  |       |  |  | (3,658 | ) |  |       | 5,036  |   |       |  | 5,639  |  |  |  | 928    | 
|Net income per share from continuing operations (excluding
    Telenor Media)                                             |  |                                         | 0.599  |  |       |  | 1.066  |       |  |  |       |   |  |       |       |   |       |  |       |  |  |  |       | 
|Net income per share cumulative effect on prior years (prior to
    December 31, 2001) of change in accounting principles |  |                                         |       |  |       |  | 0.033  |       |  |  |       |   |  |       | (0.10  | ) |       |  |       |  |  |  |       | 
|Net income per share  primary (excluding treasury
    shares)                                                            |  |                                         | 0.76   |  |       |  | 3.95   |       |  |  | (2.06  | ) |  |       | 2.84   |   |       |  | 3.22   |  |  |  | 0.53   | 
|Net income per share  diluted (excluding treasury
    shares)                                                            |  |                                         | 0.76   |  |       |  | 3.95   |       |  |  | (2.06  | ) |  |       | 2.84   |   |       |  | 3.22   |  |  |  | 0.53   | 






|    |                                                                        
|--- | -----------------------------------------------------------------------
|(1) | Dividends in respect of 2004 will be paid in June 2005.                
|   
|(2) | Discontinued operations consist of the business area Telenor
    Media.

|                                       |  |                 |        |  |       |  |        |       |  |  |        |  |  |       |         |  |       |  |         |  |  |  |        | 
|-------------------------------------- |  | --------------- | ------ |  | ----- |  | ------ | ----- |  |  | ------ |  |  | ----- | ------- |  | ----- |  | ------- |  |  |  | ------ | 
|                                       |  | At December 31, |       
|                                       |  |                 |       
|                                       |  | 2000            |        |  | 2001  |  |        | 2002  |  |  | 2003   |  |  | 2004  |         |  | 2004  | 
|                                       |  |                 |        |  |       |  |        |       |  |  |        |  |  |       |         |  |       | 
|                                       |  | (NOK)           |        |  | (NOK) |  |        | (NOK) |  |  | (NOK)  |  |  | (NOK) |         |  | (USD) | 
|                                       |  | (in millions)   |       
|Balance Sheet Data                     |  |                 |        |  |       |  |        |       |  |  |        |  |  |       |         |  |       |  |         |  |  |  |        | 
|Norwegian GAAP                         |  |                 |        |  |       |  |        |       |  |  |        |  |  |       |         |  |       |  |         |  |  |  |        | 
|Total fixed assets                     |  |                 | 80,881 |  |       |  | 66,095 |       |  |  | 74,162 |  |  |       | 68,346  |  |       |  | 71,359  |  |  |  | 11,738 | 
|Total current assets                   |  |                 | 12,804 |  |       |  | 16,528 |       |  |  | 15,296 |  |  |       | 17,764  |  |       |  | 16,735  |  |  |  | 2,753  | 
|                                       |  |                 |        |  |       |  |        |       |  |  |        |  |  |       |         |  |       | 
|Total assets                           |  |                 | 93,685 |  |       |  | 82,623 |       |  |  | 89,458 |  |  |       | 86,110  |  |       |  | 88,094  |  |  |  | 14,491 | 
|                                       |  |                 |        |  |       |  |        |       |  |  |        |  |  |       |         |  |       | 
|Long-term liabilities and provisions   |  |                 | 15,285 |  |       |  | 15,866 |       |  |  | 26,772 |  |  |       | 25,102  |  |       |  | 24,294  |  |  |  | 3,996  | 
|Short-term liabilities                 |  |                 | 40,220 |  |       |  | 21,074 |       |  |  | 25,398 |  |  |       | 20,125  |  |       |  | 22,132  |  |  |  | 3,641  | 
|                                       |  |                 |        |  |       |  |        |       |  |  |        |  |  |       |         |  |       | 
|Total liabilities                      |  |                 | 55,505 |  |       |  | 36,940 |       |  |  | 52,170 |  |  |       | 45,227  |  |       |  | 46,426  |  |  |  | 7,637  | 
|                                       |  |                 |        |  |       |  |        |       |  |  |        |  |  |       |         |  |       | 
|Shareholders equity                   |  |                 | 35,474 |  |       |  | 42,144 |       |  |  | 33,685 |  |  |       | 37,237  |  |       |  | 37,594  |  |  |  | 6,184  | 
|Minority interests                     |  |                 | 2,706  |  |       |  | 3,539  |       |  |  | 3,603  |  |  |       | 3,646   |  |       |  | 4,074   |  |  |  | 670    | 
|                                       |  |                 |        |  |       |  |        |       |  |  |        |  |  |       |         |  |       | 
|Total equity and liabilities           |  |                 | 93,685 |  |       |  | 82,623 |       |  |  | 89,458 |  |  |       | 86,110  |  |       |  | 88,094  |  |  |  | 14,491 | 
|                                       |  |                 |        |  |       |  |        |       |  |  |        |  |  |       |         |  |       | 
|U.S. GAAP                              |  |                 |        |  |       |  |        |       |  |  |        |  |  |       |         |  |       |  |         |  |  |  |        | 
|Total assets                           |  |                 | 99,776 |  |       |  | 90,129 |       |  |  | 97,511 |  |  |       | 101,088 |  |       |  | 101,171 |  |  |  | 16,642 | 
|Long-term interest-bearing liabilities |  |                 | 19,349 |  |       |  | 20,978 |       |  |  | 30,275 |  |  |       | 39,255  |  |       |  | 34,882  |  |  |  | 5,738  | 
|Shareholders equity                   |  |                 | 36,304 |  |       |  | 42,944 |       |  |  | 35,799 |  |  |       | 42,535  |  |       |  | 42,430  |  |  |  | 6,979  | 

|                                         |  |                         |         |   |       |  |         |       |  |  |         |   |  |       |        |   |       |  |         |   |  |  |        |  
|---------------------------------------- |  | ----------------------- | ------- | - | ----- |  | ------- | ----- |  |  | ------- | - |  | ----- | ------ | - | ----- |  | ------- | - |  |  | ------ | -
|                                         |  | Year ended December 31, |        
|                                         |  |                         |        
|                                         |  | 2000                    |         |   | 2001  |  |         | 2002  |  |  | 2003    |   |  | 2004  |        |   | 2004  | 
|                                         |  |                         |         |   |       |  |         |       |  |  |         |   |  |       |        |   |       | 
|                                         |  | (NOK)                   |         |   | (NOK) |  |         | (NOK) |  |  | (NOK)   |   |  | (NOK) |        |   | (USD) | 
|Cash Flow                                |  |                         |         |   |       |  |         |       |  |  |         |   |  |       |        |   |       |  |         |   |  |  |        |  
|Norwegian GAAP                           |  |                         |         |   |       |  |         |       |  |  |         |   |  |       |        |   |       |  |         |   |  |  |        |  
|Net cash flow from operating activities  |  |                         | 5,915   |   |       |  | 6,993   |       |  |  | 12,858  |   |  |       | 13,676 |   |       |  | 18,991  |   |  |  | 3,124  |  
|Net cash flow from investment activities |  |                         | (47,308 | ) |       |  | 20,891  |       |  |  | (21,727 | ) |  |       | (3,454 | ) |       |  | (13,031 | ) |  |  | (2,143 | )
|Net cash flow from financing activities  |  |                         | 41,558  |   |       |  | (24,366 | )     |  |  | 8,641   |   |  |       | (7,887 | ) |       |  | (8,255  | ) |  |  | (1,358 | )

5



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##### Table of Contents



|                            |  |                         |        |  |       |  |        |       |  |  |        |  |  |       |        |  |       |  |        |  |  |  |       | 
|--------------------------- |  | ----------------------- | ------ |  | ----- |  | ------ | ----- |  |  | ------ |  |  | ----- | ------ |  | ----- |  | ------ |  |  |  | ----- | 
|                            |  | Year ended December 31, |       
|                            |  |                         |       
|                            |  | 2000                    |        |  | 2001  |  |        | 2002  |  |  | 2003   |  |  | 2004  |        |  | 2004  | 
|                            |  |                         |        |  |       |  |        |       |  |  |        |  |  |       |        |  |       | 
|                            |  | (NOK)                   |        |  | (NOK) |  |        | (NOK) |  |  | (NOK)  |  |  | (NOK) |        |  | (USD) | 
|Investments and EBITDA      |  |                         |        |  |       |  |        |       |  |  |        |  |  |       |        |  |       |  |        |  |  |  |       | 
|Norwegian GAAP              |  |                         |        |  |       |  |        |       |  |  |        |  |  |       |        |  |       |  |        |  |  |  |       | 
|Capital Expenditure(1)      |  |                         | 10,421 |  |       |  | 11,634 |       |  |  | 8,889  |  |  |       | 6,454  |  |       |  | 12,745 |  |  |  | 2,096 | 
|Investment in businesses(2) |  |                         | 40,251 |  |       |  | 7,212  |       |  |  | 12,411 |  |  |       | 563    |  |       |  | 5,809  |  |  |  | 956   | 
|EBITDA(3)                   |  |                         | 9,563  |  |       |  | 14,250 |       |  |  | 13,469 |  |  |       | 18,302 |  |       |  | 20,821 |  |  |  | 3,425 | 






|    |                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Capital expenditure (Capex) is investments in tangible and
    intangible assets.                                                                                                                                   
|   
|(2) | Investments in businesses are acquisitions of shares and
    participations, including acquisitions of subsidiaries and
    businesses not organized as separate companies.                                         
|   
|(3) | For the definition and discussion of EBITDA and the
    reconciliation of EBITDA to net income, you should read
    Item 5: Operating and Financial Review and
    Prospects  Operation profit (loss) and EBITDA.

|                                                                                         |                |                         |  |       |      |  |  |       |  |  |      |       |  |      |  |       |  |  |  |       | 
|---------------------------------------------------------------------------------------- | -------------- | ----------------------- |  | ----- | ---- |  |  | ----- |  |  | ---- | ----- |  | ---- |  | ----- |  |  |  | ----- | 
|                                                                                         |                | Year ended December 31, | 
|                                                                                         |                |                         | 
|                                                                                         |                | 2000                    |  |       | 2001 |  |  | 2002  |  |  | 2003 |       |  | 2004 | 
|                                                                                         |                |                         |  |       |      |  |  |       |  |  |      |       |  |      | 
|Other Operating Data                                                                     |                |                         |  |       |      |  |  |       |  |  |      |       |  |      |  |       |  |  |  |      
|Mobile telephony (digital) subscriptions inNorway, period end (000s):                    |                |                         |  |       |      |  |  |       |  |  |      |       |  |      |  |       |  |  |  |      
|                                                                                         | Contract       |                         |  | 1,145 |      |  |  | 1,210 |  |  |      | 1,215 |  |      |  | 1,228 |  |  |  | 1,395 | 
|                                                                                         | Prepaid        |                         |  | 911   |      |  |  | 1,027 |  |  |      | 1,115 |  |      |  | 1,099 |  |  |  | 1,228 | 
|Mobile telephony (digital) subscriptions inSonofon (Denmark), period end (000s):         |                |                         |  |       |      |  |  |       |  |  |      |       |  |      |  |       |  |  |  |      
|                                                                                         | Contract       |                         |  |      |      |  |  |      |  |  |      |      |  |      |  |      |  |  |  | 824   | 
|                                                                                         | Prepaid        |                         |  |      |      |  |  |      |  |  |      |      |  |      |  |      |  |  |  | 462   | 
|Mobile telephony (digital) subscriptions inTelenor Mobile Swedenperiod end (000s)        |                |                         |  |       |      |  |  |       |  |  |      |       |  |      |  |       |  |  |  |      
|                                                                                         | Contract       |                         |  |      |      |  |  |      |  |  |      |      |  |      |  | 37    |  |  |  | 48    | 
|                                                                                         | Prepaid        |                         |  |      |      |  |  |      |  |  |      |      |  |      |  | 44    |  |  |  | 57    | 
|Mobile telephony (digital) subscriptions inPannon GSM (Hungary), period end (000s):      |                |                         |  |       |      |  |  |       |  |  |      |       |  |      |  |       |  |  |  |      
|                                                                                         | Contract       |                         |  |      |      |  |  |      |  |  |      | 540   |  |      |  | 595   |  |  |  | 779   | 
|                                                                                         | Prepaid        |                         |  |      |      |  |  |      |  |  |      | 1,910 |  |      |  | 2,023 |  |  |  | 1,991 | 
|Mobile telephony (digital) subscriptions inDiGi.Com (Malaysia), period end (000s):       |                |                         |  |       |      |  |  |       |  |  |      |       |  |      |  |       |  |  |  |      
|                                                                                         | Contract       |                         |  |      |      |  |  | 137   |  |  |      | 97    |  |      |  | 106   |  |  |  | 175   | 
|                                                                                         | Prepaid        |                         |  |      |      |  |  | 902   |  |  |      | 1,519 |  |      |  | 2,101 |  |  |  | 3,067 | 
|Mobile telephony (digital) subscriptions inKyivstar (Ukraine), period end (000s):        |                |                         |  |       |      |  |  |       |  |  |      |       |  |      |  |       |  |  |  |      
|                                                                                         | Contract       |                         |  |      |      |  |  |      |  |  |      | 384   |  |      |  | 534   |  |  |  | 720   | 
|                                                                                         | Prepaid        |                         |  |      |      |  |  |      |  |  |      | 1,472 |  |      |  | 2,503 |  |  |  | 5,532 | 
|Mobile telephony (digital) subscriptions inGrameenPhone (Bangladesh), period end (000s): |                |                         |  |       |      |  |  |       |  |  |      |       |  |      |  |       |  |  |  |      
|                                                                                         | Contract       |                         |  | 142   |      |  |  | 185   |  |  |      | 206   |  |      |  | 242   |  |  |  | 296   | 
|                                                                                         | Prepaid        |                         |  | 49    |      |  |  | 279   |  |  |      | 563   |  |      |  | 899   |  |  |  | 2,092 | 
|Mobile telephony (digital) subscriptions inProMonte GSM (Montenegro)period end (000s):   |                |                         |  |       |      |  |  |       |  |  |      |       |  |      |  |       |  |  |  |      
|                                                                                         | Contract       |                         |  |      |      |  |  |      |  |  |      |      |  |      |  |      |  |  |  | 44    | 
|                                                                                         | Prepaid        |                         |  |      |      |  |  |      |  |  |      |      |  |      |  |      |  |  |  | 235   | 
|Fixed telephony access channels in Norway,
    period end (000s):                        |                |                         |  |       |      |  |  |       |  |  |      |       |  |      |  |       |  |  |  |      
|                                                                                         | Analog (PSTN)  |                         |  | 1,680 |      |  |  | 1,545 |  |  |      | 1,467 |  |      |  | 1,308 |  |  |  | 1,182 | 
|                                                                                         | Digital (ISDN) |                         |  | 1,590 |      |  |  | 1,766 |  |  |      | 1,828 |  |      |  | 1,682 |  |  |  | 1,449 | 

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|                                                                        |                                                   |                         |        |        |      |  |        |        |    |  |        |       |    |      |        |       |     |  |        |       |     | 
|----------------------------------------------------------------------- | ------------------------------------------------- | ----------------------- | ------ | ------ | ---- |  | ------ | ------ | -- |  | ------ | ----- | -- | ---- | ------ | ----- | --- |  | ------ | ----- | --- | 
|                                                                        |                                                   | Year ended December 31, |       
|                                                                        |                                                   |                         |       
|                                                                        |                                                   | 2000                    |        |        | 2001 |  |        | 2002   |    |  | 2003   |       |    | 2004 |       
|                                                                        |                                                   |                         |        |        |      |  |        |        |    |  |        |       |    |      |       
|Fixed telephony traffic in Norway (in millions of minutes):             |                                                   |                         |        |        |      |  |        |        |    |  |        |       |    |      |        |       |     |  |        |      
|                                                                        | National calls, excluding Internet traffic        |                         |        | 11,612 |      |  |        | 10,567 |    |  |        | 9,457 |    |      |        | 8,203 |     |  |        | 7,007 |    
|                                                                        | Internet traffic                                  |                         |        | 5,8967 |      |  |        | 6,067  |    |  |        | 5,293 |    |      |        | 4,619 |     |  |        | 3,577 |    
|                                                                        | Calls to mobile                                   |                         |        | 1,295  |      |  |        | 1,412  |    |  |        | 1,499 |    |      |        | 1,442 |     |  |        | 1,362 |    
|                                                                        | International                                     |                         |        | 387    |      |  |        | 383    |    |  |        | 378   |    |      |        | 340   |     |  |        | 308   |    
|                                                                        | Value-added services and directory calls, etc.    |                         |        | 599    |      |  |        | 624    |    |  |        | 710   |    |      |        | 781   |     |  |        | 772   |    
|Internet, period end (000s):                                            |                                                   |                         |        |        |      |  |        |        |    |  |        |       |    |      |        |       |     |  |        |      
|                                                                        | Internet subscriptions, residential market Norway |                         |        | 377    |      |  |        | 394    |    |  |        | 427   |    |      |        | 457   |     |  |        | 527   |    
|                                                                        |                                                   |  of which ADSL         |        |        |     |  |        |        | 23 |  |        |       | 90 |      |        |       | 163 |  |        |       | 286 | 
|                                                                        | ADSL business subscriptions, Norway               |                         |        |       |      |  |        | 1      |    |  |        | 4     |    |      |        | 14    |     |  |        | 40    |    
|Pay television subscribers in the Nordic region,
    period end (000s): |                                                   |                         |        |        |      |  |        |        |    |  |        |       |    |      |        |       |     |  |        |      
|                                                                        | Cable TV                                          |                         |        | 357    |      |  |        | 561    |    |  |        | 571   |    |      |        | 604   |     |  |        | 624   |    
|                                                                        | Small antenna networks (SMATV)                    |                         |        | 1,086  |      |  |        | 1,193  |    |  |        | 1,133 |    |      |        | 1,098 |     |  |        | 1,212 |    
|                                                                        | Home satellite dish (DTH)(1)                      |                         |        | 506    |      |  |        | 569    |    |  |        | 701   |    |      |        | 763   |     |  |        | 824   |    
|                                                                        | Digital Terrestrial Television (DTT)              |                         |        |       |      |  |        |       |    |  |        |      |    |      |        |      |     |  |        | 12    |    
|                                                                        | Total                                             |                         |        | 1,949  |      |  |        | 2,323  |    |  |        | 2,405 |    |      |        | 2,465 |     |  |        | 2,672 |    
|Number of full-time equivalent employees                                |                                                   |                         | 20,150 |        |      |  | 21,000 |        |    |  | 22,100 |       |    |      | 19,450 |       |     |  | 20,900 |      






|    |                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------
|(1) | Includes all subscribers of Canal Digital, which we consolidated
    as a wholly-owned subsidiary starting on June 30, 2002.

DIVIDENDS AND DIVIDEND POLICY








| |   |                                                                                                   
| | - | --------------------------------------------------------------------------------------------------
| |  | annual profit according to the income statement approved for the
    preceding financial year, and
|
| |  | retained profit from previous years,                                                              



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|        |  |                  |       |  |       |  |     | 
|------- |  | ---------------- | ----- |  | ----- |  | --- | 
|        |  | Total            |      
|        |  | (in millions)(1) |      
|        |  |                  |      
|Year    |  | (NOK)            |       |  | (USD) | 
|        |  |                  |       |  |       | 
|2000    |  |                  | 532   |  |       |  | 60  | 
|2001    |  |                  | 621   |  |       |  | 69  | 
|2002    |  |                  | 799   |  |       |  | 115 | 
|2003    |  |                  | 1,764 |  |       |  | 265 | 
|2004(1) |  |                  | 2,603 |  |       |  | 428 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | A dividend of NOK 1.50 per share with respect to 2004 was
    proposed by our board of directors, due for acceptance by the
    corporate assembly and approval at the annual general meeting on
    May 20, 2005. The dividend, if approved by the general
    meeting and the corporate assembly, will be paid on June 6,
    2005 to the holders of record on May 20, 2005. The total
    amounts for 2004 do not include dividends on treasury shares as
    of December 31, 2004.





EXCHANGE RATES




|                        |  |         |        | 
|----------------------- |  | ------- | ------ | 
|Year ended December 31, |  | Average |       
|                        |  |         |       
|2000                    |  |         | 8.9363 | 
|2001                    |  |         | 9.0380 | 
|2002                    |  |         | 7.9253 | 
|2003                    |  |         | 7.0627 | 
|2004                    |  |         | 6.7241 | 



|              |  |     |        |  |      |  |        | 
|------------- |  | --- | ------ |  | ---- |  | ------ | 
|              |  | Low |        |  | High | 
|              |  |     |        |  |      | 
|November 2004 |  |     | 6.0927 |  |      |  | 6.4443 | 
|December      |  |     | 6.1551 |  |      |  | 6.2225 | 
|January 2005  |  |     | 6.1035 |  |      |  | 6.3558 | 
|February      |  |     | 6.2009 |  |      |  | 6.5602 | 
|March         |  |     | 6.0667 |  |      |  | 6.3888 | 
|April(1)      |  |     | 6.3134 |  |      |  | 6.4235 | 






|    |                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------
|(1) | Low and high noon buying rates for the period starting
    April 1, 2005 and ending on April 14, 2005.

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RISK FACTORS


Risks Related to Our Business


We face increasing competition in the Norwegian
telecommunications market which may result in further reductions
in tariffs and loss of market share and could affect our future
revenues and profitability.












If we fail to successfully develop and market new mobile
communications services, our ability to achieve further revenue
growth in mobile communications services in the Norwegian market
and the more mature international markets in which we operate
may be limited.




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Lack of control, or failure to increase our ownership and
thus gain control, over companies in which we have minority
interests, or disagreements with other principal shareholders,
may impede our strategic objectives.






The value of our international operations and investments
may be adversely affected by political, economic and legal
developments in foreign countries.




Increased exposure to currency exchange rate fluctuations
may have an adverse effect on our reported earnings and the
value of our international operations and investments.




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If we or international mobile operators in which we have
invested fail to obtain, or fail to enter into agreements to
utilize, licenses for third generation mobile services, we may
be unable to achieve further revenue growth in mobile
communications or to benefit from certain cost reductions
related to network improvements in our target markets.






| |   |                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to achieve further revenue growth in mobile communications, if
    demand for improved or new services and products, which will
    work better on UMTS networks, proves to be strong; and/or
|
| |  | to benefit from the low incremental costs of increases in UMTS
    network capacity compared to increases in GSM network capacity.                                                           

Continuing rapid changes in technologies could increase
competition or require us to make substantial additional
investments.




In-orbit satellite failure may result in lost revenues in
our satellite broadcasting business.




Actual or perceived health risks or other problems
relating to mobile handsets or transmission masts could lead to
decreased mobile communications usage.




Risks Related to Regulatory Matters


Increased regulation and changes in the regulatory
environment could adversely affect our business operations in
Norway.




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Existing and new regulatory requirements may impair our
flexibility in setting tariff structures, require us to further
reduce tariffs, provide advantages to our competitors or provide
grounds for legal proceedings against us.








The new regulatory framework in Norway, which is based on
EU telecommunications regulation, may impair our ability to
compete effectively in our existing or new markets.




Increased and unpredictable regulation of our
international mobile operations and investments and the lack of
institutional continuity and safeguards in certain of the
emerging market countries in which we operate could adversely
affect our competitive position, increase our costs of
regulatory compliance and adversely affect our results and
business prospects.






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Risks Related to Our Ownership by the Kingdom of Norway


We could be influenced by the Kingdom of Norway whose
interest may not always be aligned with the interests of our
other shareholders.




Risks Related to Our Ordinary Shares and the American
Depositary Shares


The price of our ordinary shares and ADSs may be volatile
and fluctuate significantly due to many factors, including
variations in our operating results and changes to the
regulatory environment.




An ADS holder may not be able to exercise voting rights as
readily as an ordinary shareholder.




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ITEM 4:  INFORMATION ON THE COMPANY


THE COMPANY










OVERVIEW






Mobile operations






| |   |                                                                                                 
| | - | ------------------------------------------------------------------------------------------------
| |  | a 100% ownership interest in Sonofon in Denmark, with
    1.29 million subscribers;             
|
| |  | a 100% ownership interest in Pannon GSM in Hungary, with
    2.77 million subscriptions;        
|
| |  | a 61% ownership interest in DiGi.Com in Malaysia, with
    3.24 million subscriptions;          
|
| |  | a 56.5% ownership interest in Kyivstar in Ukraine, with
    6.25 million subscriptions;         
|
| |  | a 62% ownership interest in GrameenPhone in Bangladesh, with
    2.39 million subscriptions; and
|
| |  | a 100% ownership interest in ProMonte GSM in Montenegro, with
    0.28 million subscriptions.   

15



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Telenor Fixed






Telenor Broadcast






Other Businesses




STRATEGY




16



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | To maintain and further develop our leading position within
    telecommunications in Norway with a broad range of services in
    both the residential and business markets and high market shares.                                                                                                                                                                                                                            
|
| |  | To realize synergies across the Nordic region, primarily with
    respect to our mobile operations, through our recently
    established Nordic unit, which comprises and coordinates our
    mobile and fixed operations in the Nordic region.                                                                                                                                                                                 
|
| |  | To ensure value creation in our mobile portfolio by maximizing
    cash flow in mature markets, securing continued subscriber
    growth in our international portfolio, with a particular
    emphasis on subscriber growth in emerging markets, and achieving
    control in order to benefit from synergies across our
    international and domestic operations and, as a result, to
    increase our overall profitability.
|
| |  | To continue to streamline our Nordic operations by improving
    their cost-efficiency and effectiveness in order to increase our
    attractiveness to customers.                                                                                                                                                                                                                                                              
|
| |  | To maintain and further develop a leading position within the
    Nordic TV distribution market.                                                                                                                                                                                                                                                                                                                                
|
| |  | To enhance the value of those companies which are not strategic
    for our main business areas and dispose of all or part of our
    interest in such companies.                                                                                                                                                                                                                                                               









To strengthen our position as an international mobile
operator.




To strengthen our position in the Nordic region.




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To be the leading provider of communications services in
Norway.




To continue to be the leading distributor of TV services
to consumers in the Nordic region.




Organization








MOBILE OPERATIONS


Overview


Definitions




Subscriptions.


Churn.


Telenor Mobile Operators




18



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| |   |                                                                                                                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | With effect from February 12, 2004, we acquired the
    remaining 46.5% ownership interest in Sonofon from Bell South,
    increasing our ownership interest from 53.5% to 100%.                                           
|
| |  | With effect from April 2, 2004, we acquired an additional
    1.16% ownership interest in Kyivstar, increasing our ownership
    interest from 55.35% to 56.51%.                                                           
|
| |  | In April 2004, following a government auction, our subsidiary
    Telenor Pakistan acquired one of two new national licenses for
    mobile telephony in Pakistan. Telenor Pakistan launched
    operations March 15, 2005.
|
| |  | With effect from August 12, 2004, we acquired the remaining
    55.9% ownership interest in ProMonte, increasing our ownership
    interest from 44.1% to 100%.                                                            
|
| |  | Between October 26, 2004 and December 27, 2004, we
    acquired an additional 11% ownership interest in GrameenPhone,
    increasing our ownership interest from 51% to 62%.                                               





|                                        |  |        |                    |                      |                  |  |                 |            |  |       |               |  |           |            |        |  |  |  |        | 
|--------------------------------------- |  | ------ | ------------------ | -------------------- | ---------------- |  | --------------- | ---------- |  | ----- | ------------- |  | --------- | ---------- | ------ |  |  |  | ------ | 
|                                        |  |        |                    | Date of Commencement |                  |  | Date of Initial |            |  | Total |               |  | Ownership |           
|Company                                 |  | Market |                    |                      | of Operations(1) |  |                 | Investment |  |       | Investment(2) |  |           | percentage |       
|                                        |  |        |                    |                      |                  |  |                 |            |  |       |               |  |           |            |       
|                                        |  |        |                    |                      |                  |  |                 | (NOK m)    |  |       |              
|Subsidiaries                            |  |        |                    |                      |                  |  |                 |            |  |       |               |  |           |            |        |  |  |  |        | 
|Telenor Mobil                           |  |        | Norway             |                      |                  |  | May 1993        |            |  |       |               |  |           |            |        |  |  |  | 100.00 | 
|Sonofon                                 |  |        | Denmark            |                      |                  |  | July 1992       |            |  |       | 2000          |  |           |            | 21,483 |  |  |  | 100.00 | 
|Telenor Mobile Sweden                   |  |        | Sweden             |                      |                  |  | June 2001       |            |  |       | 2001          |  |           |            | 713    |  |  |  | 100.00 | 
|Pannon GSM(3)                           |  |        | Hungary            |                      |                  |  | March 1994      |            |  |       | 1993          |  |           |            | 8,606  |  |  |  | 100.00 | 
|Kyivstar GSM                            |  |        | Ukraine            |                      |                  |  | October 1997    |            |  |       | 1998          |  |           |            | 1,115  |  |  |  | 56.51  | 
|DiGi.Com                                |  |        | Malaysia           |                      |                  |  | May 1995        |            |  |       | 1999          |  |           |            | 5,486  |  |  |  | 61.00  | 
|GrameenPhone                            |  |        | Bangladesh         |                      |                  |  | March 1997      |            |  |       | 1997          |  |           |            | 565    |  |  |  | 62.00  | 
|Telenor Pakistan                        |  |        | Pakistan           |                      |                  |  | March 2005      |            |  |       | 2004          |  |           |            | 1,128  |  |  |  | 100.00 | 
|ProMonte GSM                            |  |        | Montenegro         |                      |                  |  | July 1996       |            |  |       | 1996          |  |           |            | 563    |  |  |  | 100.00 | 
|Associated companies and Joint Ventures |  |        |                    |                      |                  |  |                 |            |  |       |               |  |           |            |        |  |  |  |        | 
|TAC(4)                                  |  |        | Thailand           |                      |                  |  | July 1992       |            |  |       | 2000          |  |           |            | 6,554  |  |  |  | 40.29  | 
|VimpelCom                               |  |        | Russia/ Kazakhstan |                      |                  |  | June 1994       |            |  |       | 1999          |  |           |            | 2,293  |  |  |  | 29.91  | 
|ONE                                     |  |        | Austria            |                      |                  |  | October 1998    |            |  |       | 1997          |  |           |            | 1,918  |  |  |  | 17.45  | 






|    |                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Dates company commenced operations to provide commercial mobile
    services.                                                                                                  
|   
|(2) | Total investment is stated as of December 31, 2004 and
    includes guarantees, capital contributions, loans and other
    advances.                                           
|   
|(3) | Our ownership interest in Pannon GSM includes both our direct
    investment in Pannon GSM and our indirect investment through our
    wholly-owned subsidiary Telenor Hungary.
|   
|(4) | Our ownership interest in TAC includes our direct ownership
    interest of 29.94% and our indirect interest of 10.35% held
    through our 24.85% shareholding in UCOM.       



19



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.


Alliances and Associations






20



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Customers




|                                           |  |        |            |           |                |  |              |                  |  |             |               |           |               |           |        |         |       |  |     |  |  |  |     | 
|------------------------------------------ |  | ------ | ---------- | --------- | -------------- |  | ------------ | ---------------- |  | ----------- | ------------- | --------- | ------------- | --------- | ------ | ------- | ----- |  | --- |  |  |  | --- | 
|                                           |  |        |            | Mobile    |                |  | Market Share |                  |  |             |               | Growth in |               |           |       
|                                           |  |        |            | Telephony |                |  | Based on     |                  |  | Total       |               |           | Subscriptions |           |        | Prepaid |      
|Company                                    |  | Market |            |           | Penetration(1) |  |              | Subscriptions(1) |  |             | Subscriptions |           |               | From 2003 |        |         | Share | 
|                                           |  |        |            |           |                |  |              |                  |  |             |               |           |               |           |        |         |       | 
|                                           |  |        |            | (%)       |                |  | (%)          |                  |  | (thousands) |               |           | (%)           |           |        | (%)     |      
|Subsidiaries                               |  |        |            |           |                |  |              |                  |  |             |               |           |               |           |        |         |       |  |     |  |  |  |     | 
|Telenor Mobil                              |  |        | Norway     |           |                |  | 102          |                  |  |             | 56            |           |               |           | 2,645  |         |       |  | 12  |  |  |  | 46  | 
|Sonofon                                    |  |        | Denmark    |           |                |  | 88           |                  |  |             | 27            |           |               |           | 1,286  |         |       |  | 27  |  |  |  | 36  | 
|Telenor Mobile                             |  |        |            |           |                |  |              |                  |  |             |               |           |               |           |        |         |       |  |     |  |  |  |     | 
|Sweden                                     |  |        | Sweden     |           |                |  | 105          |                  |  |             | 1             |           |               |           | 105    |         |       |  | 30  |  |  |  | 54  | 
|Pannon GSM                                 |  |        | Hungary    |           |                |  | 80           |                  |  |             | 34            |           |               |           | 2,770  |         |       |  | 6   |  |  |  | 72  | 
|DiGi.Com                                   |  |        | Malaysia   |           |                |  | 57           |                  |  |             | 22            |           |               |           | 3,242  |         |       |  | 47  |  |  |  | 95  | 
|Kyivstar GSM                               |  |        | Ukraine    |           |                |  | 29           |                  |  |             | 45            |           |               |           | 6,252  |         |       |  | 106 |  |  |  | 88  | 
|GrameenPhone                               |  |        | Bangladesh |           |                |  | 2.8          |                  |  |             | 62            |           |               |           | 2,388  |         |       |  | 109 |  |  |  | 88  | 
|Telenor Pakistan                           |  |        | Pakistan   |           |                |  | 5.2          |                  |  |             | n/a           |           |               |           | n/a    |         |       |  | n/a |  |  |  | n/a | 
|ProMonte GSM                               |  |        | Montenegro |           |                |  | 78           |                  |  |             | 58            |           |               |           | 279    |         |       |  | 16  |  |  |  | 84  | 
|Associated companies and Joint Ventures(2) |  |        |            |           |                |  |              |                  |  |             |               |           |               |           |        |         |       |  |     |  |  |  |     | 
|TAC                                        |  |        | Thailand   |           |                |  | 43           |                  |  |             | 29            |           |               |           | 7,786  |         |       |  | 19  |  |  |  | 84  | 
|VimpelCom(3)                               |  |        | Russia     |           |                |  | 51           |                  |  |             | 35            |           |               |           | 25,724 |         |       |  | 147 |  |  |  | 91  | 
|                                           |  |        | Kazakhstan |           |                |  | 18           |                  |  |             | 31            |           |               |           | 859    |         |       |  | 92  |  |  |  | 13  | 
|ONE                                        |  |        | Austria    |           |                |  | 91           |                  |  |             | 20            |           |               |           | 1,502  |         |       |  | 5   |  |  |  | 44  | 






|    |                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Based on our and the local regulatory authorities
    estimates unless otherwise stated.                                                  
|   
|(2) | All information for associated companies and joint ventures is
    based on figures published by the companies unless otherwise
    stated.
|   
|(3) | Source: iKS-Consulting                                                                                                                     

Licenses and Networks




|              |  |          |          |  |              |         |               |         |            |  |      |         |  |          |      |  |  |  |        | 
|------------- |  | -------- | -------- |  | ------------ | ------- | ------------- | ------- | ---------- |  | ---- | ------- |  | -------- | ---- |  |  |  | ------ | 
|              |  |          |          |  |              |         |               | Licence |            |  |     
|              |  |          |          |  |              | Licence |               |         | Expiration |  |      | Licence | 
|Company       |  | Licences |          |  | Network Type |         |               | Granted |            |  | Date |         |  | Duration |     
|              |  |          |          |  |              |         |               |         |            |  |      |         |  |          |     
|Telenor Mobil |  |          | GSM 900  |  |              |         | GSM/GPRS/EDGE |         |            |  | 1992 |         |  |          | 2005 |  |  |  | 13 yrs | 
|              |  |          | GSM 900  |  |              |         |               |         |            |  | 2001 |         |  |          | 2013 |  |  |  | 12 yrs | 
|              |  |          | GSM 1800 |  |              |         |               |         |            |  | 1998 |         |  |          | 2010 |  |  |  | 12 yrs | 
|              |  |          | UMTS     |  |              |         | W-CDMA        |         |            |  | 2000 |         |  |          | 2012 |  |  |  | 12 yrs | 
|Sonofon       |  |          | GSM 900  |  |              |         | GSM/GPRS      |         |            |  | 1997 |         |  |          | 2012 |  |  |  | 15 yrs | 
|              |  |          | GSM 1800 |  |              |         |               |         |            |  | 1997 |         |  |          | 2007 |  |  |  | 10 yrs | 
|Pannon GSM    |  |          | GSM 900  |  |              |         | GSM/GPRS/EDGE |         |            |  | 1993 |         |  |          | 2008 |  |  |  | 15 yrs | 
|              |  |          | GSM 1800 |  |              |         |               |         |            |  | 1999 |         |  |          | 2014 |  |  |  | 15 yrs | 
|              |  |          | UMTS     |  |              |         | W-CDMA        |         |            |  | 2004 |         |  |          | 2019 |  |  |  | 15 yrs | 
|Kyivstar GSM  |  |          | GSM 900  |  |              |         | GSM/GPRS      |         |            |  | 1997 |         |  |          | 2012 |  |  |  | 15 yrs | 
|              |  |          | GSM 1800 |  |              |         |               |         |            |  | 2001 |         |  |          | 2016 |  |  |  | 15 yrs | 
|DiGi.Com(1)   |  |          | GSM 1800 |  |              |         | GSM/GPRS/EDGE |         |            |  | 2000 |         |  |          | 2015 |  |  |  | 15 yrs | 
|              |  |          | EGSM     |  |              |         |               |         |            |  |      |         |  |          |      |  |  |  |        | 
|GrameenPhone  |  |          | GSM 900  |  |              |         | GSM           |         |            |  | 1996 |         |  |          | 2011 |  |  |  | 15 yrs | 
|              |  |          | GSM 1800 |  |              |         |               |         |            |  |      |         |  |          |      |  |  |  |        | 

21



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|                 |                                    |          |          |              |              |         |           |          |            |  |      |         |  |          |      |      |  |                       |        |        | 
|---------------- | ---------------------------------- | -------- | -------- | ------------ | ------------ | ------- | --------- | -------- | ---------- |  | ---- | ------- |  | -------- | ---- | ---- |  | --------------------- | ------ | ------ | 
|                 |                                    |          |          |              |              |         |           | Licence  |            |  |     
|                 |                                    |          |          |              |              | Licence |           |          | Expiration |  |      | Licence | 
|Company          |                                    | Licences |          |              | Network Type |         |           | Granted  |            |  | Date |         |  | Duration |     
|                 |                                    |          |          |              |              |         |           |          |            |  |      |         |  |          |     
|Telenor Pakistan |                                    |          | GSM 900  |              |              |         | GSM/GPRS/ |          |            |  | 2004 |         |  |          | 2019 |      |  |                       | 15 yrs |       
|                 |                                    |          | GSM 1800 |              |              |         |           |          |            |  | 2004 |         |  |          | 2019 |      |  |                       | 15 yrs |       
|VimpelCom:(2)    |                                    |          |          |              |              |         |           |          |            |  |      |         |  |          |      |      |  |                       |        |       
|                 | Moscow region                      |          |          | GSM 900/1800 |              |         |           | GSM/GPRS |            |  |      | 1998    |  |          |      | 2008 |  |                       |        | 10 yrs | 
|                 | Center region                      |          |          | GSM 900/1800 |              |         |           |          |            |  |      | 2000    |  |          |      | 2008 |  |                       |        | 8 yrs  | 
|                 | Volga region                       |          |          | GSM 900/1800 |              |         |           |          |            |  |      | 2000    |  |          |      | 2008 |  |                       |        | 8 yrs  | 
|                 | North-Caucasus region              |          |          | GSM 900/1800 |              |         |           |          |            |  |      | 2000    |  |          |      | 2008 |  |                       |        | 8 yrs  | 
|                 | Siberia region                     |          |          | GSM 900/1800 |              |         |           |          |            |  |      | 2000    |  |          |      | 2008 |  |                       |        | 8 yrs  | 
|                 | North and North-west region        |          |          | GSM 900/1800 |              |         |           |          |            |  |      | 2002    |  |          |      | 2012 |  |                       |        | 10 yrs | 
|                 | Ural region                        |          |          | GSM 900/1800 |              |         |           |          |            |  |      | 2002    |  |          |      | 2012 |  |                       |        | 10 yrs | 
|                 | Ural Region (whole Ural territory) |          |          | GSM 1800     |              |         |           |          |            |  |      | 2002    |  |          |      | 2012 |  |                       |        | 11 yrs | 
|                 | Khabarovskiy region                |          |          | GSM 1800     |              |         |           |          |            |  |      | 2002    |  |          |      | 2012 |  |                       |        | 10 yrs | 
|                 | Amurskaya region                   |          |          | GSM 1800     |              |         |           |          |            |  |      | 2002    |  |          |      | 2012 |  |                       |        | 10 yrs | 
|                 | Kamchatskaya region                |          |          | GSM 1800     |              |         |           |          |            |  |      | 2002    |  |          |      | 2012 |  |                       |        | 10 yrs | 
|                 | Armur GSM 1800                     |          |          | GSM 1800     |              |         |           |          |            |  |      | 2002    |  |          |      | 2012 |  |                       |        | 10 yrs | 
|                 | Kaliningrad GSM 900                |          |          | GSM 900      |              |         |           |          |            |  |      | 1996    |  |          |      | 2006 |  |                       |        | 10 yrs | 
|                 | Kazakhstan                         |          |          | GSM 900      |              |         |           |          |            |  |      | 1998    |  |          |      | 2013 |  |                       |        | 15 yrs | 
|TAC(3)           |                                    |          | AMPS 800 |              |              |         | AMPS      |          |            |  | 1990 |         |  |          | 2018 |      |  | Extended 1996 to 2018
|                 |                                    |          | GSM 1800 |              |              |         | GSM/GPRS  |          |            |  | 1990 |         |  |          | 2018 |      |  |                       |        |       
|ProMonte         |                                    |          | GSM 900  |              |              |         | GSM/GPRS  |          |            |  | 2002 |         |  |          | 2017 |      |  |                       | 15 yrs |       
|                 |                                    |          | GSM 1800 |              |              |         |           |          |            |  | 2002 |         |  |          | 2017 |      |  |                       | 15 yrs |       
|One              |                                    |          | GSM 1800 |              |              |         | GSM/GPRS  |          |            |  | 1997 |         |  |          | 2017 |      |  |                       | 20 yrs |       
|                 |                                    |          | UMTS     |              |              |         | W-CDMA    |          |            |  | 2000 |         |  |          | 2020 |      |  |                       | 20 yrs |       






|    |                                                                                                                                                 
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Rather than a license, DiGi.Com holds the the right to operate a
    mobile network (Spectrum allocation)                                     
|   
|(2) | In addition, VimpelCom also holds AMPS/ D-AMPS in eight regions
    (Kaluga, Novosibirsk, Orenburg, Ryazan, Samara, Tver, Vladimir,
    Vologda)
|   
|(3) | Rather than a license, TAC has the right to operate a mobile
    network pursuant to a concession                                               

GSM




UMTS




22



---



##### Table of Contents





Wireless LAN




Network Development








Products and services




Voice services






23



---



##### Table of Contents





Data services


SMS and MMS.


Content services.


Internet/intranet access.


mCommerce.


Interconnection




International Roaming




Wholesale services




24



---



##### Table of Contents





Marketing






Consolidated Subsidiaries


Telenor Mobil  Norway








Products and services






25



---



##### Table of Contents





Marketing and distribution








Customers


Retail








|                                                  |          |                        |      |       |       |  |      |       |       |  |      |       |       | 
|------------------------------------------------- | -------- | ---------------------- | ---- | ----- | ----- |  | ---- | ----- | ----- |  | ---- | ----- | ----- | 
|                                                  |          | Year ended December 31 |     
|                                                  |          |                        |     
|                                                  |          | 2002                   |      |       | 2003  |  |      | 2004  |      
|                                                  |          |                        |      |       |       |  |      |       |      
|Mobile subscriptions (period end, 000s):          |          |                        |      |       |       |  |      |       |       |  |      |      
|Digital                                           |          |                        |      |       |       |  |      |       |       |  |      |      
|                                                  | Contract |                        |      | 1,215 |       |  |      | 1,228 |       |  |      | 1,395 |      
|                                                  | Prepaid  |                        |      | 1,115 |       |  |      | 1,099 |       |  |      | 1,228 |      
|Analog                                            |          |                        | 52   |       |       |  | 37   |       |       |  | 22   |      
|                                                  |          |                        |      |       |       |  |      |       |      
|                                                  |          | Total                  |      |       | 2,382 |  |      |       | 2,364 |  |      |       | 2,645 | 
|                                                  |          |                        |      |       |       |  |      |       |      
|Subscriptions through service providers and MVNOs |          |                        | 306  |       |       |  | 487  |       |       |  | 540  |      
|Mobile Telephony Penetration in Norway            |          |                        | 85   | %     |       |  | 90   | %     |       |  | 102  | %    
|Churn rates for contract subscriptions            |          |                        | 17.5 | %     |       |  | 21.4 | %     |       |  | 15.2 | %    

26



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Wholesale






Traffic




|                                                                                     |  |      |       |  |      |  |       |      |  |  |       | 
|------------------------------------------------------------------------------------ |  | ---- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                                                                     |  | 2002 |       |  | 2003 |  |       | 2004 | 
|                                                                                     |  |      |       |  |      |  |       |      | 
|Traffic:                                                                             |  |      |       |  |      |  |       |      |  |  |       | 
|Digital                                                                              |  |      |       |  |      |  |       |      |  |  |       | 
|Total outgoing traffic (in million of minutes)                                       |  |      | 2,986 |  |      |  | 3,083 |      |  |  | 3,478 | 
|Total incoming traffic (in million of minutes)                                       |  |      | 1,974 |  |      |  | 2,100 |      |  |  | 2,223 | 
|Average monthly incoming and outgoing traffic (minutes per
    digital subscription) |  |      | 180   |  |      |  | 188   |      |  |  | 195   | 
|Number of outgoing SMS, MMS and content messages (in millions)                       |  |      | 1,692 |  |      |  | 1,926 |      |  |  | 2,165 | 
|Analog                                                                               |  |      |       |  |      |  |       |      |  |  |       | 
|Total outgoing traffic (in million of minutes)                                       |  |      | 47    |  |      |  | 36    |      |  |  | 23    | 
|Total incoming traffic (in million of minutes)                                       |  |      | 20    |  |      |  | 14    |      |  |  | 9     | 

Competition








27



---



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Regulatory




ex ante




Sonofon  Denmark




Products and services






Marketing and distribution






28



---



##### Table of Contents



Customers




|                                         |                                         |                         |      |     |       |  |      |         |       |  |      |     |       | 
|---------------------------------------- | --------------------------------------- | ----------------------- | ---- | --- | ----- |  | ---- | ------- | ----- |  | ---- | --- | ----- | 
|                                         |                                         | Year ended December 31  |     
|                                         |                                         |                         |     
|                                         |                                         | 2002                    |      |     | 2003  |  |      | 2004(1) |      
|                                         |                                         |                         |      |     |       |  |      |         |      
|Mobile subscriptions (period end, 000s): |                                         |                         |      |     |       |  |      |         |       |  |      |    
|Digital                                  |                                         |                         |      |     |       |  |      |         |       |  |      |    
|                                         | Contract                                |                         |      | 855 |       |  |      | 772     |       |  |      | 824 |      
|                                         | Prepaid                                 |                         |      | 186 |       |  |      | 238     |       |  |      | 462 |      
|                                         |                                         |                         |      |     |       |  |      |         |      
|                                         |                                         | Total own subscriptions |      |     | 1,041 |  |      |         | 1,010 |  |      |     | 1,286 | 
|                                         |                                         |                         |      |     |       |  |      |         |      
|                                         | Subscriptions through service providers |                         |      | 155 |       |  |      | 407     |       |  |      | 185 |      
|                                         | Fixed-line customers                    |                         |      | 495 |       |  |      | 448     |       |  |      | 461 |      
|Mobile Telephony Penetration in Denmark  |                                         |                         | 74   | %   |       |  | 82   | %       |       |  | 88   | %  
|Churn rates for contract subscriptions   |                                         |                         | 24.1 | %   |       |  | 38.6 | %       |       |  | 33.1 | %  






|    |                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The number of subscribers as at December 31, 2004 includes
    subscribers of CBB Mobil, a service provider which Sonofon
    purchased on April 30, 2004. CBB Mobil continues to operate
    as an independent company with its own name and brand.



Traffic




|                                                                                       |  |      |       |  |      |  |       |         |  |  |       | 
|-------------------------------------------------------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ------- |  |  | ----- | 
|                                                                                       |  | 2002 |       |  | 2003 |  |       | 2004(1) | 
|                                                                                       |  |      |       |  |      |  |       |         | 
|GSM                                                                                    |  |      |       |  |      |  |       |         |  |  |       | 
|Traffic:                                                                               |  |      |       |  |      |  |       |         |  |  |       | 
|Total outgoing traffic (in millions of minutes)                                        |  |      | 1,027 |  |      |  | 1,093 |         |  |  | 1,192 | 
|Total incoming traffic (in millions of minutes)                                        |  |      | 694   |  |      |  | 701   |         |  |  | 826   | 
|Average monthly incoming and outgoing traffic 
    (minutes per digital subscription) |  |      | 171   |  |      |  | 173   |         |  |  | 179   | 
|Number of outgoing SMS and content messages (in millions)                              |  |      | 536   |  |      |  | 809   |         |  |  | 1,273 | 






|    |                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Data for 2004 includes traffic generated by subscribers to CBB
    Mobil subsequent to Sonofons acquisition of CBB Mobil on
    April 30, 2004

Competition






29



---



##### Table of Contents



Regulatory issues












Telenor Mobile Sweden  Sweden






Products and Services




30



---



##### Table of Contents



Customers




Traffic




|                                                                                       |  |      |    |  |      |  |      |      |  |  |      | 
|-------------------------------------------------------------------------------------- |  | ---- | -- |  | ---- |  | ---- | ---- |  |  | ---- | 
|                                                                                       |  | 2002 |    |  | 2003 |  |      | 2004 | 
|                                                                                       |  |      |    |  |      |  |      |      | 
|GSM                                                                                    |  |      |    |  |      |  |      |      |  |  |      | 
|Traffic:                                                                               |  |      |    |  |      |  |      |      |  |  |      | 
|Total outgoing traffic (in millions of minutes)                                        |  |      | 29 |  |      |  | 28.2 |      |  |  | 56.8 | 
|Total incoming traffic (in millions of minutes)                                        |  |      | 0  |  |      |  | 11.7 |      |  |  | 60.3 | 
|Average monthly incoming and outgoing traffic 
    (minutes per digital subscription) |  |      |   |  |      |  | 49   |      |  |  | 111  | 
|Number of outgoing SMS (in millions)                                                   |  |      | 10 |  |      |  | 13   |      |  |  | 26   | 

Competition






Regulatory issues




Pannon GSM  Hungary




Products and services




31



---



##### Table of Contents





Marketing and distribution






Customers




|                                         |          |                        |    |       |       |  |    |       |       |  |    |       |       | 
|---------------------------------------- | -------- | ---------------------- | -- | ----- | ----- |  | -- | ----- | ----- |  | -- | ----- | ----- | 
|                                         |          | Year ended December 31 |   
|                                         |          |                        |   
|                                         |          | 2002                   |    |       | 2003  |  |    | 2004  |      
|                                         |          |                        |    |       |       |  |    |       |      
|Mobile subscriptions (period end, 000s): |          |                        |    |       |       |  |    |       |       |  |    |      
|                                         | Contract |                        |    | 540   |       |  |    | 595   |       |  |    | 779   |      
|                                         | Prepaid  |                        |    | 1,910 |       |  |    | 2,023 |       |  |    | 1,991 |      
|                                         |          |                        |    |       |       |  |    |       |      
|                                         |          | Total                  |    |       | 2,450 |  |    |       | 2,618 |  |    |       | 2,770 | 
|                                         |          |                        |    |       |       |  |    |       |      
|Mobile Telephony Penetration in Hungary  |          |                        | 63 | %     |       |  | 73 | %     |       |  | 80 | %    

Network




Competition




Regulatory issues


Significant market power.




32



---



##### Table of Contents







USF contributions




Termination charges




GVH investigation.




33



---



##### Table of Contents



DiGi.Com  Malaysia




Products and Services






Marketing and Distribution




Customers




|                                         |          |                        |    |       |       |  |    |       |       |  |    |       |       | 
|---------------------------------------- | -------- | ---------------------- | -- | ----- | ----- |  | -- | ----- | ----- |  | -- | ----- | ----- | 
|                                         |          | Year ended December 31 |   
|                                         |          |                        |   
|                                         |          | 2002                   |    |       | 2003  |  |    | 2004  |      
|                                         |          |                        |    |       |       |  |    |       |      
|Mobile subscriptions (period end, 000s): |          |                        |    |       |       |  |    |       |       |  |    |      
|                                         | Contract |                        |    | 97    |       |  |    | 106   |       |  |    | 175   |      
|                                         | Prepaid  |                        |    | 1,519 |       |  |    | 2,101 |       |  |    | 3,067 |      
|                                         |          |                        |    |       |       |  |    |       |      
|                                         |          | Total                  |    |       | 1,616 |  |    |       | 2,207 |  |    |       | 3,242 | 
|                                         |          |                        |    |       |       |  |    |       |      
|Mobile Telephony Penetration in Malaysia |          |                        | 37 | %     |       |  | 44 | %     |       |  | 57 | %    

Competition




34



---



##### Table of Contents







Regulatory issues






Kyivstar  Ukraine








Products and services




Marketing and distribution




35



---



##### Table of Contents





Customers




|                                         |          |                        |   |       |       |  |    |       |       |  |    |       |       | 
|---------------------------------------- | -------- | ---------------------- | - | ----- | ----- |  | -- | ----- | ----- |  | -- | ----- | ----- | 
|                                         |          | Year ended December 31 |  
|                                         |          |                        |  
|                                         |          | 2002                   |   |       | 2003  |  |    | 2004  |      
|                                         |          |                        |   |       |       |  |    |       |      
|Mobile subscriptions (period end, 000s): |          |                        |   |       |       |  |    |       |       |  |    |      
|                                         | Contract |                        |   | 384   |       |  |    | 534   |       |  |    | 720   |      
|                                         | Prepaid  |                        |   | 1,472 |       |  |    | 2,503 |       |  |    | 5,532 |      
|                                         |          |                        |   |       |       |  |    |       |      
|                                         |          | Total                  |   |       | 1,856 |  |    |       | 3,037 |  |    |       | 6,252 | 
|                                         |          |                        |   |       |       |  |    |       |      
|Mobile Telephony Penetration in Ukraine  |          |                        | 8 | %     |       |  | 14 | %     |       |  | 29 | %    



Traffic




Competition








Regulatory issues




36



---



##### Table of Contents



Legal proceedings




GrameenPhone  Bangladesh






Product and services






Marketing and distribution




Customers




|                                           |          |                        |     |     |      |  |     |      |       |  |     |       |       | 
|------------------------------------------ | -------- | ---------------------- | --- | --- | ---- |  | --- | ---- | ----- |  | --- | ----- | ----- | 
|                                           |          | Year ended December 31 |    
|                                           |          |                        |    
|                                           |          | 2002                   |     |     | 2003 |  |     | 2004 |      
|                                           |          |                        |     |     |      |  |     |      |      
|Mobile subscriptions (period end, 000s):   |          |                        |     |     |      |  |     |      |       |  |     |      
|                                           | Contract |                        |     | 206 |      |  |     | 242  |       |  |     | 296   |      
|                                           | Prepaid  |                        |     | 563 |      |  |     | 899  |       |  |     | 2,092 |      
|                                           |          |                        |     |     |      |  |     |      |      
|                                           |          | Total                  |     |     | 769  |  |     |      | 1,141 |  |     |       | 2,388 | 
|                                           |          |                        |     |     |      |  |     |      |      
|Mobile Telephony Penetration in Bangladesh |          |                        | 0.9 | %   |      |  | 1.3 | %    |       |  | 2.8 | %    

37



---



##### Table of Contents



Traffic




Competitors




Regulatory issues






Telenor Pakistan  Pakistan


Overview








38



---



##### Table of Contents



Regulatory issues












ProMonte GSM  Montenegro






39



---



##### Table of Contents



Products and services






Marketing and distribution




Customers






|                                           |          |                        |    |     |      |  |    |      |     |  |    |     |     | 
|------------------------------------------ | -------- | ---------------------- | -- | --- | ---- |  | -- | ---- | --- |  | -- | --- | --- | 
|                                           |          | Year ended December 31 |   
|                                           |          |                        |   
|                                           |          | 2002                   |    |     | 2003 |  |    | 2004 |    
|                                           |          |                        |    |     |      |  |    |      |    
|Mobile subscriptions (period end, 000s):   |          |                        |    |     |      |  |    |      |     |  |    |    
|                                           | Contract |                        |    | 47  |      |  |    | 46   |     |  |    | 44  |    
|                                           | Prepaid  |                        |    | 223 |      |  |    | 207  |     |  |    | 235 |    
|                                           |          |                        |    |     |      |  |    |      |    
|                                           |          | Total                  |    |     | 260  |  |    |      | 253 |  |    |     | 279 | 
|                                           |          |                        |    |     |      |  |    |      |    
|Mobile Telephony Penetration in Montenegro |          |                        | 63 | %   |      |  | 69 | %    |     |  | 78 | %  

Competition




 


Associated Companies and Joint Ventures


Total Access Communication PCL and United Communication
Industry PCL  Thailand




40



---



##### Table of Contents



Products and Services




Marketing and Distribution




Customers






|                                         |          |                        |    |       |       |  |    |       |       |  |    |       |       | 
|---------------------------------------- | -------- | ---------------------- | -- | ----- | ----- |  | -- | ----- | ----- |  | -- | ----- | ----- | 
|                                         |          | Year ended December 31 |   
|                                         |          |                        |   
|                                         |          | 2002                   |    |       | 2003  |  |    | 2004  |      
|                                         |          |                        |    |       |       |  |    |       |      
|Mobile subscriptions (period end, 000s): |          |                        |    |       |       |  |    |       |       |  |    |      
|                                         | Contract |                        |    | 1,250 |       |  |    | 1,167 |       |  |    | 1,277 |      
|                                         | Prepaid  |                        |    | 4,204 |       |  |    | 5,383 |       |  |    | 6,509 |      
|                                         |          |                        |    |       |       |  |    |       |      
|                                         |          | Total                  |    |       | 5,454 |  |    |       | 6,550 |  |    |       | 7,786 | 
|                                         |          |                        |    |       |       |  |    |       |      
|Mobile Telephony Penetration in Thailand |          |                        | 29 | %     |       |  | 35 | %     |       |  | 43 | %    

Competition






Seconded personnel




Regulatory Issues




41



---



##### Table of Contents











VimpelCom  Russia and Kazakhstan






|                                         |  |                    |        |  |                  |  |        | 
|---------------------------------------- |  | ------------------ | ------ |  | ---------------- |  | ------ | 
|                                         |  | Economic ownership |        |  | Voting ownership | 
|                                         |  |                    |        |  |                  | 
|Alfa Telecom                             |  |                    | 24.50% |  |                  |  | 32.91% | 
|Telenor (through Telenor East Invest AS) |  |                    | 29.91% |  |                  |  | 26.58% | 

Mergers and acquisitions






42



---



##### Table of Contents







Products and services












Marketing and distribution








43



---



##### Table of Contents



Customers and Competition




|                                            |          |                        |      |       |       |  |      |        |        |  |      |        |        | 
|------------------------------------------- | -------- | ---------------------- | ---- | ----- | ----- |  | ---- | ------ | ------ |  | ---- | ------ | ------ | 
|                                            |          | Year ended December 31 |     
|                                            |          |                        |     
|                                            |          | 2002                   |      |       | 2003  |  |      | 2004   |       
|                                            |          |                        |      |       |       |  |      |        |       
|Mobile subscriptions (period end, 000s):(1) |          |                        |      |       |       |  |      |        |        |  |      |       
|                                            | Contract |                        |      | 725   |       |  |      | 820    |        |  |      | 3,184  |       
|                                            | Prepaid  |                        |      | 4,428 |       |  |      | 10,617 |        |  |      | 23,399 |       
|                                            |          |                        |      |       |       |  |      |        |       
|                                            |          | Total                  |      |       | 5,153 |  |      |        | 11,437 |  |      |        | 26,583 | 
|                                            |          |                        |      |       |       |  |      |        |       
|Mobile Telephony Penetration in Russia      |          |                        | 12   | %     |       |  | 25   | %      |        |  | 51   | %     
|Churn rates                                 |          |                        | 30.8 | %     |       |  | 39.3 | %      |        |  | 29.6 | %     






|    |                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------
|(1) | Figures are based on 6 months churn for prepaid and include
    subscriptions in Kazakhstan as of the end of 2004











Seconded personnel




Regulatory issues


Regulatory Environment




44



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##### Table of Contents





Licensing issues








Numbering capacity




Tax issues




45



---



##### Table of Contents







Other litigation








46



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##### Table of Contents





ONE  Austria






TELENOR FIXED






| |   |                                                                                     
| | - | ------------------------------------------------------------------------------------
| |  | analog (PSTN) and digital (ISDN) fixed line telephony
    services;                 
|
| |  | Internet access via PSTN/ ISDN and asynchronous digital
    subscriber lines (ADSL);
|
| |  | value-added services; and                                                           
|
| |  | leased lines.                                                                       





Overview and Background


Fixed Norway




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Residential market.We provide traditional analog voice
    telephony services on a public switched telephone network
    (PSTN) and digital fixed telephony service on an integrated
    services digital network (ISDN). We also provide narrowband
    (PSTN/ ISDN) and broadband (ADSL) Internet access and
    services to homes across Norway. At December 31, 2004, we
    had approximately 1,001,000 analog subscriptions and 371,000
    ISDN basic rate access subscriptions for telephony services. We
    also had 527,000 Internet access subscriptions in the
    residential market, comprising 241,000 narrowband (ISDN/ PSTN)
    subscribers and 286,000 broadband (ADSL) subscribers.
|
| |  | Business market.We provide our business customers, which
    include a number of public sector entities, with traditional
    analog and ISDN voice telephony services, Internet access DSL,
    both asymmetric (ADSL) and symmetric (SHDSL), and leased
    lines services. At December 31, 2004, we had approximately
    181,000 analog subscriptions and 239,000 basic rate and 8,000
    primary rate ISDN subscriptions for telephony services. We also
    had 40,000 subscriptions for Internet access via DSL in this
    market. In addition, we provide integrated voice and data
    telecommunications, access and                                                                        

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | network services to the business market in Norway. These
    integrated services include advanced network services, Internet
    Protocol (IP) based communication services, including
    Internet access and IP-based Virtual Private Networks, data
    communication services, telephone-based customer contact
    solutions, messaging, hosting solutions and value-added voice
    services.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | Wholesale market.We provide a range of interconnection
    and capacity services, including leased lines, in the Norwegian
    market. Our interconnection and capacity services allow other
    network operators, Internet service providers and other service
    providers to connect to our network or use our infrastructure in
    order to facilitate their own service offerings. We also provide
    international operators with transit and capacity services for
    international voice and data traffic into or through Norway. We
    provide unbundled telephony access (PSTN and ISDN) and DSL
    access (ADSL and SHDSL), to other operators and service
    providers. Further, we provide local loop unbundling
    (LLUB) and shared access to the local loop, which enables
    other operators able to provide end users with broadband.

Fixed Sweden




Fixed Norway


Overview












48



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##### Table of Contents





Retail Markets


Residential Market




Services




Analog (PSTN).


ISDN.


ADSL.


Value-added services.


Fees and tariffs


Familie & Venner






49



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##### Table of Contents



Subscriptions




|                    |                             |                    |       |       |      |  |       |       |  |  |       |       | 
|------------------- | --------------------------- | ------------------ | ----- | ----- | ---- |  | ----- | ----- |  |  | ----- | ----- | 
|                    |                             | As of December 31, |      
|                    |                             |                    |      
|                    |                             | 2002               |       |       | 2003 |  |       | 2004  | 
|                    |                             |                    |       |       |      |  |       |       | 
|                    |                             | (in thousands)     |      
|Telephony           |                             |                    |       |       |      |  |       |       |  |  |       |      
|                    | Analog (PSTN)               |                    |       | 1,210 |      |  |       | 1,096 |  |  |       | 1,001 | 
|                    | Digital (ISDN)(1)           |                    |       | 500   |      |  |       | 454   |  |  |       | 371   | 
|Total Subscriptions |                             |                    | 1,710 |       |      |  | 1,550 |       |  |  | 1,371 |      
|Internet Access     |                             |                    |       |       |      |  |       |       |  |  |       |      
|                    | PSTN/ ISDN access (dial-up) |                    |       | 377   |      |  |       | 294   |  |  |       | 241   | 
|                    | ADSL access                 |                    |       | 90    |      |  |       | 163   |  |  |       | 286   | 
|Total Subscriptions |                             |                    | 467   |       |      |  | 457   |       |  |  | 527   |      






|    |                                                                                             
|--- | --------------------------------------------------------------------------------------------
|(1) | Each digital (ISDN) subscription in the residential market
    provides two access channels.



Traffic




|                                                                           |  |                         |        |   |                     |  |        |      |  |  |           |   |  |           |       |   |  |  |       |  
|-------------------------------------------------------------------------- |  | ----------------------- | ------ | - | ------------------- |  | ------ | ---- |  |  | --------- | - |  | --------- | ----- | - |  |  | ----- | -
|                                                                           |  | Year ended December 31, |        |   | Increase (decrease) | 
|                                                                           |  |                         |        |   |                     | 
|                                                                           |  | 2002                    |        |   | 2003                |  |        | 2004 |  |  | 2003/2002 |   |  | 2004/2003 |      
|                                                                           |  |                         |        |   |                     |  |        |      |  |  |           |   |  |           |      
|                                                                           |  |                         |        |   |                     |  |        | %    |  |  | %         |  
|Traffic (millions of minutes):                                             |  |                         |        |   |                     |  |        |      |  |  |           |   |  |           |       |   |  |  |       |  
|National calls (excluding Internet traffic and calls to mobile
    phones) |  |                         | 5,835  |   |                     |  | 5,202  |      |  |  | 4,654     |   |  |           | (10.8 | ) |  |  | (10.5 | )
|Internet traffic                                                           |  |                         | 3,812  |   |                     |  | 3,323  |      |  |  | 2,605     |   |  |           | (13.0 | ) |  |  | (21,6 | )
|Calls to mobile phones                                                     |  |                         | 889    |   |                     |  | 847    |      |  |  | 810       |   |  |           | (4.7  | ) |  |  | (4.4  | )
|International                                                              |  |                         | 225    |   |                     |  | 207    |      |  |  | 193       |   |  |           | (8.0  | ) |  |  | (6,8  | )
|Other                                                                      |  |                         | 472    |   |                     |  | 520    |      |  |  | 529       |   |  |           | 10.2  |   |  |  | 1,7   |  
|                                                                           |  |                         |        |   |                     |  |        |      |  |  |           |   |  |           |      
|Total                                                                      |  |                         | 11,233 |   |                     |  | 10,099 |      |  |  | 8,791     |   |  |           | (10.2 | ) |  |  | (13,0 | )
|                                                                           |  |                         |        |   |                     |  |        |      |  |  |           |   |  |           |      
|Market share (based on minutes):                                           |  |                         |        |   |                     |  |        |      |  |  |           |   |  |           |       |   |  |  |       |  
|Total residential(1)                                                       |  |                         | 70     | % |                     |  | 67     | %    |  |  | 68        | % |  |           |       |   |  |  |       |  






|    |                         
|--- | ------------------------
|(1) | Average during the year.

Competition




50



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Business Market




Services


Basic network services.


Leased Lines.


Internet access.


VPN.


Nordicom.




| |   |                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | includes nodes located across the country, with ATM connections
    (asynchronous transfer mode, i.e. high capacity broadband) in
    five other countries and frame relay connections worldwide;
|
| |  | enables our customers to transfer data at rates from 64 Kbps to
    155 Mbps; and                                                                                                                

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| |   |                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------
| |  | includes our dedicated X.25 network, which consists of
    approximately 500 transit nodes, to which we connect our
    customers terminals.

Value-added telephony services.




| |   |                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------
| |  | customer contact services such as virtual call center solutions,
    traffic routing and toll-free numbers; and
|
| |  | interactive services such as interactive voice response, short
    messaging and web services.                 

Messaging.


Hosting.


Managed Voice Services.


Subscriptions




|                |                     |                          |  |     |      |  |  |      |     |  |  |     |     | 
|--------------- | ------------------- | ------------------------ |  | --- | ---- |  |  | ---- | --- |  |  | --- | --- | 
|                |                     | As of December 31,       | 
|                |                     |                          | 
|                |                     | 2002                     |  |     | 2003 |  |  | 2004 |    
|                |                     |                          |  |     |      |  |  |      |    
|                |                     | (in thousands)           | 
|Telephony       |                     |                          |  |     |      |  |  |      |     |  |  |    
|                | Analog (PSTN)       |                          |  | 257 |      |  |  | 212  |     |  |  | 181 |    
|                | Digital (ISDN)      |                          |  | 305 |      |  |  | 278  |     |  |  | 246 |    
|                |                     | Of which basic rate(1)   |  |     | 297  |  |  |      | 270 |  |  |     | 239 | 
|                |                     | Of which primary rate(1) |  |     | 8    |  |  |      | 8   |  |  |     | 8   | 
|                |                     | Total Subscriptions      |  |     | 562  |  |  |      | 490 |  |  |     | 426 | 
|Internet Access |                     |                          |  |     |      |  |  |      |     |  |  |    
|                | ADSL access         |                          |  | 4   |      |  |  | 14   |     |  |  | 40  |    
|                | Total Subscriptions |                          |  | 4   |      |  |  | 14   |     |  |  | 40  |    






|    |                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | A basic rate digital (ISDN) subscription provides two
    access channels and a primary rate digital
    (ISDN) subscription provides 12 to 30 access channels.



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Traffic




|                                                                           |  |                         |       |   |                     |  |       |      |  |  |           |   |  |           |       |   |  |  |       |  
|-------------------------------------------------------------------------- |  | ----------------------- | ----- | - | ------------------- |  | ----- | ---- |  |  | --------- | - |  | --------- | ----- | - |  |  | ----- | -
|                                                                           |  | Year ended December 31, |       |   | Increase (decrease) | 
|                                                                           |  |                         |       |   |                     | 
|                                                                           |  | 2002                    |       |   | 2003                |  |       | 2004 |  |  | 2003/2002 |   |  | 2004/2003 |      
|                                                                           |  |                         |       |   |                     |  |       |      |  |  |           |   |  |           |      
|                                                                           |  |                         |       |   |                     |  |       | %    |  |  | %         |  
|Traffic (millions of minutes):                                             |  |                         |       |   |                     |  |       |      |  |  |           |   |  |           |       |   |  |  |       |  
|National calls (excluding Internet traffic and calls to mobile
    phones) |  |                         | 3,622 |   |                     |  | 3,001 |      |  |  | 2,353     |   |  |           | (17.1 | ) |  |  | (21.6 | )
|Internet traffic                                                           |  |                         | 1,481 |   |                     |  | 1,296 |      |  |  | 972       |   |  |           | (12.5 | ) |  |  | (25.0 | )
|Calls to mobile phones                                                     |  |                         | 610   |   |                     |  | 595   |      |  |  | 552       |   |  |           | (2.5  | ) |  |  | 7.2   | )
|International                                                              |  |                         | 153   |   |                     |  | 133   |      |  |  | 115       |   |  |           | (13.1 | ) |  |  | (13.5 | )
|Other                                                                      |  |                         | 238   |   |                     |  | 261   |      |  |  | 243       |   |  |           | 9.7   |   |  |  | (6.9  | )
|                                                                           |  |                         |       |   |                     |  |       |      |  |  |           |   |  |           |      
|Total                                                                      |  |                         | 6,104 |   |                     |  | 5,286 |      |  |  | 4,235     |   |  |           | (13.4 | ) |  |  | 19.9  | )
|                                                                           |  |                         |       |   |                     |  |       |      |  |  |           |   |  |           |      
|Market share (based on minutes):                                           |  |                         |       |   |                     |  |       |      |  |  |           |   |  |           |       |   |  |  |       |  
|Total business(1)                                                          |  |                         | 76    | % |                     |  | 74    | %    |  |  | 72        | % |  |           |       |   |  |  |       |  






|    |                         
|--- | ------------------------
|(1) | Average during the year.

Distribution and marketing




Competition




Wholesale Market


Domestic wholesale


Interconnection services.


Local loop unbundling.


53



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DSL. .


Intelligent network services.


Wholesale line rental.


Access




|                      |                              |                    |    |   |      |  |     |      |  |  |     |     | 
|--------------------- | ---------------------------- | ------------------ | -- | - | ---- |  | --- | ---- |  |  | --- | --- | 
|                      |                              | As of December 31, |   
|                      |                              |                    |   
|                      |                              | 2002               |    |   | 2003 |  |     | 2004 | 
|                      |                              |                    |    |   |      |  |     |      | 
|                      |                              | (in thousands)     |   
|Analog (PSTN) lines   |                              |                    | 7  |   |      |  | 104 |      |  |  | 188 |    
|Digital (ISDN) lines: |                              |                    |    |   |      |  |     |      |  |  |     |    
|                      | Basic rate access lines(1)   |                    |    | 3 |      |  |     | 57   |  |  |     | 113 | 
|                      | Primary rate access lines(1) |                    |    |  |      |  |     | 0    |  |  |     | 1   | 
|                      | Digital access channels(2)   |                    |    | 6 |      |  |     | 126  |  |  |     | 250 | 
|ADSL access           |                              |                    | 15 |   |      |  | 56  |      |  |  | 91  |    
|LLUB access           |                              |                    | 42 |   |      |  | 80  |      |  |  | 145 |    






|    |                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | A basic digital (ISDN) line provides two access channels
    and a primary digital (ISDN) line provides 12 to 30 access
    channels.                              
|   
|(2) | The number of digital access channels is calculated by adding up
    the number of access channels of basic rate access lines and of
    primary rate access lines.

Competition






International wholesale




54



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International direct dialing.


Roaming.


Leased capacity services.


Network Operations


Domestic infrastructure




Trunk transmission network.








Access network.


55



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International infrastructure


International wholesale network.




Transatlantic submarine cable.


Fixed Sweden










56



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##### Table of Contents



Fixed International Other




TELENOR BROADCAST


Overview






Distribution.


Transmission.


Other.


Distribution










57



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|                          |  |        |           |  |        |  |         |         |  |  |         |  |  |       |         |  |  |  |           | 
|------------------------- |  | ------ | --------- |  | ------ |  | ------- | ------- |  |  | ------- |  |  | ----- | ------- |  |  |  | --------- | 
|                          |  | Norway |           |  | Sweden |  |         | Denmark |  |  | Finland |  |  | Total |        
|                          |  |        |           |  |        |  |         |         |  |  |         |  |  |       |        
|Subscribers Broadcast     |  |        |           |  |        |  |         |         |  |  |         |  |  |       |         |  |  |  |           | 
|DTH pay-TV subscribers    |  |        | 308,000   |  |        |  | 349,000 |         |  |  | 124,000 |  |  |       | 43,000  |  |  |  | 824,000   | 
|DTH basic tier households |  |        | 141,000   |  |        |  | 62,000  |         |  |  | 47,000  |  |  |       | 3,000   |  |  |  | 253,000   | 
|Cable TV subscribers      |  |        | 399,000   |  |        |  | 225,000 |         |  |  |        |  |  |       |        |  |  |  | 624,000   | 
|SMATV households          |  |        | 178,000   |  |        |  | 300,000 |         |  |  | 660,000 |  |  |       | 74,000  |  |  |  | 1,212,000 | 
|DTT pay-TV subscribers    |  |        |          |  |        |  |        |         |  |  |        |  |  |       | 12,000  |  |  |  | 12,000    | 
|Broadcasting              |  |        | 1,026,000 |  |        |  | 936,000 |         |  |  | 831,000 |  |  |       | 132,000 |  |  |  | 2,925,000 | 

DTH






|                          |  |                         |         |  |      |  |           |      |  |  |           | 
|------------------------- |  | ----------------------- | ------- |  | ---- |  | --------- | ---- |  |  | --------- | 
|                          |  | Year ended December 31, |        
|                          |  |                         |        
|                          |  | 2002                    |         |  | 2003 |  |           | 2004 | 
|                          |  |                         |         |  |      |  |           |      | 
|Subscribers at period end |  |                         |         |  |      |  |           |      |  |  |           | 
|DTH pay-TV subscribers    |  |                         | 701,000 |  |      |  | 763,000   |      |  |  | 824,000   | 
|                          |  |                         |         |  |      |  |           |      | 
|DTH basic tier households |  |                         | 240,000 |  |      |  | 241,000   |      |  |  | 253,000   | 
|                          |  |                         |         |  |      |  |           |      | 
|Total subscribers         |  |                         | 941,000 |  |      |  | 1,004,000 |      |  |  | 1,077,000 | 
|                          |  |                         |         |  |      |  |           |      | 



Cable TV










|                          |                                        |                         |         |        |      |  |         |        |  |  |         |        | 
|------------------------- | -------------------------------------- | ----------------------- | ------- | ------ | ---- |  | ------- | ------ |  |  | ------- | ------ | 
|                          |                                        | Year ended December 31, |        
|                          |                                        |                         |        
|                          |                                        | 2002                    |         |        | 2003 |  |         | 2004   | 
|                          |                                        |                         |         |        |      |  |         |        | 
|Subscribers at period end |                                        |                         |         |        |      |  |         |        |  |  |         |       
|Basic tier                |                                        |                         | 571,000 |        |      |  | 604,000 |        |  |  | 624,000 |       
|                          | Of which digital pay-TV                |                         |         | 33,000 |      |  |         | 35,000 |  |  |         | 51,000 | 
|                          | Of which cable TV Internet subscribers |                         |         | 21,000 |      |  |         | 31,000 |  |  |         | 44,000 | 

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SMATV/Small Antenna Networks






|                          |  |                         |           |  |      |  |           |      |  |  |           | 
|------------------------- |  | ----------------------- | --------- |  | ---- |  | --------- | ---- |  |  | --------- | 
|                          |  | Year ended December 31, |          
|                          |  |                         |          
|                          |  | 2002                    |           |  | 2003 |  |           | 2004 | 
|                          |  |                         |           |  |      |  |           |      | 
|Subscribers at period end |  |                         |           |  |      |  |           |      |  |  |           | 
|SMATV households          |  |                         | 1,133,000 |  |      |  | 1,098,000 |      |  |  | 1,212,000 | 

DTT




Competition










Transmission




Satellite Broadcasting




59



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##### Table of Contents







|                              |  |                         |    |  |      |  |    |      |  |  |    | 
|----------------------------- |  | ----------------------- | -- |  | ---- |  | -- | ---- |  |  | -- | 
|                              |  | Year ended December 31, |   
|                              |  |                         |   
|                              |  | 2002                    |    |  | 2003 |  |    | 2004 | 
|                              |  |                         |    |  |      |  |    |      | 
|Transponders at period end    |  |                         |    |  |      |  |    |      |  |  |    | 
|Used for digital transmission |  |                         | 27 |  |      |  | 32 |      |  |  | 33 | 
|Used for analog transmission  |  |                         | 7  |  |      |  | 6  |      |  |  | 3  | 
|Spare capacity                |  |                         | 9  |  |      |  | 5  |      |  |  | 4  | 
|Total number of transponders  |  |                         | 43 |  |      |  | 43 |      |  |  | 40 | 



Terrestrial broadcasting








Competition




60



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Other


Conditional access systems






Related interests






Corporate functions




EDB BUSINESS PARTNER ASA


Overview






Strategy and recent developments






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to be a leading expertise-based IT business, focusing on
    application development, management and operations, and
    infrastructure and network operations; and                                                                                                                                                                                                                                               
|
| |  | to take advantage of the increasing trend on the part of large
    and medium-sized businesses to out-source their
    IT functions as well as other opportunities arising from
    current IT trends, such as the growth of Internet applications,
    application service provisioning, e-commerce, Internet banking,
    mobile telephony/wireless application protocol and business
    critical applications.



61



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Business Areas and Services




IT Operations






| |   |                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | provides both the centralized and remote operation of computer
    systems, application service provisioning (ASP), data
    communications and services related to backup, security and
    publishing; and
|
| |  | serves customers in all industries and sectors.                                                                                                                                                             



Bank and Finance




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Telecom








Competition




SATELLITE SERVICES


Overview




Mobile Satellite Services (MSS)


Overview










| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In March 2001, we acquired SAIT Communication S.A. from
    SAIT-STENTO for approximately NOK 190 million. The
    company, which was renamed Marlink SA after the acquisition, is
    one of the leading companies in the market for retail sales of
    Inmarsat-based satellite communication services. Although
    Marlink provides services to customers on land and in flight,
    the majority of Marlinks customers are in the maritime
    market.
|
| |  | In January 2002, we completed the acquisition of
    COMSAT Mobile Communications (CMC) from Lockheed
    Martin Global Telecommunications. Following the acquisition, we
    organized CMCs assets                                                                                                                                                                                                                                                         

63



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | and operations, including the Southbury and Santa Paula LESs, in
    the newly established company Telenor Satellite Services, Inc.
    (TSSI). The acquisition strengthened our position as a major
    satellite mobile operator with global coverage and made us one
    of the largest Inmarsat operators in the world. As a result of
    this acquisition, we can provide coverage in all four Inmarsat
    satellite regions and offer a truly global and seamless
    satellite mobile communication service. The acquisition has
    improved our operational efficiency and further expanded our
    already wide range of services.
|
| |  | In August 2004, we acquired GMPCS Personal
    Communications Inc. The company, which is a full service
    provider of global mobile personal communications via satellite,
    is well positioned as a retailer of equipment, accessories and
    value-added solutions, with a particularly strong position in
    the land mobile market.                                                                                                                                                                                                                                                                                                 
|
| |  | In December 2004, we acquired the Norwegian retail company
    Neratek AS. Neratek is well positioned in the Norwegian market
    for maritime solutions. The acquisition of Neratek (which has
    been incorporated into Marlink) strengthens our position in the
    retail market for satellite communications and enables us to
    offer customers a broader range of services and equipment.                                                                                                                                                                                                                                           





Services




Mobile telephony and data services






64



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Traffic accounting services




Terminal activation services




Leased lines




Competition






Corporate Networks (CN) and Taide




65



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| |   |                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | international communication solutions for governmental,
    intergovernmental and large corporate organizations; and                                                                                                                        
|
| |  | satellite-based services, including Internet access, Voice over
    IP (VOIP) and gateway services, to Internet service
    providers and telecom operators who are operating in markets
    lacking competitive terrestrial infrastructure.





TELESERVICE AS






SOFTWARE SERVICES




NEXTRA INTERNATIONAL






66



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RESEARCH AND DEVELOPMENT








REGULATION


Regulatory Environment


Norway








Regulatory framework and authorities




67



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Regulations on the provision of networks and
telecommunications services






68



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Regulation of satellite, cable television, terrestrial
broadcasting networks and television distribution










Regulatory developments




69



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Competition








70



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European Union regulation




Liberalization and harmonization of telecommunications
regulation










71



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WTO obligations






72



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Regulatory Issues and Licensing (Norway)


Service licenses














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Universal service obligations and special service
obligations


Universal service obligations (USO)








Special service obligations (SSO)




Non-discrimination, transparency and objectivity
requirements








Cost and price regulation


General




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|                 |                          |                   |  |        |      |  |  |        |  |  |  |        | 
|---------------- | ------------------------ | ----------------- |  | ------ | ---- |  |  | ------ |  |  |  | ------ | 
|                 |                          | 2001              |  |        | 2002 |  |  | 2003   | 
|                 |                          |                   |  |        |      |  |  |        | 
|                 |                          | (NOK in millions) | 
|Fixed telephony  |                          |                   |  |        |      |  |  |        |  |  |  |       
|                 | Operating profit         |                   |  | 2,172  |      |  |  | 2,184  |  |  |  | 2,607  | 
|                 | Average capital employed |                   |  | 12,644 |      |  |  | 11,735 |  |  |  | 10,281 | 
|Mobile telephony |                          |                   |  |        |      |  |  |        |  |  |  |       
|                 | Operating profit         |                   |  | 2,591  |      |  |  | 2,221  |  |  |  | 2,222  | 
|                 | Average capital employed |                   |  | 3,633  |      |  |  | 3,431  |  |  |  | 2,932  | 
|Leased lines     |                          |                   |  |        |      |  |  |        |  |  |  |       
|                 | Operating profit         |                   |  | 195    |      |  |  | 295    |  |  |  | 316    | 
|                 | Average capital employed |                   |  | 2,971  |      |  |  | 3,287  |  |  |  | 3,259  | 







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Accounting separation and reporting






Costing methodology






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Interconnection and access


General






Interconnection








77



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Access for resellers in the fixed network (Wholesale line
rental)




Access for Mobile Virtual Network Operators (MVNOs)




Access for mobile service providers






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Access for value-added telephony service providers






Access for broadband service providers




Local loop unbundling




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Wholesale Leased Line Part Circuit




Mobile national roaming






Carrier selection






80



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Numbering and number portability


Numbering




Directory Inquiry Services




Number portability






Rights of way






81



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Competition Issues




EFTA Surveillance Authority (ESA)






Norwegian Competition Authority










82



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Consumer Protection Issues






Gender Equality






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ORGANIZATIONAL STRUCTURE




PROPERTY, PLANTS AND EQUIPMENT






|                        |  |                   |     |  |      |  |    |      |  |  |      |  |  |      |    |  |            |  |    |  |  |  |     | 
|----------------------- |  | ----------------- | --- |  | ---- |  | -- | ---- |  |  | ---- |  |  | ---- | -- |  | ---------- |  | -- |  |  |  | --- | 
|                        |  | 2005              |     |  | 2006 |  |    | 2007 |  |  | 2008 |  |  | 2009 |    |  | After 2009 | 
|                        |  |                   |     |  |      |  |    |      |  |  |      |  |  |      |    |  |            | 
|                        |  | (NOK in millions) |    
|Total lease obligations |  |                   | 151 |  |      |  | 90 |      |  |  | 72   |  |  |      | 65 |  |            |  | 58 |  |  |  | 218 | 





ITEM 5:     OPERATING AND FINANCIAL
REVIEW AND PROSPECTS


INTRODUCTION


The following discussion should be read in conjunction with
our consolidated financial statements, which have been prepared
in accordance with Norwegian GAAP, which differ in certain
respects from US GAAP. For a reconciliation of the material
differences between Norwegian and US GAAP, you should read
note 32 to our consolidated financial statements.








| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | increased competition;                                                                         
|
| |  | the political, economic and legal environment in the foreign
    countries in which we operate;

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| |   |                                                                                            
| | - | -------------------------------------------------------------------------------------------
| |  | our exposure to currency exchange rate fluctuations, when
    reporting in Norwegian Krone;
|
| |  | regulatory developments both in and outside Norway.                                        



GROUP OVERVIEW














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RESULTS OF OPERATIONS  GROUP


Revenues


|                                                                                 |  |                   |        |  |      |  |        |      |  |  |        | 
|-------------------------------------------------------------------------------- |  | ----------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                                                                 |  | 2002              |        |  | 2003 |  |        | 2004 | 
|                                                                                 |  |                   |        |  |      |  |        |      | 
|                                                                                 |  | (NOK in millions) |       
|External revenues                                                                |  |                   |        |  |      |  |        |      |  |  |        | 
|External revenues excluding gains on disposal of fixed assets
    and operations |  |                   |        |  |      |  |        |      |  |  |        | 
|Telenor Mobil  Norway                                                           |  |                   | 9,441  |  |      |  | 9,639  |      |  |  | 10,508 | 
|Sonofon  Denmark                                                                |  |                   |       |  |      |  |       |      |  |  | 4,346  | 
|Pannon GSM  Hungary                                                             |  |                   | 4,502  |  |      |  | 5,368  |      |  |  | 5,858  | 
|DiGi.Com  Malaysia                                                              |  |                   | 2,702  |  |      |  | 3,170  |      |  |  | 3,950  | 
|Kyivstar  Ukraine                                                               |  |                   | 708    |  |      |  | 2,634  |      |  |  | 4,344  | 
|GrameenPhone  Bangladesh                                                        |  |                   | 1,589  |  |      |  | 1,535  |      |  |  | 2,202  | 
|Other mobile operations                                                          |  |                   | 137    |  |      |  | 137    |      |  |  | 357    | 
|Total mobile operations                                                          |  |                   | 19,079 |  |      |  | 22,483 |      |  |  | 31,565 | 
|Fixed                                                                            |  |                   | 18,338 |  |      |  | 18,787 |      |  |  | 17,430 | 
|Broadcast                                                                        |  |                   | 3,366  |  |      |  | 4,641  |      |  |  | 5,211  | 
|EDB Business Partner                                                             |  |                   | 3,383  |  |      |  | 3,210  |      |  |  | 3,311  | 
|Other business units                                                             |  |                   | 4,255  |  |      |  | 3,539  |      |  |  | 2,979  | 
|Corporate functions and Group activities                                         |  |                   | 247    |  |      |  | 229    |      |  |  | 256    | 
|Total external revenues excluding gains                                          |  |                   | 48,668 |  |      |  | 52,889 |      |  |  | 60,752 | 
|Gains on disposal of fixed assets and operations                                 |  |                   | 158    |  |      |  | 232    |      |  |  | 550    | 
|Total external revenues                                                          |  |                   | 48,826 |  |      |  | 53,121 |      |  |  | 61,302 | 











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|                               |  |                   |        |  |      |  |        |      |  |  |        | 
|------------------------------ |  | ----------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                               |  | 2002              |        |  | 2003 |  |        | 2004 | 
|                               |  |                   |        |  |      |  |        |      | 
|                               |  | (NOK in millions) |       
|Consolidated revenues          |  |                   |        |  |      |  |        |      |  |  |        | 
|Norway                         |  |                   | 33,085 |  |      |  | 33,409 |      |  |  | 33,461 | 
|Outside Norway                 |  |                   | 15,583 |  |      |  | 19,480 |      |  |  | 27,291 | 
|                               |  |                   |        |  |      |  |        |      | 
|Total revenues excluding gains |  |                   | 48,668 |  |      |  | 52,889 |      |  |  | 60,752 | 
|                               |  |                   |        |  |      |  |        |      | 

Operating Expenses


Costs of materials and traffic charges


|                                       |  |                   |        |  |      |  |        |      |  |  |        | 
|-------------------------------------- |  | ----------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                       |  | 2002              |        |  | 2003 |  |        | 2004 | 
|                                       |  |                   |        |  |      |  |        |      | 
|                                       |  | (NOK in millions) |       
|Traffic charges  network capacity     |  |                   | 6,463  |  |      |  | 7,183  |      |  |  | 9,001  | 
|Traffic charges  satellite capacity   |  |                   | 1,527  |  |      |  | 1,343  |      |  |  | 1,190  | 
|Costs of materials etc.                |  |                   | 4,495  |  |      |  | 4,569  |      |  |  | 5,895  | 
|                                       |  |                   |        |  |      |  |        |      | 
|Costs of materials and traffic charges |  |                   | 12,485 |  |      |  | 13,094 |      |  |  | 16,087 | 
|                                       |  |                   |        |  |      |  |        |      | 

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Own work capitalized








Own work capitalized


|                             |  |                   |     |  |      |  |     |      |  |  |     | 
|---------------------------- |  | ----------------- | --- |  | ---- |  | --- | ---- |  |  | --- | 
|                             |  | 2002              |     |  | 2003 |  |     | 2004 | 
|                             |  |                   |     |  |      |  |     |      | 
|                             |  | (NOK in millions) |    
|Costs of materials etc.      |  |                   | 29  |  |      |  | 25  |      |  |  | 162 | 
|Salaries and personnel costs |  |                   | 303 |  |      |  | 301 |      |  |  | 311 | 
|Other operating expenses     |  |                   | 235 |  |      |  | 245 |      |  |  | 84  | 
|                             |  |                   |     |  |      |  |     |      | 
|Total own work capitalized   |  |                   | 567 |  |      |  | 571 |      |  |  | 557 | 
|                             |  |                   |     |  |      |  |     |      | 



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Salaries and personnel costs


|                                            |  |                   |        |  |      |  |       |      |  |  |        | 
|------------------------------------------- |  | ----------------- | ------ |  | ---- |  | ----- | ---- |  |  | ------ | 
|                                            |  | 2002              |        |  | 2003 |  |       | 2004 | 
|                                            |  |                   |        |  |      |  |       |      | 
|                                            |  | (NOK in millions) |       
|Salaries and holiday pay                    |  |                   | 7,659  |  |      |  | 7,248 |      |  |  | 7,530  | 
|Social security tax                         |  |                   | 1,168  |  |      |  | 1,151 |      |  |  | 1,142  | 
|Pension costs including social security tax |  |                   | 789    |  |      |  | 760   |      |  |  | 932    | 
|Other personnel costs                       |  |                   | 488    |  |      |  | 402   |      |  |  | 417    | 
|                                            |  |                   |        |  |      |  |       |      | 
|Total salaries and personnel costs          |  |                   | 10,104 |  |      |  | 9,561 |      |  |  | 10,021 | 
|                                            |  |                   |        |  |      |  |       |      | 















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Other operating expenses


|                                                     |  |                   |        |  |      |  |        |      |  |  |        | 
|---------------------------------------------------- |  | ----------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                                     |  | 2002              |        |  | 2003 |  |        | 2004 | 
|                                                     |  |                   |        |  |      |  |        |      | 
|                                                     |  | (NOK in millions) |       
|Costs of premises, vehicles, office equipment, etc.  |  |                   | 2,196  |  |      |  | 1,768  |      |  |  | 1,863  | 
|Operation and maintenance                            |  |                   | 3,418  |  |      |  | 3,556  |      |  |  | 3,632  | 
|Travel and travel allowances                         |  |                   | 560    |  |      |  | 474    |      |  |  | 482    | 
|Postage, freight, distribution and telecommunication |  |                   | 327    |  |      |  | 281    |      |  |  | 296    | 
|Concession fees                                      |  |                   | 425    |  |      |  | 505    |      |  |  | 582    | 
|Marketing and sales commission                       |  |                   | 2,069  |  |      |  | 2,583  |      |  |  | 3,838  | 
|Advertising                                          |  |                   | 916    |  |      |  | 1,187  |      |  |  | 1,415  | 
|Bad debt                                             |  |                   | 337    |  |      |  | 209    |      |  |  | 248    | 
|Consultancy fees and external personnel              |  |                   | 1,394  |  |      |  | 1,327  |      |  |  | 1,350  | 
|Workforce reductions and loss contracts(1)           |  |                   | 982    |  |      |  | 287    |      |  |  | 898    | 
|Other                                                |  |                   | 564    |  |      |  | 329    |      |  |  | 268    | 
|                                                     |  |                   |        |  |      |  |        |      | 
|Total other operating expenses                       |  |                   | 13,188 |  |      |  | 12,506 |      |  |  | 14,872 | 
|                                                     |  |                   |        |  |      |  |        |      | 

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|                                                                               |  |                   |       |  |      |  |     |      |  |  |     | 
|------------------------------------------------------------------------------ |  | ----------------- | ----- |  | ---- |  | --- | ---- |  |  | --- | 
|                                                                               |  | 2002              |       |  | 2003 |  |     | 2004 | 
|                                                                               |  |                   |       |  |      |  |     |      | 
|                                                                               |  | (NOK in millions) |      
|(1)  Specification of expenses for workforce
    reductions and loss contracts |  |                   |       |  |      |  |     |      |  |  |     | 
|Total mobile operations                                                        |  |                   | 120   |  |      |  | (21 | )    |  |  | 630 | 
|Fixed                                                                          |  |                   | 311   |  |      |  | 6   |      |  |  | 86  | 
|Broadcast                                                                      |  |                   | 65    |  |      |  | 7   |      |  |  | 5   | 
|EDB Business Partner                                                           |  |                   | 111   |  |      |  | 223 |      |  |  | 33  | 
|Other business units                                                           |  |                   | 56    |  |      |  | 38  |      |  |  | 28  | 
|Corporate functions and Group activities                                       |  |                   | 272   |  |      |  | 34  |      |  |  | 116 | 
|Eliminations                                                                   |  |                   | 47    |  |      |  |    |      |  |  |    | 
|                                                                               |  |                   |       |  |      |  |     |      | 
|Total                                                                          |  |                   | 982   |  |      |  | 287 |      |  |  | 898 | 
|                                                                               |  |                   |       |  |      |  |     |      | 
|Other business units  previously granted pension
    benefits in Teleservice  |  |                   | 66    |  |      |  |    |      |  |  |    | 
|                                                                               |  |                   |       |  |      |  |     |      | 
|Total(1)                                                                       |  |                   | 1,048 |  |      |  | 287 |      |  |  | 898 | 
|                                                                               |  |                   |       |  |      |  |     |      | 






|    |                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | This line item corresponds to the same line item in the table
    with the breakdown of other operating expenses set
    forth above, except for 2002, where NOK 66 million
    related to previously granted pension benefits in Teleservice is
    included in salaries and personnel costs.

















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Losses on disposal of fixed assets and operations




Depreciation, Amortization and Write-downs


|                                                 |  |                   |        |  |      |  |        |      |  |  |        | 
|------------------------------------------------ |  | ----------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                                 |  | 2002              |        |  | 2003 |  |        | 2004 | 
|                                                 |  |                   |        |  |      |  |        |      | 
|                                                 |  | (NOK in millions) |       
|Depreciation of tangible assets                  |  |                   | 7,624  |  |      |  | 7,986  |      |  |  | 7,753  | 
|Amortization of goodwill                         |  |                   | 1,002  |  |      |  | 686    |      |  |  | 939    | 
|Amortization of other intangible assets          |  |                   | 1,610  |  |      |  | 1,925  |      |  |  | 2,931  | 
|                                                 |  |                   |        |  |      |  |        |      | 
|Total depreciation and amortization(1)           |  |                   | 10,236 |  |      |  | 10,597 |      |  |  | 11,623 | 
|                                                 |  |                   |        |  |      |  |        |      | 
|Write-downs of tangible assets                   |  |                   | 424    |  |      |  | 104    |      |  |  | 282    | 
|Write-downs of goodwill                          |  |                   | 2,632  |  |      |  | 16     |      |  |  | 2,194  | 
|Write-downs of other intangible assets           |  |                   | 497    |  |      |  | 25     |      |  |  | 120    | 
|Total write-downs(2)                             |  |                   | 3,553  |  |      |  | 145    |      |  |  | 2,596  | 
|                                                 |  |                   |        |  |      |  |        |      | 
|Total depreciation, amortization and write-downs |  |                   | 13,789 |  |      |  | 10,742 |      |  |  | 14,219 | 
|                                                 |  |                   |        |  |      |  |        |      | 



|    |                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Specification of depreciation of tangible assets,
    amortization of goodwill and amortization of other intangible
    assets in 2002, 20023 and 2004:

|                                         |  |                   |       |       |          |  |            |        |       |          |        |  |  |          |            |   |        |          |     |        |  |  |            |  |  |        |       |   |  |  |      |   |  |  |       | 
|---------------------------------------- |  | ----------------- | ----- | ----- | -------- |  | ---------- | ------ | ----- | -------- | ------ |  |  | -------- | ---------- | - | ------ | -------- | --- | ------ |  |  | ---------- |  |  | ------ | ----- | - |  |  | ---- | - |  |  | ----- | 
|                                         |  | 2002              |       |       | 2003     |  |            | 2004   |      
|                                         |  |                   |       |       |          |  |            |        |      
|                                         |  |                   |       | Other |          |  |            |        | Other |          |        |  |  | Other    |           
|                                         |  | Tangible          |       |       |          |  | Intangible |        |       | Tangible |        |  |  |          | Intangible |   |        | Tangible |     |        |  |  | Intangible | 
|                                         |  | Assets            |       |       | Goodwill |  |            | Assets |       |          | Assets |  |  | Goodwill |            |   | Assets |          |     | Assets |  |  | Goodwill   |  |  | Assets |      
|                                         |  |                   |       |       |          |  |            |        |       |          |        |  |  |          |            |   |        |          |     |        |  |  |            |  |  |        |      
|                                         |  | (NOK in millions) |      
|Total mobile operations                  |  |                   | 2,232 |       |          |  | 509        |        |       |          | 1,038  |  |  |          | 2,674      |   |        |          | 400 |        |  |  | 1,234      |  |  |        | 3,147 |   |  |  | 678  |   |  |  | 2,247 | 
|Fixed                                    |  |                   | 3,858 |       |          |  | 134        |        |       |          | 374    |  |  |          | 3,774      |   |        |          | (95 | )      |  |  | 431        |  |  |        | 3,174 |   |  |  | (105 | ) |  |  | 399   | 
|Broadcast                                |  |                   | 679   |       |          |  | 133        |        |       |          | 32     |  |  |          | 755        |   |        |          | 197 |        |  |  | 78         |  |  |        | 603   |   |  |  | 192  |   |  |  | 92    | 
|EDB Business Partner                     |  |                   | 224   |       |          |  | 166        |        |       |          | 3      |  |  |          | 223        |   |        |          | 151 |        |  |  | 1          |  |  |        | 242   |   |  |  | 158  |   |  |  | 1     | 
|Other business units                     |  |                   | 359   |       |          |  | 60         |        |       |          | 163    |  |  |          | 305        |   |        |          | 34  |        |  |  | 152        |  |  |        | 267   |   |  |  | 30   |   |  |  | 75    | 
|Corporate functions and Group activities |  |                   | 362   |       |          |  |           |        |       |          |       |  |  |          | 355        |   |        |          |    |        |  |  | 29         |  |  |        | 326   |   |  |  |     |   |  |  | 58    | 
|Eliminations                             |  |                   | (90   | )     |          |  |           |        |       |          |       |  |  |          | (100       | ) |        |          | (1  | )      |  |  |           |  |  |        | (6    | ) |  |  | (14  | ) |  |  | 59    | 
|                                         |  |                   |       |       |          |  |            |        |       |          |        |  |  |          |            |   |        |          |     |        |  |  |            |  |  |        |      
|Total                                    |  |                   | 7,624 |       |          |  | 1,002      |        |       |          | 1,610  |  |  |          | 7,986      |   |        |          | 686 |        |  |  | 1,925      |  |  |        | 7,753 |   |  |  | 939  |   |  |  | 2,931 | 
|                                         |  |                   |       |       |          |  |            |        |       |          |        |  |  |          |            |   |        |          |     |        |  |  |            |  |  |        |      

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|    |                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------
|(2) | Specification of write-downs of tangible assets, goodwill and
    other intangible assets in 2002, 2003 and 2004:

|                                         |  |                   |     |       |          |  |            |        |       |          |        |  |  |          |            |  |        |          |    |        |  |  |            |  |  |        |     |  |  |  |       |  |  |  |     | 
|---------------------------------------- |  | ----------------- | --- | ----- | -------- |  | ---------- | ------ | ----- | -------- | ------ |  |  | -------- | ---------- |  | ------ | -------- | -- | ------ |  |  | ---------- |  |  | ------ | --- |  |  |  | ----- |  |  |  | --- | 
|                                         |  | 2002              |     |       | 2003     |  |            | 2004   |      
|                                         |  |                   |     |       |          |  |            |        |      
|                                         |  |                   |     | Other |          |  |            |        | Other |          |        |  |  | Other    |           
|                                         |  | Tangible          |     |       |          |  | Intangible |        |       | Tangible |        |  |  |          | Intangible |  |        | Tangible |    |        |  |  | Intangible | 
|                                         |  | Assets            |     |       | Goodwill |  |            | Assets |       |          | Assets |  |  | Goodwill |            |  | Assets |          |    | Assets |  |  | Goodwill   |  |  | Assets |    
|                                         |  |                   |     |       |          |  |            |        |       |          |        |  |  |          |            |  |        |          |    |        |  |  |            |  |  |        |    
|                                         |  | (NOK in millions) |    
|Total mobile operations                  |  |                   | 33  |       |          |  | 2,138      |        |       |          | 118    |  |  |          | 33         |  |        |          |   |        |  |  | 2          |  |  |        | 251 |  |  |  | 2,190 |  |  |  | 78  | 
|Fixed                                    |  |                   | 340 |       |          |  | 160        |        |       |          |        |  |  |          | 19         |  |        |          |   |        |  |  | 5          |  |  |        | 13  |  |  |  | 2     |  |  |  |    | 
|Broadcast                                |  |                   | 47  |       |          |  |           |        |       |          | 83     |  |  |          | 15         |  |        |          |   |        |  |  | 3          |  |  |        | 13  |  |  |  |      |  |  |  | 7   | 
|EDB Business Partner                     |  |                   | 8   |       |          |  | 356        |        |       |          |       |  |  |          | 12         |  |        |          | 16 |        |  |  |           |  |  |        |    |  |  |  |      |  |  |  |    | 
|Other business units                     |  |                   | 5   |       |          |  | 31         |        |       |          | 296    |  |  |          | 22         |  |        |          |   |        |  |  | 15         |  |  |        | 2   |  |  |  | 2     |  |  |  | 35  | 
|Corporate functions and Group activities |  |                   |    |       |          |  |           |        |       |          |       |  |  |          | 3          |  |        |          |   |        |  |  |           |  |  |        | 3   |  |  |  |      |  |  |  |    | 
|Eliminations                             |  |                   | (9  | )     |          |  | (53        | )      |       |          |       |  |  |          |           |  |        |          |   |        |  |  |            |  |  |        |    |  |  |  |      |  |  |  |    | 
|                                         |  |                   |     |       |          |  |            |        |       |          |        |  |  |          |            |  |        |          |    |        |  |  |            |  |  |        |    
|Total                                    |  |                   | 424 |       |          |  | 2,632      |        |       |          | 497    |  |  |          | 104        |  |        |          | 16 |        |  |  | 25         |  |  |        | 282 |  |  |  | 2,194 |  |  |  | 120 | 
|                                         |  |                   |     |       |          |  |            |        |       |          |        |  |  |          |            |  |        |          |    |        |  |  |            |  |  |        |    













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Operating Profit (Loss) and EBITDA




|                                                                                              |  |                   |        |   |      |  |       |      |  |  |        |  
|--------------------------------------------------------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ----- | ---- |  |  | ------ | -
|                                                                                              |  | 2002              |        |   | 2003 |  |       | 2004 | 
|                                                                                              |  |                   |        |   |      |  |       |      | 
|                                                                                              |  | (NOK in millions) |       
|Operating profit                                                                              |  |                   | (320   | ) |      |  | 7,560 |      |  |  | 6,602  |  
|Of which:                                                                                     |  |                   |        |   |      |  |       |      |  |  |        |  
|Gains on disposal of fixed assets and operations                                              |  |                   | 158    |   |      |  | 232   |      |  |  | 550    |  
|Losses on disposal of fixed assets and operations                                             |  |                   | (147   | ) |      |  | (229  | )    |  |  | (74    | )
|Expenses for workforce reductions and loss contracts(1)                                       |  |                   | (1,048 | ) |      |  | (287  | )    |  |  | (898   | )
|Write-downs of tangible and intangible assets(2)                                              |  |                   | (3,553 | ) |      |  | (145  | )    |  |  | (2,596 | )
|                                                                                              |  |                   |        |   |      |  |       |      | 
|Total gains, losses, expenses for workforce reductions and
    loss contracts and write-downs |  |                   | (4,590 | ) |      |  | (429  | )    |  |  | (3,018 | )
|                                                                                              |  |                   |        |   |      |  |       |      | 






|    |                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------
|(1) | For a breakdown of our expenses for workforce reductions, and
    loss contracts, you should read Other operating
    expenses.
|   
|(2) | For a breakdown of our write-downs, you should read
     Depreciation, amortization and
    write-downs.                      



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|                                                  |  |                   |        |   |      |  |        |      |  |  |        |  
|------------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                  |  | 2002              |        |   | 2003 |  |        | 2004 | 
|                                                  |  |                   |        |   |      |  |        |      | 
|                                                  |  | (NOK in millions) |       
|Net income (loss)                                 |  |                   | (4,298 | ) |      |  | 4,560  |      |  |  | 5,358  |  
|Minority interests                                |  |                   | (358   | ) |      |  | 490    |      |  |  | 1,244  |  
|Taxes                                             |  |                   | (480   | ) |      |  | 2,376  |      |  |  | 2,244  |  
|Profit (loss) before taxes and minority interests |  |                   | (5,136 | ) |      |  | 7,426  |      |  |  | 8,846  |  
|Net financial items                               |  |                   | 2,366  |   |      |  | 1,365  |      |  |  | (1,526 | )
|Associated companies                              |  |                   | 2,450  |   |      |  | (1,231 | )    |  |  | (718   | )
|Operating profit (loss)                           |  |                   | (320   | ) |      |  | 7,560  |      |  |  | 6,602  |  
|Depreciation and amortization                     |  |                   | 10,236 |   |      |  | 10,597 |      |  |  | 11,623 |  
|Write-downs                                       |  |                   | 3,553  |   |      |  | 145    |      |  |  | 2,596  |  
|EBITDA                                            |  |                   | 13,469 |   |      |  | 18,302 |      |  |  | 20,821 |  







95



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Associated Companies


|                                             |  |                   |        |   |      |  |       |      |  |  |      |  
|-------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ----- | ---- |  |  | ---- | -
|                                             |  | 2002              |        |   | 2003 |  |       | 2004 | 
|                                             |  |                   |        |   |      |  |       |      | 
|                                             |  | (NOK in millions) |       
|Telenors share of:(1)                       |  |                   |        |   |      |  |       |      |  |  |      |  
|Net income (loss) after taxes                |  |                   | 341    |   |      |  | 329   |      |  |  | 912  |  
|Amortization of Telenors net excess values  |  |                   | (862   | ) |      |  | (579  | )    |  |  | (226 | )
|Write-downs of Telenors excess values       |  |                   | (1,965 | ) |      |  | (26   | )    |  |  |     |  
|Net gains on disposal of ownership interests |  |                   | 36     |   |      |  | 1,507 |      |  |  | 32   |  
|                                             |  |                   |        |   |      |  |       |      | 
|Net result from associated companies         |  |                   | (2,450 | ) |      |  | 1,231 |      |  |  | 718  |  
|                                             |  |                   |        |   |      |  |       |      | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The figures are partially based on our managements
    estimates in the preparation of our consolidated financial
    statements. Our consolidated profit and loss statement contains
    only the line item net result from associated
    companies. Our share of the other items shown in the table
    is not included in our consolidated financial statements, but
    this information is set forth in note 16 to our
    consolidated financial statements. Net excess values are the
    difference between our acquisition cost and our share of equity
    at the time of the acquisition of the associated companies.















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Financial Income and Expenses


|                                                            |  |                   |        |   |      |  |        |      |  |  |        |  
|----------------------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                            |  | 2002              |        |   | 2003 |  |        | 2004 | 
|                                                            |  |                   |        |   |      |  |        |      | 
|                                                            |  | (NOK in millions) |       
|Interest income                                             |  |                   | 476    |   |      |  | 484    |      |  |  | 394    |  
|Other financial income                                      |  |                   | 91     |   |      |  | 102    |      |  |  | 102    |  
|Total financial income                                      |  |                   | 567    |   |      |  | 586    |      |  |  | 496    |  
|Interest expenses                                           |  |                   | (1,901 | ) |      |  | (2,033 | )    |  |  | (1,585 | )
|Other financial expenses                                    |  |                   | (96    | ) |      |  | (45    | )    |  |  | (67    | )
|Capitalized interest                                        |  |                   | 164    |   |      |  | 55     |      |  |  | 117    |  
|Total financial expenses                                    |  |                   | (1,833 | ) |      |  | (2,023 | )    |  |  | (1,534 | )
|Net foreign currency gain (loss)                            |  |                   | (311   | ) |      |  | (1     | )    |  |  | (87    | )
|Gains on disposal of financial assets                       |  |                   | 59     |   |      |  | 95     |      |  |  | 2,630  |  
|Losses on disposal of financial assets                      |  |                   | (31    | ) |      |  | (91    | )    |  |  | (17    | )
|Write-downs and reversal of write-downs of financial assets |  |                   | (817   | ) |      |  | 69     |      |  |  | 38     |  
|Net gains (losses on and write-downs) of financial assets   |  |                   | (789   | ) |      |  | 73     |      |  |  | 2,651  |  
|                                                            |  |                   |        |   |      |  |        |      | 
|Net financial items                                         |  |                   | (2,366 | ) |      |  | (1,365 | )    |  |  | 1,526  |  
|                                                            |  |                   |        |   |      |  |        |      | 













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98



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Income Taxes




|                                                                                            |  |      |        |   |      |  |       |      |  |  |       |  
|------------------------------------------------------------------------------------------- |  | ---- | ------ | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                                                                            |  | 2002 |        |   | 2003 |  |       | 2004 | 
|                                                                                            |  |      |        |   |      |  |       |      | 
|Effective tax rate                                                                          |  |      |        |   |      |  |       |      |  |  |       |  
|(in NOK millions, except tax rate in %)                                                     |  |      |        |   |      |  |       |      |  |  |       |  
|Expected income taxes according to statutory tax rate (28%)                                 |  |      | (1,438 | ) |      |  | 2,079 |      |  |  | 2,477 |  
|Tax rates outside Norway different from 28%                                                 |  |      | (15    | ) |      |  | 3     |      |  |  | (34   | )
|Associated companies                                                                        |  |      | 808    |   |      |  | 177   |      |  |  | (192  | )
|Net loss in subsidiaries outside Norway                                                     |  |      | 188    |   |      |  | 145   |      |  |  | 181   |  
|Net income in subsidiaries outside Norway  Previous
    not recognized deferred tax assets |  |      |       |   |      |  | (25   | )    |  |  | (30   | )
|Non-taxable income                                                                          |  |      | (21    | ) |      |  | (99   | )    |  |  | (94   | )
|Non-deductible expenses                                                                     |  |      | 106    |   |      |  | 207   |      |  |  | 190   |  
|Amortizations and write-downs of goodwill that are not tax
    deductible                   |  |      | 850    |   |      |  | 148   |      |  |  | 813   |  
|Previous not recognized deferred tax assets                                                 |  |      | (3,952 | ) |      |  | (797  | )    |  |  | (874  | )
|Non-taxable gain on sale of shares                                                          |  |      |       |   |      |  |      |      |  |  | (152  | )
|Changes in tax rules in Norway  previous recognized
    tax assets not realized            |  |      |        |   |      |  |       |      |  |  | 259   |  
|Deferred taxes on retained earnings in subsidiaries and
    associated companies            |  |      | 16     |   |      |  | 705   |      |  |  | (375  | )
|Not recognized tax assets current year                                                      |  |      | 73     |   |      |  | 52    |      |  |  | 39    |  
|Previous recognized tax assets  not realized or
    valuation allowance current year       |  |      |       |   |      |  | 50    |      |  |  | 27    |  
|Tax claim related to Sonofon                                                                |  |      | 2,409  |   |      |  |      |      |  |  |      |  
|Court case in Greece                                                                        |  |      | 414    |   |      |  | (200  | )    |  |  |      |  
|Other                                                                                       |  |      | 82     |   |      |  | (69   | )    |  |  | 9     |  
|Income tax expense (income)                                                                 |  |      | (480   | ) |      |  | 2,376 |      |  |  | 2,244 |  
|Effective tax rate in %                                                                     |  |      | N/A    |   |      |  | 32.0  |      |  |  | 25.4  |  









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Minority Interests




|                         |  |                   |      |                         |            |  |                 |            |  |          |            |   |           |               |       |           |               |  |       |  |  |  |       | 
|------------------------ |  | ----------------- | ---- | ----------------------- | ---------- |  | --------------- | ---------- |  | -------- | ---------- | - | --------- | ------------- | ----- | --------- | ------------- |  | ----- |  |  |  | ----- | 
|                         |  |                   |      | Year ended December 31, |            |  | At December 31, |           
|                         |  | At December 31,   |      |                         |            |  |                 |            | 
|                         |  | 2004              |      |                         | 2002       |  |                 | 2003       |  |          | 2004       |   |           | 2003          |       |           | 2004          | 
|                         |  |                   |      |                         |            |  |                 |            |  |          |            |   |           |               |       |           |               | 
|                         |  |                   |      | Minority                |            |  | Minority        |            |  | Minority |            |   | Minority  |               |       | Minority  |              
|                         |  |                   |      | part of                 |            |  | part of         |            |  | part of  |            |   | Interests |               |       | Interests |              
|                         |  | Minority          |      |                         | net income |  |                 | net income |  |          | net income |   |           | in the        |       |           | in the        | 
|                         |  | share in %        |      |                         | (loss)     |  |                 | (loss)     |  |          | (loss)     |   |           | balance sheet |       |           | balance sheet | 
|                         |  |                   |      |                         |            |  |                 |            |  |          |            |   |           |               |       |           |               | 
|                         |  | (NOK in millions) |     
|Telenor Venture AS       |  |                   |     |                         |            |  | (6              | )          |  |          | (30        | ) |           |               |      |           |               |  |      |  |  |  |      | 
|Telenor Venture II ASA   |  |                   | 49.9 |                         |            |  | (67             | )          |  |          | (32        | ) |           |               | 12    |           |               |  | 136   |  |  |  | 134   | 
|JSC Kyvistar GSM         |  |                   | 43.5 |                         |            |  | 51              |            |  |          | 256        |   |           |               | 588   |           |               |  | 998   |  |  |  | 1,255 | 
|OJSC Comincom/ Combellga |  |                   |     |                         |            |  | 15              |            |  |          | 14         |   |           |               |      |           |               |  |      |  |  |  |      | 
|DiGi.Com bhd             |  |                   | 39.0 |                         |            |  | 47              |            |  |          | 68         |   |           |               | 187   |           |               |  | 1,131 |  |  |  | 1,191 | 
|GrameenPhone Ltd.        |  |                   | 38.0 |                         |            |  | 162             |            |  |          | 283        |   |           |               | 411   |           |               |  | 448   |  |  |  | 528   | 
|EDB Business Partner ASA |  |                   | 48.2 |                         |            |  | (555            | )          |  |          | (26        | ) |           |               | 28    |           |               |  | 888   |  |  |  | 895   | 
|Telenor Venture IV AS    |  |                   | 20.0 |                         |            |  |                |            |  |          |           |   |           |               |      |           |               |  |      |  |  |  | 52    | 
|Other                    |  |                   |     |                         |            |  | (5              | )          |  |          | (43        | ) |           |               | 18    |           |               |  | 45    |  |  |  | 19    | 
|                         |  |                   |      |                         |            |  |                 |            |  |          |            |   |           |               |       |           |               | 
|Total                    |  |                   |      |                         |            |  | (358            | )          |  |          | 490        |   |           |               | 1,244 |           |               |  | 3,646 |  |  |  | 4,074 | 
|                         |  |                   |      |                         |            |  |                 |            |  |          |            |   |           |               |       |           |               | 







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RESULTS OF OPERATIONS




|                                                                        |  |                   |        |   |      |  |        |      |  |  |        |  
|----------------------------------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                                        |  | 2002              |        |   | 2003 |  |        | 2004 | 
|                                                                        |  |                   |        |   |      |  |        |      | 
|                                                                        |  | (NOK in millions) |       
|Revenues excluding gains on disposal of fixed assets and
    operations |  |                   |        |   |      |  |        |      |  |  |        |  
|Telenor Mobil  Norway                                                  |  |                   | 10,695 |   |      |  | 10,909 |      |  |  | 11,734 |  
|Sonofon  Denmark                                                       |  |                   |       |   |      |  |       |      |  |  | 4,393  |  
|Pannon GSM  Hungary                                                    |  |                   | 4,505  |   |      |  | 5,370  |      |  |  | 5,864  |  
|DiGi.Com  Malaysia                                                     |  |                   | 2,715  |   |      |  | 3,176  |      |  |  | 3,953  |  
|Kyivstar  Ukraine                                                      |  |                   | 708    |   |      |  | 2,634  |      |  |  | 4,346  |  
|GrameenPhone  Bangladesh                                               |  |                   | 1,589  |   |      |  | 1,536  |      |  |  | 2,202  |  
|Other mobile operations/ eliminations                                   |  |                   | 134    |   |      |  | 185    |      |  |  | 455    |  
|Total mobile operations                                                 |  |                   | 20,346 |   |      |  | 23,810 |      |  |  | 32,947 |  
|Fixed                                                                   |  |                   | 20,008 |   |      |  | 20,500 |      |  |  | 19,256 |  
|Broadcast                                                               |  |                   | 3,607  |   |      |  | 4,800  |      |  |  | 5,346  |  
|EDB Business Partner                                                    |  |                   | 4,338  |   |      |  | 4,270  |      |  |  | 4,235  |  
|Other business units                                                    |  |                   | 5,040  |   |      |  | 4,154  |      |  |  | 3,460  |  
|Corporate functions and Group activities                                |  |                   | 2,116  |   |      |  | 2,184  |      |  |  | 2,089  |  
|Eliminations                                                            |  |                   | (6,787 | ) |      |  | (6,829 | )    |  |  | (6581  | )
|                                                                        |  |                   |        |   |      |  |        |      | 
|Total revenues excluding gains                                          |  |                   | 48,668 |   |      |  | 52,889 |      |  |  | 60,752 |  
|Gains on disposal of fixed assets and operations                        |  |                   | 158    |   |      |  | 232    |      |  |  | 550    |  
|                                                                        |  |                   |        |   |      |  |        |      | 
|Total revenues                                                          |  |                   | 48,826 |   |      |  | 53,121 |      |  |  | 61,302 |  
|                                                                        |  |                   |        |   |      |  |        |      | 

|                                         |  |                   |        |   |      |  |       |      |  |  |        |  
|---------------------------------------- |  | ----------------- | ------ | - | ---- |  | ----- | ---- |  |  | ------ | -
|                                         |  | 2002              |        |   | 2003 |  |       | 2004 | 
|                                         |  |                   |        |   |      |  |       |      | 
|                                         |  | (NOK in millions) |       
|Operating profit (loss)(1)               |  |                   |        |   |      |  |       |      |  |  |        |  
|Telenor Mobil  Norway                   |  |                   | 3,008  |   |      |  | 3,115 |      |  |  | 3,213  |  
|Sonofon  Denmark                        |  |                   |       |   |      |  |      |      |  |  | (3,248 | )
|Pannon GSM  Hungary                     |  |                   | 297    |   |      |  | 379   |      |  |  | 453    |  
|DiGi.Com  Malaysia                      |  |                   | (2,003 | ) |      |  | 374   |      |  |  | 785    |  
|Kyivstar  Ukraine                       |  |                   | 251    |   |      |  | 1,093 |      |  |  | 1,989  |  
|GrameenPhone  Bangladesh                |  |                   | 631    |   |      |  | 843   |      |  |  | 1,095  |  
|Other mobile operations/ eliminations    |  |                   | (770   | ) |      |  | (580  | )    |  |  | (1,260 | )
|Total mobile operations                  |  |                   | 1,414  |   |      |  | 5,224 |      |  |  | 3,027  |  
|Fixed                                    |  |                   | 731    |   |      |  | 2,531 |      |  |  | 2,794  |  
|Broadcast                                |  |                   | (475   | ) |      |  | 181   |      |  |  | 589    |  
|EDB Business Partner                     |  |                   | (409   | ) |      |  | (4    | )    |  |  | 524    |  
|Other business units                     |  |                   | (736   | ) |      |  | (120  | )    |  |  | 113    |  
|Corporate functions and Group activities |  |                   | (931   | ) |      |  | (364  | )    |  |  | (468   | )
|Eliminations                             |  |                   | 86     |   |      |  | 112   |      |  |  | 23     |  
|                                         |  |                   |        |   |      |  |       |      | 
|Total operating profit (loss)            |  |                   | (320   | ) |      |  | 7,560 |      |  |  | 6,602  |  
|                                         |  |                   |        |   |      |  |       |      | 






|    |                                                                                              
|--- | ---------------------------------------------------------------------------------------------
|(1) | Amortization and write-downs of Telenors net excess values
    are included in each segment.

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|                                         |  |                   |        |   |      |  |        |      |  |  |        |  
|---------------------------------------- |  | ----------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                         |  | 2002              |        |   | 2003 |  |        | 2004 | 
|                                         |  |                   |        |   |      |  |        |      | 
|                                         |  | (NOK in millions) |       
|EBITDA                                   |  |                   |        |   |      |  |        |      |  |  |        |  
|Telenor Mobil  Norway                   |  |                   | 4,330  |   |      |  | 4,262  |      |  |  | 4,283  |  
|Sonofon  Denmark                        |  |                   |       |   |      |  |       |      |  |  | 680    |  
|Pannon GSM  Hungary                     |  |                   | 1,586  |   |      |  | 1,924  |      |  |  | 2,092  |  
|DiGi.Com  Malaysia                      |  |                   | 1,022  |   |      |  | 1,295  |      |  |  | 1,732  |  
|Kyivstar  Ukraine                       |  |                   | 403    |   |      |  | 1,573  |      |  |  | 2,581  |  
|GrameenPhone  Bangladesh                |  |                   | 757    |   |      |  | 1,001  |      |  |  | 1,313  |  
|Other mobile operations/ eliminations    |  |                   | (616   | ) |      |  | (488   | )    |  |  | (1,063 | )
|Total mobile operations                  |  |                   | 7,482  |   |      |  | 9,567  |      |  |  | 11,618 |  
|Fixed                                    |  |                   | 5,597  |   |      |  | 6,665  |      |  |  | 6,277  |  
|Broadcast                                |  |                   | 499    |   |      |  | 1,229  |      |  |  | 1,495  |  
|EDB Business Partner                     |  |                   | 348    |   |      |  | 399    |      |  |  | 924    |  
|Other business units                     |  |                   | 178    |   |      |  | 408    |      |  |  | 524    |  
|Corporate functions and Group activities |  |                   | (569   | ) |      |  | 23     |      |  |  | (81    | )
|Eliminations                             |  |                   | (66    | ) |      |  | 11     |      |  |  | 64     |  
|                                         |  |                   |        |   |      |  |        |      | 
|Total EBITDA(1)                          |  |                   | 13,469 |   |      |  | 18,302 |      |  |  | 20,821 |  
|                                         |  |                   |        |   |      |  |        |      | 






|    |                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | You should read Results of Operations 
    Group-Operating Profit (Loss) and EBITDA for the
    reconciliation of EBITDA to net income for the group.

MOBILE OPERATIONS


|                                                                 |  |                   |        |   |      |  |        |      |  |  |        |  
|---------------------------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                                 |  | 2002              |        |   | 2003 |  |        | 2004 | 
|                                                                 |  |                   |        |   |      |  |        |      | 
|                                                                 |  | (NOK in millions) |       
|External revenues                                                |  |                   | 19,079 |   |      |  | 22,483 |      |  |  | 31,565 |  
|Internal revenues                                                |  |                   | 1,267  |   |      |  | 1,327  |      |  |  | 1,382  |  
|Gains on disposal of fixed assets and operations                 |  |                   |       |   |      |  |       |      |  |  | 5      |  
|                                                                 |  |                   |        |   |      |  |        |      | 
|Total revenues                                                   |  |                   | 20,346 |   |      |  | 23,810 |      |  |  | 32,952 |  
|                                                                 |  |                   |        |   |      |  |        |      | 
|External costs of materials and traffic charges                  |  |                   | 5,020  |   |      |  | 5,481  |      |  |  | 8,680  |  
|Internal costs of materials and traffic charges                  |  |                   | 725    |   |      |  | 770    |      |  |  | 874    |  
|Total costs of materials and traffic charges                     |  |                   | 5,745  |   |      |  | 6,251  |      |  |  | 9,554  |  
|                                                                 |  |                   |        |   |      |  |        |      | 
|Own work capitalized                                             |  |                   | (69    | ) |      |  | (97    | )    |  |  | (72    | )
|Salaries and personnel costs                                     |  |                   | 1,898  |   |      |  | 1,917  |      |  |  | 2,695  |  
|Other external operating expenses                                |  |                   | 4,330  |   |      |  | 5,170  |      |  |  | 8,119  |  
|Other internal operating expenses                                |  |                   | 960    |   |      |  | 997    |      |  |  | 1,026  |  
|Losses on disposal of fixed assets and operations                |  |                   |       |   |      |  | 5      |      |  |  | 12     |  
|Depreciation and amortization (1)                                |  |                   | 3,779  |   |      |  | 4,308  |      |  |  | 6,072  |  
|Write-downs (2)                                                  |  |                   | 2,289  |   |      |  | 35     |      |  |  | 2,519  |  
|                                                                 |  |                   |        |   |      |  |        |      | 
|Total operating expenses                                         |  |                   | 18,932 |   |      |  | 18,586 |      |  |  | 29,925 |  
|                                                                 |  |                   |        |   |      |  |        |      | 
|Operating profit                                                 |  |                   | 1,414  |   |      |  | 5,224  |      |  |  | 3,027  |  
|                                                                 |  |                   |        |   |      |  |        |      | 
|Associated companies                                             |  |                   | (2,030 | ) |      |  | 1,639  |      |  |  | 694    |  
|Net financial items                                              |  |                   | (2,050 | ) |      |  | (2,182 | )    |  |  | 873    |  
|                                                                 |  |                   |        |   |      |  |        |      | 
|Profit before taxes and minority interests                       |  |                   | (2,666 | ) |      |  | 4,681  |      |  |  | 4,594  |  
|                                                                 |  |                   |        |   |      |  |        |      | 
|(1) Includes amortization of Telenors net excess
    values* by |  |                   | 924    |   |      |  | 906    |      |  |  | 1,844  |  
|                                                                 |  |                   |        |   |      |  |        |      | 
|(2) Includes write-downs of Telenors net excess
    values* by  |  |                   | 2,138  |   |      |  |       |      |  |  | 2,190  |  
|                                                                 |  |                   |        |   |      |  |        |      | 






|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Net excess values are the difference between our acquisition
    cost and our share of equity at acquisition of subsidiaries.

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|                                     |                           |  |        |       |  |  |        |       |  |  |        |       | 
|------------------------------------ | ------------------------- |  | ------ | ----- |  |  | ------ | ----- |  |  | ------ | ----- | 
|EBITDA                               |                           |  | 7,482  |       |  |  | 9,567  |       |  |  | 11,618 |      
|Depreciation and amortization        |                           |  | 3,779  |       |  |  | 4,308  |       |  |  | 6,072  |      
|Write-downs                          |                           |  | 2,289  |       |  |  | 35     |       |  |  | 2,519  |      
|                                     |                           |  |        |       |  |  |        |       | 
|Operating profit                     |                           |  | 1,414  |       |  |  | 5,224  |       |  |  | 3,027  |      
|                                     |                           |  |        |       |  |  |        |       | 
|Operating profit/ Total revenues (%) |                           |  | 6.9    |       |  |  | 21.9   |       |  |  | 9.2    |      
|EBITDA/ Total revenues (%)           |                           |  | 36.8   |       |  |  | 40.2   |       |  |  | 35.3   |      
|Investments:                         |                           |  |        |       |  |  |        |       |  |  |        |      
|                                     | Capex                     |  |        | 3,731 |  |  |        | 3,667 |  |  |        | 9,427 | 
|                                     | Investments in businesses |  |        | 8,894 |  |  |        | 95    |  |  |        | 4,711 | 
|No. of man-years (end of period)     |                           |  | 6,551  |       |  |  | 6,924  |       |  |  | 9,335  |      
|                                     | Of which abroad           |  |        | 4,673 |  |  |        | 5,201 |  |  |        | 7,767 | 
|Revenues                             |                           |  |        |       |  |  |        |       |  |  |        |      
|Telenor Mobil  Norway               |                           |  | 10,695 |       |  |  | 10,909 |       |  |  | 11,734 |      
|Sonofon  Denmark                    |                           |  |       |       |  |  |       |       |  |  | 4,393  |      
|                                     |                           |  |        |       |  |  |        |       | 
|Telenor Mobile Sweden                |                           |  | 81     |       |  |  | 127    |       |  |  | 223    |      
|                                     |                           |  |        |       |  |  |        |       | 
|Pannon GSM  Hungary                 |                           |  | 4,505  |       |  |  | 5,370  |       |  |  | 5,869  |      
|DiGi.Com  Malaysia                  |                           |  | 2,715  |       |  |  | 3,176  |       |  |  | 3,953  |      
|GrameenPhone  Bangladesh            |                           |  | 1,589  |       |  |  | 1,536  |       |  |  | 2,202  |      
|Kyivstar  Ukraine                   |                           |  | 708    |       |  |  | 2,634  |       |  |  | 4,346  |      
|ProMonte GSM  Montenegro            |                           |  |       |       |  |  |       |       |  |  | 200    |      
|                                     |                           |  |        |       |  |  |        |       | 
|Other including eliminations         |                           |  | 53     |       |  |  | 58     |       |  |  | 32     |      
|                                     |                           |  |        |       |  |  |        |       | 
|Total revenues                       |                           |  | 20,346 |       |  |  | 23,810 |       |  |  | 32,952 |      
|                                     |                           |  |        |       |  |  |        |       | 
|EBITDA                               |                           |  |        |       |  |  |        |       |  |  |        |      
|Telenor Mobil  Norway               |                           |  | 4,330  |       |  |  | 4,262  |       |  |  | 4,283  |      
|Sonofon  Denmark                    |                           |  |       |       |  |  |       |       |  |  | 680    |      
|Telenor Mobile Sweden                |                           |  | (77    | )     |  |  | (114   | )     |  |  | (725   | )    
|Pannon GSM  Hungary                 |                           |  | 1,586  |       |  |  | 1,924  |       |  |  | 2,092  |      
|DiGi.Com  Malaysia                  |                           |  | 1,022  |       |  |  | 1,295  |       |  |  | 1,732  |      
|GrameenPhone  Bangladesh            |                           |  | 757    |       |  |  | 1,001  |       |  |  | 1,313  |      
|Kyivstar  Ukraine                   |                           |  | 403    |       |  |  | 1,573  |       |  |  | 2,581  |      
|ProMonte GSM  Montenegro            |                           |  |       |       |  |  |       |       |  |  | 91     |      
|                                     |                           |  |        |       |  |  |        |       | 
|Other including eliminations         |                           |  | (539   | )     |  |  | (374   | )     |  |  | (429   | )    
|                                     |                           |  |        |       |  |  |        |       | 
|Total EBITDA                         |                           |  | 7,482  |       |  |  | 9,567  |       |  |  | 11,618 |      
|                                     |                           |  |        |       |  |  |        |       | 

Overview






| |   |                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | ProMonte as a subsidiary effective from August 12, 2004,
    when we increased our ownership interest in the Montenegrin
    operator from 44.1% to 100%.                                                                                                                                                        
|
| |  | Sonofon as a subsidiary effective from February 12, 2004,
    when we increased our ownership interest in the Danish operator
    from 53.5% to 100%.                                                                                                                                                            
|
| |  | Kyivstar as a subsidiary effective from September 1, 2002,
    when we increased our ownership interest in the Ukrainian
    operator from 45.4% to 54.2%. As of May 2003, our ownership
    interest increased to 55.4% and as of April 2004, our ownership
    interest in Kyivstar increased further to 56.5%.
|
| |  | Pannon GSM as a subsidiary effective from February 4, 2002,
    when we increased our ownership interest in the Hungarian
    operator from 25.8% to 100%.                                                                                                                                                       



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105



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Telenor Mobil  Norway


|                                    |                           |                   |        |   |      |  |        |      |  |  |        |    | 
|----------------------------------- | ------------------------- | ----------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -- | 
|                                    |                           | 2002              |        |   | 2003 |  |        | 2004 | 
|                                    |                           |                   |        |   |      |  |        |      | 
|                                    |                           | (NOK in millions) |       
|External revenues                   |                           |                   |        |   |      |  |        |      |  |  |        |   
|Mobile outgoing traffic             |                           |                   | 3,880  |   |      |  | 3,712  |      |  |  | 3,845  |   
|Mobile incoming traffic             |                           |                   | 389    |   |      |  | 455    |      |  |  | 541    |   
|Roaming(1)                          |                           |                   | 1,173  |   |      |  | 1,163  |      |  |  | 1,182  |   
|                                    |                           |                   |        |   |      |  |        |      | 
|Total traffic                       |                           |                   | 5,442  |   |      |  | 5,329  |      |  |  | 5,568  |   
|SMS, MMS and content services(1)(2) |                           |                   | 1,577  |   |      |  | 1,599  |      |  |  | 1,595  |   
|Subscriptions and connections       |                           |                   | 1,350  |   |      |  | 1,216  |      |  |  | 1,533  |   
|Customer equipment                  |                           |                   | 616    |   |      |  | 722    |      |  |  | 589    |   
|Service providers and other         |                           |                   | 456    |   |      |  | 773    |      |  |  | 1,223  |   
|                                    |                           |                   |        |   |      |  |        |      | 
|Total external revenues             |                           |                   | 9,441  |   |      |  | 9,639  |      |  |  | 10,508 |   
|Internal revenues                   |                           |                   | 1,254  |   |      |  | 1,270  |      |  |  | 1,226  |   
|Gains on disposal                   |                           |                   |       |   |      |  |       |      |  |  |       |   
|                                    |                           |                   |        |   |      |  |        |      | 
|Total revenues                      |                           |                   | 10,695 |   |      |  | 10,909 |      |  |  | 11,734 |   
|                                    |                           |                   |        |   |      |  |        |      | 
|Total operating expenses            |                           |                   | 7,687  |   |      |  | 7,794  |      |  |  | 8,521  |   
|                                    |                           |                   |        |   |      |  |        |      | 
|Operating profit                    |                           |                   | 3,008  |   |      |  | 3,115  |      |  |  | 3,213  |   
|                                    |                           |                   |        |   |      |  |        |      | 
|EBITDA                              |                           |                   | 4,330  |   |      |  | 4,262  |      |  |  | 4,283  |   
|Depreciation and amortization       |                           |                   | 1,207  |   |      |  | 1,147  |      |  |  | 1,056  |   
|Write-downs                         |                           |                   | 115    |   |      |  |       |      |  |  | 14     |   
|                                    |                           |                   |        |   |      |  |        |      | 
|Operating profit                    |                           |                   | 3,008  |   |      |  | 3,115  |      |  |  | 3,213  |   
|                                    |                           |                   |        |   |      |  |        |      | 
|Operating profit/Total revenues (%) |                           |                   | 28.1   |   |      |  | 28.6   |      |  |  | 27.4   |   
|EBITDA/Total revenues (%)           |                           |                   | 40.5   |   |      |  | 39.1   |      |  |  | 36.5   |   
|Investments Capex                   |                           |                   | 750    |   |      |  | 500    |      |  |  | 973    |   
|                                    | Acquisition of businesses |                   |        |  |      |  |        |     |  |  |        | 52 | 
|No. of man-years (end of period)    |                           |                   | 1,713  |   |      |  | 1,602  |      |  |  | 1,413  |   
|No. of subscriptions (in thousands) |                           |                   | 2,382  |   |      |  | 2,364  |      |  |  | 2,645  |   






|    |                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Compared to previously reported external revenues, SMS services
    from abroad (roaming) have been reclassified from
    Roaming to SMS, MMS and content services
|   
|(2) | Includes terminated SMS                                                                                                                                               

Operating profit and EBITDA  Telenor
Mobil  Norway






Revenues  Telenor
Mobil  Norway




106



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107



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Operating expenses  Telenor
Mobil  Norway


|                                                  |  |                   |       |   |      |  |       |      |  |  |       |  
|------------------------------------------------- |  | ----------------- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                                  |  | 2002              |       |   | 2003 |  |       | 2004 | 
|                                                  |  |                   |       |   |      |  |       |      | 
|                                                  |  | (NOK in millions) |      
|External costs of materials and traffic charges   |  |                   | 1,872 |   |      |  | 2,127 |      |  |  | 2,291 |  
|Internal costs of materials and traffic charges   |  |                   | 722   |   |      |  | 775   |      |  |  | 867   |  
|                                                  |  |                   |       |   |      |  |       |      | 
|Total costs of materials and traffic charges      |  |                   | 2,594 |   |      |  | 2,902 |      |  |  | 3,158 |  
|                                                  |  |                   |       |   |      |  |       |      | 
|Own work capitalized                              |  |                   | (52   | ) |      |  | (33   | )    |  |  | (23   | )
|Salaries and personnel costs                      |  |                   | 1,064 |   |      |  | 936   |      |  |  | 884   |  
|Other external operating expenses                 |  |                   | 1,970 |   |      |  | 2,019 |      |  |  | 2,593 |  
|Other internal operating expenses                 |  |                   | 789   |   |      |  | 823   |      |  |  | 839   |  
|Losses on disposal of fixed assets and operations |  |                   |      |   |      |  |      |      |  |  |      |  
|Depreciation and amortization                     |  |                   | 1,207 |   |      |  | 1,147 |      |  |  | 1,056 |  
|Write-downs                                       |  |                   | 115   |   |      |  |      |      |  |  | 14    |  
|                                                  |  |                   |       |   |      |  |       |      | 
|Total operating expenses                          |  |                   | 7,687 |   |      |  | 7,794 |      |  |  | 8,521 |  
|                                                  |  |                   |       |   |      |  |       |      | 











Capital expenditure  Telenor
Mobil  Norway






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Sonofon  Denmark


|                                   |  |                   |   |  |      |  |   |      |  |  |        |  
|---------------------------------- |  | ----------------- | - |  | ---- |  | - | ---- |  |  | ------ | -
|                                   |  | 2002              |   |  | 2003 |  |   | 2004 | 
|                                   |  |                   |   |  |      |  |   |      | 
|                                   |  | (NOK in millions) |  
|Mobile related revenues            |  |                   |  |  |      |  |  |      |  |  | 3,369  |  
|Other revenues                     |  |                   |  |  |      |  |  |      |  |  | 1,024  |  
|                                   |  |                   |   |  |      |  |   |      | 
|Total revenues                     |  |                   |  |  |      |  |  |      |  |  | 4,393  |  
|                                   |  |                   |   |  |      |  |   |      | 
|Total operating expenses           |  |                   |  |  |      |  |  |      |  |  | 7,641  |  
|                                   |  |                   |   |  |      |  |   |      | 
|Operating (loss)                   |  |                   |  |  |      |  |  |      |  |  | (3,248 | )
|                                   |  |                   |   |  |      |  |   |      | 
|EBITDA                             |  |                   |  |  |      |  |  |      |  |  | 680    |  
|Depreciation and amortization      |  |                   |  |  |      |  |  |      |  |  | 1,523  |  
|Write-downs                        |  |                   |  |  |      |  |  |      |  |  | 2,405  |  
|                                   |  |                   |   |  |      |  |   |      | 
|Operating (loss)                   |  |                   |  |  |      |  |  |      |  |  | (3,248 | )
|                                   |  |                   |   |  |      |  |   |      | 
|EBITDA/ Total revenues (%)         |  |                   |  |  |      |  |  |      |  |  | 15.5   |  
|Capex                              |  |                   |  |  |      |  |  |      |  |  | 388    |  
|No. of man-years (end of period)   |  |                   |  |  |      |  |  |      |  |  | 1,343  |  
|No. of subscriptions (in thousand) |  |                   |  |  |      |  |  |      |  |  | 1,286  |  



Operating profit (loss) and
EBITDA  Sonofon




Revenues  Sonofon




,


109



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Operating expenses  Sonofon


|                                                                 |  |                   |   |  |      |  |   |      |  |  |       |  
|---------------------------------------------------------------- |  | ----------------- | - |  | ---- |  | - | ---- |  |  | ----- | -
|                                                                 |  | 2002              |   |  | 2003 |  |   | 2004 | 
|                                                                 |  |                   |   |  |      |  |   |      | 
|                                                                 |  | (NOK in millions) |  
|External costs of materials and traffic charges                  |  |                   |  |  |      |  |  |      |  |  | 2,090 |  
|Internal costs of materials and traffic charges                  |  |                   |  |  |      |  |  |      |  |  | 33    |  
|                                                                 |  |                   |   |  |      |  |   |      | 
|Total costs of materials and traffic charges                     |  |                   |  |  |      |  |  |      |  |  | 2,123 |  
|                                                                 |  |                   |   |  |      |  |   |      | 
|Own work capitalized                                             |  |                   |  |  |      |  |  |      |  |  | (30   | )
|Salaries and personnel costs                                     |  |                   |  |  |      |  |  |      |  |  | 586   |  
|Other external operating expenses                                |  |                   |  |  |      |  |  |      |  |  | 1,032 |  
|Other internal operating expenses                                |  |                   |  |  |      |  |  |      |  |  | 2     |  
|Losses on disposal of fixed assets and operations                |  |                   |  |  |      |  |  |      |  |  |      |  
|Depreciation and amortization(1)                                 |  |                   |  |  |      |  |  |      |  |  | 1,523 |  
|Write-downs(2)                                                   |  |                   |  |  |      |  |  |      |  |  | 2,405 |  
|                                                                 |  |                   |   |  |      |  |   |      | 
|Total operating expenses                                         |  |                   |  |  |      |  |  |      |  |  | 7,641 |  
|                                                                 |  |                   |   |  |      |  |   |      | 
|(1) Includes amortization of Telenors net excess
    values* by |  |                   |   |  |      |  |   |      |  |  | 880   |  
|(2) Includes write-downs of Telenors net excess
    values* by  |  |                   |   |  |      |  |   |      |  |  | 2,190 |  






|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Net excess values are the difference between our acquisition
    cost and our share of equity at acquisition of subsidiaries.



Capital expenditure  Sonofon




Telenor Mobile Sweden


|                                    |  |                   |     |   |      |  |      |      |  |  |       |  
|----------------------------------- |  | ----------------- | --- | - | ---- |  | ---- | ---- |  |  | ----- | -
|                                    |  | 2002              |     |   | 2003 |  |      | 2004 | 
|                                    |  |                   |     |   |      |  |      |      | 
|                                    |  | (NOK in millions) |    
|Total revenues                      |  |                   | 81  |   |      |  | 127  |      |  |  | 223   |  
|                                    |  |                   |     |   |      |  |      |      | 
|Total operating expenses            |  |                   | 166 |   |      |  | 265  |      |  |  | 1,072 |  
|                                    |  |                   |     |   |      |  |      |      | 
|Operating (loss)                    |  |                   | (85 | ) |      |  | (138 | )    |  |  | (849  | )
|                                    |  |                   |     |   |      |  |      |      | 
|EBITDA                              |  |                   | (77 | ) |      |  | (114 | )    |  |  | (725  | )
|Depreciation and amortization       |  |                   | 8   |   |      |  | 24   |      |  |  | 49    |  
|Write-downs                         |  |                   |    |   |      |  |     |      |  |  | 75    |  
|                                    |  |                   |     |   |      |  |      |      | 
|Operating (loss)                    |  |                   | (85 | ) |      |  | (138 | )    |  |  | (849  | )
|                                    |  |                   |     |   |      |  |      |      | 
|Capex                               |  |                   | 16  |   |      |  | 79   |      |  |  | 17    |  
|No. of man-years (end of period)    |  |                   | 17  |   |      |  | 21   |      |  |  | 16    |  
|No. of subscriptions (in thousands) |  |                   | 54  |   |      |  | 81   |      |  |  | 105   |  






|    |                                                                                               
|--- | ----------------------------------------------------------------------------------------------
|(1) | The table shows figures included in the accounts for Telenor
    from the date of acquisition.

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Operating profit and EBITDA  Telenor
Mobile Sweden






Revenues  Telenor Mobile Sweden




Operating expenses  Telenor Mobile
Sweden


|                                                  |  |                   |     |  |      |  |     |      |  |  |       | 
|------------------------------------------------- |  | ----------------- | --- |  | ---- |  | --- | ---- |  |  | ----- | 
|                                                  |  | 2002              |     |  | 2003 |  |     | 2004 | 
|                                                  |  |                   |     |  |      |  |     |      | 
|                                                  |  | (NOK in millions) |    
|External costs of materials and traffic charges   |  |                   | 48  |  |      |  | 65  |      |  |  | 200   | 
|Internal costs of materials and traffic charges   |  |                   |    |  |      |  | 7   |      |  |  | 45    | 
|                                                  |  |                   |     |  |      |  |     |      | 
|Total costs of materials and traffic charges      |  |                   | 48  |  |      |  | 72  |      |  |  | 245   | 
|                                                  |  |                   |     |  |      |  |     |      | 
|Own work capitalized                              |  |                   |    |  |      |  |    |      |  |  |      | 
|Salaries and personnel costs                      |  |                   | 11  |  |      |  | 23  |      |  |  | 17    | 
|Other external operating expenses                 |  |                   | 94  |  |      |  | 131 |      |  |  | 655   | 
|Other internal operating expenses                 |  |                   | 5   |  |      |  | 15  |      |  |  | 31    | 
|Losses on disposal of fixed assets and operations |  |                   |    |  |      |  |    |      |  |  |      | 
|Depreciation and amortization                     |  |                   | 8   |  |      |  | 24  |      |  |  | 49    | 
|Write-downs                                       |  |                   |    |  |      |  |    |      |  |  | 75    | 
|Total operating expenses                          |  |                   | 166 |  |      |  | 265 |      |  |  | 1,072 | 
|                                                  |  |                   |     |  |      |  |     |      | 



Capital expenditure  Telenor Mobile
Sweden




111



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##### Table of Contents



Pannon GSM  Hungary


|                                     |  |                   |       |  |      |  |       |      |  |  |       | 
|------------------------------------ |  | ----------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                     |  | 2002              |       |  | 2003 |  |       | 2004 | 
|                                     |  |                   |       |  |      |  |       |      | 
|                                     |  | (NOK in millions) |      
|Mobile related revenues              |  |                   | 4,187 |  |      |  | 5,005 |      |  |  | 5,499 | 
|Other revenues                       |  |                   | 318   |  |      |  | 365   |      |  |  | 370   | 
|                                     |  |                   |       |  |      |  |       |      | 
|Total revenues                       |  |                   | 4,505 |  |      |  | 5,370 |      |  |  | 5,869 | 
|                                     |  |                   |       |  |      |  |       |      | 
|Total operating expenses             |  |                   | 4,208 |  |      |  | 4,991 |      |  |  | 5,416 | 
|                                     |  |                   |       |  |      |  |       |      | 
|Operating profit                     |  |                   | 297   |  |      |  | 379   |      |  |  | 453   | 
|                                     |  |                   |       |  |      |  |       |      | 
|EBITDA                               |  |                   | 1,586 |  |      |  | 1,924 |      |  |  | 2,092 | 
|Depreciation and amortization        |  |                   | 1,274 |  |      |  | 1,535 |      |  |  | 1,618 | 
|Write-downs                          |  |                   | 15    |  |      |  | 10    |      |  |  | 21    | 
|                                     |  |                   |       |  |      |  |       |      | 
|Operating profit                     |  |                   | 297   |  |      |  | 379   |      |  |  | 453   | 
|                                     |  |                   |       |  |      |  |       |      | 
|Operating profit/ Total revenues (%) |  |                   | 6.6   |  |      |  | 7.1   |      |  |  | 7.7   | 
|EBITDA/ Total revenues (%)           |  |                   | 35.2  |  |      |  | 35.8  |      |  |  | 35.6  | 
|Capex                                |  |                   | 825   |  |      |  | 644   |      |  |  | 1,166 | 
|No. of man-years (end of period)     |  |                   | 1,523 |  |      |  | 1,499 |      |  |  | 1,384 | 
|No. of subscriptions (in thousand)   |  |                   | 2,450 |  |      |  | 2,618 |      |  |  | 2,770 | 





Operating profit and EBITDA  Pannon
GSM




Revenues  Pannon GSM




112



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##### Table of Contents







Operating expenses  Pannon GSM


|                                                                 |  |                   |       |  |      |  |       |      |  |  |       | 
|---------------------------------------------------------------- |  | ----------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                                                 |  | 2002              |       |  | 2003 |  |       | 2004 | 
|                                                                 |  |                   |       |  |      |  |       |      | 
|                                                                 |  | (NOK in millions) |      
|External costs of materials and traffic charges                  |  |                   | 1,754 |  |      |  | 2,048 |      |  |  | 2,243 | 
|Internal costs of materials and traffic charges                  |  |                   | 2     |  |      |  | 2     |      |  |  | 5     | 
|                                                                 |  |                   |       |  |      |  |       |      | 
|Total costs of materials and traffic charges                     |  |                   | 1,756 |  |      |  | 2,050 |      |  |  | 2,248 | 
|                                                                 |  |                   |       |  |      |  |       |      | 
|Own work capitalized                                             |  |                   |      |  |      |  |      |      |  |  |      | 
|Salaries and personnel costs                                     |  |                   | 298   |  |      |  | 385   |      |  |  | 378   | 
|Other external operating expenses                                |  |                   | 865   |  |      |  | 1,001 |      |  |  | 1,125 | 
|Other internal operating expenses                                |  |                   |      |  |      |  | 10    |      |  |  | 22    | 
|Losses on disposal of fixed assets and operations                |  |                   |      |  |      |  |      |      |  |  | 4     | 
|Depreciation and amortization(1)                                 |  |                   | 1,274 |  |      |  | 1,535 |      |  |  | 1,618 | 
|Write-downs                                                      |  |                   | 15    |  |      |  | 10    |      |  |  | 21    | 
|                                                                 |  |                   |       |  |      |  |       |      | 
|Total operating expenses                                         |  |                   | 4,208 |  |      |  | 4,991 |      |  |  | 5,416 | 
|                                                                 |  |                   |       |  |      |  |       |      | 
|(1) Includes amortization of Telenors net excess
    values* by |  |                   | 574   |  |      |  | 646   |      |  |  | 683   | 






|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Net excess values are the difference between our acquisition
    cost and our share of equity at acquisition of subsidiaries.





Capital expenditure  Pannon GSM




113



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##### Table of Contents



DiGi.Com  Malaysia


|                                     |  |                   |        |   |      |  |       |      |  |  |       | 
|------------------------------------ |  | ----------------- | ------ | - | ---- |  | ----- | ---- |  |  | ----- | 
|                                     |  | 2002              |        |   | 2003 |  |       | 2004 | 
|                                     |  |                   |        |   |      |  |       |      | 
|                                     |  | (NOK in millions) |       
|Mobile related revenues              |  |                   | 2,273  |   |      |  | 2,713 |      |  |  | 3,437 | 
|Other revenues                       |  |                   | 442    |   |      |  | 463   |      |  |  | 516   | 
|                                     |  |                   |        |   |      |  |       |      | 
|Total revenues                       |  |                   | 2,715  |   |      |  | 3,176 |      |  |  | 3,953 | 
|                                     |  |                   |        |   |      |  |       |      | 
|Total operating expenses             |  |                   | 4,718  |   |      |  | 2,802 |      |  |  | 3,168 | 
|                                     |  |                   |        |   |      |  |       |      | 
|Operating profit (loss)              |  |                   | (2,003 | ) |      |  | 374   |      |  |  | 785   | 
|                                     |  |                   |        |   |      |  |       |      | 
|EBITDA                               |  |                   | 1,022  |   |      |  | 1,295 |      |  |  | 1,732 | 
|Depreciation and amortization        |  |                   | 875    |   |      |  | 903   |      |  |  | 947   | 
|Write-downs                          |  |                   | 2,150  |   |      |  | 18    |      |  |  |      | 
|                                     |  |                   |        |   |      |  |       |      | 
|Operating profit (loss)              |  |                   | (2,003 | ) |      |  | 374   |      |  |  | 785   | 
|                                     |  |                   |        |   |      |  |       |      | 
|Operating profit/ Total revenues (%) |  |                   | nm     |   |      |  | 11.8  |      |  |  | 19.9  | 
|EBITDA/ Total revenues (%)           |  |                   | 37.6   |   |      |  | 40.8  |      |  |  | 43.8  | 
|Capex                                |  |                   | 1,457  |   |      |  | 1,043 |      |  |  | 920   | 
|No. of man-years (end of period)     |  |                   | 1,443  |   |      |  | 1,450 |      |  |  | 1,549 | 
|No. of subscriptions (in thousand)   |  |                   | 1,616  |   |      |  | 2,207 |      |  |  | 3,242 | 



Operating profit and EBITDA  DiGi.Com






Revenues  DiGi.Com




114



---



##### Table of Contents







Operating expenses  DiGi.Com


|                                                                 |  |                   |       |   |      |  |       |      |  |  |       |  
|---------------------------------------------------------------- |  | ----------------- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                                                 |  | 2002              |       |   | 2003 |  |       | 2004 | 
|                                                                 |  |                   |       |   |      |  |       |      | 
|                                                                 |  | (NOK in millions) |      
|External costs of materials and traffic charges                  |  |                   | 730   |   |      |  | 801   |      |  |  | 904   |  
|Internal costs of materials and traffic charges                  |  |                   | 3     |   |      |  | 3     |      |  |  | 3     |  
|                                                                 |  |                   |       |   |      |  |       |      | 
|Total costs of materials and traffic charges                     |  |                   | 733   |   |      |  | 804   |      |  |  | 907   |  
|                                                                 |  |                   |       |   |      |  |       |      | 
|Own work capitalized                                             |  |                   | (3    | ) |      |  | (7    | )    |  |  | (6    | )
|Salaries and personnel costs                                     |  |                   | 194   |   |      |  | 197   |      |  |  | 212   |  
|Other external operating expenses                                |  |                   | 760   |   |      |  | 886   |      |  |  | 1,095 |  
|Other internal operating expenses                                |  |                   | 9     |   |      |  | 1     |      |  |  | 13    |  
|Losses on disposal of fixed assets and operations                |  |                   |      |   |      |  |      |      |  |  |      |  
|Depreciation and amortization (1)                                |  |                   | 875   |   |      |  | 903   |      |  |  | 947   |  
|Write-downs (2)                                                  |  |                   | 2,150 |   |      |  | 18    |      |  |  |      |  
|                                                                 |  |                   |       |   |      |  |       |      | 
|Total operating expenses                                         |  |                   | 4,718 |   |      |  | 2,802 |      |  |  | 3,168 |  
|                                                                 |  |                   |       |   |      |  |       |      | 
|(1) Includes amortization of Telenors net excess
    values* by |  |                   | 296   |   |      |  | 123   |      |  |  | 118   |  
|(2) Includes write-downs of Telenors net excess
    values* by  |  |                   | 2,138 |   |      |  |      |      |  |  |      |  






|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Net excess values are the difference between our acquisition
    cost and our share of equity at acquisition of subsidiaries.





115



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Capital expenditure  DiGi.Com




Kyivstar  Ukraine


|                                     |  |                   |       |  |      |  |       |      |  |  |       | 
|------------------------------------ |  | ----------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                     |  | 2002              |       |  | 2003 |  |       | 2004 | 
|                                     |  |                   |       |  |      |  |       |      | 
|                                     |  | (NOK in millions) |      
|Mobile related revenues              |  |                   | 681   |  |      |  | 2,569 |      |  |  | 4,278 | 
|Other revenues                       |  |                   | 27    |  |      |  | 65    |      |  |  | 68    | 
|                                     |  |                   |       |  |      |  |       |      | 
|Total revenues                       |  |                   | 708   |  |      |  | 2,634 |      |  |  | 4,346 | 
|                                     |  |                   |       |  |      |  |       |      | 
|Total operating expenses             |  |                   | 457   |  |      |  | 1,541 |      |  |  | 2,357 | 
|                                     |  |                   |       |  |      |  |       |      | 
|Operating profit                     |  |                   | 251   |  |      |  | 1,093 |      |  |  | 1,989 | 
|                                     |  |                   |       |  |      |  |       |      | 
|EBITDA                               |  |                   | 403   |  |      |  | 1,573 |      |  |  | 2,581 | 
|Depreciation and amortization        |  |                   | 152   |  |      |  | 480   |      |  |  | 592   | 
|Write-downs                          |  |                   |      |  |      |  |      |      |  |  |      | 
|                                     |  |                   |       |  |      |  |       |      | 
|Operating profit                     |  |                   | 251   |  |      |  | 1,093 |      |  |  | 1,989 | 
|                                     |  |                   |       |  |      |  |       |      | 
|Operating profit/ Total revenues (%) |  |                   | 35.5  |  |      |  | 41.5  |      |  |  | 45.8  | 
|EBITDA/ Total revenues (%)           |  |                   | 56.9  |  |      |  | 59.7  |      |  |  | 59.4  | 
|Capex                                |  |                   | 329   |  |      |  | 979   |      |  |  | 2,608 | 
|No. of man-years (end of period)     |  |                   | 994   |  |      |  | 1,269 |      |  |  | 1,880 | 
|No. of subscriptions (in thousand)   |  |                   | 1,856 |  |      |  | 3,037 |      |  |  | 6,252 | 





Operating profit and EBITDA  Kyivstar




116



---



##### Table of Contents





Revenues  Kyivstar








Operating expenses  Kyivstar


|                                                                 |  |                   |     |  |      |  |       |      |  |  |       | 
|---------------------------------------------------------------- |  | ----------------- | --- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                                                 |  | 2002              |     |  | 2003 |  |       | 2004 | 
|                                                                 |  |                   |     |  |      |  |       |      | 
|                                                                 |  | (NOK in millions) |    
|External costs of materials and traffic charges                  |  |                   | 92  |  |      |  | 276   |      |  |  | 646   | 
|Internal costs of materials and traffic charges                  |  |                   |    |  |      |  |      |      |  |  | 5     | 
|                                                                 |  |                   |     |  |      |  |       |      | 
|Total costs of materials and traffic charges                     |  |                   | 92  |  |      |  | 276   |      |  |  | 651   | 
|                                                                 |  |                   |     |  |      |  |       |      | 
|Own work capitalized                                             |  |                   |    |  |      |  |      |      |  |  |      | 
|Salaries and personnel costs                                     |  |                   | 25  |  |      |  | 89    |      |  |  | 183   | 
|Other external operating expenses                                |  |                   | 179 |  |      |  | 684   |      |  |  | 920   | 
|Other internal operating expenses                                |  |                   | 9   |  |      |  | 12    |      |  |  | 11    | 
|Losses on disposal of fixed assets and operations                |  |                   |    |  |      |  |      |      |  |  |      | 
|Depreciation and amortization(1)                                 |  |                   | 152 |  |      |  | 480   |      |  |  | 592   | 
|Write-downs                                                      |  |                   |    |  |      |  |      |      |  |  |      | 
|                                                                 |  |                   |     |  |      |  |       |      | 
|Total operating expenses                                         |  |                   | 457 |  |      |  | 1,541 |      |  |  | 2,357 | 
|                                                                 |  |                   |     |  |      |  |       |      | 
|(1) Includes amortization of Telenors net excess
    values* by |  |                   | 54  |  |      |  | 137   |      |  |  | 130   | 






|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Net excess values are the difference between our acquisition
    cost and our share of equity at acquisition of subsidiaries.



117



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##### Table of Contents





Capital expenditure  Kyivstar




GrameenPhone  Bangladesh


|                                     |  |                   |       |  |      |  |       |      |  |  |       | 
|------------------------------------ |  | ----------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                     |  | 2002              |       |  | 2003 |  |       | 2004 | 
|                                     |  |                   |       |  |      |  |       |      | 
|                                     |  | (NOK in millions) |      
|Mobile related revenues              |  |                   | 1,203 |  |      |  | 1,529 |      |  |  | 2,194 | 
|Other revenues*                      |  |                   | 386   |  |      |  | 7     |      |  |  | 8     | 
|                                     |  |                   |       |  |      |  |       |      | 
|Total revenues                       |  |                   | 1,589 |  |      |  | 1,536 |      |  |  | 2,202 | 
|                                     |  |                   |       |  |      |  |       |      | 
|Total operating expenses             |  |                   | 958   |  |      |  | 693   |      |  |  | 1,107 | 
|                                     |  |                   |       |  |      |  |       |      | 
|Operating profit                     |  |                   | 631   |  |      |  | 843   |      |  |  | 1,095 | 
|                                     |  |                   |       |  |      |  |       |      | 
|EBITDA                               |  |                   | 757   |  |      |  | 1,001 |      |  |  | 1,313 | 
|Depreciation and amortization        |  |                   | 126   |  |      |  | 158   |      |  |  | 215   | 
|Write-downs                          |  |                   |      |  |      |  |      |      |  |  | 3     | 
|                                     |  |                   |       |  |      |  |       |      | 
|Operating profit                     |  |                   | 631   |  |      |  | 843   |      |  |  | 1,095 | 
|                                     |  |                   |       |  |      |  |       |      | 
|Operating profit/ Total revenues (%) |  |                   | 39.7  |  |      |  | 54.9  |      |  |  | 49.7  | 
|EBITDA/ Total revenues (%)           |  |                   | 47.6  |  |      |  | 65.2  |      |  |  | 59.6  | 
|Capex                                |  |                   | 342   |  |      |  | 429   |      |  |  | 1,318 | 
|No. of man-years (end of period)     |  |                   | 692   |  |      |  | 829   |      |  |  | 1,147 | 
|No. of subscriptions (in thousand)   |  |                   | 769   |  |      |  | 1,141 |      |  |  | 2,388 | 






|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | With effect from the third quarter of 2002, Government royalty
    and license fees collected by GrameenPhone on behalf of the
    Government authority have been excluded from other
    revenues. With effect from January 1, 2003, sales of
    handsets by GrameenPhone are regarded as commission sales and
    are therefore excluded from revenues and costs of materials.
    These changes contributed to a significant decrease in
    other revenues and costs of materials in
    2003, but had no effect on profits.



Operating profit and EBITDA 
GrameenPhone




Revenues  GrameenPhone




118



---



##### Table of Contents









Operating expenses  GrameenPhone


|                                                  |  |                   |     |  |      |  |     |      |  |  |       | 
|------------------------------------------------- |  | ----------------- | --- |  | ---- |  | --- | ---- |  |  | ----- | 
|                                                  |  | 2002              |     |  | 2003 |  |     | 2004 | 
|                                                  |  |                   |     |  |      |  |     |      | 
|                                                  |  | (NOK in millions) |    
|External costs of materials and traffic charges   |  |                   | 524 |  |      |  | 164 |      |  |  | 245   | 
|Internal costs of materials and traffic charges   |  |                   |    |  |      |  |    |      |  |  |      | 
|                                                  |  |                   |     |  |      |  |     |      | 
|Total costs of materials and traffic charges      |  |                   | 524 |  |      |  | 164 |      |  |  | 245   | 
|                                                  |  |                   |     |  |      |  |     |      | 
|Own work capitalized                              |  |                   |    |  |      |  |    |      |  |  |      | 
|Salaries and personnel costs                      |  |                   | 42  |  |      |  | 51  |      |  |  | 75    | 
|Other external operating expenses                 |  |                   | 266 |  |      |  | 309 |      |  |  | 539   | 
|Other internal operating expenses                 |  |                   |    |  |      |  | 6   |      |  |  | 22    | 
|Losses on disposal of fixed assets and operations |  |                   |    |  |      |  | 5   |      |  |  | 8     | 
|Depreciation and amortization                     |  |                   | 126 |  |      |  | 158 |      |  |  | 215   | 
|Write-downs                                       |  |                   |    |  |      |  |    |      |  |  | 3     | 
|                                                  |  |                   |     |  |      |  |     |      | 
|Total operating expenses                          |  |                   | 958 |  |      |  | 693 |      |  |  | 1,107 | 
|                                                  |  |                   |     |  |      |  |     |      | 





Capital expenditure  GrameenPhone




119



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##### Table of Contents



ProMonte GSM  Montenegro


|                                     |  |                   |   |  |      |  |   |      |  |  |      | 
|------------------------------------ |  | ----------------- | - |  | ---- |  | - | ---- |  |  | ---- | 
|                                     |  | 2002              |   |  | 2003 |  |   | 2004 | 
|                                     |  |                   |   |  |      |  |   |      | 
|                                     |  | (NOK in millions) |  
|Mobile related revenues              |  |                   |  |  |      |  |  |      |  |  | 189  | 
|Other revenues                       |  |                   |  |  |      |  |  |      |  |  | 11   | 
|                                     |  |                   |   |  |      |  |   |      | 
|Total revenues                       |  |                   |  |  |      |  |  |      |  |  | 200  | 
|                                     |  |                   |   |  |      |  |   |      | 
|Total operating expenses             |  |                   |  |  |      |  |  |      |  |  | 177  | 
|                                     |  |                   |   |  |      |  |   |      | 
|Operating profit                     |  |                   |  |  |      |  |  |      |  |  | 23   | 
|EBITDA                               |  |                   |  |  |      |  |  |      |  |  | 91   | 
|Depreciation and amortization        |  |                   |  |  |      |  |  |      |  |  | 68   | 
|Write-downs                          |  |                   |  |  |      |  |  |      |  |  |     | 
|                                     |  |                   |   |  |      |  |   |      | 
|Operating profit                     |  |                   |  |  |      |  |  |      |  |  | 23   | 
|                                     |  |                   |   |  |      |  |   |      | 
|Operating profit/ Total revenues (%) |  |                   |  |  |      |  |  |      |  |  | 11.5 | 
|EBITDA/ Total revenues (%)           |  |                   |  |  |      |  |  |      |  |  | 45.5 | 
|Capex                                |  |                   |  |  |      |  |  |      |  |  | 16   | 
|No. of man-years (end of period)     |  |                   |  |  |      |  |  |      |  |  | 224  | 
|No. of subscriptions (in thousand)   |  |                   |  |  |      |  |  |      |  |  | 279  | 






|    |                                                                                               
|--- | ----------------------------------------------------------------------------------------------
|(1) | The table shows figures included in the accounts for Telenor
    from the date of acquisition.



Operating profit and EBITDA  ProMonte
GSM




Revenues  ProMonte GSM






120



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##### Table of Contents



Operating expenses  ProMonte GSM


|                                                                 |  |                   |   |  |      |  |   |      |  |  |     | 
|---------------------------------------------------------------- |  | ----------------- | - |  | ---- |  | - | ---- |  |  | --- | 
|                                                                 |  | 2002              |   |  | 2003 |  |   | 2004 | 
|                                                                 |  |                   |   |  |      |  |   |      | 
|                                                                 |  | (NOK in millions) |  
|External costs of materials and traffic charges                  |  |                   |  |  |      |  |  |      |  |  | 57  | 
|Internal costs of materials and traffic charges                  |  |                   |  |  |      |  |  |      |  |  |    | 
|                                                                 |  |                   |   |  |      |  |   |      | 
|Total costs of materials and traffic charges                     |  |                   |  |  |      |  |  |      |  |  | 57  | 
|                                                                 |  |                   |   |  |      |  |   |      | 
|Own work capitalized                                             |  |                   |  |  |      |  |  |      |  |  |    | 
|Salaries and personnel costs                                     |  |                   |  |  |      |  |  |      |  |  | 15  | 
|Other external operating expenses                                |  |                   |  |  |      |  |  |      |  |  | 34  | 
|Other internal operating expenses                                |  |                   |  |  |      |  |  |      |  |  | 3   | 
|Losses on disposal of fixed assets and operations                |  |                   |  |  |      |  |  |      |  |  |    | 
|Depreciation and amortization(1)                                 |  |                   |  |  |      |  |  |      |  |  | 68  | 
|Write-downs                                                      |  |                   |  |  |      |  |  |      |  |  |    | 
|                                                                 |  |                   |   |  |      |  |   |      | 
|Total operating expenses                                         |  |                   |  |  |      |  |  |      |  |  | 177 | 
|                                                                 |  |                   |   |  |      |  |   |      | 
|(1) Includes amortization of Telenors net excess
    values* by |  |                   |  |  |      |  |  |      |  |  | 33  | 






|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Net excess values are the difference between our acquisition
    cost and our share of equity at acquisition of subsidiaries.



Capital expenditure  ProMonte GSM




Other including eliminations


|                                 |       |                   |      |    |      |  |      |      |   |  |      |       | 
|-------------------------------- | ----- | ----------------- | ---- | -- | ---- |  | ---- | ---- | - |  | ---- | ----- | 
|                                 |       | 2002              |      |    | 2003 |  |      | 2004 |  
|                                 |       |                   |      |    |      |  |      |      |  
|                                 |       | (NOK in millions) |     
|EBITDA                           |       |                   | (539 | )  |      |  | (374 | )    |   |  | (429 | )    
|Depreciation and amortization    |       |                   | 137  |    |      |  | 61   |      |   |  | 5    |      
|Write-downs                      |       |                   | 9    |    |      |  | 7    |      |   |  |     |      
|                                 |       |                   |      |    |      |  |      |      |  
|Operating (loss)                 |       |                   | (685 | )  |      |  | (442 | )    |   |  | (434 | )    
|                                 |       |                   |      |    |      |  |      |      |  
|Investments                      |       |                   |      |    |      |  |      |      |   |  |      |      
|                                 | Capex |                   |      | 12 |      |  |      | (7   | ) |  |      | 2,021 | 
|No. of man-years (end of period) |       |                   | 169  |    |      |  | 254  |      |   |  | 380  |      







121



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Associated Companies and Joint Ventures


|                                            |  |                   |        |   |      |  |       |      |  |  |      |  
|------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ----- | ---- |  |  | ---- | -
|                                            |  | 2002              |        |   | 2003 |  |       | 2004 | 
|                                            |  |                   |        |   |      |  |       |      | 
|                                            |  | (NOK in millions) |       
|Telenors share of(1):                      |  |                   |        |   |      |  |       |      |  |  |      |  
|Net income after taxes                      |  |                   | 612    |   |      |  | 608   |      |  |  | 857  |  
|Amortization of Telenors net excess values |  |                   | (798   | ) |      |  | (534  | )    |  |  | (163 | )
|Write-downs of Telenors excess values      |  |                   | (1,884 | ) |      |  | (15   | )    |  |  |     |  
|Gain on disposal of ownership interests     |  |                   | 40     |   |      |  | 1,580 |      |  |  |     |  
|                                            |  |                   |        |   |      |  |       |      | 
|Net result from associated companies        |  |                   | (2,030 | ) |      |  | 1,639 |      |  |  | 694  |  
|                                            |  |                   |        |   |      |  |       |      | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | These figures are partly based on our managements
    estimates in connection with the preparation of our consolidated
    financial statements. Our consolidated profit and loss statement
    contains only the line item net result from associated
    companies. Our share of the other items shown in the table
    is not included in our consolidated financial statements but
    this information is set forth in note 16 to our
    consolidated financial statements. Net excess values are the
    difference between our acquisition cost and our share of equity
    at acquisition of the associated companies.





| |   |                                                                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The sale of Extel in 2002, and the sale of Stavtelesot, OniWay
    and 9% of the shares in Cosmote in 2003.                                                                                   
|
| |  | Pannon GSM, Kyivstar, Sonofon and ProMonte being accounted for
    as subsidiaries effective February 4, 2002,
    September 1, 2002, February 12, 2004 and
    August 12, 2004, respectively.











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TELENOR FIXED


|                                                                 |                           |                   |        |       |      |  |        |       |  |  |        |       | 
|---------------------------------------------------------------- | ------------------------- | ----------------- | ------ | ----- | ---- |  | ------ | ----- |  |  | ------ | ----- | 
|                                                                 |                           | 2002              |        |       | 2003 |  |        | 2004  | 
|                                                                 |                           |                   |        |       |      |  |        |       | 
|                                                                 |                           | (NOK in millions) |       
|External revenues                                                |                           |                   | 18,338 |       |      |  | 18,787 |       |  |  | 17,430 |      
|Internal revenues                                                |                           |                   | 1,670  |       |      |  | 1,713  |       |  |  | 1,826  |      
|Gains on disposal of fixed assets and operations                 |                           |                   | 14     |       |      |  | 9      |       |  |  | 10     |      
|                                                                 |                           |                   |        |       |      |  |        |       | 
|Total revenues                                                   |                           |                   | 20,022 |       |      |  | 20,509 |       |  |  | 19,266 |      
|                                                                 |                           |                   |        |       |      |  |        |       | 
|External costs of materials and traffic charges                  |                           |                   | 3,649  |       |      |  | 3,903  |       |  |  | 3,731  |      
|Internal costs of materials and traffic charges                  |                           |                   | 1,626  |       |      |  | 1,529  |       |  |  | 1,327  |      
|Total costs of materials and traffic charges                     |                           |                   | 5,275  |       |      |  | 5,432  |       |  |  | 5,058  |      
|                                                                 |                           |                   |        |       |      |  |        |       | 
|Own work capitalized                                             |                           |                   | (110   | )     |      |  | (117   | )     |  |  | (132   | )    
|Salaries and personnel costs                                     |                           |                   | 3,577  |       |      |  | 3,650  |       |  |  | 3,490  |      
|Other external operating expenses                                |                           |                   | 3,966  |       |      |  | 3,140  |       |  |  | 2,881  |      
|Other internal operating expenses                                |                           |                   | 1,685  |       |      |  | 1,714  |       |  |  | 1,667  |      
|Losses on disposal of fixed assets and operations                |                           |                   | 32     |       |      |  | 25     |       |  |  | 25     |      
|Depreciation and amortization(1)                                 |                           |                   | 4,366  |       |      |  | 4,110  |       |  |  | 3,468  |      
|Write-downs(2)                                                   |                           |                   | 500    |       |      |  | 24     |       |  |  | 15     |      
|                                                                 |                           |                   |        |       |      |  |        |       | 
|Total operating expenses                                         |                           |                   | 19,291 |       |      |  | 17,978 |       |  |  | 16,472 |      
|                                                                 |                           |                   |        |       |      |  |        |       | 
|Operating profit                                                 |                           |                   | 731    |       |      |  | 2,531  |       |  |  | 2,794  |      
|                                                                 |                           |                   |        |       |      |  |        |       | 
|Associated companies                                             |                           |                   | (5     | )     |      |  | 8      |       |  |  | 50     |      
|Net financial items                                              |                           |                   | (297   | )     |      |  | (736   | )     |  |  | (438   | )    
|                                                                 |                           |                   |        |       |      |  |        |       | 
|Profit before taxes and minority interests                       |                           |                   | 429    |       |      |  | 1,803  |       |  |  | 2,406  |      
|                                                                 |                           |                   |        |       |      |  |        |       | 
|(1) Includes amortization of Telenors net excess
    values* by |                           |                   | 157    |       |      |  | (76    | )     |  |  | (102   | )    
|(2) Includes write-downs of Telenors net excess
    values* by  |                           |                   | 160    |       |      |  |       |       |  |  |       |      
|EBITDA                                                           |                           |                   | 5,597  |       |      |  | 6,665  |       |  |  | 6,277  |      
|Depreciation and amortization                                    |                           |                   | 4,366  |       |      |  | 4,110  |       |  |  | 3,468  |      
|Write-downs                                                      |                           |                   | 500    |       |      |  | 24     |       |  |  | 15     |      
|                                                                 |                           |                   |        |       |      |  |        |       | 
|Operating profit                                                 |                           |                   | 731    |       |      |  | 2,531  |       |  |  | 2,794  |      
|                                                                 |                           |                   |        |       |      |  |        |       | 
|Operating profit/ Total revenues (%)                             |                           |                   | 3.7    |       |      |  | 12.3   |       |  |  | 14.5   |      
|EBITDA/ Total revenues (%)                                       |                           |                   | 28.0   |       |      |  | 32.5   |       |  |  | 32.6   |      
|Investments:                                                     |                           |                   |        |       |      |  |        |       |  |  |        |      
|                                                                 | Capex                     |                   |        | 3,260 |      |  |        | 1,867 |  |  |        | 1,791 | 
|                                                                 | Investments in businesses |                   |        | 270   |      |  |        | 294   |  |  |        | 105   | 
|No. of man-years (end of period)                                 |                           |                   | 7,215  |       |      |  | 6,087  |       |  |  | 5,651  |      
|                                                                 | Of which abroad           |                   |        | 1,583 |      |  |        | 652   |  |  |        | 643   | 






|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Net excess values are the difference between our acquisition
    cost and our share of equity at acquisition of subsidiaries.

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|                        |  |                   |        |   |      |  |        |      |  |  |        |  
|----------------------- |  | ----------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                        |  | 2002              |        |   | 2003 |  |        | 2004 | 
|                        |  |                   |        |   |      |  |        |      | 
|                        |  | (NOK in millions) |       
|Revenues                |  |                   |        |   |      |  |        |      |  |  |        |  
|Norway                  |  |                   | 18,281 |   |      |  | 18,189 |      |  |  | 17,518 |  
|Sweden                  |  |                   | 1,073  |   |      |  | 1,603  |      |  |  | 1,692  |  
|Russia(1)               |  |                   | 682    |   |      |  | 703    |      |  |  |       |  
|Other                   |  |                   | 149    |   |      |  | 162    |      |  |  | 175    |  
|Eliminations            |  |                   | (163   | ) |      |  | (148   | )    |  |  | (119   | )
|                        |  |                   |        |   |      |  |        |      | 
|Total revenues          |  |                   | 20,022 |   |      |  | 20,509 |      |  |  | 19,266 |  
|                        |  |                   |        |   |      |  |        |      | 
|EBITDA                  |  |                   |        |   |      |  |        |      |  |  |        |  
|Norway                  |  |                   | 5,489  |   |      |  | 6,512  |      |  |  | 6,271  |  
|Sweden                  |  |                   | (100   | ) |      |  | (56    | )    |  |  | 8      |  
|Russia(1)               |  |                   | 228    |   |      |  | 215    |      |  |  |       |  
|Other                   |  |                   | (23    | ) |      |  | (8     | )    |  |  | 6      |  
|Eliminations            |  |                   | 3      |   |      |  | 2      |      |  |  | (8     | )
|                        |  |                   |        |   |      |  |        |      | 
|Total EBITDA            |  |                   | 5,597  |   |      |  | 6,665  |      |  |  | 6,277  |  
|                        |  |                   |        |   |      |  |        |      | 
|Operating profit (loss) |  |                   |        |   |      |  |        |      |  |  |        |  
|Norway                  |  |                   | 1,157  |   |      |  | 2,720  |      |  |  | 3,025  |  
|Sweden                  |  |                   | (333   | ) |      |  | (198   | )    |  |  | (167   | )
|Russia(1)               |  |                   | 70     |   |      |  | 71     |      |  |  |       |  
|Other                   |  |                   | (166   | ) |      |  | (71    | )    |  |  | (64    | )
|Eliminations            |  |                   | 3      |   |      |  | 9      |      |  |  |       |  
|                        |  |                   |        |   |      |  |        |      | 
|Total operating profit  |  |                   | 731    |   |      |  | 2,531  |      |  |  | 2,794  |  
|                        |  |                   |        |   |      |  |        |      | 






|    |                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | On December 1, 2003, we exchanged the shares in our
    consolidated subsidiary Comincom/Combellga (Russia) for an
    ownership interest in the listed company Golden Telecom, which
    is now reported as an associated company

Overview








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Operating profit and EBITDA






Fixed  Norway


|                                                                                  |  |                   |        |  |      |  |        |      |  |  |        | 
|--------------------------------------------------------------------------------- |  | ----------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                                                                  |  | 2002              |        |  | 2003 |  |        | 2004 | 
|                                                                                  |  |                   |        |  |      |  |        |      | 
|                                                                                  |  | (NOK in millions) |       
|Business market  fixed network                                                   |  |                   |        |  |      |  |        |      |  |  |        | 
|Subscriptions and connections  analog (PSTN)/digital (ISDN)                      |  |                   | 1,335  |  |      |  | 1,240  |      |  |  | 1,062  | 
|Subscriptions and connections  ADSL/Internett                                    |  |                   | 194    |  |      |  | 226    |      |  |  | 264    | 
|Fixed to fixed traffic domestic, excluding traffic to service
    providers (ISP) |  |                   | 776    |  |      |  | 625    |      |  |  | 496    | 
|Traffic to Internet service providers (ISP)                                       |  |                   | 170    |  |      |  | 116    |      |  |  | 63     | 
|Traffic to mobile                                                                 |  |                   | 666    |  |      |  | 647    |      |  |  | 633    | 
|Traffic abroad                                                                    |  |                   | 180    |  |      |  | 159    |      |  |  | 148    | 
|Other traffic                                                                     |  |                   | 669    |  |      |  | 621    |      |  |  | 536    | 
|Total fixed network business market                                               |  |                   | 3,990  |  |      |  | 3,634  |      |  |  | 3,202  | 
|Residential market  fixed network                                                |  |                   |        |  |      |  |        |      |  |  |        | 
|Subscriptions and connections  analog (PSTN)/digital (ISDN)                      |  |                   | 3,026  |  |      |  | 3,060  |      |  |  | 2,621  | 
|Subscriptions and connections  ADSL/Internett                                    |  |                   | 543    |  |      |  | 815    |      |  |  | 1,051  | 
|Fixed to fixed traffic domestic, excluding traffic to service
    providers (ISP) |  |                   | 1,190  |  |      |  | 1,061  |      |  |  | 933    | 
|Traffic to Internet service providers (ISP)                                       |  |                   | 520    |  |      |  | 445    |      |  |  | 347    | 
|Traffic to mobile                                                                 |  |                   | 1,144  |  |      |  | 1,069  |      |  |  | 1,023  | 
|Traffic abroad                                                                    |  |                   | 279    |  |      |  | 250    |      |  |  | 229    | 
|Other traffic                                                                     |  |                   | 660    |  |      |  | 630    |      |  |  | 497    | 
|Total fixed network residential market                                            |  |                   | 7,362  |  |      |  | 7,330  |      |  |  | 6,701  | 
|Other retail revenues                                                             |  |                   |        |  |      |  |        |      |  |  |        | 
|Leased lines                                                                      |  |                   | 341    |  |      |  | 329    |      |  |  | 301    | 
|Data services (frame relay, ATM, lan-lan, datapak)                                |  |                   | 828    |  |      |  | 836    |      |  |  | 854    | 
|Managed Services (Operating services)                                             |  |                   | 679    |  |      |  | 726    |      |  |  | 454    | 
|Other                                                                             |  |                   | 388    |  |      |  | 377    |      |  |  | 509    | 
|                                                                                  |  |                   |        |  |      |  |        |      | 
|Total other retail revenues                                                       |  |                   | 2,236  |  |      |  | 2,268  |      |  |  | 2,118  | 
|                                                                                  |  |                   |        |  |      |  |        |      | 
|Total retail revenues                                                             |  |                   | 13,588 |  |      |  | 13,232 |      |  |  | 12,021 | 
|                                                                                  |  |                   |        |  |      |  |        |      | 

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|                                                 |                           |                   |        |       |      |  |        |       |  |  |        |       | 
|------------------------------------------------ | ------------------------- | ----------------- | ------ | ----- | ---- |  | ------ | ----- |  |  | ------ | ----- | 
|                                                 |                           | 2002              |        |       | 2003 |  |        | 2004  | 
|                                                 |                           |                   |        |       |      |  |        |       | 
|                                                 |                           | (NOK in millions) |       
|Wholesale market  fixed network                 |                           |                   |        |       |      |  |        |       |  |  |        |      
|Sale to service providers and operators          |                           |                   | 107    |       |      |  | 249    |       |  |  | 711    |      
|Domestic interconnect                            |                           |                   | 629    |       |      |  | 643    |       |  |  | 608    |      
|International interconnect                       |                           |                   | 340    |       |      |  | 339    |       |  |  | 329    |      
|Transit traffic                                  |                           |                   | 1,027  |       |      |  | 1,038  |       |  |  | 993    |      
|Leased lines                                     |                           |                   | 647    |       |      |  | 631    |       |  |  | 614    |      
|Other wholesale                                  |                           |                   | 194    |       |      |  | 277    |       |  |  | 393    |      
|                                                 |                           |                   |        |       |      |  |        |       | 
|Total wholesale market  fixed network           |                           |                   | 2,944  |       |      |  | 3,177  |       |  |  | 3,648  |      
|                                                 |                           |                   |        |       |      |  |        |       | 
|Total external revenues                          |                           |                   | 16,532 |       |      |  | 16,409 |       |  |  | 15,669 |      
|                                                 |                           |                   |        |       |      |  |        |       | 
|Internal revenues                                |                           |                   | 1,749  |       |      |  | 1,776  |       |  |  | 1,844  |      
|Gains on disposal of fixed assets and operations |                           |                   |       |       |      |  | 4      |       |  |  | 5      |      
|                                                 |                           |                   |        |       |      |  |        |       | 
|Total revenues                                   |                           |                   | 18,281 |       |      |  | 18,189 |       |  |  | 17,518 |      
|                                                 |                           |                   |        |       |      |  |        |       | 
|Total operating expenses                         |                           |                   | 17,124 |       |      |  | 15,469 |       |  |  | 14,493 |      
|                                                 |                           |                   |        |       |      |  |        |       | 
|Operating profit                                 |                           |                   | 1,157  |       |      |  | 2,720  |       |  |  | 3,025  |      
|                                                 |                           |                   |        |       |      |  |        |       | 
|EBITDA                                           |                           |                   | 5,489  |       |      |  | 6,512  |       |  |  | 6,271  |      
|Depreciation and amortization                    |                           |                   | 3,919  |       |      |  | 3,773  |       |  |  | 3,244  |      
|Write-downs                                      |                           |                   | 413    |       |      |  | 19     |       |  |  | 2      |      
|                                                 |                           |                   |        |       |      |  |        |       | 
|Operating profit                                 |                           |                   | 1,157  |       |      |  | 2,720  |       |  |  | 3,025  |      
|                                                 |                           |                   |        |       |      |  |        |       | 
|Operating profit/ Total revenues (%)             |                           |                   | 6.3    |       |      |  | 15.0   |       |  |  | 17.3   |      
|EBITDA/ Total revenues (%)                       |                           |                   | 30.0   |       |      |  | 35.8   |       |  |  | 35.8   |      
|Investments:                                     |                           |                   |        |       |      |  |        |       |  |  |        |      
|                                                 | Capex                     |                   |        | 2,919 |      |  |        | 1,568 |  |  |        | 1,473 | 
|                                                 | Investments in businesses |                   |        | 11    |      |  |        | 1     |  |  |        | 2     | 
|No. of man-years (end of period)                 |                           |                   | 5,653  |       |      |  | 5,440  |       |  |  | 5,000  |      

Operating profit and EBITDA  Fixed 
Norway








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External revenues  Fixed  Norway


Business and residential market


















Other external retail revenues






Wholesale market




127



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Internal revenues  Fixed-Norway






Operating expenses  Fixed-Norway


|                                                                 |  |                   |        |   |      |  |        |      |  |  |        |  
|---------------------------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                                 |  | 2002              |        |   | 2003 |  |        | 2004 | 
|                                                                 |  |                   |        |   |      |  |        |      | 
|                                                                 |  | (NOK in millions) |       
|External costs of materials and traffic charges                  |  |                   | 2,759  |   |      |  | 2,545  |      |  |  | 2,562  |  
|Internal costs of materials and traffic charges                  |  |                   | 1,704  |   |      |  | 1,583  |      |  |  | 1,327  |  
|Total costs of materials and traffic charges                     |  |                   | 4,463  |   |      |  | 4,128  |      |  |  | 3,890  |  
|                                                                 |  |                   |        |   |      |  |        |      | 
|Own work capitalized                                             |  |                   | (96    | ) |      |  | (103   | )    |  |  | (116   | )
|Salaries and personnel costs                                     |  |                   | 3,175  |   |      |  | 3,189  |      |  |  | 3,150  |  
|Other external operating expenses                                |  |                   | 3,563  |   |      |  | 2,792  |      |  |  | 2,659  |  
|Other internal operating expenses                                |  |                   | 1,658  |   |      |  | 1,682  |      |  |  | 1,640  |  
|Losses on disposal of fixed assets and operations                |  |                   | 29     |   |      |  | (11    | )    |  |  | 24     |  
|Depreciation and amortization(1)                                 |  |                   | 3,919  |   |      |  | 3,773  |      |  |  | 3,244  |  
|Write-downs(2)                                                   |  |                   | 413    |   |      |  | 19     |      |  |  | 2      |  
|                                                                 |  |                   |        |   |      |  |        |      | 
|Total operating expenses                                         |  |                   | 17,124 |   |      |  | 15,469 |      |  |  | 14,493 |  
|                                                                 |  |                   |        |   |      |  |        |      | 
|(1) Includes amortization of Telenors net excess
    values* by |  |                   | 23     |   |      |  | 9      |      |  |  | 2      |  
|(2) Includes write-downs of Telenors net excess
    values* by  |  |                   | 89     |   |      |  |       |      |  |  |       |  






|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Net excess values are the difference between our acquisition
    cost and our share of equity at acquisition of subsidiaries.



128



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Capital Expenditure  Fixed-Norway




129



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Fixed  Sweden


|                                                 |                           |                   |       |     |      |  |       |      |  |  |       |     | 
|------------------------------------------------ | ------------------------- | ----------------- | ----- | --- | ---- |  | ----- | ---- |  |  | ----- | --- | 
|                                                 |                           | 2002              |       |     | 2003 |  |       | 2004 | 
|                                                 |                           |                   |       |     |      |  |       |      | 
|                                                 |                           | (NOK in millions) |      
|External revenues                                |                           |                   | 983   |     |      |  | 1,517 |      |  |  | 1,588 |    
|Internal revenues                                |                           |                   | 76    |     |      |  | 81    |      |  |  | 99    |    
|Gains on disposal of fixed assets and operations |                           |                   | 14    |     |      |  | 5     |      |  |  | 5     |    
|                                                 |                           |                   |       |     |      |  |       |      | 
|Total revenues                                   |                           |                   | 1,073 |     |      |  | 1,603 |      |  |  | 1,692 |    
|                                                 |                           |                   |       |     |      |  |       |      | 
|Total operating expenses                         |                           |                   | 1,406 |     |      |  | 1,801 |      |  |  | 1,859 |    
|                                                 |                           |                   |       |     |      |  |       |      | 
|Operating (loss)                                 |                           |                   | (333  | )   |      |  | (198  | )    |  |  | (167  | )  
|                                                 |                           |                   |       |     |      |  |       |      | 
|EBITDA                                           |                           |                   | (100  | )   |      |  | (56   | )    |  |  | 8     |    
|Depreciation and amortization                    |                           |                   | 218   |     |      |  | 141   |      |  |  | 164   |    
|Write-downs                                      |                           |                   | 15    |     |      |  | 1     |      |  |  | 11    |    
|                                                 |                           |                   |       |     |      |  |       |      | 
|Operating (loss)                                 |                           |                   | (333  | )   |      |  | (198  | )    |  |  | (167  | )  
|                                                 |                           |                   |       |     |      |  |       |      | 
|Investments:                                     |                           |                   |       |     |      |  |       |      |  |  |       |    
|                                                 | Capex                     |                   |       | 84  |      |  |       | 85   |  |  |       | 279 | 
|                                                 | Investments in businesses |                   |       | 257 |      |  |       | 13   |  |  |       | 93  | 
|No. of man-years (end of period)                 |                           |                   | 551   |     |      |  | 443   |      |  |  | 455   |    





Operating (loss)  Fixed-Sweden






Revenues  Fixed-Sweden




130



---



##### Table of Contents



Operating Expenses  Fixed-Sweden


|                                                                                 |  |                   |       |  |      |  |       |      |  |  |       |  
|-------------------------------------------------------------------------------- |  | ----------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | -
|                                                                                 |  | 2002              |       |  | 2003 |  |       | 2004 | 
|                                                                                 |  |                   |       |  |      |  |       |      | 
|                                                                                 |  | (NOK in millions) |      
|Operating expenses                                                               |  |                   |       |  |      |  |       |      |  |  |       |  
|External costs of materials and traffic charges                                  |  |                   | 626   |  |      |  | 1,047 |      |  |  | 1,084 |  
|Internal costs of materials and traffic charges                                  |  |                   | 69    |  |      |  | 93    |      |  |  | 110   |  
|                                                                                 |  |                   |       |  |      |  |       |      | 
|Total costs of materials and traffic charges                                     |  |                   | 695   |  |      |  | 1,140 |      |  |  | 1,194 |  
|                                                                                 |  |                   |       |  |      |  |       |      | 
|Own work capitalized                                                             |  |                   |      |  |      |  |      |      |  |  | (16   | )
|Salaries and personnel costs                                                     |  |                   | 236   |  |      |  | 294   |      |  |  | 296   |  
|Other external operating expenses                                                |  |                   | 222   |  |      |  | 198   |      |  |  | 184   |  
|Other internal operating expenses                                                |  |                   | 20    |  |      |  | 18    |      |  |  | 26    |  
|Losses on disposal of fixed assets and operations                                |  |                   |      |  |      |  | 9     |      |  |  |      |  
|Depreciation and amortization(1)                                                 |  |                   | 218   |  |      |  | 141   |      |  |  | 164   |  
|Write-downs(1)                                                                   |  |                   | 15    |  |      |  | 1     |      |  |  | 11    |  
|                                                                                 |  |                   |       |  |      |  |       |      | 
|Total operating expenses                                                         |  |                   | 1,406 |  |      |  | 1,801 |      |  |  | 1,859 |  
|                                                                                 |  |                   |       |  |      |  |       |      | 
|(1) Includes amortization and write-downs of Telenors
    net excess values* by |  |                   | 31    |  |      |  | (143  | )    |  |  | (104  | )






|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Net excess values are the difference between our acquisition
    cost and our share of equity at acquisition of subsidiaries.







Fixed  Russia




Fixed  Other Countries






131



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##### Table of Contents



TELENOR BROADCAST


|                                                                                 |                           |                   |        |       |      |  |       |      |  |  |       |     | 
|-------------------------------------------------------------------------------- | ------------------------- | ----------------- | ------ | ----- | ---- |  | ----- | ---- |  |  | ----- | --- | 
|                                                                                 |                           | 2002              |        |       | 2003 |  |       | 2004 | 
|                                                                                 |                           |                   |        |       |      |  |       |      | 
|                                                                                 |                           | (NOK in millions) |       
|External revenues                                                                |                           |                   | 3,366  |       |      |  | 4,641 |      |  |  | 5,211 |    
|Internal revenues                                                                |                           |                   | 241    |       |      |  | 159   |      |  |  | 135   |    
|Gains on disposal of fixed assets and operations                                 |                           |                   | (2     | )     |      |  | 20    |      |  |  | 1     |    
|                                                                                 |                           |                   |        |       |      |  |       |      | 
|Total revenues                                                                   |                           |                   | 3,605  |       |      |  | 4,820 |      |  |  | 5,347 |    
|                                                                                 |                           |                   |        |       |      |  |       |      | 
|External costs of materials and traffic charges                                  |                           |                   | 1,477  |       |      |  | 1,934 |      |  |  | 2,072 |    
|Internal costs of materials and traffic charges                                  |                           |                   | 94     |       |      |  | 92    |      |  |  | 98    |    
|Total costs of materials and traffic charges                                     |                           |                   | 1,571  |       |      |  | 2,026 |      |  |  | 2,170 |    
|                                                                                 |                           |                   |        |       |      |  |       |      | 
|Own work capitalized                                                             |                           |                   | (32    | )     |      |  | (18   | )    |  |  | (10   | )  
|Salaries and personnel costs                                                     |                           |                   | 609    |       |      |  | 570   |      |  |  | 576   |    
|Other external operating expenses                                                |                           |                   | 700    |       |      |  | 734   |      |  |  | 864   |    
|Other internal operating expenses                                                |                           |                   | 252    |       |      |  | 271   |      |  |  | 251   |    
|Losses on disposal of fixed assets and operations                                |                           |                   | 6      |       |      |  | 8     |      |  |  | 1     |    
|Depreciation and amortization(1)                                                 |                           |                   | 844    |       |      |  | 1,030 |      |  |  | 886   |    
|Write-downs(1)                                                                   |                           |                   | 130    |       |      |  | 18    |      |  |  | 20    |    
|                                                                                 |                           |                   |        |       |      |  |       |      | 
|Total operating expenses                                                         |                           |                   | 4,080  |       |      |  | 4,639 |      |  |  | 4,758 |    
|                                                                                 |                           |                   |        |       |      |  |       |      | 
|Operating profit (loss)                                                          |                           |                   | (475   | )     |      |  | 181   |      |  |  | 589   |    
|                                                                                 |                           |                   |        |       |      |  |       |      | 
|Associated companies                                                             |                           |                   | (264   | )     |      |  | (84   | )    |  |  | 1     |    
|Net financial items                                                              |                           |                   | (812   | )     |      |  | (909  | )    |  |  | (471  | )  
|                                                                                 |                           |                   |        |       |      |  |       |      | 
|Profit (loss) before taxes and minority interests                                |                           |                   | (1,551 | )     |      |  | (812  | )    |  |  | 119   |    
|                                                                                 |                           |                   |        |       |      |  |       |      | 
|(1) Includes amortization and write-downs of Telenors
    net excess values* by |                           |                   | 161    |       |      |  | 256   |      |  |  | 243   |    
|EBITDA                                                                           |                           |                   | 499    |       |      |  | 1,229 |      |  |  | 1,495 |    
|Depreciation and amortization                                                    |                           |                   | 844    |       |      |  | 1,030 |      |  |  | 886   |    
|Write-downs                                                                      |                           |                   | 130    |       |      |  | 18    |      |  |  | 20    |    
|Operating profit (loss)                                                          |                           |                   | (475   | )     |      |  | 181   |      |  |  | 589   |    
|Operating profit (loss)/Total revenues (%)                                       |                           |                   | nm     |       |      |  | 3.8   |      |  |  | 11.0  |    
|EBITDA/ Total revenues(%)                                                        |                           |                   | 13.8   |       |      |  | 25.5  |      |  |  | 28.0  |    
|Investments                                                                      |                           |                   |        |       |      |  |       |      |  |  |       |    
|                                                                                 | Capex                     |                   |        | 384   |      |  |       | 252  |  |  |       | 243 | 
|                                                                                 | Investments in businesses |                   |        | 2.385 |      |  |       | 14   |  |  |       |    | 
|No. of man-years (end of period)                                                 |                           |                   | 972    |       |      |  | 809   |      |  |  | 774   |    
|                                                                                 | Of which abroad           |                   |        | 226   |      |  |       | 210  |  |  |       | 222 | 
|Revenues                                                                         |                           |                   |        |       |      |  |       |      |  |  |       |    
|Distribution                                                                     |                           |                   | 2,162  |       |      |  | 3,794 |      |  |  | 4,310 |    
|Transmission                                                                     |                           |                   | 1,457  |       |      |  | 1,277 |      |  |  | 1,211 |    
|Other                                                                            |                           |                   | 326    |       |      |  | 354   |      |  |  | 461   |    
|Eliminations                                                                     |                           |                   | (340   | )     |      |  | (605  | )    |  |  | (635  | )  
|                                                                                 |                           |                   |        |       |      |  |       |      | 
|Total revenues                                                                   |                           |                   | 3,605  |       |      |  | 4,820 |      |  |  | 5,347 |    
|                                                                                 |                           |                   |        |       |      |  |       |      | 
|EBITDA                                                                           |                           |                   |        |       |      |  |       |      |  |  |       |    
|Distribution                                                                     |                           |                   | 19     |       |      |  | 686   |      |  |  | 749   |    
|Transmission                                                                     |                           |                   | 581    |       |      |  | 554   |      |  |  | 685   |    
|Other                                                                            |                           |                   | (102   | )     |      |  | (10   | )    |  |  | 61    |    
|Eliminations                                                                     |                           |                   | 1      |       |      |  | (1    | )    |  |  |      |    
|                                                                                 |                           |                   |        |       |      |  |       |      | 
|Total EBITDA                                                                     |                           |                   | 499    |       |      |  | 1,229 |      |  |  | 1,495 |    
|                                                                                 |                           |                   |        |       |      |  |       |      | 






|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Net excess values are the difference between our acquisition
    cost and our share of equity at acquisition of subsidiaries.

132



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##### Table of Contents



Overview






Operating profit (loss) and EBITDA






Distribution


|                                                 |                           |                   |       |       |      |  |       |      |  |  |       |     | 
|------------------------------------------------ | ------------------------- | ----------------- | ----- | ----- | ---- |  | ----- | ---- |  |  | ----- | --- | 
|                                                 |                           | 2002              |       |       | 2003 |  |       | 2004 | 
|                                                 |                           |                   |       |       |      |  |       |      | 
|                                                 |                           | (NOK in millions) |      
|External revenues                                |                           |                   |       |       |      |  |       |      |  |  |       |    
|DTH                                              |                           |                   | 1,099 |       |      |  | 2,528 |      |  |  | 2,917 |    
|Cable TV                                         |                           |                   | 742   |       |      |  | 888   |      |  |  | 986   |    
|SMATV                                            |                           |                   | 252   |       |      |  | 335   |      |  |  | 382   |    
|Other                                            |                           |                   | 55    |       |      |  | 10    |      |  |  | 15    |    
|                                                 |                           |                   |       |       |      |  |       |      | 
|Total external revenues                          |                           |                   | 2,148 |       |      |  | 3,761 |      |  |  | 4,300 |    
|Internal revenues                                |                           |                   | 16    |       |      |  | 13    |      |  |  | 9     |    
|Gains on disposal of fixed assets and operations |                           |                   | (2    | )     |      |  | 20    |      |  |  | 1     |    
|                                                 |                           |                   |       |       |      |  |       |      | 
|Total revenues                                   |                           |                   | 2,162 |       |      |  | 3,794 |      |  |  | 4,310 |    
|                                                 |                           |                   |       |       |      |  |       |      | 
|Total operating expenses                         |                           |                   | 2,740 |       |      |  | 3,870 |      |  |  | 4,168 |    
|                                                 |                           |                   |       |       |      |  |       |      | 
|Operating profit (loss)                          |                           |                   | (578  | )     |      |  | (76   | )    |  |  | 142   |    
|                                                 |                           |                   |       |       |      |  |       |      | 
|EBITDA                                           |                           |                   | 19    |       |      |  | 686   |      |  |  | 749   |    
|Depreciation and amortization                    |                           |                   | 541   |       |      |  | 754   |      |  |  | 592   |    
|Write-downs                                      |                           |                   | 56    |       |      |  | 8     |      |  |  | 15    |    
|                                                 |                           |                   |       |       |      |  |       |      | 
|Operating profit (loss)                          |                           |                   | (578  | )     |      |  | (76   | )    |  |  | 142   |    
|                                                 |                           |                   |       |       |      |  |       |      | 
|Operating profit (loss)/Total revenues (%)       |                           |                   | nm    |       |      |  | nm    |      |  |  | 3.3   |    
|EBITDA/ Total revenues (%)                       |                           |                   | 0.9   |       |      |  | 18.1  |      |  |  | 17.4  |    
|Investments                                      |                           |                   |       |       |      |  |       |      |  |  |       |    
|                                                 | Capex                     |                   |       | 235   |      |  |       | 112  |  |  |       | 120 | 
|                                                 | Investments in businesses |                   |       | 2,369 |      |  |       |     |  |  |       |    | 
|No. of man-years (end of period)                 |                           |                   | 563   |       |      |  | 416   |      |  |  | 373   |    

Operating profit (loss) and EBITDA 
Distribution




133



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##### Table of Contents







Revenues  Distribution






Operating expenses  Distribution


|                                                                                 |  |                   |       |   |      |  |       |      |  |  |       | 
|-------------------------------------------------------------------------------- |  | ----------------- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | 
|                                                                                 |  | 2002              |       |   | 2003 |  |       | 2004 | 
|                                                                                 |  |                   |       |   |      |  |       |      | 
|                                                                                 |  | (NOK in millions) |      
|External costs of materials and traffic charges                                  |  |                   | 1,075 |   |      |  | 1,591 |      |  |  | 1,883 | 
|Internal costs of materials and traffic charges                                  |  |                   | 233   |   |      |  | 480   |      |  |  | 481   | 
|                                                                                 |  |                   |       |   |      |  |       |      | 
|Total costs of materials and traffic charges                                     |  |                   | 1,308 |   |      |  | 2,071 |      |  |  | 2,364 | 
|                                                                                 |  |                   |       |   |      |  |       |      | 
|Own work capitalized                                                             |  |                   | (16   | ) |      |  | (8    | )    |  |  |      | 
|Salaries and personnel costs                                                     |  |                   | 274   |   |      |  | 263   |      |  |  | 256   | 
|Other external operating expenses                                                |  |                   | 452   |   |      |  | 570   |      |  |  | 710   | 
|Other internal operating expenses                                                |  |                   | 125   |   |      |  | 204   |      |  |  | 230   | 
|Losses on disposal of fixed assets and operations                                |  |                   |      |   |      |  | 8     |      |  |  | 1     | 
|Depreciation and amortization(1)                                                 |  |                   | 541   |   |      |  | 754   |      |  |  | 592   | 
|Write-downs(1)                                                                   |  |                   | 56    |   |      |  | 8     |      |  |  | 15    | 
|                                                                                 |  |                   |       |   |      |  |       |      | 
|Total operating expenses                                                         |  |                   | 2,740 |   |      |  | 3,870 |      |  |  | 4,168 | 
|                                                                                 |  |                   |       |   |      |  |       |      | 
|(1) Includes amortization and write-downs of Telenors
    net excess values* by |  |                   | 160   |   |      |  | 255   |      |  |  | 243   | 






|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Net excess values are the difference between our acquisition
    cost and our share of equity at acquisition of subsidiaries.









134



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##### Table of Contents





Transmission


|                                                 |                           |                   |       |     |      |  |       |      |  |  |       |     | 
|------------------------------------------------ | ------------------------- | ----------------- | ----- | --- | ---- |  | ----- | ---- |  |  | ----- | --- | 
|                                                 |                           | 2002              |       |     | 2003 |  |       | 2004 | 
|                                                 |                           |                   |       |     |      |  |       |      | 
|                                                 |                           | (NOK in millions) |      
|External revenues                                |                           |                   |       |     |      |  |       |      |  |  |       |    
|Satellite Broadcasting                           |                           |                   | 655   |     |      |  | 352   |      |  |  | 317   |    
|Norkring                                         |                           |                   | 455   |     |      |  | 464   |      |  |  | 471   |    
|                                                 |                           |                   |       |     |      |  |       |      | 
|Total external revenues                          |                           |                   | 1,110 |     |      |  | 816   |      |  |  | 788   |    
|                                                 |                           |                   |       |     |      |  |       |      | 
|Internal revenues                                |                           |                   | 347   |     |      |  | 461   |      |  |  | 423   |    
|Gains on disposal of fixed assets and operations |                           |                   |      |     |      |  |      |      |  |  |      |    
|                                                 |                           |                   |       |     |      |  |       |      | 
|Total revenues                                   |                           |                   | 1,457 |     |      |  | 1,277 |      |  |  | 1,211 |    
|                                                 |                           |                   |       |     |      |  |       |      | 
|Total operating expenses                         |                           |                   | 1,207 |     |      |  | 996   |      |  |  | 803   |    
|                                                 |                           |                   |       |     |      |  |       |      | 
|Operating profit                                 |                           |                   | 250   |     |      |  | 281   |      |  |  | 408   |    
|                                                 |                           |                   |       |     |      |  |       |      | 
|EBITDA                                           |                           |                   | 581   |     |      |  | 554   |      |  |  | 685   |    
|Depreciation and amortization                    |                           |                   | 290   |     |      |  | 266   |      |  |  | 276   |    
|Write-downs                                      |                           |                   | 41    |     |      |  | 7     |      |  |  | 1     |    
|                                                 |                           |                   |       |     |      |  |       |      | 
|Operating profit                                 |                           |                   | 250   |     |      |  | 281   |      |  |  | 408   |    
|                                                 |                           |                   |       |     |      |  |       |      | 
|Operating profit (loss)/Total revenues (%)       |                           |                   | 17.2  |     |      |  | 22.0  |      |  |  | 33.7  |    
|EBITDA/ Total revenues (%)                       |                           |                   | 39.9  |     |      |  | 43.4  |      |  |  | 56.6  |    
|Investments                                      |                           |                   |       |     |      |  |       |      |  |  |       |    
|                                                 | Capex                     |                   |       | 115 |      |  |       | 116  |  |  |       | 735 | 
|                                                 | Investments in businesses |                   |       |    |      |  |       |     |  |  |       |    | 
|No. of man-years (end of period)                 |                           |                   | 252   |     |      |  | 222   |      |  |  | 220   |    

Operating profit and EBITDA 
Transmission






Revenues  Transmission






135



---



##### Table of Contents



Operating expenses  Transmission


|                                                  |  |                   |       |   |      |  |     |      |  |  |     |  
|------------------------------------------------- |  | ----------------- | ----- | - | ---- |  | --- | ---- |  |  | --- | -
|                                                  |  | 2002              |       |   | 2003 |  |     | 2004 | 
|                                                  |  |                   |       |   |      |  |     |      | 
|                                                  |  | (NOK in millions) |      
|External costs of materials and traffic charges   |  |                   | 354   |   |      |  | 287 |      |  |  | 135 |  
|Internal costs of materials and traffic charges   |  |                   | 70    |   |      |  | 45  |      |  |  | 15  |  
|                                                  |  |                   |       |   |      |  |     |      | 
|Total costs of materials and traffic charges      |  |                   | 424   |   |      |  | 332 |      |  |  | 150 |  
|                                                  |  |                   |       |   |      |  |     |      | 
|Own work capitalized                              |  |                   | (10   | ) |      |  | (7  | )    |  |  | (7  | )
|Salaries and personnel costs                      |  |                   | 194   |   |      |  | 159 |      |  |  | 159 |  
|Other external operating expenses                 |  |                   | 152   |   |      |  | 90  |      |  |  | 90  |  
|Other internal operating expenses                 |  |                   | 116   |   |      |  | 149 |      |  |  | 134 |  
|Losses on disposal of fixed assets and operations |  |                   |      |   |      |  |    |      |  |  |    |  
|Depreciation and amortization                     |  |                   | 290   |   |      |  | 266 |      |  |  | 276 |  
|Write-downs                                       |  |                   | 41    |   |      |  | 7   |      |  |  | 1   |  
|                                                  |  |                   |       |   |      |  |     |      | 
|Total operating expenses                          |  |                   | 1,207 |   |      |  | 996 |      |  |  | 803 |  
|                                                  |  |                   |       |   |      |  |     |      | 









Other








Capital Expenditure






136



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##### Table of Contents



Associated Companies


|                                            |  |                   |      |   |      |  |     |      |  |  |     |  
|------------------------------------------- |  | ----------------- | ---- | - | ---- |  | --- | ---- |  |  | --- | -
|                                            |  | 2002              |      |   | 2003 |  |     | 2004 | 
|                                            |  |                   |      |   |      |  |     |      | 
|                                            |  | (NOK in millions) |     
|Telenors share of:(1)                      |  |                   |      |   |      |  |     |      |  |  |     |  
|Net income (loss) after taxes               |  |                   | (138 | ) |      |  | 10  |      |  |  | 18  |  
|Amortization of Telenors net excess values |  |                   | (55  | ) |      |  | (22 | )    |  |  | (11 | )
|Write-downs of Telenors excess values      |  |                   | (71  | ) |      |  |     |      |  |  |     |  
|Loss on disposal of ownership interests     |  |                   |     |   |      |  | (72 | )    |  |  | (6  | )
|                                            |  |                   |      |   |      |  |     |      | 
|Net result from associated companies        |  |                   | (264 | ) |      |  | (84 | )    |  |  | 1   |  
|                                            |  |                   |      |   |      |  |     |      | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The figures are partly based on our managements estimates
    in connection with the preparation of our consolidated financial
    statements. The consolidated profit and loss statement contains
    only the line item net result from associated
    companies. Telenors share of the other line items in
    the table is not included in our consolidated financial
    statements but this information is set forth in note 16 to
    our consolidated financial statements. Net excess values are the
    difference between our acquisition cost and our share of equity
    at acquisition of the associated companies.









EDB BUSINESS PARTNER (ownership interest 51.8% as of
December 31, 2003)


|                                                  |                           |                   |       |     |      |  |       |      |  |  |       |       | 
|------------------------------------------------- | ------------------------- | ----------------- | ----- | --- | ---- |  | ----- | ---- |  |  | ----- | ----- | 
|                                                  |                           | 2002              |       |     | 2003 |  |       | 2004 | 
|                                                  |                           |                   |       |     |      |  |       |      | 
|                                                  |                           | (NOK in millions) |      
|External revenues                                 |                           |                   | 3,383 |     |      |  | 3,210 |      |  |  | 3,311 |      
|Internal revenues                                 |                           |                   | 955   |     |      |  | 1,060 |      |  |  | 924   |      
|Gains on disposal of fixed assets and operations  |                           |                   | 3     |     |      |  | 19    |      |  |  | 295   |      
|                                                  |                           |                   |       |     |      |  |       |      | 
|Total revenues                                    |                           |                   | 4,341 |     |      |  | 4,289 |      |  |  | 4,530 |      
|Total operating expenses                          |                           |                   | 4,750 |     |      |  | 4,293 |      |  |  | 4,006 |      
|                                                  |                           |                   |       |     |      |  |       |      | 
|Operating profit (loss)                           |                           |                   | (409  | )   |      |  | (4    | )    |  |  | 524   |      
|Associated companies                              |                           |                   | (5    | )   |      |  | (13   | )    |  |  |      |      
|Net financial items                               |                           |                   | (86   | )   |      |  | (71   | )    |  |  | (44   | )    
|                                                  |                           |                   |       |     |      |  |       |      | 
|Profit (loss) before taxes and minority interests |                           |                   | (500  | )   |      |  | (88   | )    |  |  | 480   |      
|EBITDA                                            |                           |                   | 348   |     |      |  | 399   |      |  |  | 924   |      
|Depreciation and amortization                     |                           |                   | 393   |     |      |  | 375   |      |  |  | 400   |      
|Write-downs                                       |                           |                   | 364   |     |      |  | 28    |      |  |  |      |      
|                                                  |                           |                   |       |     |      |  |       |      | 
|Operating profit (loss)                           |                           |                   | (409  | )   |      |  | (4    | )    |  |  | 524   |      
|                                                  |                           |                   |       |     |      |  |       |      | 
|Investments:                                      |                           |                   |       |     |      |  |       |      |  |  |       |      
|                                                  | Capex                     |                   |       | 167 |      |  |       | 210  |  |  |       | 233   | 
|                                                  | Investments in businesses |                   |       | 88  |      |  |       | 95   |  |  |       | 1,076 | 
|Total full-time equivalent employees (period end) |                           |                   | 2,760 |     |      |  | 2,477 |      |  |  | 3,008 |      
|                                                  | Of which outside Norway   |                   |       | 308 |      |  |       | 266  |  |  |       | 512   | 

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Overview








Operating profit (loss) and EBITDA






Revenues






138



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##### Table of Contents



Operating Expenses


|                                                  |  |                   |       |  |      |  |       |      |  |  |       |  
|------------------------------------------------- |  | ----------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | -
|                                                  |  | 2002              |       |  | 2003 |  |       | 2004 | 
|                                                  |  |                   |       |  |      |  |       |      | 
|                                                  |  | (NOK in millions) |      
|Costs of materials and traffic charges            |  |                   | 393   |  |      |  | 370   |      |  |  | 355   |  
|Own work capitalized                              |  |                   |      |  |      |  |      |      |  |  | (1    | )
|Salaries and personnel costs                      |  |                   | 1,862 |  |      |  | 1,753 |      |  |  | 1,660 |  
|Other operating expenses                          |  |                   | 1,738 |  |      |  | 1,761 |      |  |  | 1,592 |  
|Losses on disposal of fixed assets and operations |  |                   |      |  |      |  | 6     |      |  |  |      |  
|                                                  |  |                   |       |  |      |  |       |      | 
|Depreciation and amortization                     |  |                   | 393   |  |      |  | 375   |      |  |  | 400   |  
|Write-downs                                       |  |                   | 364   |  |      |  | 28    |      |  |  |      |  
|                                                  |  |                   |       |  |      |  |       |      | 
|Total operating expenses                          |  |                   | 4,750 |  |      |  | 4,293 |      |  |  | 4,006 |  
|                                                  |  |                   |       |  |      |  |       |      | 

















Capital Expenditure




Investments in businesses




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OTHER BUSINESS UNITS


|                                                                                  |                           |                   |        |       |      |  |       |       |  |  |       |     | 
|--------------------------------------------------------------------------------- | ------------------------- | ----------------- | ------ | ----- | ---- |  | ----- | ----- |  |  | ----- | --- | 
|                                                                                  |                           | 2002              |        |       | 2003 |  |       | 2004  | 
|                                                                                  |                           |                   |        |       |      |  |       |       | 
|                                                                                  |                           | (NOK in millions) |       
|External revenues                                                                 |                           |                   | 4,255  |       |      |  | 3,539 |       |  |  | 2,979 |    
|Internal revenues                                                                 |                           |                   | 785    |       |      |  | 615   |       |  |  | 481   |    
|Gains on disposal of fixed assets and operations                                  |                           |                   |       |       |      |  | 51    |       |  |  | 135   |    
|                                                                                  |                           |                   |        |       |      |  |       |       | 
|Total revenues                                                                    |                           |                   | 5,040  |       |      |  | 4,205 |       |  |  | 3,595 |    
|                                                                                  |                           |                   |        |       |      |  |       |       | 
|External costs of materials and traffic charges                                   |                           |                   | 2,017  |       |      |  | 1,527 |       |  |  | 1,361 |    
|Internal costs of materials and traffic charges                                   |                           |                   | 265    |       |      |  | 214   |       |  |  | 164   |    
|Total costs of materials and traffic charges                                      |                           |                   | 2,282  |       |      |  | 1,741 |       |  |  | 1,525 |    
|                                                                                  |                           |                   |        |       |      |  |       |       | 
|Own work capitalized                                                              |                           |                   | (2     | )     |      |  | 1     |       |  |  |      |    
|Salaries and personnel costs                                                      |                           |                   | 1,465  |       |      |  | 1,088 |       |  |  | 870   |    
|Other external operating expenses                                                 |                           |                   | 854    |       |      |  | 580   |       |  |  | 467   |    
|Other internal operating expenses                                                 |                           |                   | 237    |       |      |  | 210   |       |  |  | 188   |    
|Losses on disposal of fixed assets and operations                                 |                           |                   | 26     |       |      |  | 177   |       |  |  | 21    |    
|Depreciation and amortization(1)                                                  |                           |                   | 582    |       |      |  | 491   |       |  |  | 372   |    
|Write-downs(1)                                                                    |                           |                   | 332    |       |      |  | 37    |       |  |  | 39    |    
|                                                                                  |                           |                   |        |       |      |  |       |       | 
|Total operating expenses                                                          |                           |                   | 5,776  |       |      |  | 4,325 |       |  |  | 3,482 |    
|                                                                                  |                           |                   |        |       |      |  |       |       | 
|Operating profit (loss)                                                           |                           |                   | (736   | )     |      |  | (120  | )     |  |  | 113   |    
|                                                                                  |                           |                   |        |       |      |  |       |       | 
|Associated companies                                                              |                           |                   | (132   | )     |      |  | (318  | )     |  |  | (32   | )  
|Net financial items                                                               |                           |                   | (943   | )     |      |  | (314  | )     |  |  | (27   | )  
|                                                                                  |                           |                   |        |       |      |  |       |       | 
|Profit (loss) before taxes and minority interests                                 |                           |                   | (1,811 | )     |      |  | (752  | )     |  |  | 54    |    
|                                                                                  |                           |                   |        |       |      |  |       |       | 
|(1)  Includes amortization and write-downs of
    Telenors net excess values* by |                           |                   | 99     |       |      |  | 40    |       |  |  | 37    |    
|Investments                                                                       |                           |                   |        |       |      |  |       |       |  |  |       |    
|                                                                                  | Capex                     |                   |        | 301   |      |  |       | 233   |  |  |       | 215 | 
|                                                                                  | Investments in businesses |                   |        | 771   |      |  |       | 30    |  |  |       | 200 | 
|No. of man-years (end of period)                                                  |                           |                   | 3,541  |       |      |  | 2,244 |       |  |  | 1,127 |    
|                                                                                  | Of which abroad           |                   |        | 2,075 |      |  |       | 1,076 |  |  |       | 357 | 






|  |                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------
|* | Net excess values are the difference between our acquisition
    cost and our share of equity at acquisition of subsidiaries.

|                     |  |                   |       |   |      |  |       |      |  |  |       |  
|-------------------- |  | ----------------- | ----- | - | ---- |  | ----- | ---- |  |  | ----- | -
|                     |  | 2002              |       |   | 2003 |  |       | 2004 | 
|                     |  |                   |       |   |      |  |       |      | 
|                     |  | (NOK in millions) |      
|Revenues             |  |                   |       |   |      |  |       |      |  |  |       |  
|Satellite Services   |  |                   | 2,764 |   |      |  | 2,566 |      |  |  | 2,385 |  
|Nextra International |  |                   | 725   |   |      |  | 272   |      |  |  |      |  
|Software Services    |  |                   | 185   |   |      |  | 121   |      |  |  | 60    |  
|Itworks              |  |                   | 188   |   |      |  |      |      |  |  |      |  
|Other                |  |                   | 1,194 |   |      |  | 1,241 |      |  |  | 1,150 |  
|Eliminations         |  |                   | (16   | ) |      |  | 5     |      |  |  |      |  
|                     |  |                   |       |   |      |  |       |      | 
|Total revenues       |  |                   | 5,040 |   |      |  | 4,205 |      |  |  | 3,595 |  
|                     |  |                   |       |   |      |  |       |      | 
|EBITDA               |  |                   |       |   |      |  |       |      |  |  |       |  
|Satellite Services   |  |                   | 412   |   |      |  | 554   |      |  |  | 410   |  
|Nextra International |  |                   | (155  | ) |      |  | (195  | )    |  |  | 13    |  
|Software Services    |  |                   | 62    |   |      |  | 33    |      |  |  | (18   | )
|Itworks              |  |                   | (16   | ) |      |  |      |      |  |  |      |  
|Other                |  |                   | (125  | ) |      |  | 16    |      |  |  | 119   |  
|                     |  |                   |       |   |      |  |       |      | 
|Total EBITDA         |  |                   | 178   |   |      |  | 408   |      |  |  | 524   |  
|                     |  |                   |       |   |      |  |       |      | 

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|                              |  |                   |      |   |      |  |      |      |  |  |     |  
|----------------------------- |  | ----------------- | ---- | - | ---- |  | ---- | ---- |  |  | --- | -
|                              |  | 2002              |      |   | 2003 |  |      | 2004 | 
|                              |  |                   |      |   |      |  |      |      | 
|                              |  | (NOK in millions) |     
|Operating profit (loss)       |  |                   |      |   |      |  |      |      |  |  |     |  
|Satellite Services            |  |                   | 139  |   |      |  | 234  |      |  |  | 108 |  
|Nextra International          |  |                   | (260 | ) |      |  | (220 | )    |  |  | 13  |  
|Software Services             |  |                   | (372 | ) |      |  | (86  | )    |  |  | (87 | )
|Itworks                       |  |                   | (23  | ) |      |  |     |      |  |  |    |  
|Other                         |  |                   | (220 | ) |      |  | (48  | )    |  |  | 79  |  
|                              |  |                   |      |   |      |  |      |      | 
|Total operating profit (loss) |  |                   | (736 | ) |      |  | (120 | )    |  |  | 113 |  
|                              |  |                   |      |   |      |  |      |      | 

Overview




Satellite Services
















141



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Nextra International






Software Service










Itworks




Other










142



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CORPORATE FUNCTIONS AND GROUP ACTIVITIES


|                                                  |                           |                   |       |       |      |  |       |      |  |  |       |     | 
|------------------------------------------------- | ------------------------- | ----------------- | ----- | ----- | ---- |  | ----- | ---- |  |  | ----- | --- | 
|                                                  |                           | 2002              |       |       | 2003 |  |       | 2004 | 
|                                                  |                           |                   |       |       |      |  |       |      | 
|                                                  |                           | (NOK in millions) |      
|External revenues                                 |                           |                   | 247   |       |      |  | 229   |      |  |  | 256   |    
|Internal revenues                                 |                           |                   | 1,869 |       |      |  | 1,955 |      |  |  | 1,833 |    
|Gains on disposal of fixed assets and operations  |                           |                   | 143   |       |      |  | 133   |      |  |  | 104   |    
|                                                  |                           |                   |       |       |      |  |       |      | 
|Total revenues                                    |                           |                   | 2,259 |       |      |  | 2,317 |      |  |  | 2,193 |    
|                                                  |                           |                   |       |       |      |  |       |      | 
|External costs of materials and traffic charges   |                           |                   | 43    |       |      |  | 38    |      |  |  | 57    |    
|Internal costs of materials and traffic charges   |                           |                   |      |       |      |  | 13    |      |  |  | 21    |    
|Total costs of materials and traffic charges      |                           |                   | 43    |       |      |  | 51    |      |  |  | 78    |    
|                                                  |                           |                   |       |       |      |  |       |      | 
|Own work capitalized                              |                           |                   | (7    | )     |      |  | (2    | )    |  |  | (3    | )  
|Salaries and personnel costs                      |                           |                   | 875   |       |      |  | 781   |      |  |  | 884   |    
|Other external operating expenses                 |                           |                   | 1,608 |       |      |  | 1,193 |      |  |  | 1,129 |    
|Other internal operating expenses                 |                           |                   | 226   |       |      |  | 263   |      |  |  | 155   |    
|Losses on disposal of fixed assets and operations |                           |                   | 83    |       |      |  | 8     |      |  |  | 31    |    
|Depreciation and amortization                     |                           |                   | 362   |       |      |  | 384   |      |  |  | 384   |    
|Write-downs                                       |                           |                   |      |       |      |  | 3     |      |  |  | 3     |    
|                                                  |                           |                   |       |       |      |  |       |      | 
|Total operating expenses                          |                           |                   | 3,190 |       |      |  | 2,681 |      |  |  | 2,661 |    
|                                                  |                           |                   |       |       |      |  |       |      | 
|Operating (loss)                                  |                           |                   | (931  | )     |      |  | (364  | )    |  |  | (468  | )  
|                                                  |                           |                   |       |       |      |  |       |      | 
|Associated companies                              |                           |                   | (1    | )     |      |  | (2    | )    |  |  | 3     |    
|Net financial items                               |                           |                   | 1,929 |       |      |  | 2,846 |      |  |  | 1,646 |    
|                                                  |                           |                   |       |       |      |  |       |      | 
|Profit before taxes and minority interests        |                           |                   | 997   |       |      |  | 2,480 |      |  |  | 1,181 |    
|                                                  |                           |                   |       |       |      |  |       |      | 
|Investments                                       |                           |                   |       |       |      |  |       |      |  |  |       |    
|                                                  | Capex                     |                   |       | 1,064 |      |  |       | 253  |  |  |       | 234 | 
|                                                  | Investments in businesses |                   |       | 56    |      |  |       | 93   |  |  |       | 54  | 
|No. of man-years (end of period)                  |                           |                   | 1,077 |       |      |  | 888   |      |  |  | 1,008 |    
|                                                  | Of which abroad           |                   |       | 21    |      |  |       | 20   |  |  |       | 22  | 
|EBITDA                                            |                           |                   | (569  | )     |      |  | 23    |      |  |  | (81   | )  
|Depreciation and amortization                     |                           |                   | 362   |       |      |  | 384   |      |  |  | 384   |    
|Write-downs                                       |                           |                   |      |       |      |  | 3     |      |  |  | 3     |    
|                                                  |                           |                   |       |       |      |  |       |      | 
|Operating (loss)                                  |                           |                   | (931  | )     |      |  | (364  | )    |  |  | (468  | )  
|                                                  |                           |                   |       |       |      |  |       |      | 





Revenues




143



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##### Table of Contents



Operating (loss) and EBITDA






Capital Expenditure




WORKING CAPITAL




144



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##### Table of Contents



LIQUIDITY




|                                                                             |  |                   |         |   |      |  |        |      |  |  |         |  
|---------------------------------------------------------------------------- |  | ----------------- | ------- | - | ---- |  | ------ | ---- |  |  | ------- | -
|                                                                             |  | 2002              |         |   | 2003 |  |        | 2004 | 
|                                                                             |  |                   |         |   |      |  |        |      | 
|                                                                             |  | (NOK in millions) |        
|Aggregated cash flow statement                                               |  |                   |         |   |      |  |        |      |  |  |         |  
|Net cash flow from operating activities                                      |  |                   | 12,858  |   |      |  | 13,676 |      |  |  | 18,991  |  
|Net cash flow from investment activities                                     |  |                   | (21,727 | ) |      |  | (3,454 | )    |  |  | (13,031 | )
|Net cash flow from financing activities                                      |  |                   | 8,641   |   |      |  | (7,887 | )    |  |  | (8,255  | )
|Effect on cash and cash equivalents of changes in foreign
    exchange rates |  |                   | (347    | ) |      |  | 45     |      |  |  | (268    | )
|Net change in cash and cash equivalents                                      |  |                   | (575    | ) |      |  | 2,380  |      |  |  | (2,563  | )
|Cash and cash equivalents January 1                                          |  |                   | 5,839   |   |      |  | 5,264  |      |  |  | 7,644   |  
|Cash and cash equivalents December 31                                        |  |                   | 5,264   |   |      |  | 7,644  |      |  |  | 5,081   |  







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INVESTMENTS


|                                                                         |  |                   |        |   |      |  |       |      |  |  |        | 
|------------------------------------------------------------------------ |  | ----------------- | ------ | - | ---- |  | ----- | ---- |  |  | ------ | 
|                                                                         |  | 2002              |        |   | 2003 |  |       | 2004 | 
|                                                                         |  |                   |        |   |      |  |       |      | 
|                                                                         |  | (NOK in millions) |       
|Fixed networks                                                           |  |                   | 3,001  |   |      |  | 2,099 |      |  |  | 2,153  | 
|Mobile networks                                                          |  |                   | 2,205  |   |      |  | 2,487 |      |  |  | 4,175  | 
|Properties                                                               |  |                   | 2,840  |   |      |  | 546   |      |  |  | 233    | 
|Support systems (office and computer equipment, software, cars
    etc.) |  |                   | 3,042  |   |      |  | 1,991 |      |  |  | 2,159  | 
|Other intangible assets                                                  |  |                   | 455    |   |      |  | 81    |      |  |  | 2,654  | 
|Satellites                                                               |  |                   |       |   |      |  |      |      |  |  | 636    | 
|Work in progress (net additions) and other                               |  |                   | (2,654 | ) |      |  | (750  | )    |  |  | 735    | 
|                                                                         |  |                   |        |   |      |  |       |      | 
|Total Capital expenditure (Capex)(1)                                     |  |                   | 8,889  |   |      |  | 6,454 |      |  |  | 12,745 | 
|Investments in businesses(2)                                             |  |                   | 12,411 |   |      |  | 563   |      |  |  | 5,809  | 
|                                                                         |  |                   |        |   |      |  |       |      | 
|Total                                                                    |  |                   | 21,300 |   |      |  | 7,017 |      |  |  | 18,554 | 
|                                                                         |  |                   |        |   |      |  |       |      | 

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|    |                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Capital expenditure (Capex) is investments in tangible and
    intangible assets.                                                                                        
|   
|(2) | Investments in businesses are acquisition of shares and
    participations, including acquisition of subsidiaries and
    businesses not organized as separate companies.











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|                                                  |  |                   |        |  |      |  |     |      |  |  |       | 
|------------------------------------------------- |  | ----------------- | ------ |  | ---- |  | --- | ---- |  |  | ----- | 
|                                                  |  | 2002              |        |  | 2003 |  |     | 2004 | 
|                                                  |  |                   |        |  |      |  |     |      | 
|                                                  |  | (NOK in millions) |       
|Sonofon Holding A/S                               |  |                   |       |  |      |  |    |      |  |  | 3,639 | 
|European Telecom Luxembourg SA (ProMonte)         |  |                   |       |  |      |  |    |      |  |  | 541   | 
|GrameenPhone Ltd                                  |  |                   |       |  |      |  | 86  |      |  |  | 298   | 
|CBB AS                                            |  |                   |       |  |      |  |    |      |  |  | 147   | 
|Nordialog                                         |  |                   |       |  |      |  |    |      |  |  | 52    | 
|Kyivstar G.S.M. JSC                               |  |                   | 294    |  |      |  | 8   |      |  |  | 35    | 
|Pannon GSM RT                                     |  |                   | 7,906  |  |      |  |    |      |  |  |      | 
|VimpelCom (incl VimpelCom-Region)                 |  |                   | 432    |  |      |  |    |      |  |  |      | 
|OniWay                                            |  |                   | 217    |  |      |  |    |      |  |  |      | 
|ONE GmbH (Connect Austria)                        |  |                   | 44     |  |      |  |    |      |  |  |      | 
|Purchase of IT-operations in EDB Business Partner |  |                   |       |  |      |  |    |      |  |  | 738   | 
|GMPCS Personal Communications Inc.                |  |                   |       |  |      |  |    |      |  |  | 85    | 
|Neratek AS                                        |  |                   |       |  |      |  |    |      |  |  | 42    | 
|Bravida ASA                                       |  |                   | 91     |  |      |  | 82  |      |  |  | 27    | 
|COMSAT Mobile Communications                      |  |                   | 743    |  |      |  |    |      |  |  |      | 
|Utfors AB                                         |  |                   | 153    |  |      |  | 13  |      |  |  | 70    | 
|OJSC Comincom/ Combellga                          |  |                   |       |  |      |  | 217 |      |  |  |      | 
|OJSC Golden Telecom                               |  |                   |       |  |      |  | 63  |      |  |  |      | 
|Glocalnet AB                                      |  |                   | 102    |  |      |  |    |      |  |  |      | 
|Canal Digital                                     |  |                   | 2,166  |  |      |  |    |      |  |  |      | 
|Other                                             |  |                   | 263    |  |      |  | 94  |      |  |  | 135   | 
|                                                  |  |                   |        |  |      |  |     |      | 
|Total investments in businesses                   |  |                   | 12,411 |  |      |  | 563 |      |  |  | 5,809 | 
|                                                  |  |                   |        |  |      |  |     |      | 



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INFORMATION ABOUT CONTRACTUAL CASH PAYMENTS


Contractual Cash Payments




|                                       |  |                   |        |           |        |  |       |           |      |  |           |  |  |         |       |  |  |  |       | 
|-------------------------------------- |  | ----------------- | ------ | --------- | ------ |  | ----- | --------- | ---- |  | --------- |  |  | ------- | ----- |  |  |  | ----- | 
|                                       |  | Payments due      |       
|                                       |  |                   |       
|                                       |  |                   |        | Less than |        |  |      
|                                       |  |                   |        | 1 year    |        |  |       |           | Over | 
|                                       |  | Total             |        |           | (2005) |  |       | 2-3 years |      |  | 4-5 years |  |  | 5 years |      
|                                       |  |                   |        |           |        |  |       |           |      |  |           |  |  |         |      
|                                       |  | (NOK in millions) |       
|Interest-bearing liabilities           |  |                   | 23,144 |           |        |  | 3,660 |           |      |  | 9,349     |  |  |         | 5,752 |  |  |  | 4,383 | 
|Finance lease obligations              |  |                   | 1,449  |           |        |  | 331   |           |      |  | 434       |  |  |         | 565   |  |  |  | 119   | 
|Committed purchase obligations(1)      |  |                   |        |           |        |  |       |           |      |  |           |  |  |         |       |  |  |  |       | 
|Rent of premises                       |  |                   | 4,534  |           |        |  | 737   |           |      |  | 1,151     |  |  |         | 928   |  |  |  | 1,718 | 
|Rent of cars, office equipment etc.    |  |                   | 131    |           |        |  | 63    |           |      |  | 61        |  |  |         | 7     |  |  |  |      | 
|Rent of satellite and network capacity |  |                   | 2,479  |           |        |  | 1,052 |           |      |  | 407       |  |  |         | 288   |  |  |  | 732   | 
|IT-related agreements                  |  |                   | 1,260  |           |        |  | 372   |           |      |  | 365       |  |  |         | 439   |  |  |  | 84    | 
|Other contractual obligations          |  |                   | 860    |           |        |  | 565   |           |      |  | 196       |  |  |         | 62    |  |  |  | 37    | 
|Committed investments(1)               |  |                   |        |           |        |  |       |           |      |  |           |  |  |         |       |  |  |  |       | 
|Properties and equipment               |  |                   | 2,791  |           |        |  | 2,478 |           |      |  | 223       |  |  |         | 60    |  |  |  | 30    | 
|Other contractual investments          |  |                   | 13     |           |        |  | 13    |           |      |  |          |  |  |         |      |  |  |  |      | 
|Total contractual cash obligations     |  |                   | 36,661 |           |        |  | 9,271 |           |      |  | 12,186    |  |  |         | 8,101 |  |  |  | 7,103 | 
|Guarantees (expire)                    |  |                   | 2,169  |           |        |  | 48    |           |      |  | 1,964     |  |  |         |      |  |  |  | 157   | 






|    |                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The table does not include agreements under which we have no
    binding obligation to purchase or future investments required
    under the UMTS licenses awarded to us in Norway and Hungary.











CAPITAL RESOURCES




149



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OFF BALANCE SHEET ARRANGEMENTS






150



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|                      |  |                   |       |           |               |  |        |           |  |        |           |  |      |         |   |  |  |  |     | 
|--------------------- |  | ----------------- | ----- | --------- | ------------- |  | ------ | --------- |  | ------ | --------- |  | ---- | ------- | - |  |  |  | --- | 
|                      |  |                   |       | Expire    |               |  |        |           |  |        | Expire    | 
|                      |  |                   |       | less than |               |  | Expire |           |  | Expire |           |  | over |        
|                      |  | Total             |       |           | 1 year (2005) |  |        | 2-3 years |  |        | 4-5 years |  |      | 5 years |  
|                      |  |                   |       |           |               |  |        |           |  |        |           |  |      |         |  
|                      |  | (NOK in millions) |      
|Guarantee liabilities |  |                   | 2,169 |           |               |  | 48     |           |  |        | 1,964     |  |      |         |  |  |  |  | 157 | 











CRITICAL ACCOUNTING ESTIMATES UNDER NORWEGIAN GAAP




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Revenue recognition.


Impairment.




| |   |                                                                                               
| | - | ----------------------------------------------------------------------------------------------
| |  | Significant fall in market values;                                                            
|
| |  | Significant underperformance relative to historical or projected
    future operating results;
|
| |  | Significant changes in the use of our assets or the strategy for
    our overall business;    
|
| |  | Significant negative industry or economic trends.                                             











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Depreciation and amortization.


Business combinations.




Income taxes.






Pension costs, pension obligations and pension plan assets.


153



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|                                  |                                                                                                         |                   |  |              |      |  |               |        |  |             |             |       |  |     |  |      |     |  |  |      |   |  |     |      |   |  |  |     |  |  |  |      |  
|--------------------------------- | ------------------------------------------------------------------------------------------------------- | ----------------- |  | ------------ | ---- |  | ------------- | ------ |  | ----------- | ----------- | ----- |  | --- |  | ---- | --- |  |  | ---- | - |  | --- | ---- | - |  |  | --- |  |  |  | ---- | -
|                                  |                                                                                                         |                   |  |              |      |  |               | Social |  |             | Annual      |      
|                                  |                                                                                                         |                   |  | Compensation |      |  | Security base |        |  | adjustments |            
|                                  |                                                                                                         | Discount rate     |  |              | rate |  |               | amount |  |             | to pensions |      
|                                  |                                                                                                         |                   |  |              |      |  |               |        |  |             |             |      
|(Change in % is percentage point) |                                                                                                         | +1%               |  |              | -1%  |  |               | +1%    |  |             | -1%         |       |  | +1% |  |      | -1% |  |  | +1%  |   |  | -1% |     
|                                  |                                                                                                         |                   |  |              |      |  |               |        |  |             |             |       |  |     |  |      |     |  |  |      |   |  |     |     
|                                  |                                                                                                         | (NOK in millions) | 
|Changes in pension:               |                                                                                                         |                   |  |              |      |  |               |        |  |             |             |       |  |     |  |      |     |  |  |      |   |  |     |      |   |  |  |     |  |  |  |     
|                                  | Liabilities                                                                                             |                   |  | (870         | )    |  |               | 1,160  |  |             |             | 1,100 |  |     |  | (850 | )   |  |  | (410 | ) |  |     | 440  |   |  |  | 530 |  |  |  | (440 | )
|                                  | Unrecognized actuarial losses                                                                           |                   |  | (870         | )    |  |               | 1,160  |  |             |             | 1,100 |  |     |  | (850 | )   |  |  | (410 | ) |  |     | 440  |   |  |  | 530 |  |  |  | (440 | )
|                                  | Expenses due to amortization of actuarial losses                                                        |                   |  | (100         | )    |  |               | 200    |  |             |             | 190   |  |     |  | (100 | )   |  |  | (70  | ) |  |     | 75   |   |  |  | 90  |  |  |  | (80  | )
|                                  | Net periodic benefit cost including effect due to amortization
    of actuarial losses (as shown above) |                   |  | (250         | )    |  |               | 420    |  |             |             | 390   |  |     |  | (250 | )   |  |  | 150  |   |  |     | (160 | ) |  |  | 190 |  |  |  | (160 | )

Legal proceedings.


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OTHER INFORMATION


Inflation




Norwegian GAAP compared with U.S. GAAP












International Financial Reporting Standards






155



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| |   |                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------
| |  | Revenue and partially related costs.                                                                                      
|
| |  | Business combinations.                                                                                                    
|
| |  | Goodwill.                                                                                                                 
|
| |  | Tangible and intangible assets including depreciation,
    amortization and write-downs, and asset retirement obligations.
|
| |  | Financial investments, liabilities and derivatives including
    hedge accounting.                                        
|
| |  | Pensions, including the discount rate used.                                                                               
|
| |  | Share-based payments.                                                                                                     
|
| |  | Dividends not recorded as deduction to equity before it is
    declared.                                                  
|
| |  | Translation adjustment.                                                                                                   
|
| |  | Deferred taxes and tax assets.                                                                                            
|
| |  | Minority interests.                                                                                                       



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ITEM 6:     DIRECTORS, SENIOR
MANAGEMENT AND EMPLOYEES


DIRECTORS AND SENIOR MANAGEMENT








Board of Directors


|                         |  |                        |  |      |  |                 |  |               |             | 
|------------------------ |  | ---------------------- |  | ---- |  | --------------- |  | ------------- | ----------- | 
|                         |  |                        |  |      |  |                 |  | Expiration of |            
|Name                     |  | Address                |  | Born |  | Positions       |  | current term  |            
|                         |  |                        |  |      |  |                 |  |               |            
|Thorleif Enger           |  | Oslo                   |  | 1943 |  | Chairman        |  |               | Spring 2005 | 
|Bjørg Ven                |  | Oslo                   |  | 1946 |  | Deputy Chairman |  |               | Spring 2005 | 
|Hanne de Mora            |  | Erlenbach, Switzerland |  | 1960 |  | Director        |  |               | Spring 2005 | 
|John Giverholt           |  | Asker                  |  | 1952 |  | Director        |  |               | Spring 2005 | 
|Liselott Kilaas          |  | Oslo                   |  | 1959 |  | Director        |  |               | Spring 2005 | 
|Jørgen Lindegaard        |  | Copenhagen, Denmark    |  | 1943 |  | Director        |  |               | Spring 2005 | 
|Pual Bergqvist           |  | Copenhagen, Denmark    |  | 1946 |  | Director        |  |               | Spring 2007 | 
|Harald Stavn(2)          |  | Kongsberg              |  | 1954 |  | Director        |  |               | Spring 2005 | 
|Per Gunnar Salomonsen(2) |  | Skien                  |  | 1954 |  | Director        |  |               | Spring 2005 | 
|Irma Tystad(2)           |  | Trysil                 |  | 1943 |  | Director        |  |               | Spring 2005 | 






|    |                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------
|(1) | Each director whose current term expires in Spring 2005 has
    agreed to serve another term, which will expire in Spring 2007.
|   
|(2) | Elected by the employees.                                                                                                      

Thorleif Enger


Bjørg Ven


Hanne de Mora


John Giverholt


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Liselott Kilaas


Jørgen Lindegaard


Paul Bergqvist


Harald Stavn


Per Gunnar Salomonsen


Irma Tystad


Board Practices


Compensation Committee




Audit Committee




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Group Management


|                     |  |          |  |      |      |  |          |                                                            
|-------------------- |  | -------- |  | ---- | ---- |  | -------- | -----------------------------------------------------------
|Name                 |  | Address  |  | Born |      |  | Position
|                     |  |          |  |      |      |  |         
|Jon Fredrik Baksaas  |  | Sandvika |  |      | 1954 |  |          | President and Chief Executive Officer                      
|Torstein Moland      |  | Lier     |  |      | 1945 |  |          | Senior Executive Vice President and Chief Financial Officer
|Arve Johansen        |  | Oslo     |  |      | 1949 |  |          | Senior Executive Vice President(1)                         
|Morten Karlsen Sørby |  | Oslo     |  |      | 1959 |  |          | Executive Vice President(2)                                
|Jan Edvard Thygesen  |  | Nesbru   |  |      | 1951 |  |          | Executive Vice President; General Manager of Sonofon       
|Stig Eide Sivertsen  |  | Oslo     |  |      | 1959 |  |          | Executive Vice President(3)                                






|    |                                                                      
|--- | ---------------------------------------------------------------------
|(1) | And head of Telenors international mobile operations.               
|   
|(2) | And head of Telenors Nordic mobile and fixed network
    operations.
|   
|(3) | And head of Telenors Broadcast operations.                          

Jon Fredrik Baksaas


Torstein Moland


Arve Johansen


Morten Karlsen Sørby


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Jan Edvard Thygesen


Stig Eide Sivertsen


Corporate Assembly










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|                            |  |              |  |                
|--------------------------- |  | ------------ |  | ---------------
|Name                        |  | Address      |  | Position       
|                            |  |              |  |                
|Mona Røkke                  |  | Tønsberg     |  | Chairman       
|Randi Braathe               |  | Rygge        |  | Deputy Chairman
|Jostein Devold              |  | Kristiansand |  | Member         
|Jørgen Ole Haslestad        |  | Erlangen     |  | Member         
|Arne Jenssen                |  | Trondheim    |  | Member         
|Hans Olav Karde             |  | Tromsø       |  | Member         
|Berit Kopren                |  | Stavanger    |  | Member         
|Jan Erik Korssjoen          |  | Kongsberg    |  | Member         
|Nils-Edvard Olsen           |  | Kirkenes     |  | Member         
|Stein Erik Olsen            |  | Flaktveit    |  | Member         
|Jan Riddervold              |  | Lillehammer  |  | Member         
|Signe Marie Jore Ritterberg |  | Oslo         |  | Member         
|Rune Selmar                 |  | Oppegard     |  | Member         
|Bjørg Simonsen              |  | Mo           |  | Member         
|Astri Skare                 |  | Bergen       |  | Member         

Compensation of the Board of Directors, Corporate Assembly
and Group Management








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|                                                            |  |           |          |  |           |  |          |                     |       |                                                                                                                                                                                                                                                               |  |       |         |  |       |         |         |  |  |  |         | 
|----------------------------------------------------------- |  | --------- | -------- |  | --------- |  | -------- | ------------------- | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----- | ------- |  | ----- | ------- | ------- |  |  |  | ------- | 
|                                                            |  | Agreed    |          |  |           |  |          |                     | Share |                                                                                                                                                                                                                                                               |  | Share |         |  | Share |        
|                                                            |  | period of |          |  | Severance |  |          |                     |       | Options                                                                                                                                                                                                                                                       |  |       | Options |  |       | Options |        
|Name/title                                                  |  | notice    |          |  | Pay       |  |          | Pension benefits(1) |       | 2004(1)                                                                                                                                                                                                                                                       |  |       | 2003(1) |  |       | 2002(1) |        
|                                                            |  |           |          |  |           |  |          |                     |       |                                                                                                                                                                                                                                                               |  |       |         |  |       |         |        
|Senior Executive Vice President Arve Johansen(2)            |  |           | 6 months |  |           |  | 6 months |                     |       | 66% of pension-qualifying income at the date of retirement with
    the right to retire at the age of 60. The pension-qualifying
    income will be equal to salary as of December 31, 2004,
    with an annual adjustment based on the consumer price index. |  |       |        |  |       |         | 100,000 |  |  |  | 100,000 | 
|Senior Executive Vice President and CFO, Torstein Moland(2) |  |           | 6 months |  |           |  | 6 months |                     |       | 66% of pension-qualifying income at the date of retirement with
    the right to retire at the age of 60. The pension-qualifying
    income will be equal to salary as of December 31, 2004,
    with an annual adjustment based on the consumer price index. |  |       |        |  |       |         | 100,000 |  |  |  | 100,000 | 
|Executive Vice President Stig Eide Sivertsen                |  |           | 6 months |  |           |  | No       |                     |       | 66% of pension-qualifying income at the date of retirement with
    the right to retire at the age of 62. The pension-qualifying
    income will be equal to salary as of December 31, 2004,
    with an annual adjustment based on the consumer price index. |  |       |        |  |       |         | 75,000  |  |  |  | 75,000  | 
|Executive Vice President Jan Edvard Thygesen                |  |           | 6 months |  |           |  | 6 months |                     |       | 66% of pension-qualifying income at the date of retirement with
    the right to retire at the age of 62. The pension-qualifying
    income will be equal to salary as of December 31, 2003,
    with an annual adjustment based on the consumer price index. |  |       |        |  |       |         | 75,000  |  |  |  | 75,000  | 

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|                                              |  |           |          |  |           |  |          |                     |       |                                                                                                                                                                                                                                                               |  |       |         |  |       |         |        |  |  |  |        | 
|--------------------------------------------- |  | --------- | -------- |  | --------- |  | -------- | ------------------- | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----- | ------- |  | ----- | ------- | ------ |  |  |  | ------ | 
|                                              |  | Agreed    |          |  |           |  |          |                     | Share |                                                                                                                                                                                                                                                               |  | Share |         |  | Share |        
|                                              |  | period of |          |  | Severance |  |          |                     |       | Options                                                                                                                                                                                                                                                       |  |       | Options |  |       | Options |       
|Name/title                                    |  | notice    |          |  | Pay       |  |          | Pension benefits(1) |       | 2004(1)                                                                                                                                                                                                                                                       |  |       | 2003(1) |  |       | 2002(1) |       
|                                              |  |           |          |  |           |  |          |                     |       |                                                                                                                                                                                                                                                               |  |       |         |  |       |         |       
|Executive Vice President Morten Karlsen Sørby |  |           | 6 months |  |           |  | 6 months |                     |       | 66% of pension-qualifying income at the date of retirement with
    the right to retire at the age of 62. The pension-qualifying
    income will be equal to salary as of December 31, 2002,
    with an annual adjustment based on the consumer price index. |  |       |        |  |       |         | 75,000 |  |  |  | 70,000 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The share option programs for 2002, 2003 and 2004 are described
    under  Incentive Programs below.                                                                                                                                                                                                                                                                                                
|   
|(2) | Arve Johansen and Torstein Moland, both have agreements which
    entitle them to a possible transfer to other positions within
    the organization with the right to be compensated by an amount
    equal to half their salary. These agreements relate to a
    specified time period up to the age of retirement. The future
    pension benefits are based on the salary at the time of transfer.



Incentive Programs






Options granted in 2002:


Options granted in 2003 and 2004:


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|                                      |  |               |           |                |                |  |       | 
|------------------------------------- |  | ------------- | --------- | -------------- | -------------- |  | ----- | 
|                                      |  |               |           | Exercise price |               
|                                      |  |               |           | at the end of  |               
|                                      |  | Share options |           |                | option life(1) | 
|                                      |  |               |           |                |                | 
|Options granted in 2002 (February 21) |  |               | 2,520,000 |                |                |  | 50.96 | 
|Options granted in 2002 (June 21)     |  |               | 150,000   |                |                |  | 42.12 | 
|Options forfeited in 2002             |  |               | 55,000    |                |                |  | 50.96 | 
|Balance at December 31, 2002          |  |               | 2,615,000 |                |                |  | 50.45 | 
|Options granted in 2003               |  |               | 2,850,000 |                |                |  | 26.44 | 
|Options forfeited in 2003             |  |               | 290,000   |                |                |  | 32.36 | 
|Options exercised in 2003             |  |               | 71,667    |                |                |  | 50.96 | 
|Balance at December 31, 2003          |  |               | 5,103,333 |                |                |  | 38.06 | 
|Options granted in 2004               |  |               | 380,000   |                |                |  | 48.36 | 
|Options forfeited in 2004             |  |               | 45,000    |                |                |  | 26.98 | 
|Options exercised in 2004             |  |               | 1,027,994 |                |                |  | 36.28 | 
|Balance at December 31, 2004          |  |               | 4,410,339 |                |                |  | 33.97 | 



|                 |          |  |             |  |                  |                |  |                     |                      |  |  |  |         | 
|---------------- | -------- |  | ----------- |  | ---------------- | -------------- |  | ------------------- | -------------------- |  |  |  | ------- | 
|Weighted Average |          |  |             |  | Weighted Average |                |  | Options Exercisable |                     
|Exercise Price   |          |  | Options     |  |                  | Remaining Life |  |                     | as of                | 
|(in NOK)         |          |  | Outstanding |  |                  | in years       |  |                     | 31. December 2004(1) | 
|                 |          |  |             |  |                  |                |  |                     |                      | 
|                 | 50.96(2) |  |             |  | 1,630,335        |                |  |                     | 4 years              |  |  |  | 913,667 | 
|                 | 42.12(3) |  |             |  | 150,000          |                |  |                     | 4 years              |  |  |  | 100,000 | 
|                 | 26.44(4) |  |             |  | 2,250,004        |                |  |                     | 5 years              |  |  |  | 583,328 | 
|                 | 48.36(5) |  |             |  | 380,000          |                |  |                     | 6 years              |  |  |  |        | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Exercise price for the share option programs of 2002 are
    calculated at the latest possible date of exercise, and based on
    12 month NIBOR implied forward rates calculated of the spot
    curve (February 20, and June 20, each year,
    respectively). For the share option program of 2003 and 2004,
    the exercise prices are fixed throughout the options
    terms. The options may only be exercised in the period right
    immediately following the publication of Telenors
    quarterly financial results.
|   
|(2) | First possible exercise was February 2003 for
    1/3
    of the options.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(3) | First possible exercise was June 2003 for
    1/3
    of the options.                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(4) | First possible exercise was February 2004 for
    1/3
    of the options.                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(5) | First possible exercise was February 2005 for
    1/3
    of the options.                                                                                                                                                                                                                                                                                                                                                                                                                                                         



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|                     |  |              |         |  |              |  |         | 
|-------------------- |  | ------------ | ------- |  | ------------ |  | ------- | 
|                     |  | Options      |         |  | Options      | 
|                     |  | Granted on   |         |  | Granted on   | 
|                     |  | February 21, |         |  | February 21, | 
|Name                 |  | 2002         |         |  | 2003         | 
|                     |  |              |         |  |              | 
|Jon Fredrik Baksaas  |  |              | 100,000 |  |              |  | 250,000 | 
|Torstein Moland      |  |              | 100,000 |  |              |  | 100,000 | 
|Arve Johansen        |  |              | 100,000 |  |              |  | 100,000 | 
|Jan Edvard Thygesen  |  |              | 75,000  |  |              |  | 75,000  | 
|Stig Eide Sivertsen  |  |              | 75,000  |  |              |  | 75,000  | 
|Morten Karlsen Sørby |  |              | 70,000  |  |              |  | 75,000  | 






|    |                                                                                
|--- | -------------------------------------------------------------------------------
|(1) | An additional 150,000 options were granted to Mr. Baksaas
    on June 21, 2002.



Pension Benefits














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Exemptions from corporate governance listing requirements
under the NASDAQ Marketplace Rules




1 3








EMPLOYEES




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|                                         |  |                        |        |         |                        |  |       |                        |  |  |         |  |  |        |        |  |       |         |       |        |  |  |        |  |  |       |        |  |  |  |       |  |  |  |        | 
|---------------------------------------- |  | ---------------------- | ------ | ------- | ---------------------- |  | ----- | ---------------------- |  |  | ------- |  |  | ------ | ------ |  | ----- | ------- | ----- | ------ |  |  | ------ |  |  | ----- | ------ |  |  |  | ----- |  |  |  | ------ | 
|                                         |  | Number of employees(1) |        |         | Number of employees(1) |  |       | Number of employees(1) | 
|                                         |  |                        |        |         |                        |  |       |                        | 
|                                         |  | December 31, 2002      |        |         | December 31, 2003      |  |       | December 31, 2004      | 
|                                         |  |                        |        |         |                        |  |       |                        | 
|                                         |  |                        |        | Outside |                        |  |       |                        |  |  | Outside |  |  |        |        |  |       | Outside |       |        | 
|Business Area                            |  | Norway                 |        |         | Norway                 |  |       | Total                  |  |  | Norway  |  |  | Norway |        |  | Total |         |       | Norway |  |  | Norway |  |  | Total |       
|                                         |  |                        |        |         |                        |  |       |                        |  |  |         |  |  |        |        |  |       |         |       |        |  |  |        |  |  |       |       
|Mobile                                   |  |                        | 1,878  |         |                        |  | 4,673 |                        |  |  | 6,551   |  |  |        | 1,723  |  |       |         | 5,201 |        |  |  | 6,924  |  |  |       | 1,568  |  |  |  | 7,767 |  |  |  | 9,335  | 
|Fixed                                    |  |                        | 5,632  |         |                        |  | 1,583 |                        |  |  | 7,215   |  |  |        | 5,435  |  |       |         | 652   |        |  |  | 6,087  |  |  |       | 5,008  |  |  |  | 643   |  |  |  | 5,651  | 
|Broadcast                                |  |                        | 746    |         |                        |  | 226   |                        |  |  | 972     |  |  |        | 599    |  |       |         | 210   |        |  |  | 809    |  |  |       | 552    |  |  |  | 222   |  |  |  | 774    | 
|EDB Business Partner FO                  |  |                        | 2,452  |         |                        |  | 308   |                        |  |  | 2,760   |  |  |        | 2,211  |  |       |         | 266   |        |  |  | 2,477  |  |  |       | 2,496  |  |  |  | 512   |  |  |  | 3,008  | 
|Other business units                     |  |                        | 1,466  |         |                        |  | 2,075 |                        |  |  | 3,541   |  |  |        | 1,168  |  |       |         | 1,076 |        |  |  | 2,244  |  |  |       | 770    |  |  |  | 354   |  |  |  | 1,124  | 
|Corporate functions and group activities |  |                        | 1,026  |         |                        |  | 35    |                        |  |  | 1,061   |  |  |        | 864    |  |       |         | 45    |        |  |  | 909    |  |  |       | 986    |  |  |  | 22    |  |  |  | 1,008  | 
|                                         |  |                        |        |         |                        |  |       |                        |  |  |         |  |  |        |        |  |       |         |       |        |  |  |        |  |  |       |       
|Total                                    |  |                        | 13,200 |         |                        |  | 8,900 |                        |  |  | 22,100  |  |  |        | 12,000 |  |       |         | 7,450 |        |  |  | 19,450 |  |  |       | 11,380 |  |  |  | 9,520 |  |  |  | 20,900 | 
|                                         |  |                        |        |         |                        |  |       |                        |  |  |         |  |  |        |        |  |       |         |       |        |  |  |        |  |  |       |       






|    |                      
|--- | ---------------------
|(1) | Full-time equivalents









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SHARE OWNERSHIP




|                       |  |                  |        | 
|---------------------- |  | ---------------- | ------ | 
|                       |  | Number of shares |       
|                       |  | as of            |       
|The Board of Directors |  | April 8, 2005    |       
|                       |  |                  |       
|Thorleif Enger         |  |                  | 12,000 | 
|Bjørg Ven              |  |                  | 10,000 | 
|Harald Stavn           |  |                  | 3,689  | 
|Per Gunnar Salomonsen  |  |                  | 1,857  | 
|Irma Tystad            |  |                  | 813    | 

|                       |  |                  |       | 
|---------------------- |  | ---------------- | ----- | 
|                       |  | Number of shares |      
|                       |  | as of            |      
|The Corporate Assembly |  | April 8, 2005    |      
|                       |  |                  |      
|Mona Røkke             |  |                  | 200   | 
|Berit Kopren           |  |                  | 275   | 
|Stein Erik Olsen       |  |                  | 1,035 | 
|Arne Jenssen           |  |                  | 407   | 

|                     |  |                  |        | 
|-------------------- |  | ---------------- | ------ | 
|                     |  | Number of shares |       
|                     |  | as of            |       
|The Group Management |  | April 8, 2005    |       
|                     |  |                  |       
|Jon Fredrik Baksaas  |  |                  | 29,697 | 
|Torstein Moland      |  |                  | 20,199 | 
|Arve Johansen        |  |                  | 44,977 | 
|Morten Karlsen Sørby |  |                  | 7,639  | 
|Jan Edvard Thygesen  |  |                  | 56,123 | 
|Stig Eide Sivertsen  |  |                  | 28,160 | 







ITEM 7:  MAJOR SHAREHOLDERS AND RELATED PARTY
TRANSACTIONS




168



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RELATIONSHIP BETWEEN TELENOR AND THE KINGDOM OF NORWAY


Background




The Kingdom of Norway as a Shareholder














169



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The Kingdom of Norway as a Regulator






The Kingdom of Norway as a Customer




OTHER RELATED PARTY TRANSACTIONS




170



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OTHER INFORMATION








ITEM 8:  FINANCIAL INFORMATION


FINANCIAL STATEMENTS




LEGAL PROCEEDINGS










171



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Disputes mentioned in note 24 to the Telenors financial
statements for 2003, for which a verdict has been reached.




ITEM 9:  THE OFFER AND LISTING






|               |  |                |       |  |           |  |       |      |  |  |        |  |  |  |        | 
|-------------- |  | -------------- | ----- |  | --------- |  | ----- | ---- |  |  | ------ |  |  |  | ------ | 
|               |  | NOK per        |       |  |          
|               |  | ordinary share |       |  | $ per ADS | 
|               |  |                |       |  |           | 
|               |  | High           |       |  | Low       |  |       | High |  |  | Low    | 
|               |  |                |       |  |           |  |       |      |  |  |        | 
|2001           |  |                | 45.40 |  |           |  | 28.00 |      |  |  | 15.625 |  |  |  | 9.000  | 
|2002           |  |                | 39.30 |  |           |  | 22.50 |      |  |  | 13.330 |  |  |  | 9.000  | 
|2003           |  |                | 44.50 |  |           |  | 22.80 |      |  |  | 20.200 |  |  |  | 9.500  | 
|2004           |  |                | 56.50 |  |           |  | 43.40 |      |  |  | 28.390 |  |  |  | 19.008 | 
|2002           |  |                |       |  |           |  |       |      |  |  |        |  |  |  |        | 
|First Quarter  |  |                | 39.60 |  |           |  | 31.60 |      |  |  | 13.329 |  |  |  | 10.449 | 
|Second Quarter |  |                | 36.50 |  |           |  | 22.70 |      |  |  | 12.850 |  |  |  | 9.550  | 
|Third Quarter  |  |                | 29.80 |  |           |  | 22.20 |      |  |  | 12.239 |  |  |  | 9.050  | 
|Fourth Quarter |  |                | 31.20 |  |           |  | 22.50 |      |  |  | 12.550 |  |  |  | 9.000  | 
|2003           |  |                |       |  |           |  |       |      |  |  |        |  |  |  |        | 
|First Quarter  |  |                | 28.80 |  |           |  | 22.80 |      |  |  | 12.000 |  |  |  | 9.500  | 
|Second Quarter |  |                | 31.80 |  |           |  | 23.20 |      |  |  | 13.800 |  |  |  | 9.760  | 
|Third Quarter  |  |                | 33.80 |  |           |  | 29.20 |      |  |  | 14.300 |  |  |  | 12.020 | 
|Fourth Quarter |  |                | 44.50 |  |           |  | 32.20 |      |  |  | 20.200 |  |  |  | 13.701 | 

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|               |  |                |       |  |           |  |       |      |  |  |        |  |  |  |        | 
|-------------- |  | -------------- | ----- |  | --------- |  | ----- | ---- |  |  | ------ |  |  |  | ------ | 
|               |  | NOK per        |       |  |          
|               |  | ordinary share |       |  | $ per ADS | 
|               |  |                |       |  |           | 
|               |  | High           |       |  | Low       |  |       | High |  |  | Low    | 
|               |  |                |       |  |           |  |       |      |  |  |        | 
|2004           |  |                |       |  |           |  |       |      |  |  |        |  |  |  |        | 
|First Quarter  |  |                | 51.00 |  |           |  | 43.40 |      |  |  | 22.550 |  |  |  | 19.760 | 
|Second Quarter |  |                | 48.60 |  |           |  | 43.60 |      |  |  | 21.890 |  |  |  | 19.008 | 
|Third Quarter  |  |                | 51.25 |  |           |  | 45.50 |      |  |  | 22.650 |  |  |  | 19.690 | 
|Fourth Quarter |  |                | 56.50 |  |           |  | 50.75 |      |  |  | 28,390 |  |  |  | 23.150 | 
|2005           |  |                |       |  |           |  |       |      |  |  |        |  |  |  |        | 
|First Quarter  |  |                | 60.75 |  |           |  | 54.75 |      |  |  | 29.600 |  |  |  | 26.000 | 
|October 2004   |  |                | 54.75 |  |           |  | 50.75 |      |  |  | 24.979 |  |  |  | 23.150 | 
|November       |  |                | 54.25 |  |           |  | 50.75 |      |  |  | 26.840 |  |  |  | 23.840 | 
|December       |  |                | 56.50 |  |           |  | 51.75 |      |  |  | 28.390 |  |  |  | 25.000 | 
|January 2005   |  |                | 60.25 |  |           |  | 55.25 |      |  |  | 29.015 |  |  |  | 26.660 | 
|February       |  |                | 60.75 |  |           |  | 54.75 |      |  |  | 28.230 |  |  |  | 26.000 | 
|March          |  |                | 59.50 |  |           |  | 56.25 |      |  |  | 29.600 |  |  |  | 26.880 | 

ITEM 10:  ADDITIONAL INFORMATION


MEMORANDUM AND ARTICLES OF ASSOCIATION


Summary of our Articles of Association


Name of the company




Registered office




Object of the company




Share capital






Nominal value of shares




Board of Directors




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Corporate Assembly




Annual General Meeting




Election Committee




Shareholders Meetings








Voting Rights








174



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The VPS System and Transfer of Shares












Amendments to our Articles of Association, including
Variation of Rights




Additional Issuances and Preferential Rights








175



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Minority Rights




Mandatory Bid Requirement




Compulsory Acquisition






176



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Election and Removal of Directors and Corporate Assembly








Payment of Dividends




Rights of Redemption and Repurchase of Shares








Shareholders Votes on Certain Reorganizations






177



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Liability of Directors






Indemnification of Directors and Officers




Disclosures of Interests




Distribution of Assets on Liquidation




MATERIAL CONTRACTS




EXCHANGE CONTROLS






178



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TAXATION


Norwegian Tax Matters




Taxation of dividends
















179



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Wealth tax




Inheritance tax and gift tax




Taxation upon realization of shares and subscription
rights














180



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Transfer tax




United States Tax Matters


General






| |   |                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------
| |  | dealers in securities,                                                                                          
|
| |  | traders in securities that elect to use a mark-to-market method
    of accounting for their securities holdings,
|
| |  | tax-exempt organizations,                                                                                       
|
| |  | life insurance companies,                                                                                       
|
| |  | persons liable for alternative minimum tax,                                                                     
|
| |  | persons who actually or constructively own 10% or more of the
    voting stock of Telenor,                      
|
| |  | persons who hold shares or ADSs through a partnership or other
    pass-through entity,                         
|
| |  | persons who hold shares or ADSs as part of a straddle or a
    hedging or conversion transaction, or            
|
| |  | U.S. holders (as defined below) whose functional currency is not
    the U.S. dollar.                           







| |   |                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a citizen or resident of the United States,                                                                                                                                                                          
|
| |  | a U.S. domestic corporation,                                                                                                                                                                                         
|
| |  | an estate whose income is subject to United States federal
    income tax regardless of its source, or                                                                                                               
|
| |  | a trust if a United States court can exercise primary
    supervision over the trusts administration and one or more
    United States persons are authorized to control all substantial
    decisions of the trust.

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You should consult your own tax advisor regarding the United
States federal, state and local and other tax consequences of
owning and disposing of shares and ADSs in your particular
circumstances.


Taxation of dividends








Taxation of capital gains






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Passive Foreign Investment Company
(PFIC) Rules








| |   |                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | At least 75% of our gross income for the taxable year is passive
    income, or                                                                                                          
|
| |  | At least 50% of the value, determined on the basis of a
    quarterly average, of our assets is attributable to assets that
    produce or are held for the production of passive income.







| |   |                                                                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Any gain you realize on the sale or other disposition of your
    shares or ADSs, and                                                                                                                                                                                                                                                                  
|
| |  | Any excess distribution that we make to you (generally, any
    distributions to you during a single taxable year that are
    greater than 125% of the average annual distributions received
    by you in respect of the shares or ADSs during the three
    preceding taxable years or, if shorter, your holding period for
    the shares or ADSs).





| |   |                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------
| |  | The gain or excess distribution will be allocated ratably over
    your holding period for the shares or ADSs,                                
|
| |  | The amount allocated to the taxable year in which you realized
    the gain or excess distribution will be taxed as ordinary income,          
|
| |  | The amount allocated to each prior year, with certain
    exceptions, will be taxed at the highest tax rate in effect for
    that year, and  
|
| |  | The interest charge generally applicable to underpayments of tax
    will be imposed in respect of the tax attributable to each such
    year.







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DOCUMENTS ON DISPLAY




ITEM 11:     QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK


FUNDING AND FINANCIAL RISK MANAGEMENT ACTIVITIES IN
TELENOR




SENSITIVITY ANALYSIS












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|                                    |  |                   |         |   |            |  |         |                |  |            |                |   |  |            |     |   |     |  |       |      |  |  |        |   |  |  |     |   |  |  |    | 
|----------------------------------- |  | ----------------- | ------- | - | ---------- |  | ------- | -------------- |  | ---------- | -------------- | - |  | ---------- | --- | - | --- |  | ----- | ---- |  |  | ------ | - |  |  | --- | - |  |  | -- | 
|                                    |  |                   |         |   |            |  |         |                |  | Volatility |               
|                                    |  | Book value        |         |   | Fair value |  |         | Interest rates |  |            | Exchange rates |   |  | of options |    
|                                    |  | as of             |         |   | as of      |  |         |                |  |            |                |   |  |            |    
|2004                                |  | 31.12.04          |         |   | 31.12.04   |  |         | -10%           |  |            | 10%            |   |  | -10%       |     |   | 10% |  |       | -10% |  |  | 10%    |  
|                                    |  |                   |         |   |            |  |         |                |  |            |                |   |  |            |     |   |     |  |       |      |  |  |        |  
|                                    |  | (NOK in millions) |        
|Foreign exchange derivatives        |  |                   | 727     |   |            |  | 967     |                |  |            | 39             |   |  |            | (38 | ) |     |  | (111  | )    |  |  | 111    |   |  |  |    |   |  |  |   | 
|Interest rate derivatives           |  |                   | 54      |   |            |  | 26      |                |  |            | 28             |   |  |            | (24 | ) |     |  | (28   | )    |  |  | 28     |   |  |  | (10 | ) |  |  | 10 | 
|Net interest-bearing liabilities(1) |  |                   | (19 854 | ) |            |  | (21,180 | )              |  |            | (265           | ) |  |            | 260 |   |     |  | 2,277 |      |  |  | (2,277 | ) |  |  |    |   |  |  |   | 
|                                    |  |                   |         |   |            |  |         |                |  |            |                |   |  |            |     |   |     |  |       |      |  |  |        |  
|Total                               |  |                   | (19,073 | ) |            |  | (20,187 | )              |  |            | (198           | ) |  |            | 198 |   |     |  | 2,138 |      |  |  | (2,138 | ) |  |  | (10 | ) |  |  | 10 | 
|                                    |  |                   |         |   |            |  |         |                |  |            |                |   |  |            |     |   |     |  |       |      |  |  |        |  

|                                    |  |                   |         |   |            |  |         |                |  |            |                |   |  |            |     |   |     |  |       |      |  |  |        |   |  |  |     |   |  |  |    | 
|----------------------------------- |  | ----------------- | ------- | - | ---------- |  | ------- | -------------- |  | ---------- | -------------- | - |  | ---------- | --- | - | --- |  | ----- | ---- |  |  | ------ | - |  |  | --- | - |  |  | -- | 
|                                    |  |                   |         |   |            |  |         |                |  | Volatility |               
|                                    |  | Book value        |         |   | Fair value |  |         | Interest rates |  |            | Exchange rates |   |  | of options |    
|                                    |  | as of             |         |   | as of      |  |         |                |  |            |                |   |  |            |    
|2003                                |  | 31.12.03          |         |   | 31.12.03   |  |         | -10%           |  |            | 10%            |   |  | -10%       |     |   | 10% |  |       | -10% |  |  | 10%    |  
|                                    |  |                   |         |   |            |  |         |                |  |            |                |   |  |            |     |   |     |  |       |      |  |  |        |  
|                                    |  | (NOK in millions) |        
|Foreign exchange derivatives        |  |                   | 940     |   |            |  | 1,515   |                |  |            | 62             |   |  |            | (61 | ) |     |  | (576  | )    |  |  | 576    |   |  |  |    |   |  |  |   | 
|Interest rate derivatives           |  |                   | 49      |   |            |  | (26     | )              |  |            | (8             | ) |  |            | 11  |   |     |  | (32   | )    |  |  | 32     |   |  |  | (10 | ) |  |  | 10 | 
|Net interest-bearing liabilities(1) |  |                   | (18 800 | ) |            |  | (20,147 | )              |  |            | (287           | ) |  |            | 280 |   |     |  | 2,034 |      |  |  | (2,034 | ) |  |  |    |   |  |  |   | 
|                                    |  |                   |         |   |            |  |         |                |  |            |                |   |  |            |     |   |     |  |       |      |  |  |        |  
|Total                               |  |                   | (17,811 | ) |            |  | (18,658 | )              |  |            | (233           | ) |  |            | 230 |   |     |  | 1,426 |      |  |  | (1,426 | ) |  |  | (10 | ) |  |  | 10 | 
|                                    |  |                   |         |   |            |  |         |                |  |            |                |   |  |            |     |   |     |  |       |      |  |  |        |  






|    |                                                                                           
|--- | ------------------------------------------------------------------------------------------
|(1) | Includes interest-bearing liabilities and Cash and short-term
    money market investments







ITEM 12:     DESCRIPTION OF
SECURITIES OTHER THAN EQUITY SECURITIES




PART II


ITEM 13:     DEFAULTS, DIVIDEND
ARREARAGES AND DELINQUENCIES






|         |                                                                                 
|-------- | --------------------------------------------------------------------------------
|ITEM 14: | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
    USE OF PROCEEDS



ITEM 15:     CONTROLS AND
PROCEDURES




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ITEM 16A:     AUDIT COMMITTEE
FINANCIAL EXPERT




ITEM 16B:     CODE OF ETHICS




186



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ITEM 16C:     PRINCIPAL ACCOUNTANT
FEES AND SERVICES




|                   |  |              |      |  |      |  |      | 
|------------------ |  | ------------ | ---- |  | ---- |  | ---- | 
|                   |  | Year ended   |     
|                   |  | December 31, |     
|                   |  |              |     
|                   |  | 2003         |      |  | 2004 | 
|                   |  |              |      |  |      | 
|                   |  | (NOK in      |     
|                   |  | millions)    |     
|Audit Fees         |  |              | 24.5 |  |      |  | 29.0 | 
|Audit-Related Fees |  |              | 17.1 |  |      |  | 10.0 | 
|Tax Fees           |  |              | 6.3  |  |      |  | 5.2  | 
|All Other Fees     |  |              | 1.0  |  |      |  | 0.7  | 
|                   |  |              |      |  |      | 
|Total              |  |              | 48.9 |  |      |  | 44.9 | 
|                   |  |              |      |  |      | 

Audit services.


Audit-related services.


Tax services.


Other services.








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|          |                                                           
|--------- | ----------------------------------------------------------
|ITEM 16D: | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES





|          |                                                                       
|--------- | ----------------------------------------------------------------------
|ITEM 16E: | PURCHASES OF EQUITY SECURITIES BY ISSUER AND AFFILIATED
    PURCHASERS







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ISSUER PURCHASES OF EQUITY SECURITIES


|            |  |                     |            |                   |                   |                     |                    |             |                  |                  |                    |  |  |  |             | 
|----------- |  | ------------------- | ---------- | ----------------- | ----------------- | ------------------- | ------------------ | ----------- | ---------------- | ---------------- | ------------------ |  |  |  | ----------- | 
|            |  |                     |            |                   |                   | (c) Total Number of |                    |             | (d) Maximum      |                 
|            |  |                     |            |                   |                   | Shares Purchased as |                    |             | Number of Shares |                 
|            |  |                     |            |                   |                   | Part of             |                    |             | that May         |                 
|            |  |                     |            | (b) Average Price |                   |                     | Publicly Announced |             |                  | Yet Be Purchased |                   
|            |  | (a) Total Number of |            |                   | Paid per Share in |                     |                    | Plans or    |                  |                  | Under the Plans or | 
|Period 2004 |  | Shares Purchased    |            |                   | NOK               |                     |                    | Programs(1) |                  |                  | Programs(2)        | 
|            |  |                     |            |                   |                   |                     |                    |             |                  |                  |                    | 
|January     |  |                     | 1,390,000  |                   |                   |                     | 48.13              |             |                  |                  | 1,390,000          |  |  |  | 87,460,000  | 
|February    |  |                     | 1,005,000  |                   |                   |                     | 48.73              |             |                  |                  | 1,005,000          |  |  |  | 86,455,000  | 
|March       |  |                     | 10,415,000 |                   |                   |                     | 48.42              |             |                  |                  | 10,415,000         |  |  |  | 76,040,000  | 
|April       |  |                     |           |                   |                   |                     |                   |             |                  |                  |                   |  |  |  | 76,040,000  | 
|May         |  |                     | 3,121,900  |                   |                   |                     | 46.88              |             |                  |                  | 3,121,900          |  |  |  | 171,798,198 | 
|June        |  |                     | 8,818,000  |                   |                   |                     | 46.82              |             |                  |                  | 8,818,000          |  |  |  | 162,980,198 | 
|July        |  |                     |           |                   |                   |                     |                   |             |                  |                  |                   |  |  |  | 162,980,198 | 
|August      |  |                     | 1,440,000  |                   |                   |                     | 46.97              |             |                  |                  | 1,440,000          |  |  |  | 161,540,198 | 
|September   |  |                     | 1,560,000  |                   |                   |                     | 49.44              |             |                  |                  | 1,560,000          |  |  |  | 159,980,198 | 
|October     |  |                     |           |                   |                   |                     |                   |             |                  |                  |                   |  |  |  | 159,980,198 | 
|November    |  |                     |           |                   |                   |                     |                   |             |                  |                  |                   |  |  |  | 159,980,198 | 
|December    |  |                     |           |                   |                   |                     |                   |             |                  |                  |                   |  |  |  | 159,980,198 | 
|            |  |                     |            |                   |                   |                     |                    |             |                  |                  |                    | 
|Sum         |  |                     | 27,749,900 | (3)               |                   |                     | 47.76              | (4)         |                  |                  | 27,749,900         |  |  |  |             | 
|            |  |                     |            |                   |                   |                     |                    |             |                  |                  |                    | 






|    |                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Shares purchased prior to May 2004 were purchased pursuant to
    the 2003 share buyback authorization. Shares purchased from May
    2004 onwards were purchased pursuant to the 2004 share buyback
    authorization.                                                  
|   
|(2) | Up until May 6, 2004, Telenor was authorized to purchase up
    to 5% of its own shares (approximately 88,890,000 shares). Since
    May 6, 2004, Telenor has been authorized to purchase
    174,980,098 of its own shares (approximately 10% of its share
    capital).
|   
|(3) | All shares were purchased in the open market and pursuant to the
    authorizations described above.                                                                                                                                                                     
|   
|(4) | Weighted average price per share, calculated for convenience
    using the year-end USD/NOK exchange rate of 6.0386.                                                                                                                                                     

PART III


ITEM 17:     FINANCIAL STATEMENTS




ITEM 18:     FINANCIAL STATEMENTS




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ITEM 19:     EXHIBITS




|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 1       |  | Articles of Association for Telenor ASA, as amended on
    February 15, 2005 (English translation)                                                                                                                                                                                                                                                                                                                                   
|Exhibit 2(b)(i) |  | Instruments defining the Rights of Holders of Long-Term Debt:                                                                                                                                                                                                                                                                                                                                                                        
|                |  | Terms and conditions of Telenors US$6 billion Euro
    Medium-Term Notes program.(*) Excluding such program, the total
    amount of long-term debt securities of Telenor authorized under
    any instrument, does not exceed 10% of the total assets of
    Telenor on a consolidated basis. Telenor agrees to furnish
    copies of any or all such other instruments to the Securities
    and Exchange commission upon request.
|Exhibit 4(c)    |  | Form of Director/ Group Management Employment Contract(**)                                                                                                                                                                                                                                                                                                                                                                           
|Exhibit 8       |  | Subsidiaries                                                                                                                                                                                                                                                                                                                                                                                                                         
|Exhibit 12      |  | Certifications pursuant to Section 302 of the
    Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                         
|Exhibit 13      |  | Certifications pursuant to Section 906 of the
    Sarbanes-Oxley Act of 2002                                                                                                                                                                                                                                                                                                                                                         






|     |                                                                                                      
|---- | -----------------------------------------------------------------------------------------------------
|(*)  | Incorporated by reference to our annual report on Form 20-F
    for the year ended December 31, 2002.
|    
|(**) | Incorporated by reference to our annual report on Form 20-F
    for the year ended December 31, 2000.

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SIGNATURE






| |             
| | ------------
| | Telenor ASA 
| | (Registrant)



| |     |                    
| | --- | -------------------
| | By: | /s/ Torstein Moland

| |                        
| | -----------------------
| |                        
| | Torstein Moland        
| | Chief Financial Officer



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TELENOR ASA


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


|                                               |                                                                                                                                                                   |  |      |     | 
|---------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | --- | 
|TELENOR ASA                                    |                                                                                                                                                                   |  |      |    
|Annual consolidated financial statements:      |                                                                                                                                                                   |  |      |    
|Reports of Independent Accountants             |                                                                                                                                                                   |  |      |    
|                                               | Report of Ernst & Young AS as of and for the years ended
    December 31, 2003 and 2004, dated March 31, 2005                                                     |  |      | F-2 | 
|                                               | Report of PricewaterhouseCoopers DA on the financial
    statements of Telenor Mobil AS, as of and for the year
    ended December 31, 2004, dated March 23, 2004 |  |      | F-3 | 
|                                               | Report of Rahman Rahman Huq for the fiscal year ended
    December 31, 2004, dated April 13, 2005                                                                 |  |      | F-4 | 
|Consolidated Statements of Profit and Loss     |                                                                                                                                                                   |  | F-5  |    
|Consolidated Balance Sheet                     |                                                                                                                                                                   |  | F-6  |    
|Consolidated Cash Flow Statement               |                                                                                                                                                                   |  | F-7  |    
|Consolidated Statement of Shareholders Equity |                                                                                                                                                                   |  | F-8  |    
|Summary of Significant Accounting Principles   |                                                                                                                                                                   |  | F-10 |    
|Notes to the Consolidated Financial Statements |                                                                                                                                                                   |  | F-16 |    

F-1



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##### Table of Contents



REPORT OF REGISTERED PUBLIC ACCOUNTING FIRM


















F-2



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##### Table of Contents



REPORT OF INDEPENDENT AUDITORS










/s/ PricewaterhouseCoopers DA


Oslo, Norway 
 March 23, 2004


F-3



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##### Table of Contents



Auditors Report


to the Board of Directors and Shareholders of


GrameenPhone Ltd.










/s/ Rahman Rahman Huq


April 13, 2005


F-4



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##### Table of Contents





CONSOLIDATED STATEMENT OF PROFIT AND LOSS


Telenor Group January 1  December 31


|                                                                            |  |      |        |                          |      |  |        |      |  |  |        |   |  |  |        |  
|--------------------------------------------------------------------------- |  | ---- | ------ | ------------------------ | ---- |  | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                                                            |  | Note |        |                          | 2002 |  |        | 2003 |  |  | 2004   |  
|                                                                            |  |      |        |                          |      |  |        |      |  |  |        |  
|                                                                            |  |      |        | (in NOK millions, except |     
|                                                                            |  |      |        | per share amounts)       |     
|Revenues                                                                    |  |      | 2      |                          |      |  | 48,668 |      |  |  | 52,889 |   |  |  | 60,752 |  
|Gains on disposal of fixed assets and operations                            |  |      | 2      |                          |      |  | 158    |      |  |  | 232    |   |  |  | 550    |  
|                                                                            |  |      |        |                          |      |  |        |      |  |  |        |  
|Total revenues                                                              |  |      |        |                          |      |  | 48,826 |      |  |  | 53,121 |   |  |  | 61,302 |  
|Operating expenses                                                          |  |      |        |                          |      |  |        |      |  |  |        |   |  |  |        |  
|Costs of materials and traffic charges                                      |  |      | 4      |                          |      |  | 12,485 |      |  |  | 13,094 |   |  |  | 16,070 |  
|Own work capitalized                                                        |  |      | 5      |                          |      |  | (567   | )    |  |  | (571   | ) |  |  | (557   | )
|Salaries and personnel costs                                                |  |      | 6, 7   |                          |      |  | 10,104 |      |  |  | 9,561  |   |  |  | 10,021 |  
|Other operating expenses                                                    |  |      | 8, 9   |                          |      |  | 13,188 |      |  |  | 12,506 |   |  |  | 14,873 |  
|Losses on disposal of fixed assets and operations                           |  |      |        |                          |      |  | 147    |      |  |  | 229    |   |  |  | 74     |  
|Depreciation and amortization                                               |  |      | 14, 15 |                          |      |  | 10,236 |      |  |  | 10,597 |   |  |  | 11,623 |  
|Write-downs                                                                 |  |      | 14, 15 |                          |      |  | 3,553  |      |  |  | 145    |   |  |  | 2,596  |  
|                                                                            |  |      |        |                          |      |  |        |      |  |  |        |  
|Total operating expenses                                                    |  |      |        |                          |      |  | 49,146 |      |  |  | 45,561 |   |  |  | 54,700 |  
|                                                                            |  |      |        |                          |      |  |        |      |  |  |        |  
|Operating profit (loss)                                                     |  |      |        |                          |      |  | (320   | )    |  |  | 7,560  |   |  |  | 6,602  |  
|                                                                            |  |      |        |                          |      |  |        |      |  |  |        |  
|Associated companies                                                        |  |      | 16     |                          |      |  | (2,450 | )    |  |  | 1,231  |   |  |  | 718    |  
|Financial income and expenses                                               |  |      |        |                          |      |  |        |      |  |  |        |   |  |  |        |  
|Financial income                                                            |  |      |        |                          |      |  | 567    |      |  |  | 586    |   |  |  | 496    |  
|Financial expenses                                                          |  |      |        |                          |      |  | (1,833 | )    |  |  | (2,023 | ) |  |  | (1,534 | )
|Net currency loss                                                           |  |      |        |                          |      |  | (311   | )    |  |  | (1     | ) |  |  | (87    | )
|Net gain (loss and write-downs) of financial items                          |  |      |        |                          |      |  | (789   | )    |  |  | 73     |   |  |  | 2,651  |  
|Net financial items                                                         |  |      | 12     |                          |      |  | (2,366 | )    |  |  | (1,365 | ) |  |  | 1,526  |  
|                                                                            |  |      |        |                          |      |  |        |      |  |  |        |  
|Profit (loss) before taxes and minority interests                           |  |      |        |                          |      |  | (5,136 | )    |  |  | 7,426  |   |  |  | 8,846  |  
|                                                                            |  |      |        |                          |      |  |        |      |  |  |        |  
|Taxes                                                                       |  |      | 13     |                          |      |  | 480    |      |  |  | (2,376 | ) |  |  | (2,244 | )
|                                                                            |  |      |        |                          |      |  |        |      |  |  |        |  
|Profit (loss) before minority interests                                     |  |      |        |                          |      |  | (4,656 | )    |  |  | 5,050  |   |  |  | 6,602  |  
|Minority interests                                                          |  |      |        |                          |      |  | 358    |      |  |  | (490   | ) |  |  | (1,244 | )
|                                                                            |  |      |        |                          |      |  |        |      |  |  |        |  
|Net income (loss)                                                           |  |      |        |                          |      |  | (4,298 | )    |  |  | 4,560  |   |  |  | 5,358  |  
|                                                                            |  |      |        |                          |      |  |        |      |  |  |        |  
|Net income (loss) per share in NOK (basic), excluding treasury
    shares   |  |      |        |                          |      |  | (2.42  | )    |  |  | 2.57   |   |  |  | 3.07   |  
|                                                                            |  |      |        |                          |      |  |        |      |  |  |        |  
|Net income (loss) per share in NOK (diluted), excluding treasury
    shares |  |      |        |                          |      |  | (2.42  | )    |  |  | 2.57   |   |  |  | 3.06   |  
|                                                                            |  |      |        |                          |      |  |        |      |  |  |        |  

F-5



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##### Table of Contents



CONSOLIDATED BALANCE SHEET


Telenor Group at December 31


|                                            |  |                   |        |  |      |  |        |      |  |  |        | 
|------------------------------------------- |  | ----------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                            |  | Note              |        |  | 2003 |  |        | 2004 | 
|                                            |  |                   |        |  |      |  |        |      | 
|                                            |  | (in NOK millions) |       
|Assets                                      |  |                   |        |  |      |  |        |      |  |  |        | 
|Deferred tax assets                         |  |                   | 13     |  |      |  | 3,850  |      |  |  | 2,999  | 
|Goodwill                                    |  |                   | 15     |  |      |  | 9,224  |      |  |  | 12,963 | 
|Other intangible assets                     |  |                   | 15     |  |      |  | 5,536  |      |  |  | 10,001 | 
|Tangible assets                             |  |                   | 15     |  |      |  | 35,722 |      |  |  | 37,676 | 
|Associated companies                        |  |                   | 16     |  |      |  | 10,166 |      |  |  | 6,428  | 
|Other financial assets                      |  |                   | 16     |  |      |  | 3,848  |      |  |  | 1,292  | 
|                                            |  |                   |        |  |      |  |        |      | 
|Total fixed assets                          |  |                   |        |  |      |  | 68,346 |      |  |  | 71,359 | 
|Inventories                                 |  |                   |        |  |      |  | 504    |      |  |  | 596    | 
|Current receivables, etc.                   |  |                   | 17     |  |      |  | 9,232  |      |  |  | 10,165 | 
|Short-term investments                      |  |                   | 18     |  |      |  | 384    |      |  |  | 893    | 
|Cash and cash equivalents                   |  |                   | 27     |  |      |  | 7,644  |      |  |  | 5,081  | 
|                                            |  |                   |        |  |      |  |        |      | 
|Total current assets                        |  |                   |        |  |      |  | 17,764 |      |  |  | 16,735 | 
|                                            |  |                   |        |  |      |  |        |      | 
|Total assets                                |  |                   |        |  |      |  | 86,110 |      |  |  | 88,094 | 
|                                            |  |                   |        |  |      |  |        |      | 
|Equity and liabilities                      |  |                   |        |  |      |  |        |      |  |  |        | 
|Shareholders equity                        |  |                   |        |  |      |  | 37,237 |      |  |  | 37,594 | 
|Minority interests                          |  |                   |        |  |      |  | 3,646  |      |  |  | 4,074  | 
|                                            |  |                   |        |  |      |  |        |      | 
|Total equity and minority interests         |  |                   |        |  |      |  | 40,883 |      |  |  | 41,668 | 
|Liabilities                                 |  |                   |        |  |      |  |        |      |  |  |        | 
|Provisions                                  |  |                   | 19     |  |      |  | 1,645  |      |  |  | 3,120  | 
|Long-term interest-bearing liabilities      |  |                   | 20, 21 |  |      |  | 22,703 |      |  |  | 20,602 | 
|Long-term non-interest-bearing liabilities  |  |                   | 22     |  |      |  | 754    |      |  |  | 572    | 
|                                            |  |                   |        |  |      |  |        |      | 
|Total long-term liabilities                 |  |                   |        |  |      |  | 23,457 |      |  |  | 21,174 | 
|Short-term interest-bearing liabilities     |  |                   | 20     |  |      |  | 3,059  |      |  |  | 3,991  | 
|Short-term non-interest-bearing liabilities |  |                   | 22     |  |      |  | 17,066 |      |  |  | 18,141 | 
|                                            |  |                   |        |  |      |  |        |      | 
|Total short-term liabilities                |  |                   |        |  |      |  | 20,125 |      |  |  | 22,132 | 
|                                            |  |                   |        |  |      |  |        |      | 
|Total equity and liabilities                |  |                   |        |  |      |  | 86,110 |      |  |  | 88,094 | 
|                                            |  |                   |        |  |      |  |        |      | 
|Assets pledged                              |  |                   | 23     |  |      |  | 8,148  |      |  |  | 8,752  | 
|Guarantee liabilities                       |  |                   | 23     |  |      |  | 2,557  |      |  |  | 2,169  | 
|Contingent liabilities                      |  |                   | 24     |  |      |  |        |      |  |  |        | 

F-6



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##### Table of Contents



CONSOLIDATED CASH FLOW STATEMENT


Telenor Group January 1  December 31


|                                                                                              |  |                   |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|--------------------------------------------------------------------------------------------- |  | ----------------- | -- |  | ---- |  | ------- | ---- |  |  | ------- | - |  |  | ------- | -
|                                                                                              |  | Note              |    |  | 2002 |  |         | 2003 |  |  | 2004    |  
|                                                                                              |  |                   |    |  |      |  |         |      |  |  |         |  
|                                                                                              |  | (in NOK millions) |   
|Proceeds from sale of goods and services                                                      |  |                   |    |  |      |  | 50,480  |      |  |  | 53,208  |   |  |  | 61,107  |  
|Payments to suppliers of goods and services and of other
    operating expenses               |  |                   |    |  |      |  | (25,056 | )    |  |  | (25,714 | ) |  |  | (30,639 | )
|Payments to employees, pensions, social security tax and tax
    deductions                   |  |                   |    |  |      |  | (9,643  | )    |  |  | (9,400  | ) |  |  | (9,280  | )
|Interest etc. received                                                                        |  |                   |    |  |      |  | 796     |      |  |  | 1,318   |   |  |  | 913     |  
|Interest etc. paid                                                                            |  |                   |    |  |      |  | (1,629  | )    |  |  | (2,494  | ) |  |  | (1,428  | )
|Other proceeds and payments related to operating activities                                   |  |                   |    |  |      |  | (142    | )    |  |  | (131    | ) |  |  | (22     | )
|Payment of taxes and public duties                                                            |  |                   |    |  |      |  | (1,948  | )    |  |  | (3,111  | ) |  |  | (1,660  | )
|                                                                                              |  |                   |    |  |      |  |         |      |  |  |         |  
|Net cash flow from operating activities(1)                                                    |  |                   |    |  |      |  | 12,858  |      |  |  | 13,676  |   |  |  | 18,991  |  
|Proceeds from sale of tangible and intangible assets                                          |  |                   |    |  |      |  | 210     |      |  |  | 523     |   |  |  | 263     |  
|Purchase of tangible and intangible assets                                                    |  |                   |    |  |      |  | (9,098  | )    |  |  | (6,536  | ) |  |  | (11,613 | )
|Cash receipts from sale of subsidiaries and associated
    companies, net of cash transferred |  |                   | 27 |  |      |  | 191     |      |  |  | 2,327   |   |  |  | 849     |  
|Cash payments on purchase of subsidiaries and associated
    companies, net of cash received  |  |                   | 27 |  |      |  | (12,232 | )    |  |  | (506    | ) |  |  | (6,281  | )
|Proceeds from sale of other investments                                                       |  |                   |    |  |      |  | 271     |      |  |  | 1,072   |   |  |  | 3,960   |  
|Payments for other investments                                                                |  |                   |    |  |      |  | (1,069  | )    |  |  | (334    | ) |  |  | (209    | )
|                                                                                              |  |                   |    |  |      |  |         |      |  |  |         |  
|Net cash flow from investment activities                                                      |  |                   |    |  |      |  | (21,727 | )    |  |  | (3,454  | ) |  |  | (13,031 | )
|Proceeds from long-term liabilities                                                           |  |                   |    |  |      |  | 19,567  |      |  |  | 779     |   |  |  | 2,486   |  
|Proceeds from short-term liabilities                                                          |  |                   |    |  |      |  | 164     |      |  |  | 311     |   |  |  | 55      |  
|Payments on long-term liabilities                                                             |  |                   |    |  |      |  | (10,140 | )    |  |  | (4,990  | ) |  |  | (6,044  | )
|Payments on short-term liabilities                                                            |  |                   |    |  |      |  | (549    | )    |  |  | (3,122  | ) |  |  | (43     | )
|Net change in overdrafts                                                                      |  |                   |    |  |      |  | 20      |      |  |  |        |   |  |  | (765    | )
|Proceeds from issuance of shares, inclusive from minority
    interests                       |  |                   |    |  |      |  | 200     |      |  |  | 32      |   |  |  | 47      |  
|Shares buy back                                                                               |  |                   |    |  |      |  |        |      |  |  | (7      | ) |  |  | (2,020  | )
|Payment of equity and dividends to minorities in subsidiaries                                 |  |                   |    |  |      |  |        |      |  |  | (91     | ) |  |  | (207    | )
|Payment of dividends                                                                          |  |                   |    |  |      |  | (621    | )    |  |  | (799    | ) |  |  | (1,764  | )
|                                                                                              |  |                   |    |  |      |  |         |      |  |  |         |  
|Net cash flow from financing activities                                                       |  |                   |    |  |      |  | 8,641   |      |  |  | (7,887  | ) |  |  | (8,255  | )
|Effect on cash and cash equivalents of changes in foreign
    exchange rates                  |  |                   |    |  |      |  | (347    | )    |  |  | 45      |   |  |  | (268    | )
|                                                                                              |  |                   |    |  |      |  |         |      |  |  |         |  
|Net change in cash and cash equivalents                                                       |  |                   |    |  |      |  | (575    | )    |  |  | 2,380   |   |  |  | (2,563  | )
|Cash and cash equivalents at January 1                                                        |  |                   |    |  |      |  | 5,839   |      |  |  | 5,264   |   |  |  | 7,644   |  
|                                                                                              |  |                   |    |  |      |  |         |      |  |  |         |  
|Cash and cash equivalents at December 31,                                                     |  |                   |    |  |      |  | 5,264   |      |  |  | 7,644   |   |  |  | 5,081   |  
|Reconciliation(1)                                                                             |  |                   |    |  |      |  |         |      |  |  |         |   |  |  |         |  
|Net income                                                                                    |  |                   |    |  |      |  | (4,298  | )    |  |  | 4,560   |   |  |  | 5,358   |  
|Minority interests                                                                            |  |                   |    |  |      |  | (358    | )    |  |  | (490    | ) |  |  | 1,244   |  
|Taxes                                                                                         |  |                   |    |  |      |  | (480    | )    |  |  | (2,376  | ) |  |  | 2,244   |  
|                                                                                              |  |                   |    |  |      |  |         |      |  |  |         |  
|Profit before taxes and minority interests                                                    |  |                   |    |  |      |  | (5,136  | )    |  |  | 7,426   |   |  |  | 8,846   |  
|Taxes paid                                                                                    |  |                   |    |  |      |  | (2,050  | )    |  |  | (3,283  | ) |  |  | (1,516  | )
|Net (gain) loss including write-downs of financial items                                      |  |                   |    |  |      |  | 778     |      |  |  | (76     | ) |  |  | (3,127  | )
|Depreciation, amortization and write-downs                                                    |  |                   |    |  |      |  | 13,789  |      |  |  | 10,742  |   |  |  | 14,219  |  
|Associated companies                                                                          |  |                   |    |  |      |  | 2,450   |      |  |  | (1,231  | ) |  |  | (718    | )
|Changes in inventories                                                                        |  |                   |    |  |      |  | (39     | )    |  |  | 3       |   |  |  | (79     | )
|Changes in accounts receivable and prepayments from customers                                 |  |                   |    |  |      |  | 1,593   |      |  |  | 1,017   |   |  |  | 387     |  
|Changes in accounts payable and prepaid expenses                                              |  |                   |    |  |      |  | 126     |      |  |  | 119     |   |  |  | 237     |  
|Difference between expensed and paid pensions                                                 |  |                   |    |  |      |  | 359     |      |  |  | 134     |   |  |  | 362     |  
|Currency (gains) losses not relating to operating activities                                  |  |                   |    |  |      |  | 391     |      |  |  | (78     | ) |  |  | 57      |  
|Change in other accruals                                                                      |  |                   |    |  |      |  | 597     |      |  |  | (1,097  | ) |  |  | 323     |  
|                                                                                              |  |                   |    |  |      |  |         |      |  |  |         |  
|Net cash flow from operating activities                                                       |  |                   |    |  |      |  | 12,858  |      |  |  | 13,676  |   |  |  | 18,991  |  
|                                                                                              |  |                   |    |  |      |  |         |      |  |  |         |  

F-7



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##### Table of Contents



CONSOLIDATED STATEMENTS OF SHAREHOLDERS EQUITY


Telenor Group


|                                                                            |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      |        |          |      |        |        |   |  |  |        |   |  |  |        |  
|--------------------------------------------------------------------------- |  | --------- | ------------- | ----- | ------ | ---- | ------ | ------- | ---- | ------ | ------- | ---- | ---------- | ------ | ------ | ------ | ----------- | ---- | ------ | -------- | ---- | ------ | ------ | - |  |  | ------ | - |  |  | ------ | -
|                                                                            |  |           |               |       |        |      |        | Other   |      |        |         |      | Cumulative |        |        |        |             |     
|                                                                            |  | Number    |               |       | Nom    |      |        | Share   |      |        | paid    |      |            | Other  |        |        | translation |      |        | Treasury |      |        |       
|                                                                            |  | of shares |               |       | Amount |      |        | Capital |      |        | capital |      |            | equity |        |        | adjustment  |      |        | shares   |      |        | Total  |  
|                                                                            |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      |        |          |      |        |        |  
|                                                                            |  |           |               |       |        | (NOK |        |         | (NOK |        |         | (NOK |            |        | (NOK   |        |             | (NOK |        |          | (NOK |       
|                                                                            |  |           |               | (NOK) |        |      | mill.) |         |      | mill.) |         |      | mill.)     |        |        | mill.) |             |      | mill.) |          |      | mill.) |       
|Balance as of December 31, 2001                                             |  |           | 1,802,730,652 |       |        |      | 6      |         |      |        | 10,816  |      |            |        | 18,619 |        |             |      | 13,023 |          |      |        | (145   | ) |  |  | (169   | ) |  |  | 42,144 |  
|Net income for the year 2002                                                |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      | (4,298 | )        |      |        |        |   |  |  |        |   |  |  | (4,298 | )
|Dividends                                                                   |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      | (799   | )        |      |        |        |   |  |  |        |   |  |  | (799   | )
|Translation adjustments                                                     |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      |        |          |      |        | (2,723 | ) |  |  |        |   |  |  | (2,723 | )
|Employee share issue                                                        |  |           | 695,520       |       |        |      | 6      |         |      |        | 4       |      |            |        | 15     |        |             |      |        |          |      |        |        |   |  |  |        |   |  |  | 19     |  
|Consolidation Canal Digital AS                                              |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      | (658   | )        |      |        |        |   |  |  |        |   |  |  | (658   | )
|                                                                            |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      |        |          |      |        |        |  
|Balance as of December 31, 2002                                             |  |           | 1,803,426,172 |       |        |      | 6      |         |      |        | 10,820  |      |            |        | 18,634 |        |             |      | 7,268  |          |      |        | (2,868 | ) |  |  | (169   | ) |  |  | 33,685 |  
|Net income for the year 2003                                                |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      | 4,560  |          |      |        |        |   |  |  |        |   |  |  | 4,560  |  
|Dividends                                                                   |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      | (1,776 | )        |      |        |        |   |  |  |        |   |  |  | (1,776 | )
|Translation adjustments                                                     |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      |        |          |      |        | 816    |   |  |  |        |   |  |  | 816    |  
|Employee share issue                                                        |  |           | 595,109       |       |        |      | 6      |         |      |        | 4       |      |            |        | 22     |        |             |      |        |          |      |        |        |   |  |  |        |   |  |  | 26     |  
|Increased ownership interest in Comincom/ Combellga                         |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      | (35    | )        |      |        |        |   |  |  |        |   |  |  | (35    | )
|Increased ownership interest in GrameenPhone Ltd.                           |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      | (39    | )        |      |        |        |   |  |  |        |   |  |  | (39    | )
|                                                                            |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      |        |          |      |        |        |  
|Balance as of December 31, 2003                                             |  |           | 1,804,021,281 |       |        |      | 6      |         |      |        | 10,824  |      |            |        | 18,656 |        |             |      | 9,978  |          |      |        | (2,052 | ) |  |  | (169   | ) |  |  | 37,237 |  
|Net income for the year 2004                                                |  |           |              |       |        |      |       |         |      |        |        |      |            |        |       |        |             |      | 5,358  |          |      |        |       |   |  |  |       |   |  |  | 5,358  |  
|Dividends for the year 2004 and adjusted dividends for the year
    2003(1) |  |           |              |       |        |      |       |         |      |        |        |      |            |        |       |        |             |      | (2,590 | )        |      |        |       |   |  |  |       |   |  |  | (2,590 | )
|Translation adjustments                                                     |  |           |              |       |        |      |       |         |      |        |        |      |            |        |       |        |             |      |       |          |      |        | (508   | ) |  |  |       |   |  |  | (508   | )
|Share buy back                                                              |  |           |              |       |        |      |       |         |      |        |        |      |            |        |       |        |             |      |       |          |      |        |       |   |  |  | (2,020 | ) |  |  | (2,020 | )
|Cancellation of shares                                                      |  |           | (55,444,964   | )     |        |      | 6      |         |      |        | (332    | )    |            |        | (1,152 | )      |             |      |       |          |      |        |       |   |  |  | 1,484  |   |  |  | ,      |  
|Sale of shares and share issue to employees                                 |  |           | 1,120,730     |       |        |      | 6      |         |      |        | 6       |      |            |        | 35     |        |             |      |       |          |      |        |       |   |  |  | 18     |   |  |  | 59     |  
|Increased ownership interest in GrameenPhone Ltd.                           |  |           |              |       |        |      |       |         |      |        |        |      |            |        |       |        |             |      | (168   | )        |      |        |       |   |  |  |       |   |  |  | (168   | )
|Increased ownership interest in ProMonte GSM                                |  |           |              |       |        |      |       |         |      |        |        |      |            |        |       |        |             |      | 164    |          |      |        |       |   |  |  |       |   |  |  | 164    |  
|Equity adjustments in associated companies                                  |  |           |              |       |        |      |       |         |      |        |        |      |            |        |       |        |             |      | 62     |          |      |        |       |   |  |  |       |   |  |  | 62     |  
|                                                                            |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      |        |          |      |        |        |  
|Balance as of December 31, 2004                                             |  |           | 1,749,697,047 |       |        |      | 6      |         |      |        | 10,498  |      |            |        | 17,539 |        |             |      | 12,804 |          |      |        | (2,560 | ) |  |  | (687   | ) |  |  | 37,594 |  
|                                                                            |  |           |               |       |        |      |        |         |      |        |         |      |            |        |        |        |             |      |        |          |      |        |        |  






|    |                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(1) | Adjusted dividends for the year 2003 related to purchase of
    shares in the market prior to the Annual General Meeting for
    2004.

|                                                                       |  |      |               |  |      |  |               |      |  |  |               | 
|---------------------------------------------------------------------- |  | ---- | ------------- |  | ---- |  | ------------- | ---- |  |  | ------------- | 
|                                                                       |  | 2002 |               |  | 2003 |  |               | 2004 | 
|                                                                       |  |      |               |  |      |  |               |      | 
|Average number of shares basic (exclusive treasury shares)             |  |      | 1,774,637,008 |  |      |  | 1,775,340,935 |      |  |  | 1,747,864,560 | 
|Average number of shares fully diluted (exclusive treasury
    shares) |  |      | 1,774,637,008 |  |      |  | 1,775,755,932 |      |  |  | 1,749,326,657 | 
|Dividend per share in NOK                                              |  |      | 0.45          |  |      |  | 1.00          |      |  |  | 1.50          | 





F-8



---



##### Table of Contents











Minority interests


|                         |  |                   |      |  |               |  |      |               |  |          |               |   |          |                  |       |  |                  |  |       |  |  |  |       | 
|------------------------ |  | ----------------- | ---- |  | ------------- |  | ---- | ------------- |  | -------- | ------------- | - | -------- | ---------------- | ----- |  | ---------------- |  | ----- |  |  |  | ----- | 
|                         |  |                   |      |  |               |  |      |               |  | Minority |               |   | Minority |                 
|                         |  | Minority          |      |  | Minority      |  |      | Minority      |  |          | Minority      |   |          | interests in the |       |  | interests in the | 
|                         |  | share in %        |      |  | part of net   |  |      | part of net   |  |          | part of net   |   |          | balance sheet    |       |  | balance sheet    | 
|                         |  | December 31,      |      |  | income (loss) |  |      | income (loss) |  |          | income (loss) |   |          | December 31,     |       |  | December 31,     | 
|                         |  | 2004              |      |  | 2002          |  |      | 2003          |  |          | 2004          |   |          | 2003             |       |  | 2004             | 
|                         |  |                   |      |  |               |  |      |               |  |          |               |   |          |                  |       |  |                  | 
|                         |  | (in NOK millions) |     
|Telenor Venture AS       |  |                   |     |  |               |  | (6   | )             |  |          | (30           | ) |          |                  |      |  |                  |  |      |  |  |  |      | 
|Telenor Venture II ASA   |  |                   | 49.9 |  |               |  | (67  | )             |  |          | (32           | ) |          |                  | 12    |  |                  |  | 136   |  |  |  | 134   | 
|Kyvistar GSM JSC         |  |                   | 43.5 |  |               |  | 51   |               |  |          | 256           |   |          |                  | 588   |  |                  |  | 998   |  |  |  | 1,255 | 
|OJSC Comincom/ Combellga |  |                   |     |  |               |  | 15   |               |  |          | 14            |   |          |                  |      |  |                  |  |      |  |  |  |      | 
|DiGi.Com bhd             |  |                   | 39.0 |  |               |  | 47   |               |  |          | 68            |   |          |                  | 187   |  |                  |  | 1,131 |  |  |  | 1,191 | 
|GrameenPhone Ltd.        |  |                   | 38.0 |  |               |  | 162  |               |  |          | 283           |   |          |                  | 411   |  |                  |  | 448   |  |  |  | 528   | 
|EDB Business Partner ASA |  |                   | 48.2 |  |               |  | (555 | )             |  |          | (26           | ) |          |                  | 28    |  |                  |  | 888   |  |  |  | 895   | 
|Telenor Venture IV AS    |  |                   | 20.0 |  |               |  |     |               |  |          |              |   |          |                  |      |  |                  |  |      |  |  |  | 52    | 
|Other                    |  |                   |     |  |               |  | (5   | )             |  |          | (43           | ) |          |                  | 18    |  |                  |  | 45    |  |  |  | 19    | 
|                         |  |                   |      |  |               |  |      |               |  |          |               |   |          |                  |       |  |                  | 
|Total                    |  |                   |      |  |               |  | (358 | )             |  |          | 490           |   |          |                  | 1,244 |  |                  |  | 3,646 |  |  |  | 4,074 | 
|                         |  |                   |      |  |               |  |      |               |  |          |               |   |          |                  |       |  |                  | 



F-9



---



##### Table of Contents



SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES


Telenor Group


General








Consolidation principles














Goodwill




F-10



---



##### Table of Contents



Revenue recognition












Pensions




Research and development costs




Software costs






F-11



---



##### Table of Contents



Leases




Foreign currency transactions




Foreign currency translation and hedge accounting for net
investments






Derivatives and hedge accounting for interest-bearing
liabilities and firm commitments














F-12



---



##### Table of Contents





Taxes




Cash and cash equivalents




Investments










Inventories




Advertising costs, marketing and sales commissions




Tangible assets, intangible assets, depreciation and
amortization






F-13



---



##### Table of Contents





|                                                                             |  |  |        | 
|---------------------------------------------------------------------------- |  |  | ------ | 
|Office machinery and equipment, software:                                    |  |  | 20-33% | 
|Satellites, computer equipment, software at switches and other
    equipment |  |  | 10-20% | 
|Transmission and equipment related to switches:                              |  |  | 10-33% | 
|Cable and power supply installations:                                        |  |  | 6-8%   | 
|Buildings:                                                                   |  |  | 3-4%   | 



Assets retirement obligations




Share options and employee stock ownership program




Use of estimates






Changes in classification








Implementation of International Financial Reporting Standards
(IFRS)




F-14



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##### Table of Contents









| |   |                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------
| |  | Revenue and partially related costs.                                                                                      
|
| |  | Business Combinations.                                                                                                    
|
| |  | Goodwill.                                                                                                                 
|
| |  | Tangible and intangible assets including depreciation,
    amortization and write-downs, and asset retirement obligations.
|
| |  | Financial investments, liabilities and derivatives including
    hedge accounting.                                        
|
| |  | Pensions, including the discount rate used.                                                                               
|
| |  | Share-based payments.                                                                                                     
|
| |  | Dividends; not recorded as deduction to equity before it is
    declared.                                                 
|
| |  | Translation adjustments.                                                                                                  
|
| |  | Deferred taxes and tax assets.                                                                                            
|
| |  | Minority interests.                                                                                                       



F-15



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS


Telenor Group




|   |                           
|-- | --------------------------
|1. | ACQUISITIONS AND DISPOSALS



Significant acquisitions in 2004


|                                          |                   |                |     |            |       |       |          |                                    |                |  |       |            |  |  |              |        |  |  |            |          | 
|----------------------------------------- | ----------------- | -------------- | --- | ---------- | ----- | ----- | -------- | ---------------------------------- | -------------- |  | ----- | ---------- |  |  | ------------ | ------ |  |  | ---------- | -------- | 
|                                          |                   |                |     | Change in  |       |       |          |                                    | Purchase       |  |       | Net excess |  |  | Amortization |       
|Company                                   |                   | Country        |     | interest % |       |       | Business |                                    | price          |  |       | value      |  |  | period       |       
|                                          |                   |                |     |            |       |       |          |                                    |                |  |       |            |  |  |              |       
|                                          |                   |                |     |            |       |       |          | (in NOK millions)                  |                |  |      
|Sonofon Holding A/S                       |                   | Denmark        |     |            | 46.5  |       |          | Mobile Communication               |                |  | 3,639 |            |  |  | 3,753        |        |  |  | 4-20 years |         
|European Telecom Luxemburg SA. (ProMonte) |                   | Montenegro     |     |            | 55.9  |       |          | Mobile Communication               |                |  | 541   |            |  |  | 474          |        |  |  | 5-35 years |         
|GrameenPhone Ltd.                         |                   | Bangladesh     |     |            | 11.0  |       |          | Mobile Communication               |                |  | 298   |            |  |  | 168          | (1)    |  |  |           |         
|CBB A/S                                   |                   | Denmark        |     |            | 100.0 |       |          | Mobile Communication               |                |  | 147   |            |  |  | 188          |        |  |  | 4-20 years |         
|GMPCS Personal                            |                   |                |     |            |       |       |          | Satellite Mobile                   |                |  |       |            |  |  |              |        |  |  |            |         
|                                          | Communication Inc |                | USA |            |       | 100.0 |          |                                    | Communications |  |       | 85         |  |  |              | 66     |  |  |            | 10 years | 
|Utfors AB                                 |                   | Sweden         |     |            | 8.3   |       |          | Telecommunication                  |                |  | 70    |            |  |  | 25           | (4)    |  |  | 15 years   |         
|IT -operation                             |                   | Norway/ Sweden |     |            | 100.0 |       |          | Operation and application services |                |  | 738   |            |  |  | 379          | (2)(3) |  |  | 10 years   |         






|    |                                                                                                  
|--- | -------------------------------------------------------------------------------------------------
|(1) | Net excess values is not allocated to goodwill and are recorded
    against shareholders equity.
|   
|(2) | Asset purchases by EDB Business Partner ASA.                                                     
|   
|(3) | Preliminary evaluations and allocations.                                                         
|   
|(4) | Telenor owns 100% of the shares in the company as of
    December 31, 2004.                      

Acquisition of Sonofon Holding A/S in 2004




F-16



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




|                                                                 |  |                   |        | 
|---------------------------------------------------------------- |  | ----------------- | ------ | 
|                                                                 |  | Sonofon           |       
|                                                                 |  | February 12, 2004 |       
|                                                                 |  |                   |       
|                                                                 |  | (in NOK millions) |       
|Goodwill                                                         |  |                   | 6,480  | 
|Other intangible assets                                          |  |                   | 2,558  | 
|Tangible assets and financial fixed assets                       |  |                   | 2,988  | 
|Current assets                                                   |  |                   | 1,187  | 
|                                                                 |  |                   |       
|Total assets                                                     |  |                   | 13,213 | 
|                                                                 |  |                   |       
|Deferred taxes                                                   |  |                   | 737    | 
|Long-term liabilities                                            |  |                   | 3,040  | 
|Short-term liabilities                                           |  |                   | 1,825  | 
|                                                                 |  |                   |       
|Total liabilities                                                |  |                   | 5,602  | 
|                                                                 |  |                   |       
|Minority interest                                                |  |                   |       | 
|                                                                 |  |                   |       
|Net assets at the date of consolidation                          |  |                   | 7,611  | 
|Book value as an associated company at the date of consolidation |  |                   | 3,972  | 
|                                                                 |  |                   |       
|Purchase price last acquisition                                  |  |                   | 3,639  | 
|                                                                 |  |                   |       






|    |                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | These figures include consideration for the last acquisitions
    and the carrying value for the prior investment, when the
    company was accounted for as an associated company. They reflect
    the final allocation of net excess values that deviates somewhat
    from the preliminary allocation.





F-17



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Pro forma information (unaudited)




|                                                     |  |                   |        |  |      |  |        | 
|---------------------------------------------------- |  | ----------------- | ------ |  | ---- |  | ------ | 
|                                                     |  | 2003              |        |  | 2004 | 
|                                                     |  |                   |        |  |      | 
|                                                     |  | (in NOK millions, |       
|                                                     |  | except per share  |       
|                                                     |  | data)             |       
|Pro forma revenues                                   |  |                   | 59,233 |  |      |  | 63,119 | 
|Pro forma profit before taxes and minority interests |  |                   | 6,732  |  |      |  | 8,609  | 
|Pro forma net income                                 |  |                   | 4,057  |  |      |  | 5,163  | 
|Pro forma net income per share in NOK                |  |                   | 2.28   |  |      |  | 2.95   | 



Significant disposals 2004




Significant Acquisitions in 2003


|                            |  |         |            |           |            |  |      |                   |          |                      |  |            |       |  |              |        |     |     |  |  |            | 
|--------------------------- |  | ------- | ---------- | --------- | ---------- |  | ---- | ----------------- | -------- | -------------------- |  | ---------- | ----- |  | ------------ | ------ | --- | --- |  |  | ---------- | 
|                            |  |         |            | Change in |            |  |      |                   | Purchase |                      |  | Net excess |       |  | Amortization |       
|Company                     |  | Country |            |           | interest % |  |      | Business          |          | price                |  |            | value |  |              | period |    
|                            |  |         |            |           |            |  |      |                   |          |                      |  |            |       |  |              |        |    
|                            |  |         |            |           |            |  |      | (in NOK millions) |          |                      | 
|Golden Telecom Inc.(3)      |  |         | Russia     |           |            |  | 20.4 |                   |          | Telecommunication    |  |            | 1,378 |  |              |        | 850 | (1) |  |  | 5-20 years | 
|APR Media Holding AS(4)     |  |         | Norway     |           |            |  | 44.8 |                   |          | TV-distribution      |  |            | 402   |  |              |        | 74  | (1) |  |  | 5-15 years | 
|GrameenPhone Ltd.           |  |         | Bangladesh |           |            |  | 4.6  |                   |          | Mobile communication |  |            | 84    |  |              |        | 39  | (2) |  |  | 10 years   | 
|OJSC Comincom/ Combellga(3) |  |         | Russia     |           |            |  | 25.0 |                   |          | Telecommunication    |  |            | 217   |  |              |        | 30  | (2) |  |  | 18 years   | 






|    |                                                                                                                                                                             
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Net excess value is included in the book value of associated
    companies and joint ventures.                                                                              
|   
|(2) | Partially recorded directly to equity.                                                                                                                                      
|   
|(3) | In 2003 OJSC Comincom/ Combellga became a wholly owned
    subsidiary and later in 2003 Telenor sold its ownership interest
    in exchange for share in Golden Telecom Inc.
|   
|(4) | The ownership interest in APR Media Holding AS was acquired
    by exchange of Telenors shareholding in A-Pressen ASA.                                                     

Significant disposals 2003




F-18



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Significant Acquisitions in 2002:


|                                     |  |           |  |            |       |  |          |                                 |          |  |       |            |  |  |              |     |  |  |            | 
|------------------------------------ |  | --------- |  | ---------- | ----- |  | -------- | ------------------------------- | -------- |  | ----- | ---------- |  |  | ------------ | --- |  |  | ---------- | 
|                                     |  |           |  | Change in  |       |  |          |                                 | Purchase |  |       | Net excess |  |  | Amortization |    
|Company                              |  | Country   |  | interest % |       |  | Business |                                 | price    |  |       | value      |  |  | period       |    
|                                     |  |           |  |            |       |  |          |                                 |          |  |       |            |  |  |              |    
|                                     |  |           |  |            |       |  |          | (in NOK millions)               |          |  |      
|Pannon GSM Rt.                       |  | Hungary   |  |            | 74.2  |  |          | Mobile Communication            |          |  | 7,906 |            |  |  | 7,741        |     |  |  | 5-20 years | 
|Canal Digital AS                     |  | Norway(4) |  |            | 50.0  |  |          | TV-distribution                 |          |  | 2,166 |            |  |  | 2,244        |     |  |  | 5-15 years | 
|Kyivstar GSM JSC(5)                  |  | Ukraine   |  |            | 8.8   |  |          | Mobile Communication            |          |  | 294   |            |  |  | 1,005        | (6) |  |  | 5-20 years | 
|COMSAT Mobile Communications Inc.(2) |  | USA       |  |            | 100.0 |  |          | Satellite Mobile Communications |          |  | 743   |            |  |  | 22           |     |  |  | 10 years   | 
|Utfors AB(1)                         |  | Sweden    |  |            | 90.0  |  |          | Telecommunication               |          |  | 153   |            |  |  | (424         | )   |  |  | 18 years   | 
|Glocalnet AB                         |  | Sweden    |  |            | 37.2  |  |          | Telecommunication               |          |  | 102   |            |  |  | 50           | (3) |  |  | 10 years   | 
|VimpelCom-Region                     |  | Russia    |  |            | 17.5  |  |          | Mobile Communication            |          |  | 432   |            |  |  |             |     |  |  |           | 






|    |                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Telenor holds convertible loans, which may increase the
    ownership share up to 96%. Net excess value is recorded as
    negative goodwill.
|   
|(2) | Asset purchase agreement.                                                                                                                    
|   
|(3) | Net excess value is included in the book value of associated
    companies and joint ventures.                                               
|   
|(4) | The parent company is Norwegian. Canal Digital Group conducts
    business in the Nordic region via subsidiaries.                            
|   
|(5) | Telenor has an option to acquire a further 2.3% of the share
    capital.                                                                    
|   
|(6) | Includes minority share of NOK 533 million.                                                                                                  

Acquisition of Pannon GSM Rt, Canal Digital AS and Kyivstar
GSM JSC in 2002






F-19



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group






|                                                                 |  |                   |        |   |                  |  |       |                   |  |  |       |  
|---------------------------------------------------------------- |  | ----------------- | ------ | - | ---------------- |  | ----- | ----------------- |  |  | ----- | -
|                                                                 |  | Pannon GSM Rt     |        |   | Canal Digital AS |  |       | Kyivstar GSM JSC  | 
|                                                                 |  | February 4, 2002  |        |   | June 30, 2002    |  |       | September 1, 2002 | 
|                                                                 |  |                   |        |   |                  |  |       |                   | 
|                                                                 |  | (in NOK millions) |       
|Deferred tax assets                                              |  |                   |       |   |                  |  | 128   |                   |  |  | 31    |  
|Goodwill                                                         |  |                   | 5,613  |   |                  |  | 1,988 |                   |  |  | 371   |  
|Other intangible assets                                          |  |                   | 2,626  |   |                  |  | 298   |                   |  |  | 956   |  
|Tangible assets and financial fixed assets                       |  |                   | 2,517  |   |                  |  | 636   |                   |  |  | 1,644 |  
|Current assets                                                   |  |                   | 1,102  |   |                  |  | 520   |                   |  |  | 271   |  
|                                                                 |  |                   |        |   |                  |  |       |                   | 
|Total assets                                                     |  |                   | 11,858 |   |                  |  | 3,570 |                   |  |  | 3,273 |  
|                                                                 |  |                   |        |   |                  |  |       |                   | 
|Deferred taxes                                                   |  |                   | 308    |   |                  |  | 63    |                   |  |  | 153   |  
|Long-term liabilities                                            |  |                   | 1,793  |   |                  |  | 653   |                   |  |  | 740   |  
|Short-term liabilities                                           |  |                   | 1,121  |   |                  |  | 981   |                   |  |  | 840   |  
|                                                                 |  |                   |        |   |                  |  |       |                   | 
|Total liabilities                                                |  |                   | 3,222  |   |                  |  | 1,697 |                   |  |  | 1,733 |  
|                                                                 |  |                   |        |   |                  |  |       |                   | 
|Minority interests                                               |  |                   |       |   |                  |  |      |                   |  |  | 671   |  
|                                                                 |  |                   |        |   |                  |  |       |                   | 
|Net assets at the date of consolidation                          |  |                   | 8,636  |   |                  |  | 1,873 |                   |  |  | 869   |  
|Book value as an associated company at the date of consolidation |  |                   | (730   | ) |                  |  | (365  | )                 |  |  | (575  | )
|Recorded directly against equity                                 |  |                   |        |   |                  |  | 658   |                   |  |  |       |  
|                                                                 |  |                   |        |   |                  |  |       |                   | 
|Purchase price last acquisition                                  |  |                   | 7,906  |   |                  |  | 2,166 |                   |  |  | 294   |  
|                                                                 |  |                   |        |   |                  |  |       |                   | 






|    |                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | These figures include consideration for the last acquisitions
    and the carrying values for the prior investments, when the
    companies were accounted for as associated companies.







F-20



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group










Pro forma information (unaudited)




|                                                     |  |                   |        |  
|---------------------------------------------------- |  | ----------------- | ------ | -
|                                                     |  | 2002              |       
|                                                     |  |                   |       
|                                                     |  | (in NOK millions, |       
|                                                     |  | except per share) |       
|Pro forma revenues                                   |  |                   | 52,023 |  
|Pro forma profit before taxes and minority interests |  |                   | (5,693 | )
|Pro forma net income (loss)                          |  |                   | (4,854 | )
|Pro forma net income per share in NOK                |  |                   | (2.74  | )



Significant Disposals in 2002




F-21



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


2.   REVENUES


|                                                |  |                   |        |  |      |  |        |      |  |  |        | 
|----------------------------------------------- |  | ----------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                                |  | 2002              |        |  | 2003 |  |        | 2004 | 
|                                                |  |                   |        |  |      |  |        |      | 
|                                                |  | (in NOK millions) |       
|Analog (PSTN)/digital (ISDN and ADSL)           |  |                   | 14,480 |  |      |  | 15,464 |      |  |  | 14,263 | 
|Mobile telephony                                |  |                   | 17,199 |  |      |  | 20,823 |      |  |  | 28,691 | 
|Leased lines                                    |  |                   | 1,008  |  |      |  | 994    |      |  |  | 991    | 
|Satellite and TV-distribution                   |  |                   | 5,903  |  |      |  | 6,758  |      |  |  | 7,585  | 
|Other network based activities                  |  |                   | 2,493  |  |      |  | 2,164  |      |  |  | 2,271  | 
|Customer equipment                              |  |                   | 1,528  |  |      |  | 1,146  |      |  |  | 1,607  | 
|IT operations and sale of software              |  |                   | 4,626  |  |      |  | 4,254  |      |  |  | 3,994  | 
|Other                                           |  |                   | 1,431  |  |      |  | 1,286  |      |  |  | 1,350  | 
|                                                |  |                   |        |  |      |  |        |      | 
|Revenues                                        |  |                   | 48,668 |  |      |  | 52,889 |      |  |  | 60,752 | 
|Gain on disposal of fixed assets and operations |  |                   | 158    |  |      |  | 232    |      |  |  | 550    | 
|                                                |  |                   |        |  |      |  |        |      | 
|Total revenues                                  |  |                   | 48,826 |  |      |  | 53,121 |      |  |  | 61,302 | 
|                                                |  |                   |        |  |      |  |        |      | 

Analog (PSTN)/digital (ISDN and ADSL)


Mobile telephony


Leased lines


Satellite


TV-distribution


Other network-based activities


Customer equipment


IT operations and sale of software


Other


3.   KEY FIGURES SEGMENTS




Total mobile operations Fixed Broadcast EDB Business Partner ASA


F-22



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Other Business units Corporate functions and Group activities








Profit and loss 2004


|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           |               |          |           |           |       |          |  |           |   |  |  |       |   |  |  |        |  
|---------------------------------------- |  | ----------------- | ------ | -------- | ----------- |  | ------ | ------------- | ---------------- |  | ----------- | ---------- | --------- | ------------- | --------- | ------------- | -------- | --------- | --------- | ----- | -------- |  | --------- | - |  |  | ----- | - |  |  | ------ | -
|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           | Profit (loss) |         
|                                         |  |                   |        |          |             |  |        |               |                  |  |             | Associated |           |               |           |               | before   |          
|                                         |  |                   |        |          |             |  |        | Depreciation, |                  |  |             |            | companies |               |           | Net           |          |           | taxes and |      
|                                         |  |                   |        | External |             |  |        |               | amortization and |  |             | Operating  |           |               | and joint |               |          | financial |           |       | minority | 
|                                         |  | Revenues(1)       |        |          | revenues(1) |  |        | EBITDA(2)     |                  |  | write-downs |            |           | profit (loss) |           |               | ventures |           |           | items |          |  | interests |  
|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           |               |          |           |           |       |          |  |           |  
|                                         |  | (in NOK millions) |       
|Telenor Mobil  Norway                   |  |                   | 11,734 |          |             |  | 10,508 |               |                  |  | 4,283       |            |           |               | 1,070     |               |          |           | 3,213     |       |          |  | 10        |   |  |  | 69    |   |  |  | 3,292  |  
|Sonofon  Denmark                        |  |                   | 4,393  |          |             |  | 4,346  |               |                  |  | 680         |            |           |               | 3,928     |               |          |           | (3,248    | )     |          |  |          |   |  |  | (159  | ) |  |  | (3,407 | )
|Pannon GSM  Hungary                     |  |                   | 5,869  |          |             |  | 5,863  |               |                  |  | 2,092       |            |           |               | 1,639     |               |          |           | 453       |       |          |  |          |   |  |  | 54    |   |  |  | 507    |  
|DiGi.Com  Malaysia                      |  |                   | 3,953  |          |             |  | 3,950  |               |                  |  | 1,732       |            |           |               | 947       |               |          |           | 785       |       |          |  |          |   |  |  | (109  | ) |  |  | 676    |  
|Kyivstar  Ukraine                       |  |                   | 4,346  |          |             |  | 4,344  |               |                  |  | 2,581       |            |           |               | 592       |               |          |           | 1,989     |       |          |  |          |   |  |  | (158  | ) |  |  | 1,831  |  
|GrameenPhone  Bangladesh                |  |                   | 2,202  |          |             |  | 2,202  |               |                  |  | 1,313       |            |           |               | 218       |               |          |           | 1,095     |       |          |  |          |   |  |  | 2     |   |  |  | 1,097  |  
|Other mobile operations/ eliminations    |  |                   | 455    |          |             |  | 357    |               |                  |  | (1,063      | )          |           |               | 197       |               |          |           | (1,260    | )     |          |  | 684       |   |  |  | 1,174 |   |  |  | 598    |  
|Total mobile operations                  |  |                   | 32,952 |          |             |  | 31,570 |               |                  |  | 11,618      |            |           |               | 8,591     |               |          |           | 3,027     |       |          |  | 694       |   |  |  | 873   |   |  |  | 4,594  |  
|Fixed                                    |  |                   | 19,266 |          |             |  | 17,440 |               |                  |  | 6,277       |            |           |               | 3,483     |               |          |           | 2,794     |       |          |  | 50        |   |  |  | (438  | ) |  |  | 2,406  |  
|Broadcast                                |  |                   | 5,347  |          |             |  | 5,212  |               |                  |  | 1,495       |            |           |               | 906       |               |          |           | 589       |       |          |  | 1         |   |  |  | (471  | ) |  |  | 119    |  
|EDB Business Partner                     |  |                   | 4,530  |          |             |  | 3,606  |               |                  |  | 924         |            |           |               | 400       |               |          |           | 524       |       |          |  |          |   |  |  | (44   | ) |  |  | 480    |  
|Other business units                     |  |                   | 3,595  |          |             |  | 3,114  |               |                  |  | 524         |            |           |               | 411       |               |          |           | 113       |       |          |  | (32       | ) |  |  | (27   | ) |  |  | 54     |  
|Corporate functions and Group activities |  |                   | 2,193  |          |             |  | 360    |               |                  |  | (81         | )          |           |               | 387       |               |          |           | (468      | )     |          |  | 3         |   |  |  | 1,646 |   |  |  | 1,184  |  
|Eliminations                             |  |                   | (6,581 | )        |             |  |       |               |                  |  | 64          |            |           |               | 41        |               |          |           | 23        |       |          |  | 2         |   |  |  | (13   | ) |  |  | 12     |  
|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           |               |          |           |           |       |          |  |           |  
|Total                                    |  |                   | 61,302 |          |             |  | 61,302 |               |                  |  | 20,821      |            |           |               | 14,219    |               |          |           | 6,602     |       |          |  | 718       |   |  |  | 1,526 |   |  |  | 8,846  |  
|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           |               |          |           |           |       |          |  |           |  






|    |                                                                       
|--- | ----------------------------------------------------------------------
|(1) | Revenues include gains on disposal of fixed assets and
    operations.
|   
|(2) | See table below for definition and reconciliation of EBITDA.          

F-23



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Definition and reconciliation of EBITDA


|                                                  |  |                   |        |   |      |  |        |      |  |  |        |  
|------------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                  |  | 2002              |        |   | 2003 |  |        | 2004 | 
|                                                  |  |                   |        |   |      |  |        |      | 
|                                                  |  | (in NOK millions) |       
|Net income (loss)                                 |  |                   | (4,298 | ) |      |  | 4,560  |      |  |  | 5,358  |  
|                                                  |  |                   |        |   |      |  |        |      | 
|Minority interests                                |  |                   | (358   | ) |      |  | 490    |      |  |  | 1,244  |  
|Taxes                                             |  |                   | (480   | ) |      |  | 2,376  |      |  |  | 2,244  |  
|                                                  |  |                   |        |   |      |  |        |      | 
|Profit (loss) before taxes and minority interests |  |                   | (5,136 | ) |      |  | 7,426  |      |  |  | 8,846  |  
|                                                  |  |                   |        |   |      |  |        |      | 
|Net financial items                               |  |                   | 2,366  |   |      |  | 1,365  |      |  |  | (1,526 | )
|Associated companies                              |  |                   | 2,450  |   |      |  | (1,231 | )    |  |  | (718   | )
|                                                  |  |                   |        |   |      |  |        |      | 
|Operating profit (loss)                           |  |                   | (320   | ) |      |  | 7,560  |      |  |  | 6,602  |  
|                                                  |  |                   |        |   |      |  |        |      | 
|Depreciation and amortization                     |  |                   | 10,236 |   |      |  | 10,597 |      |  |  | 11,623 |  
|Write-downs                                       |  |                   | 3,553  |   |      |  | 145    |      |  |  | 2,596  |  
|                                                  |  |                   |        |   |      |  |        |      | 
|EBITDA                                            |  |                   | 13,469 |   |      |  | 18,302 |      |  |  | 20,821 |  
|                                                  |  |                   |        |   |      |  |        |      | 

Balance sheet items and investments at December 31,
2004


|                                         |  |                   |         |   |            |  |       |         |  |       |             |   |  |            |         |   |             |  |         |             |  |  |         |   |  |  |        |  
|---------------------------------------- |  | ----------------- | ------- | - | ---------- |  | ----- | ------- |  | ----- | ----------- | - |  | ---------- | ------- | - | ----------- |  | ------- | ----------- |  |  | ------- | - |  |  | ------ | -
|                                         |  |                   |         |   |            |  |       |         |  | Long- |             |   |  |            |        
|                                         |  |                   |         |   |            |  |       |         |  | term  |             |   |  |            |        
|                                         |  | Other             |         |   |            |  |       |         |  |       | liabilities |   |  | Short-     |         |   |            
|                                         |  | fixed             |         |   | Associated |  |       | Current |  |       | Total       |   |  | incl.      |         |   | term        |  |         |            
|                                         |  | assets            |         |   | companies  |  |       | assets  |  |       | assets      |   |  | provisions |         |   | liabilities |  |         | Investments | 
|                                         |  |                   |         |   |            |  |       |         |  |       |             |   |  |            |         |   |             |  |         |             | 
|                                         |  | (in NOK millions) |        
|Telenor Mobil  Norway                   |  |                   | 3,682   |   |            |  | 6     |         |  |       | 3,944       |   |  |            | 7,632   |   |             |  | 229     |             |  |  | 6,112   |   |  |  | 1,025  |  
|Sonofon  Denmark                        |  |                   | 3,077   |   |            |  | 1     |         |  |       | 1,097       |   |  |            | 4,175   |   |             |  | 3,869   |             |  |  | 780     |   |  |  | 535    |  
|Pannon GSM  Hungary                     |  |                   | 3,678   |   |            |  |      |         |  |       | 1,997       |   |  |            | 5,675   |   |             |  | 154     |             |  |  | 1,320   |   |  |  | 1,166  |  
|DiGi.Com  Malaysia                      |  |                   | 4,329   |   |            |  |      |         |  |       | 1,311       |   |  |            | 5,640   |   |             |  | 1,030   |             |  |  | 1,784   |   |  |  | 920    |  
|Kyivstar  Ukraine                       |  |                   | 4,454   |   |            |  |      |         |  |       | 852         |   |  |            | 5,306   |   |             |  | 1,510   |             |  |  | 1,208   |   |  |  | 2,608  |  
|GrameenPhone  Bangladesh                |  |                   | 2,072   |   |            |  | 1     |         |  |       | 606         |   |  |            | 2,679   |   |             |  | 450     |             |  |  | 905     |   |  |  | 1,318  |  
|Other mobile operations/ eliminations    |  |                   | 26,293  |   |            |  | 4,392 |         |  |       | 8,487       |   |  |            | 39,172  |   |             |  | 40,459  |             |  |  | 2,256   |   |  |  | 6,566  |  
|Total mobile operations                  |  |                   | 47,585  |   |            |  | 4,400 |         |  |       | 18,294      |   |  |            | 70,279  |   |             |  | 47,701  |             |  |  | 14,365  |   |  |  | 14,138 |  
|Fixed                                    |  |                   | 11,896  |   |            |  | 1,352 |         |  |       | 8,504       |   |  |            | 21,752  |   |             |  | 9,592   |             |  |  | 7,550   |   |  |  | 1,896  |  
|Broadcast                                |  |                   | 6,048   |   |            |  | 506   |         |  |       | 4,386       |   |  |            | 10,940  |   |             |  | 8,283   |             |  |  | 2,895   |   |  |  | 880    |  
|EDB Business Partner                     |  |                   | 2,783   |   |            |  |      |         |  |       | 1,085       |   |  |            | 3,868   |   |             |  | 1,038   |             |  |  | 1,232   |   |  |  | 1,309  |  
|Other business units                     |  |                   | 1,580   |   |            |  | 58    |         |  |       | 1,794       |   |  |            | 3,374   |   |             |  | 1,761   |             |  |  | 926     |   |  |  | 415    |  
|Corporate functions and Group activities |  |                   | 68,079  |   |            |  |      |         |  |       | 7,364       |   |  |            | 75,501  |   |             |  | 15,706  |             |  |  | 32,821  |   |  |  | 288    |  
|Eliminations                             |  |                   | (73,040 | ) |            |  | 112   |         |  |       | (24,692     | ) |  |            | (97,620 | ) |             |  | (59,787 | )           |  |  | (37,657 | ) |  |  | (372   | )
|                                         |  |                   |         |   |            |  |       |         |  |       |             |   |  |            |         |   |             |  |         |             | 
|Total                                    |  |                   | 64,931  |   |            |  | 6,428 |         |  |       | 16,735      |   |  |            | 88,094  |   |             |  | 24,294  |             |  |  | 22,132  |   |  |  | 18,554 |  
|                                         |  |                   |         |   |            |  |       |         |  |       |             |   |  |            |         |   |             |  |         |             | 

F-24



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Profit and loss 2003


|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           |               |          |           |           |       |          |  |           |   |  |  |        |   |  |  |       |  
|---------------------------------------- |  | ----------------- | ------ | -------- | ----------- |  | ------ | ------------- | ---------------- |  | ----------- | ---------- | --------- | ------------- | --------- | ------------- | -------- | --------- | --------- | ----- | -------- |  | --------- | - |  |  | ------ | - |  |  | ----- | -
|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           | Profit (loss) |         
|                                         |  |                   |        |          |             |  |        |               |                  |  |             | Associated |           |               |           |               | before   |          
|                                         |  |                   |        |          |             |  |        | Depreciation, |                  |  |             |            | companies |               |           | Net           |          |           | taxes and |      
|                                         |  |                   |        | External |             |  |        |               | amortization and |  |             | Operating  |           |               | and joint |               |          | financial |           |       | minority | 
|                                         |  | Revenues(1)       |        |          | revenues(1) |  |        | EBITDA(2)     |                  |  | write-downs |            |           | profit (loss) |           |               | ventures |           |           | items |          |  | interests |  
|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           |               |          |           |           |       |          |  |           |  
|                                         |  | (in NOK millions) |       
|Telenor Mobil  Norway                   |  |                   | 10,909 |          |             |  | 9,639  |               |                  |  | 4,262       |            |           |               | 1,147     |               |          |           | 3,115     |       |          |  | (22       | ) |  |  | 67     |   |  |  | 3,160 |  
|Pannon GSM  Hungary                     |  |                   | 5,370  |          |             |  | 5,368  |               |                  |  | 1,924       |            |           |               | 1,545     |               |          |           | 379       |       |          |  |          |   |  |  | (77    | ) |  |  | 302   |  
|DiGi.Com  Malaysia                      |  |                   | 3,176  |          |             |  | 3,170  |               |                  |  | 1,295       |            |           |               | 921       |               |          |           | 374       |       |          |  |          |   |  |  | (124   | ) |  |  | 250   |  
|Kyivstar  Ukraine                       |  |                   | 2,634  |          |             |  | 2,634  |               |                  |  | 1,573       |            |           |               | 480       |               |          |           | 1,093     |       |          |  |          |   |  |  | (149   | ) |  |  | 944   |  
|GrameenPhone  Bangladesh                |  |                   | 1,536  |          |             |  | 1,535  |               |                  |  | 1,001       |            |           |               | 158       |               |          |           | 843       |       |          |  |          |   |  |  | (11    | ) |  |  | 832   |  
|Other mobile operations/ eliminations    |  |                   | 185    |          |             |  | 137    |               |                  |  | (488        | )          |           |               | 92        |               |          |           | (580      | )     |          |  | 1,661     |   |  |  | (1,888 | ) |  |  | (807  | )
|Total mobile operations                  |  |                   | 23,810 |          |             |  | 22,483 |               |                  |  | 9,567       |            |           |               | 4,343     |               |          |           | 5,224     |       |          |  | 1,639     |   |  |  | (2,182 | ) |  |  | 4,681 |  
|Fixed                                    |  |                   | 20,509 |          |             |  | 18,796 |               |                  |  | 6,665       |            |           |               | 4,134     |               |          |           | 2,531     |       |          |  | 8         |   |  |  | (736   | ) |  |  | 1,803 |  
|Broadcast                                |  |                   | 4,820  |          |             |  | 4,661  |               |                  |  | 1,229       |            |           |               | 1,048     |               |          |           | 181       |       |          |  | (84       | ) |  |  | (909   | ) |  |  | (812  | )
|EDB Business Partner                     |  |                   | 4,289  |          |             |  | 3,229  |               |                  |  | 399         |            |           |               | 403       |               |          |           | (4        | )     |          |  | (13       | ) |  |  | (71    | ) |  |  | (88   | )
|Other business units                     |  |                   | 4,205  |          |             |  | 3,590  |               |                  |  | 408         |            |           |               | 528       |               |          |           | (120      | )     |          |  | (318      | ) |  |  | (314   | ) |  |  | (752  | )
|Corporate functions and Group activities |  |                   | 2,317  |          |             |  | 362    |               |                  |  | 23          |            |           |               | 387       |               |          |           | (364      | )     |          |  | (2        | ) |  |  | 2,846  |   |  |  | 2,480 |  
|Eliminations                             |  |                   | (6,829 | )        |             |  |       |               |                  |  | 11          |            |           |               | (101      | )             |          |           | 112       |       |          |  | 1         |   |  |  | 1      |   |  |  | 114   |  
|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           |               |          |           |           |       |          |  |           |  
|Total                                    |  |                   | 53,121 |          |             |  | 53,121 |               |                  |  | 18,302      |            |           |               | 10,742    |               |          |           | 7,560     |       |          |  | 1,231     |   |  |  | (1,365 | ) |  |  | 7,426 |  
|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           |               |          |           |           |       |          |  |           |  






|    |                                                                       
|--- | ----------------------------------------------------------------------
|(1) | Revenues include gains on disposal of fixed assets and
    operations.
|   
|(2) | See table above for definition and reconciliation of EBITDA.          

Balance sheet items and investments at December 31,
2003


|                                         |  |                   |         |   |            |  |        |         |  |       |             |   |  |            |         |   |             |  |         |             |  |  |         |   |  |  |        |  
|---------------------------------------- |  | ----------------- | ------- | - | ---------- |  | ------ | ------- |  | ----- | ----------- | - |  | ---------- | ------- | - | ----------- |  | ------- | ----------- |  |  | ------- | - |  |  | ------ | -
|                                         |  |                   |         |   |            |  |        |         |  | Long- |             |   |  |            |        
|                                         |  |                   |         |   |            |  |        |         |  | term  |             |   |  |            |        
|                                         |  | Other             |         |   |            |  |        |         |  |       | liabilities |   |  | Short-     |         |   |            
|                                         |  | fixed             |         |   | Associated |  |        | Current |  |       | Total       |   |  | incl.      |         |   | term        |  |         |            
|                                         |  | assets            |         |   | companies  |  |        | assets  |  |       | assets      |   |  | provisions |         |   | liabilities |  |         | Investments | 
|                                         |  |                   |         |   |            |  |        |         |  |       |             |   |  |            |         |   |             |  |         |             | 
|                                         |  | (in NOK millions) |        
|Telenor Mobil  Norway                   |  |                   | 5,227   |   |            |  | (10    | )       |  |       | 2,377       |   |  |            | 7,594   |   |             |  | 203     |             |  |  | 6,218   |   |  |  | 505    |  
|Pannon GSM  Hungary                     |  |                   | 3,347   |   |            |  |       |         |  |       | 1,975       |   |  |            | 5,322   |   |             |  |        |             |  |  | 2,200   |   |  |  | 1,166  |  
|DiGi Com                                 |  |                   | 4,696   |   |            |  |       |         |  |       | 947         |   |  |            | 5,643   |   |             |  | 1,277   |             |  |  | 1,802   |   |  |  | 920    |  
|Kyivstar                                 |  |                   | 2,824   |   |            |  |       |         |  |       | 541         |   |  |            | 3,365   |   |             |  | 1,105   |             |  |  | 487     |   |  |  | 2,608  |  
|GrameenPhone                             |  |                   | 1,232   |   |            |  | 1      |         |  |       | 696         |   |  |            | 1,929   |   |             |  | 376     |             |  |  | 633     |   |  |  | 1,318  |  
|Other mobile operations/ eliminations    |  |                   | 20,557  |   |            |  | 8,073  |         |  |       | 5,615       |   |  |            | 34,245  |   |             |  | 34,441  |             |  |  | 2,628   |   |  |  | (2,755 | )
|Total mobile operations                  |  |                   | 37,883  |   |            |  | 8,064  |         |  |       | 12,151      |   |  |            | 58,098  |   |             |  | 37,402  |             |  |  | 13,968  |   |  |  | 3,762  |  
|Fixed                                    |  |                   | 13,761  |   |            |  | 1,451  |         |  |       | 8,595       |   |  |            | 23,807  |   |             |  | 10,521  |             |  |  | 8,606   |   |  |  | 2,161  |  
|Broadcast                                |  |                   | 6,268   |   |            |  | 514    |         |  |       | 3,278       |   |  |            | 10,060  |   |             |  | 8,165   |             |  |  | 2,868   |   |  |  | 266    |  
|EDB Business Partner                     |  |                   | 2,326   |   |            |  |       |         |  |       | 995         |   |  |            | 3,321   |   |             |  | 763     |             |  |  | 953     |   |  |  | 305    |  
|Other business units                     |  |                   | 2,644   |   |            |  | 18     |         |  |       | 2,528       |   |  |            | 5,190   |   |             |  | 2,846   |             |  |  | 1,524   |   |  |  | 263    |  
|Corporate functions and Group activities |  |                   | 64,081  |   |            |  |       |         |  |       | 12,170      |   |  |            | 76,251  |   |             |  | 18,709  |             |  |  | 29,017  |   |  |  | 346    |  
|Eliminations                             |  |                   | (68,783 | ) |            |  | 119    |         |  |       | (21,953     | ) |  |            | (90,617 | ) |             |  | (53,304 | )           |  |  | (36,811 | ) |  |  | (86    | )
|                                         |  |                   |         |   |            |  |        |         |  |       |             |   |  |            |         |   |             |  |         |             | 
|Total                                    |  |                   | 58,180  |   |            |  | 10,166 |         |  |       | 17,764      |   |  |            | 86,110  |   |             |  | 25,102  |             |  |  | 20,125  |   |  |  | 7,017  |  
|                                         |  |                   |         |   |            |  |        |         |  |       |             |   |  |            |         |   |             |  |         |             | 

F-25



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Profit and loss 2002


|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           |               |          |           |           |       |          |  |           |   |  |  |        |   |  |  |        |  
|---------------------------------------- |  | ----------------- | ------ | -------- | ----------- |  | ------ | ------------- | ---------------- |  | ----------- | ---------- | --------- | ------------- | --------- | ------------- | -------- | --------- | --------- | ----- | -------- |  | --------- | - |  |  | ------ | - |  |  | ------ | -
|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           | Profit (loss) |         
|                                         |  |                   |        |          |             |  |        |               |                  |  |             | Associated |           |               |           |               | before   |          
|                                         |  |                   |        |          |             |  |        | Depreciation, |                  |  |             |            | Companies |               |           | Net           |          |           | taxes and |      
|                                         |  |                   |        | External |             |  |        |               | amortization and |  |             | Operating  |           |               | and joint |               |          | financial |           |       | minority | 
|                                         |  | Revenues(1)       |        |          | revenues(1) |  |        | EBITDA(2)     |                  |  | write-downs |            |           | profit (loss) |           |               | ventures |           |           | items |          |  | interests |  
|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           |               |          |           |           |       |          |  |           |  
|                                         |  | (in NOK millions) |       
|Telenor Mobil  Norway                   |  |                   | 10,695 |          |             |  | 9,441  |               |                  |  | 4,330       |            |           |               | 1,322     |               |          |           | 3,008     |       |          |  |          |   |  |  | 64     |   |  |  | 3,072  |  
|Pannon GSM  Hungary                     |  |                   | 4,505  |          |             |  | 4,502  |               |                  |  | 1,586       |            |           |               | 1,289     |               |          |           | 297       |       |          |  |          |   |  |  | (99    | ) |  |  | 198    |  
|DiGi.Com  Malaysia                      |  |                   | 2,715  |          |             |  | 2,702  |               |                  |  | 1,022       |            |           |               | 3,025     |               |          |           | (2,003    | )     |          |  |          |   |  |  | (124   | ) |  |  | (2,127 | )
|Kyivstar  Ukraine                       |  |                   | 708    |          |             |  | 708    |               |                  |  | 403         |            |           |               | 152       |               |          |           | 251       |       |          |  |          |   |  |  | (50    | ) |  |  | 201    |  
|GrameenPhone  Bangladesh                |  |                   | 1,589  |          |             |  | 1,589  |               |                  |  | 757         |            |           |               | 126       |               |          |           | 631       |       |          |  |          |   |  |  | (29    | ) |  |  | 602    |  
|Other mobile operations/ eliminations    |  |                   | 134    |          |             |  | 137    |               |                  |  | (616        | )          |           |               | 154       |               |          |           | (770      | )     |          |  | (2,030    | ) |  |  | (1,812 | ) |  |  | (4,612 | )
|Total mobile operations                  |  |                   | 20,346 |          |             |  | 19,079 |               |                  |  | 7,482       |            |           |               | 6,068     |               |          |           | 1,414     |       |          |  | (2,030    | ) |  |  | (2,050 | ) |  |  | (2,666 | )
|Fixed                                    |  |                   | 20,022 |          |             |  | 18,352 |               |                  |  | 5,597       |            |           |               | 4,866     |               |          |           | 731       |       |          |  | (5        | ) |  |  | (297   | ) |  |  | 429    |  
|Broadcast                                |  |                   | 3,605  |          |             |  | 3,364  |               |                  |  | 499         |            |           |               | 974       |               |          |           | (475      | )     |          |  | (264      | ) |  |  | (812   | ) |  |  | (1,551 | )
|EDB Business Partner                     |  |                   | 4,341  |          |             |  | 3,386  |               |                  |  | 348         |            |           |               | 757       |               |          |           | (409      | )     |          |  | (5        | ) |  |  | (86    | ) |  |  | (500   | )
|Other business units                     |  |                   | 5,040  |          |             |  | 4,255  |               |                  |  | 178         |            |           |               | 914       |               |          |           | (736      | )     |          |  | (132      | ) |  |  | (943   | ) |  |  | (1,811 | )
|Corporate functions and Group activities |  |                   | 2,259  |          |             |  | 390    |               |                  |  | (569        | )          |           |               | 362       |               |          |           | (931      | )     |          |  | (1        | ) |  |  | 1,929  |   |  |  | 997    |  
|Eliminations                             |  |                   | (6,787 | )        |             |  |       |               |                  |  | (66         | )          |           |               | (152      | )             |          |           | 86        |       |          |  | (13       | ) |  |  | (107   | ) |  |  | 34     |  
|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           |               |          |           |           |       |          |  |           |  
|Total                                    |  |                   | 48,826 |          |             |  | 48,826 |               |                  |  | 13,469      |            |           |               | 13,789    |               |          |           | (320      | )     |          |  | (2,450    | ) |  |  | (2,366 | ) |  |  | (5,136 | )
|                                         |  |                   |        |          |             |  |        |               |                  |  |             |            |           |               |           |               |          |           |           |       |          |  |           |  






|    |                                                                       
|--- | ----------------------------------------------------------------------
|(1) | Revenues include gains on disposal of fixed assets and
    operations.
|   
|(2) | See table above for definition and reconciliation of EBITDA.          

Geographic distribution of revenues based on customer
location(1)


|                |  |                   |        |  |      |  |        |      |  |  |        | 
|--------------- |  | ----------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                |  | 2002              |        |  | 2003 |  |        | 2004 | 
|                |  |                   |        |  |      |  |        |      | 
|                |  | (in NOK millions) |       
|Norway          |  |                   | 31,044 |  |      |  | 31,206 |      |  |  | 31,753 | 
|Other Nordic    |  |                   | 3,298  |  |      |  | 4,699  |      |  |  | 9,474  | 
|Western Europe  |  |                   | 1,588  |  |      |  | 1,343  |      |  |  | 1,194  | 
|Central Europe  |  |                   | 5,348  |  |      |  | 5,998  |      |  |  | 6,676  | 
|Eastern Europe  |  |                   | 1,619  |  |      |  | 3,551  |      |  |  | 4,551  | 
|Asia            |  |                   | 4,409  |  |      |  | 4,906  |      |  |  | 6,365  | 
|Other countries |  |                   | 1,520  |  |      |  | 1,418  |      |  |  | 1,289  | 
|                |  |                   |        |  |      |  |        |      | 
|Total revenues  |  |                   | 48,826 |  |      |  | 53,121 |      |  |  | 61,302 | 
|                |  |                   |        |  |      |  |        |      | 

F-26



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Geographic distribution of revenues based on company
location(1)


|                |  |                   |        |  |      |  |        |      |  |  |        | 
|--------------- |  | ----------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                |  | 2002              |        |  | 2003 |  |        | 2004 | 
|                |  |                   |        |  |      |  |        |      | 
|                |  | (in NOK millions) |       
|Norway          |  |                   | 33,224 |  |      |  | 33,589 |      |  |  | 33,993 | 
|Other Nordic    |  |                   | 2,492  |  |      |  | 4,032  |      |  |  | 8,959  | 
|Western Europe  |  |                   | 1,580  |  |      |  | 923    |      |  |  | 638    | 
|Central Europe  |  |                   | 4,966  |  |      |  | 5,720  |      |  |  | 6,359  | 
|Eastern Europe  |  |                   | 1,427  |  |      |  | 3,378  |      |  |  | 4,344  | 
|Asia            |  |                   | 4,295  |  |      |  | 4,706  |      |  |  | 6,153  | 
|Other countries |  |                   | 842    |  |      |  | 773    |      |  |  | 856    | 
|                |  |                   |        |  |      |  |        |      | 
|Total revenues  |  |                   | 48,826 |  |      |  | 53,121 |      |  |  | 61,302 | 
|                |  |                   |        |  |      |  |        |      | 






|    |                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Revenues include gains on disposal of fixed assets and
    operations. Gain on disposal of foreign subsidiaries is recorded
    as relating to the country in which the subsidiary was located.

Assets by geographical location of the company


|                |  |                   |        |  |              |  |        |      |  |  |        |  |  |  |        | 
|--------------- |  | ----------------- | ------ |  | ------------ |  | ------ | ---- |  |  | ------ |  |  |  | ------ | 
|                |  | Tangible assets   |        |  | Total assets | 
|                |  |                   |        |  |              | 
|                |  | 2003              |        |  | 2004         |  |        | 2003 |  |  | 2004   | 
|                |  |                   |        |  |              |  |        |      |  |  |        | 
|                |  | (in NOK millions) |       
|Norway          |  |                   | 23,167 |  |              |  | 21,132 |      |  |  | 31,849 |  |  |  | 21,026 | 
|Other Nordic    |  |                   | 1,361  |  |              |  | 3,508  |      |  |  | 8,524  |  |  |  | 13,346 | 
|Western Europe  |  |                   | 67     |  |              |  | 45     |      |  |  | 13,190 |  |  |  | 13,934 | 
|Central Europe  |  |                   | 2,817  |  |              |  | 2,891  |      |  |  | 12,635 |  |  |  | 13,326 | 
|Eastern Europe  |  |                   | 2,137  |  |              |  | 3,597  |      |  |  | 7,668  |  |  |  | 9,983  | 
|Asia            |  |                   | 5,828  |  |              |  | 6,232  |      |  |  | 11,342 |  |  |  | 15,619 | 
|Other countries |  |                   | 345    |  |              |  | 271    |      |  |  | 902    |  |  |  | 860    | 
|                |  |                   |        |  |              |  |        |      |  |  |        | 
|Total assets    |  |                   | 35,722 |  |              |  | 37,676 |      |  |  | 86,110 |  |  |  | 88,094 | 
|                |  |                   |        |  |              |  |        |      |  |  |        | 

4.   COSTS OF MATERIALS AND TRAFFIC CHARGES


|                                             |  |                   |        |  |      |  |        |      |  |  |        | 
|-------------------------------------------- |  | ----------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                             |  | 2002              |        |  | 2003 |  |        | 2004 | 
|                                             |  |                   |        |  |      |  |        |      | 
|                                             |  | (in NOK millions) |       
|Traffic charges  network capacity           |  |                   | 6,463  |  |      |  | 7,183  |      |  |  | 9,001  | 
|Traffic charges  satellite capacity         |  |                   | 1,527  |  |      |  | 1,343  |      |  |  | 1,191  | 
|Costs of materials etc.                      |  |                   | 4,495  |  |      |  | 4,568  |      |  |  | 5,878  | 
|                                             |  |                   |        |  |      |  |        |      | 
|Total costs of materials and traffic charges |  |                   | 12,485 |  |      |  | 13,094 |      |  |  | 16,070 | 
|                                             |  |                   |        |  |      |  |        |      | 

5.   OWN WORK CAPITALIZED


|                             |  |                   |     |  |      |  |     |      |  |  |     | 
|---------------------------- |  | ----------------- | --- |  | ---- |  | --- | ---- |  |  | --- | 
|                             |  | 2002              |     |  | 2003 |  |     | 2004 | 
|                             |  |                   |     |  |      |  |     |      | 
|                             |  | (in NOK millions) |    
|Costs of materials etc.      |  |                   | 29  |  |      |  | 25  |      |  |  | 161 | 
|Salaries and personnel costs |  |                   | 303 |  |      |  | 301 |      |  |  | 311 | 
|Other operating expenses     |  |                   | 235 |  |      |  | 245 |      |  |  | 85  | 
|                             |  |                   |     |  |      |  |     |      | 
|Total own work capitalized   |  |                   | 567 |  |      |  | 571 |      |  |  | 557 | 
|                             |  |                   |     |  |      |  |     |      | 

F-27



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


6.   SALARIES AND PERSONNEL COSTS


|                                            |  |                   |        |  |      |  |       |      |  |  |        | 
|------------------------------------------- |  | ----------------- | ------ |  | ---- |  | ----- | ---- |  |  | ------ | 
|                                            |  | 2002              |        |  | 2003 |  |       | 2004 | 
|                                            |  |                   |        |  |      |  |       |      | 
|                                            |  | (in NOK millions) |       
|Salaries and holiday pay                    |  |                   | 7,659  |  |      |  | 7,248 |      |  |  | 7,530  | 
|Social security tax                         |  |                   | 1,168  |  |      |  | 1,151 |      |  |  | 1,142  | 
|Pension costs including social security tax |  |                   | 789    |  |      |  | 760   |      |  |  | 932    | 
|Other personnel costs                       |  |                   | 488    |  |      |  | 402   |      |  |  | 417    | 
|                                            |  |                   |        |  |      |  |       |      | 
|Total salaries and personnel costs          |  |                   | 10,104 |  |      |  | 9,561 |      |  |  | 10,021 | 
|                                            |  |                   |        |  |      |  |       |      | 



7.   PENSION OBLIGATIONS
















F-28



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




|                                                                  |  |                   |        |   |      |  |       |  
|----------------------------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ----- | -
|                                                                  |  | 2003              |        |   | 2004 | 
|                                                                  |  |                   |        |   |      | 
|                                                                  |  | (in NOK millions) |       
|Change in benefit obligation                                      |  |                   |        |   |      |  |       |  
|Benefit obligation at the beginning of the year                   |  |                   | 3,929  |   |      |  | 4,735 |  
|Service cost                                                      |  |                   | 455    |   |      |  | 482   |  
|Interest cost                                                     |  |                   | 252    |   |      |  | 263   |  
|Actuarial gains and losses                                        |  |                   | 463    |   |      |  | 56    |  
|Acquisitions and sale                                             |  |                   | (21    | ) |      |  | (37   | )
|Benefits paid                                                     |  |                   | (343   | ) |      |  | (166  | )
|                                                                  |  |                   |        |   |      | 
|Benefit obligations at the end of the year                        |  |                   | 4,735  |   |      |  | 5,333 |  
|                                                                  |  |                   |        |   |      | 
|Change in plan assets                                             |  |                   |        |   |      |  |       |  
|Fair value of plan assets at the beginning of the year            |  |                   | 2,759  |   |      |  | 3,288 |  
|Actual return on plan assets                                      |  |                   | 409    |   |      |  | 239   |  
|Acquisitions and sale                                             |  |                   | (17    | ) |      |  | 20    |  
|Pension contribution                                              |  |                   | 454    |   |      |  | 426   |  
|Benefits paid                                                     |  |                   | (317   | ) |      |  | (162  | )
|                                                                  |  |                   |        |   |      | 
|Fair value of plan assets at the end of the year                  |  |                   | 3,288  |   |      |  | 3,811 |  
|                                                                  |  |                   |        |   |      | 
|Funded status                                                     |  |                   | 1,447  |   |      |  | 1,522 |  
|Unrecognized prior service costs                                  |  |                   | (137   | ) |      |  | (10   | )
|Unrecognized net actuarial losses                                 |  |                   | (1,016 | ) |      |  | (983  | )
|Prepaid social security tax                                       |  |                   | 44     |   |      |  | 74    |  
|                                                                  |  |                   |        |   |      | 
|Total provision for pensions                                      |  |                   | 338    |   |      |  | 603   |  
|                                                                  |  |                   |        |   |      | 
|Total provision for pensions at the beginning of the year         |  |                   | 191    |   |      |  | 338   |  
|                                                                  |  |                   |        |   |      | 
|Acquisitions and sale                                             |  |                   | (2     | ) |      |  | (39   | )
|Net periodic benefit costs                                        |  |                   | 698    |   |      |  | 791   |  
|Pension contribution                                              |  |                   | (454   | ) |      |  | (426  | )
|Benefits paid                                                     |  |                   | (26    | ) |      |  | (4    | )
|Social security tax on pension contribution and benefits paid     |  |                   | (69    | ) |      |  | (57   | )
|                                                                  |  |                   |        |   |      | 
|Total provision for pensions at the end of the year
    (Note 19) |  |                   | 338    |   |      |  | 603   |  
|                                                                  |  |                   |        |   |      | 



|                                                                                                      |  |      |       |  |      |  |       | 
|----------------------------------------------------------------------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | 
|                                                                                                      |  | 2003 |       |  | 2004 | 
|                                                                                                      |  |      |       |  |      | 
|Information for pension plans with an accumulated benefit
    obligation
    in excess of plan assets |  |      |       |  |      |  |       | 
|Projected benefit obligation                                                                          |  |      | 4,281 |  |      |  | 5,224 | 
|Accumulated benefit obligation                                                                        |  |      | 3,367 |  |      |  | 4,187 | 
|Fair value of plan assets                                                                             |  |      | 2,872 |  |      |  | 3,714 | 

F-29



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


|                                                                      |  |      |     |  |      |  |     | 
|--------------------------------------------------------------------- |  | ---- | --- |  | ---- |  | --- | 
|                                                                      |  | 2003 |     |  | 2004 | 
|                                                                      |  |      |     |  |      | 
|Assumptions used to determine benefit obligations at
    December 31, |  |      |     |  |      |  |     | 
|Discount rate in %                                                    |  |      | 5.7 |  |      |  | 5.0 | 
|Rate of compensation increase in %                                    |  |      | 3.4 |  |      |  | 3.0 | 
|Expected increase in the social security base amount in %             |  |      | 3.4 |  |      |  | 3.0 | 
|Annual adjustments to pensions in %                                   |  |      | 3.4 |  |      |  | 3.0 | 

|                                                                                          |  |      |     |  |      |  |     |      |  |  |     | 
|----------------------------------------------------------------------------------------- |  | ---- | --- |  | ---- |  | --- | ---- |  |  | --- | 
|                                                                                          |  | 2002 |     |  | 2003 |  |     | 2004 | 
|                                                                                          |  |      |     |  |      |  |     |      | 
|Assumptions used to determine net periodic benefit costs for
    years ended December 31, |  |      |     |  |      |  |     |      |  |  |     | 
|Discount rate in %                                                                        |  |      | 6.5 |  |      |  | 6.5 |      |  |  | 5.7 | 
|Expected return on plan assets in %                                                       |  |      | 7.5 |  |      |  | 7.5 |      |  |  | 6.1 | 
|Rate of compensation increase in %                                                        |  |      | 3.5 |  |      |  | 3.5 |      |  |  | 3.4 | 
|Expected increase in the social security base amount in %                                 |  |      | 3.0 |  |      |  | 3.0 |      |  |  | 3.4 | 
|Annual adjustments in pensions in %                                                       |  |      | 3.0 |  |      |  | 3.0 |      |  |  | 3.4 | 

|                                                          |  |      |      |   |      |  |      |      |  |  |      |  
|--------------------------------------------------------- |  | ---- | ---- | - | ---- |  | ---- | ---- |  |  | ---- | -
|                                                          |  | 2002 |      |   | 2003 |  |      | 2004 | 
|                                                          |  |      |      |   |      |  |      |      | 
|Components of net periodic benefit cost                   |  |      |      |   |      |  |      |      |  |  |      |  
|Service cost                                              |  |      | 543  |   |      |  | 455  |      |  |  | 482  |  
|Interest cost                                             |  |      | 218  |   |      |  | 252  |      |  |  | 263  |  
|Expected return on plan assets                            |  |      | (185 | ) |      |  | (204 | )    |  |  | (189 | )
|Amortization of prior service costs                       |  |      | 14   |   |      |  | (3   | )    |  |  | 127  |  
|Amortization of actuarial gains and losses                |  |      | 57   |   |      |  | 114  |      |  |  | 13   |  
|Social security tax                                       |  |      | 90   |   |      |  | 84   |      |  |  | 95   |  
|                                                          |  |      |      |   |      |  |      |      | 
|Net periodic benefit costs                                |  |      | 737  |   |      |  | 698  |      |  |  | 791  |  
|                                                          |  |      |      |   |      |  |      |      | 
|Contribution plan costs                                   |  |      | 52   |   |      |  | 62   |      |  |  | 141  |  
|                                                          |  |      |      |   |      |  |      |      | 
|Total pension costs charged to profit (loss) for the year |  |      | 789  |   |      |  | 760  |      |  |  | 932  |  
|                                                          |  |      |      |   |      |  |      |      | 



|                  |  |      |     |   |      |  |     |  
|----------------- |  | ---- | --- | - | ---- |  | --- | -
|Asset category    |  | 2003 |     |   | 2004 | 
|                  |  |      |     |   |      | 
|Bonds             |  |      | 72  | % |      |  | 70  | %
|Equity securities |  |      | 25  | % |      |  | 26  | %
|Other             |  |      | 3   | % |      |  | 4   | %
|                  |  |      |     |   |      | 
|Total             |  |      | 100 | % |      |  | 100 | %
|                  |  |      |     |   |      | 





F-30



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group






|                                  |  |                   |     |  |      |  |     |      |  |  |      |         |  |      |     |  |      |  |     |  |  |  |       | 
|--------------------------------- |  | ----------------- | --- |  | ---- |  | --- | ---- |  |  | ---- | ------- |  | ---- | --- |  | ---- |  | --- |  |  |  | ----- | 
|                                  |  |                   |     |  |      |  |     |      |  |  |      | 2010 to | 
|                                  |  | 2005              |     |  | 2006 |  |     | 2007 |  |  | 2008 |         |  | 2009 |     |  | 2014 | 
|                                  |  |                   |     |  |      |  |     |      |  |  |      |         |  |      |     |  |      | 
|                                  |  | (in NOK millions) |    
|Expected pension benefit payments |  |                   | 129 |  |      |  | 135 |      |  |  | 116  |         |  |      | 116 |  |      |  | 135 |  |  |  | 1,026 | 



8.   OTHER OPERATING EXPENSES


|                                                    |  |                   |        |  |      |  |        |      |  |  |        | 
|--------------------------------------------------- |  | ----------------- | ------ |  | ---- |  | ------ | ---- |  |  | ------ | 
|                                                    |  | 2002              |        |  | 2003 |  |        | 2004 | 
|                                                    |  |                   |        |  |      |  |        |      | 
|                                                    |  | (in NOK millions) |       
|Cost of premises, vehicles, office equipment etc.   |  |                   | 2,196  |  |      |  | 1,876  |      |  |  | 1,863  | 
|Operation and maintenance                           |  |                   | 3,418  |  |      |  | 3,448  |      |  |  | 3,632  | 
|Travel and travel allowances                        |  |                   | 560    |  |      |  | 474    |      |  |  | 482    | 
|Postage freight, distribution and telecommunication |  |                   | 327    |  |      |  | 281    |      |  |  | 296    | 
|Concession fees                                     |  |                   | 425    |  |      |  | 505    |      |  |  | 582    | 
|Marketing and sales commission                      |  |                   | 2,069  |  |      |  | 2,583  |      |  |  | 3,838  | 
|Advertising                                         |  |                   | 916    |  |      |  | 1,187  |      |  |  | 1,416  | 
|Bad debt(1)                                         |  |                   | 337    |  |      |  | 209    |      |  |  | 248    | 
|Consultancy fees and external personnel(2)          |  |                   | 1,394  |  |      |  | 1,327  |      |  |  | 1,350  | 
|Workforce reductions and loss contracts(3)          |  |                   | 982    |  |      |  | 287    |      |  |  | 898    | 
|Other                                               |  |                   | 564    |  |      |  | 329    |      |  |  | 268    | 
|                                                    |  |                   |        |  |      |  |        |      | 
|Total other operating expenses                      |  |                   | 13,188 |  |      |  | 12,506 |      |  |  | 14,873 | 
|                                                    |  |                   |        |  |      |  |        |      | 








|    |                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Includes fees for consultants and external personnel, which
    perform services that are sold to external customers or
    capitalized on fixed assets.



9.   BAD DEBT


|                                            |  |                   |      |   |      |  |     |      |  |  |      |  
|------------------------------------------- |  | ----------------- | ---- | - | ---- |  | --- | ---- |  |  | ---- | -
|                                            |  | 2002              |      |   | 2003 |  |     | 2004 | 
|                                            |  |                   |      |   |      |  |     |      | 
|                                            |  | (in NOK millions) |     
|Provisions as of January 1                  |  |                   | 543  |   |      |  | 643 |      |  |  | 592  |  
|Provisions as of December 31,               |  |                   | 643  |   |      |  | 592 |      |  |  | 720  |  
|                                            |  |                   |      |   |      |  |     |      | 
|Change in provisions for bad debt           |  |                   | 100  |   |      |  | (51 | )    |  |  | 129  |  
|Other changes in provisions for bad debt(1) |  |                   | (119 | ) |      |  | 36  |      |  |  | (111 | )
|Realized losses for the year                |  |                   | 418  |   |      |  | 309 |      |  |  | 297  |  
|Recovered amounts previously written off    |  |                   | (62  | ) |      |  | (85 | )    |  |  | (67  | )
|                                            |  |                   |      |   |      |  |     |      | 
|Total bad debt                              |  |                   | 337  |   |      |  | 209 |      |  |  | 248  |  
|                                            |  |                   |      |   |      |  |     |      | 






|    |                                                                                            
|--- | -------------------------------------------------------------------------------------------
|(1) | Includes effects of disposal and acquisition of businesses and
    translation adjustments.

F-31



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


10. RESEARCH AND DEVELOPMENT COSTS




11. WORKFORCE REDUCTIONS, LOSS CONTRACTS AND LEGAL
DISPUTES








|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              |  |     |   |  |  |       | 
|--------------------------------------------- |  | ----------------- | --- |  | --------------- |  | --------- | ----------- |  |  | -------- | ---- |  | ------------- | ----------- | - | ------------ |  | --- | - |  |  | ----- | 
|                                              |  | Provisions in     |     |  |                 |  | 2002      |             |  |  |          |      |  | Provisions in |            
|                                              |  | the balance       |     |  |                 |  | additions |             |  |  |          | 2002 |  |               | the balance |  
|                                              |  | sheet             |     |  | 2002            |  |           | recorded    |  |  | 2002     |      |  | amounts       |             |   | sheet        | 
|                                              |  | December 31,      |     |  | additions in    |  |           | directly in |  |  | amounts  |      |  | taken to      |             |   | December 31, | 
|                                              |  | 2001              |     |  | profit and loss |  |           | balance     |  |  | utilized |      |  | income        |             |   | 2002         | 
|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|                                              |  | (in NOK millions) |    
|Workforce reductions                          |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              |  |     |   |  |  |       | 
|Mobile operations                             |  |                   | 12  |  |                 |  | 120       |             |  |  |         |      |  |               | (21         | ) |              |  |    |   |  |  | 111   | 
|Fixed                                         |  |                   | 35  |  |                 |  | 275       |             |  |  | 22       |      |  |               | (56         | ) |              |  | (1  | ) |  |  | 275   | 
|Broadcast                                     |  |                   |    |  |                 |  | 46        |             |  |  |         |      |  |               | (2          | ) |              |  |    |   |  |  | 44    | 
|EDB Business Partner                          |  |                   | 38  |  |                 |  | 105       |             |  |  |         |      |  |               | (80         | ) |              |  |    |   |  |  | 63    | 
|Other business units                          |  |                   | 27  |  |                 |  | 88        |             |  |  |         |      |  |               | (27         | ) |              |  |    |   |  |  | 88    | 
|Corporate functions and group activities      |  |                   |    |  |                 |  | 82        |             |  |  |         |      |  |               |            |   |              |  |    |   |  |  | 82    | 
|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Total workforce reductions                    |  |                   | 112 |  |                 |  | 716       |             |  |  | 22       |      |  |               | (186        | ) |              |  | (1  | ) |  |  | 663   | 
|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Loss contracts                                |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              |  |     |   |  |  |       | 
|Mobile operations                             |  |                   | 8   |  |                 |  |          |             |  |  |         |      |  |               | (8          | ) |              |  |    |   |  |  |      | 
|Fixed                                         |  |                   | 22  |  |                 |  | 37        |             |  |  | 39       |      |  |               | (36         | ) |              |  |    |   |  |  | 62    | 
|Broadcast                                     |  |                   | 27  |  |                 |  | 19        |             |  |  |         |      |  |               | (12         | ) |              |  |    |   |  |  | 34    | 
|EDB Business Partner                          |  |                   | 125 |  |                 |  | 6         |             |  |  |         |      |  |               | (94         | ) |              |  |    |   |  |  | 37    | 
|Other business units                          |  |                   | 125 |  |                 |  | 7         |             |  |  |         |      |  |               | (40         | ) |              |  | (39 | ) |  |  | 53    | 
|Corporate functions and group activities      |  |                   | 70  |  |                 |  | 237       |             |  |  |         |      |  |               | (57         | ) |              |  |    |   |  |  | 250   | 
|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Total loss contracts                          |  |                   | 377 |  |                 |  | 306       |             |  |  | 39       |      |  |               | (247        | ) |              |  | (39 | ) |  |  | 436   | 
|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Total workforce reductions and loss contracts |  |                   | 489 |  |                 |  | 1,022     |             |  |  | 61       |      |  |               | (433        | ) |              |  | (40 | ) |  |  | 1,099 | 
|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Legal disputes(1)                             |  |                   | 212 |  |                 |  | 8         |             |  |  | (1       | )    |  |               | (19         | ) |              |  | (59 | ) |  |  | 141   | 

F-32



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


|                                              |  |                   |       |  |                 |  |           |             |  |  |          |      |  |               |             |   |              |  |      |   |  |  |     | 
|--------------------------------------------- |  | ----------------- | ----- |  | --------------- |  | --------- | ----------- |  |  | -------- | ---- |  | ------------- | ----------- | - | ------------ |  | ---- | - |  |  | --- | 
|                                              |  | Provisions in     |       |  |                 |  | 2003      |             |  |  |          |      |  | Provisions in |            
|                                              |  | the balance       |       |  |                 |  | additions |             |  |  |          | 2003 |  |               | the balance |  
|                                              |  | sheet             |       |  | 2003            |  |           | recorded    |  |  | 2003     |      |  | amounts       |             |   | sheet        | 
|                                              |  | December 31,      |       |  | additions in    |  |           | directly in |  |  | amounts  |      |  | taken to      |             |   | December 31, | 
|                                              |  | 2002              |       |  | profit and loss |  |           | balance     |  |  | utilized |      |  | income        |             |   | 2003         | 
|                                              |  |                   |       |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|                                              |  | (in NOK millions) |      
|Workforce reductions                          |  |                   |       |  |                 |  |           |             |  |  |          |      |  |               |             |   |              |  |      |   |  |  |     | 
|Mobile operations                             |  |                   | 111   |  |                 |  |          |             |  |  |         |      |  |               | (80         | ) |              |  | (21  | ) |  |  | 10  | 
|Fixed                                         |  |                   | 275   |  |                 |  | 56        |             |  |  | 6        |      |  |               | (175        | ) |              |  | (52  | ) |  |  | 110 | 
|Broadcast                                     |  |                   | 44    |  |                 |  | 18        |             |  |  | 3        |      |  |               | (43         | ) |              |  | (3   | ) |  |  | 19  | 
|EDB Business Partner                          |  |                   | 63    |  |                 |  | 91        |             |  |  | 4        |      |  |               | (92         | ) |              |  | (4   | ) |  |  | 62  | 
|Other business units                          |  |                   | 88    |  |                 |  | 64        |             |  |  | 1        |      |  |               | (105        | ) |              |  | (2   | ) |  |  | 46  | 
|Corporate functions and group activities      |  |                   | 82    |  |                 |  | 8         |             |  |  |         |      |  |               | (40         | ) |              |  | (13  | ) |  |  | 37  | 
|                                              |  |                   |       |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Total workforce reductions                    |  |                   | 663   |  |                 |  | 237       |             |  |  | 14       |      |  |               | (535        | ) |              |  | (95  | ) |  |  | 284 | 
|                                              |  |                   |       |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Loss contracts                                |  |                   |       |  |                 |  |           |             |  |  |          |      |  |               |             |   |              |  |      |   |  |  |     | 
|Fixed                                         |  |                   | 62    |  |                 |  | 16        |             |  |  | 3        |      |  |               | (48         | ) |              |  | (14  | ) |  |  | 19  | 
|Broadcast                                     |  |                   | 34    |  |                 |  |          |             |  |  |         |      |  |               | (13         | ) |              |  | (8   | ) |  |  | 13  | 
|EDB Business Partner                          |  |                   | 37    |  |                 |  | 138       |             |  |  |         |      |  |               | (32         | ) |              |  | (2   | ) |  |  | 141 | 
|Other business units                          |  |                   | 53    |  |                 |  | 9         |             |  |  | 6        |      |  |               | (35         | ) |              |  | (33  | ) |  |  |    | 
|Corporate functions and group activities      |  |                   | 250   |  |                 |  | 39        |             |  |  | 7        |      |  |               | (115        | ) |              |  |     |   |  |  | 181 | 
|                                              |  |                   |       |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Total loss contracts                          |  |                   | 436   |  |                 |  | 202       |             |  |  | 16       |      |  |               | (243        | ) |              |  | (57  | ) |  |  | 354 | 
|                                              |  |                   |       |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Total workforce reductions and loss contracts |  |                   | 1,099 |  |                 |  | 439       |             |  |  | 30       |      |  |               | (778        | ) |              |  | (152 | ) |  |  | 638 | 
|                                              |  |                   |       |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Legal disputes(1)                             |  |                   | 141   |  |                 |  | 35        |             |  |  |         |      |  |               | (69         | ) |              |  | (77  | ) |  |  | 30  | 

F-33



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              |  |     |   |  |  |     | 
|--------------------------------------------- |  | ----------------- | --- |  | --------------- |  | --------- | ----------- |  |  | -------- | ---- |  | ------------- | ----------- | - | ------------ |  | --- | - |  |  | --- | 
|                                              |  | Provisions in     |     |  |                 |  | 2004      |             |  |  |          |      |  | Provisions in |            
|                                              |  | the balance       |     |  |                 |  | additions |             |  |  |          | 2004 |  |               | the balance |  
|                                              |  | sheet             |     |  | 2004            |  |           | recorded    |  |  | 2004     |      |  | amounts       |             |   | sheet        | 
|                                              |  | December 31,      |     |  | additions in    |  |           | directly in |  |  | amounts  |      |  | taken to      |             |   | December 31, | 
|                                              |  | 2003              |     |  | profit and loss |  |           | balance     |  |  | utilized |      |  | income        |             |   | 2004         | 
|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|                                              |  | (in NOK millions) |    
|Workforce reductions                          |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              |  |     |   |  |  |     | 
|Mobile operations                             |  |                   | 10  |  |                 |  | 66        |             |  |  |         |      |  |               | (35         | ) |              |  | (5  | ) |  |  | 36  | 
|Fixed                                         |  |                   | 110 |  |                 |  | 61        |             |  |  |         |      |  |               | (76         | ) |              |  |    |   |  |  | 95  | 
|Broadcast                                     |  |                   | 19  |  |                 |  | 5         |             |  |  |         |      |  |               | (20         | ) |              |  |    |   |  |  | 4   | 
|EDB Business Partner                          |  |                   | 62  |  |                 |  | 42        |             |  |  | 96       |      |  |               | (95         | ) |              |  | (5  | ) |  |  | 100 | 
|Other business units                          |  |                   | 46  |  |                 |  | 28        |             |  |  |         |      |  |               | (37         | ) |              |  |    |   |  |  | 37  | 
|Corporate functions and group activities      |  |                   | 37  |  |                 |  | 106       |             |  |  | (84      | )    |  |               | (30         | ) |              |  | (1  | ) |  |  | 28  | 
|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Total workforce reductions                    |  |                   | 284 |  |                 |  | 308       |             |  |  | 12       |      |  |               | (293        | ) |              |  | (11 | ) |  |  | 300 | 
|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Loss contracts                                |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              |  |     |   |  |  |     | 
|Fixed                                         |  |                   |    |  |                 |  | 569       |             |  |  | (3       | )    |  |               | (275        | ) |              |  |    |   |  |  | 291 | 
|Broadcast                                     |  |                   | 19  |  |                 |  | 25        |             |  |  | (10      | )    |  |               | (21         | ) |              |  |    |   |  |  | 13  | 
|EDB Business Partner                          |  |                   | 13  |  |                 |  |          |             |  |  |         |      |  |               | (4          | ) |              |  |    |   |  |  | 9   | 
|Other business units                          |  |                   | 141 |  |                 |  | 1         |             |  |  | 86       |      |  |               | (119        | ) |              |  | (5  | ) |  |  | 104 | 
|Corporate functions and group activities      |  |                   | 181 |  |                 |  | 21        |             |  |  | (61      | )    |  |               | (4          | ) |              |  | (10 | ) |  |  | 127 | 
|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Total loss contracts                          |  |                   | 354 |  |                 |  | 616       |             |  |  | 12       |      |  |               | (423        | ) |              |  | (15 | ) |  |  | 544 | 
|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Total workforce reductions and loss contracts |  |                   | 638 |  |                 |  | 924       |             |  |  | 24       |      |  |               | (716        | ) |              |  | (26 | ) |  |  | 844 | 
|                                              |  |                   |     |  |                 |  |           |             |  |  |          |      |  |               |             |   |              | 
|Legal disputes(1)                             |  |                   | 30  |  |                 |  | 126       |             |  |  |         |      |  |               | (6          | ) |              |  | (2  | ) |  |  | 148 | 






|    |                                                                         
|--- | ------------------------------------------------------------------------
|(1) | Does not include legal disputes relating to tax issues, see
    note 13.



|                     |  |           |     |  |      |  |     | 
|-------------------- |  | --------- | --- |  | ---- |  | --- | 
|                     |  | 2003      |     |  | 2004 | 
|                     |  |           |     |  |      | 
|                     |  | (in NOK   |    
|                     |  | millions) |    
|Short term (note 22) |  |           | 432 |  |      |  | 762 | 
|Long term (note 19)  |  |           | 236 |  |      |  | 230 | 
|                     |  |           |     |  |      | 
|Total                |  |           | 668 |  |      |  | 992 | 
|                     |  |           |     |  |      | 



F-34



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




12. FINANCIAL INCOME AND EXPENSES


|                                                            |  |                   |        |   |      |  |        |      |  |  |        |  
|----------------------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                            |  | 2002              |        |   | 2003 |  |        | 2004 | 
|                                                            |  |                   |        |   |      |  |        |      | 
|                                                            |  | (in NOK millions) |       
|Interest income                                             |  |                   | 476    |   |      |  | 484    |      |  |  | 394    |  
|Other financial income                                      |  |                   | 91     |   |      |  | 102    |      |  |  | 102    |  
|                                                            |  |                   |        |   |      |  |        |      | 
|Total financial income                                      |  |                   | 567    |   |      |  | 586    |      |  |  | 496    |  
|                                                            |  |                   |        |   |      |  |        |      | 
|Interest expenses                                           |  |                   | (1,901 | ) |      |  | (2,033 | )    |  |  | (1,585 | )
|Other financial expenses                                    |  |                   | (96    | ) |      |  | (45    | )    |  |  | (66    | )
|Capitalized interest                                        |  |                   | 164    |   |      |  | 55     |      |  |  | 117    |  
|                                                            |  |                   |        |   |      |  |        |      | 
|Total financial expenses                                    |  |                   | (1,833 | ) |      |  | (2,023 | )    |  |  | (1,534 | )
|                                                            |  |                   |        |   |      |  |        |      | 
|Net foreign currency (loss)                                 |  |                   | (311   | ) |      |  | (1     | )    |  |  | (87    | )
|Gains on disposal of financial assets                       |  |                   | 59     |   |      |  | 95     |      |  |  | 2,630  |  
|Losses on disposal of financial assets                      |  |                   | (31    | ) |      |  | (91    | )    |  |  | (17    | )
|Write-downs and reversal of write-downs of financial assets |  |                   | (817   | ) |      |  | 69     |      |  |  | 38     |  
|                                                            |  |                   |        |   |      |  |        |      | 
|Net gains (losses and write-downs) of financial assets      |  |                   | (789   | ) |      |  | 73     |      |  |  | 2,651  |  
|                                                            |  |                   |        |   |      |  |        |      | 
|Net financial items                                         |  |                   | (2,366 | ) |      |  | (1,365 | )    |  |  | 1,526  |  
|                                                            |  |                   |        |   |      |  |        |      | 



F-35



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


13. TAXES


|                                                        |  |                   |        |   |      |  |       |      |  |  |       |  
|------------------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                                        |  | 2002              |        |   | 2003 |  |       | 2004 | 
|                                                        |  |                   |        |   |      |  |       |      | 
|                                                        |  | (in NOK millions) |       
|Profit (loss) before taxes and minority interests       |  |                   |        |   |      |  |       |      |  |  |       |  
|Norway                                                  |  |                   | (1,150 | ) |      |  | 3,634 |      |  |  | 8,172 |  
|Outside Norway(1)                                       |  |                   | (3,986 | ) |      |  | 3,792 |      |  |  | 674   |  
|                                                        |  |                   |        |   |      |  |       |      | 
|Total profit (loss) before taxes and minority interests |  |                   | (5,136 | ) |      |  | 7,426 |      |  |  | 8,846 |  
|                                                        |  |                   |        |   |      |  |       |      | 
|Current taxes                                           |  |                   |        |   |      |  |       |      |  |  |       |  
|Norway                                                  |  |                   | 2,769  |   |      |  | 11    |      |  |  | 4     |  
|Outside Norway                                          |  |                   | 1,478  |   |      |  | 761   |      |  |  | 1,128 |  
|                                                        |  |                   |        |   |      |  |       |      | 
|Total current taxes                                     |  |                   | 4,247  |   |      |  | 772   |      |  |  | 1,132 |  
|                                                        |  |                   |        |   |      |  |       |      | 
|Deferred taxes                                          |  |                   |        |   |      |  |       |      |  |  |       |  
|Norway                                                  |  |                   | (4,005 | ) |      |  | 916   |      |  |  | 1,223 |  
|Outside Norway                                          |  |                   | (722   | ) |      |  | 688   |      |  |  | (111  | )
|                                                        |  |                   |        |   |      |  |       |      | 
|Total deferred taxes                                    |  |                   | (4,727 | ) |      |  | 1,604 |      |  |  | 1,112 |  
|                                                        |  |                   |        |   |      |  |       |      | 
|Total income tax expense (income)                       |  |                   | (480   | ) |      |  | 2,376 |      |  |  | 2,244 |  
|                                                        |  |                   |        |   |      |  |       |      | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes associated companies and subsidiaries outside Norway.
    Gains and losses from disposal of companies are related to the
    countries in which the disposed companies were located. The
    gains and losses are, however, to a large extent liable to tax
    in Norway. In 2004 new tax regulations were introduced in Norway
    related to gains and losses on realization of shareholdings, as
    explained below.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Effective tax rate


|                                                                                              |  |                   |        |      |      |  |       |      |  |  |       |  
|--------------------------------------------------------------------------------------------- |  | ----------------- | ------ | ---- | ---- |  | ----- | ---- |  |  | ----- | -
|                                                                                              |  | 2002              |        |      | 2003 |  |       | 2004 | 
|                                                                                              |  |                   |        |      |      |  |       |      | 
|                                                                                              |  | (in NOK millions) |       
|Expected income taxes according to corporate income tax rate
    (28%)(1)                     |  |                   | (1,438 | )    |      |  | 2,079 |      |  |  | 2,477 |  
|Tax rates outside Norway different from 28%                                                   |  |                   | (15    | )    |      |  | 3     |      |  |  | (34   | )
|Associated companies                                                                          |  |                   | 808    |      |      |  | 177   |      |  |  | (192  | )
|Net loss in subsidiaries outside Norway                                                       |  |                   | 188    |      |      |  | 145   |      |  |  | 181   |  
|Net income in subsidiaries outside Norway  Previously not
    recognized deferred tax assets |  |                   |       |      |      |  | (25   | )    |  |  | (30   | )
|Non-taxable income                                                                            |  |                   | (21    | )    |      |  | (99   | )    |  |  | (94   | )
|Non-deductible expenses                                                                       |  |                   | 106    |      |      |  | 207   |      |  |  | 190   |  
|Amortizations and write-downs of goodwill that are not tax
    deductible                     |  |                   | 850    |      |      |  | 148   |      |  |  | 813   |  
|Previously not recognized deferred tax assets                                                 |  |                   | (3,952 | )    |      |  | (797  | )    |  |  | (874  | )
|Non-taxable gain on sale of shares                                                            |  |                   |       |      |      |  |      |      |  |  | (152  | )
|Changes in tax rules in Norway  previously recognized tax
    assets not realized            |  |                   |        |      |      |  |       |      |  |  | 257   |  
|Deferred taxes on retained earnings in subsidiaries and
    associated companies              |  |                   | 16     |      |      |  | 705   |      |  |  | (375  | )
|Other tax assets not recognized current year                                                  |  |                   | 73     |      |      |  | 52    |      |  |  | 39    |  
|Previously recognized tax assets  not realized or
    valuation allowance current year       |  |                   |       |      |      |  | 50    |      |  |  | 27    |  
|Tax claim related to Sonofon                                                                  |  |                   | 2,409  |      |      |  |      |      |  |  |      |  
|Court case in Greece                                                                          |  |                   | 414    |      |      |  | (200  | )    |  |  |      |  
|Other                                                                                         |  |                   | 82     |      |      |  | (69   | )    |  |  | 11    |  
|                                                                                              |  |                   |        |      |      |  |       |      | 
|Income tax expense (income)                                                                   |  |                   | (480   | )(2) |      |  | 2,376 |      |  |  | 2,244 |  
|                                                                                              |  |                   |        |      |      |  |       |      | 
|Effective tax rate in %                                                                       |  |                   | N/A    | (2)  |      |  | 32.0  |      |  |  | 25.4  |  






|    |                                                                                                 
|--- | ------------------------------------------------------------------------------------------------
|(1) | Norwegian nominal corporate income tax rate is 28%.                                             
|   
|(2) | There was a loss before taxes and minority interests in 2002,
    and a tax income was recorded.



Comments to selected line items in the preceding table




F-37



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group
















F-38



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group










Tax losses carried forward




|                                                           |  |                   |       |  |        |  |       |              |  |  |          |  |  |       |     |  |       |  |     |  |  |  |        | 
|---------------------------------------------------------- |  | ----------------- | ----- |  | ------ |  | ----- | ------------ |  |  | -------- |  |  | ----- | --- |  | ----- |  | --- |  |  |  | ------ | 
|                                                           |  | Norway            |       |  | Sweden |  |       | Other Nordic |  |  | Malaysia |  |  | Other |     |  | Total | 
|                                                           |  |                   |       |  |        |  |       |              |  |  |          |  |  |       |     |  |       | 
|                                                           |  | (in NOK millions) |      
|2005                                                       |  |                   |      |  |        |  |      |              |  |  |         |  |  |       |    |  |       |  | 101 |  |  |  | 101    | 
|2006                                                       |  |                   |      |  |        |  |      |              |  |  |         |  |  |       |    |  |       |  | 83  |  |  |  | 83     | 
|2007                                                       |  |                   |      |  |        |  |      |              |  |  | 91       |  |  |       |    |  |       |  | 19  |  |  |  | 110    | 
|2008                                                       |  |                   |      |  |        |  |      |              |  |  | 27       |  |  |       |    |  |       |  | 16  |  |  |  | 43     | 
|2009                                                       |  |                   |      |  |        |  |      |              |  |  | 29       |  |  |       |    |  |       |  | 24  |  |  |  | 53     | 
|2010 and later                                             |  |                   | 5,389 |  |        |  |      |              |  |  | 106      |  |  |       |    |  |       |  | 30  |  |  |  | 5,525  | 
|Not time-limited                                           |  |                   |       |  |        |  | 3,714 |              |  |  | 266      |  |  |       | 360 |  |       |  | 619 |  |  |  | 4,959  | 
|                                                           |  |                   |       |  |        |  |       |              |  |  |          |  |  |       |     |  |       | 
|Total tax losses carried forward                           |  |                   | 5,389 |  |        |  | 3,714 |              |  |  | 519      |  |  |       | 360 |  |       |  | 892 |  |  |  | 10,874 | 
|Valuation allowance                                        |  |                   | 155   |  |        |  | 3,714 |              |  |  | 322      |  |  |       |    |  |       |  | 866 |  |  |  | 5,057  | 
|                                                           |  |                   |       |  |        |  |       |              |  |  |          |  |  |       |     |  |       | 
|Tax losses on which deferred tax asset has been recognized |  |                   | 5,234 |  |        |  |      |              |  |  | 197      |  |  |       | 360 |  |       |  | 26  |  |  |  | 5,817  | 
|                                                           |  |                   |       |  |        |  |       |              |  |  |          |  |  |       |     |  |       | 

F-39



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




Deferred taxes as of December 31


|                                                                            |  |                   |        |   |             |           |        |           |  |  |        |   |           |             |        |   |           |  |        |   |  |  |        |  
|--------------------------------------------------------------------------- |  | ----------------- | ------ | - | ----------- | --------- | ------ | --------- |  |  | ------ | - | --------- | ----------- | ------ | - | --------- |  | ------ | - |  |  | ------ | -
|                                                                            |  |                   |        |   |             | Valuation |        |           |  |  |        |   | Valuation |            
|                                                                            |  | Assets            |        |   | Liabilities |           |        | allowance |  |  | Assets |   |           | Liabilities |        |   | allowance | 
|                                                                            |  | 2003              |        |   | 2003        |           |        | 2003      |  |  | 2004   |   |           | 2004        |        |   | 2004      | 
|                                                                            |  |                   |        |   |             |           |        |           |  |  |        |   |           |             |        |   |           | 
|                                                                            |  | (in NOK millions) |       
|Tangible and intangible assets                                              |  |                   | 2,658  |   |             |           | (1,367 | )         |  |  | (484   | ) |           |             | 2,486  |   |           |  | (2,631 | ) |  |  | (216   | )
|Associated companies                                                        |  |                   | 5,122  |   |             |           | (30    | )         |  |  | (5,089 | ) |           |             |       |   |           |  |       |   |  |  |       |  
|Undistributed earnings in foreign subsidiaries and associated
    companies |  |                   |       |   |             |           | (831   | )         |  |  |       |   |           |             |       |   |           |  | (373   | ) |  |  |       |  
|Other long-term items                                                       |  |                   | 1,237  |   |             |           | (542   | )         |  |  | (6     | ) |           |             | 485    |   |           |  | (695   | ) |  |  | (16    | )
|                                                                            |  |                   |        |   |             |           |        |           |  |  |        |   |           |             |        |   |           | 
|Total long-term assets and liabilities                                      |  |                   | 9,017  |   |             |           | (2,770 | )         |  |  | (5,579 | ) |           |             | 2,971  |   |           |  | (3,699 | ) |  |  | (232   | )
|Total current assets and liabilities                                        |  |                   | 417    |   |             |           | (156   | )         |  |  | (43    | ) |           |             | 330    |   |           |  | (55    | ) |  |  | (12    | )
|Tax losses carried forward                                                  |  |                   | 3,426  |   |             |           |       |           |  |  | (1,278 | ) |           |             | 3,047  |   |           |  |        |   |  |  | (1,408 | )
|                                                                            |  |                   |        |   |             |           |        |           |  |  |        |   |           |             |        |   |           | 
|Deferred taxes                                                              |  |                   | 12,860 |   |             |           | (2,926 | )         |  |  | (6,900 | ) |           |             | 6,348  |   |           |  | (3,754 | ) |  |  | (1,653 | )
|Net deferred tax assets                                                     |  |                   | 3,034  |   |             |           |       |           |  |  |       |   |           |             | 942    |   |           |  |       |   |  |  |       |  
|                                                                            |  |                   |        |   |             |           |        |           |  |  |        |   |           |             |        |   |           | 
|Of which deferred tax assets                                                |  |                   | 3,850  |   |             |           |       |           |  |  |       |   |           |             | 2,999  |   |           |  |       |   |  |  |       |  
|Of which deferred tax liabilities (note 19)                                 |  |                   | (816   | ) |             |           |       |           |  |  |       |   |           |             | (2,057 | ) |           |  |       |   |  |  |       |  





Changes in valuation allowances


|                                                                         |  |                   |       |   |      |  |        |  
|------------------------------------------------------------------------ |  | ----------------- | ----- | - | ---- |  | ------ | -
|                                                                         |  | 2003              |       |   | 2004 | 
|                                                                         |  |                   |       |   |      | 
|                                                                         |  | (in NOK millions) |      
|Balance at the beginning of the year                                     |  |                   | 7,088 |   |      |  | 6,900  |  
|Changes in opening balance of valuation allowances                       |  |                   | (554  | ) |      |  | (752   | )
|Net losses from associated companies and subsidiaries outside
    Norway |  |                   | 347   |   |      |  | 151    |  
|Associated companies  changes in tax rules in Norway                    |  |                   |      |   |      |  | (4,605 | )
|Other not recognized tax assets this year                                |  |                   | 52    |   |      |  | 39     |  
|Acquisitions and divestitures                                            |  |                   | 3     |   |      |  | (55    | )
|Currency adjustments                                                     |  |                   | (36   | ) |      |  | (25    | )
|                                                                         |  |                   |       |   |      | 
|Balance at the end of the year                                           |  |                   | 6,900 |   |      |  | 1,653  |  
|                                                                         |  |                   |       |   |      | 

F-40



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group






14. AMORTIZATION, DEPRECIATION AND WRITE-DOWNS


Specification of amortization, depreciation and
write-downs:


|                              |  |                   |       |  |          |  |       |                         |  |  |       |  |  |      |       |  |      |  |     |      |  |  |       |  |  |      |       |  |  |  |       |  |  |  |       | 
|----------------------------- |  | ----------------- | ----- |  | -------- |  | ----- | ----------------------- |  |  | ----- |  |  | ---- | ----- |  | ---- |  | --- | ---- |  |  | ----- |  |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|                              |  | Tangible assets   |       |  | Goodwill |  |       | Other intangible assets | 
|                              |  |                   |       |  |          |  |       |                         | 
|                              |  | 2002              |       |  | 2003     |  |       | 2004                    |  |  | 2002  |  |  | 2003 |       |  | 2004 |  |     | 2002 |  |  | 2003  |  |  | 2004 |      
|                              |  |                   |       |  |          |  |       |                         |  |  |       |  |  |      |       |  |      |  |     |      |  |  |       |  |  |      |      
|                              |  | (in NOK millions) |      
|Amortization and depreciation |  |                   | 7,624 |  |          |  | 7,986 |                         |  |  | 7,753 |  |  |      | 1,002 |  |      |  | 686 |      |  |  | 939   |  |  |      | 1,610 |  |  |  | 1,925 |  |  |  | 2,931 | 
|Write-downs                   |  |                   | 424   |  |          |  | 104   |                         |  |  | 282   |  |  |      | 2,632 |  |      |  | 16  |      |  |  | 2,194 |  |  |      | 497   |  |  |  | 25    |  |  |  | 120   | 
|                              |  |                   |       |  |          |  |       |                         |  |  |       |  |  |      |       |  |      |  |     |      |  |  |       |  |  |      |      
|Total                         |  |                   | 8,048 |  |          |  | 8,090 |                         |  |  | 8,035 |  |  |      | 3,634 |  |      |  | 702 |      |  |  | 3,133 |  |  |      | 2,107 |  |  |  | 1,950 |  |  |  | 3,051 | 
|                              |  |                   |       |  |          |  |       |                         |  |  |       |  |  |      |       |  |      |  |     |      |  |  |       |  |  |      |      

Specification of write-downs


|                        |  |                   |     |       |          |  |            |        |       |          |        |  |  |          |            |  |        |          |    |        |  |  |            |  |  |        |     |  |  |  |       |  |  |  |     | 
|----------------------- |  | ----------------- | --- | ----- | -------- |  | ---------- | ------ | ----- | -------- | ------ |  |  | -------- | ---------- |  | ------ | -------- | -- | ------ |  |  | ---------- |  |  | ------ | --- |  |  |  | ----- |  |  |  | --- | 
|                        |  | 2002              |     |       | 2003     |  |            | 2004   |      
|                        |  |                   |     |       |          |  |            |        |      
|                        |  |                   |     | Other |          |  |            |        | Other |          |        |  |  | Other    |           
|                        |  | Tangible          |     |       |          |  | intangible |        |       | Tangible |        |  |  |          | intangible |  |        | Tangible |    |        |  |  | intangible | 
|                        |  | assets            |     |       | Goodwill |  |            | assets |       |          | assets |  |  | Goodwill |            |  | assets |          |    | assets |  |  | Goodwill   |  |  | assets |    
|                        |  |                   |     |       |          |  |            |        |       |          |        |  |  |          |            |  |        |          |    |        |  |  |            |  |  |        |    
|                        |  | (in NOK millions) |    
|Total mobile operations |  |                   | 33  |       |          |  | 2,138      |        |       |          | 118    |  |  |          | 33         |  |        |          |   |        |  |  | 2          |  |  |        | 251 |  |  |  | 2,190 |  |  |  | 78  | 
|Fixed                   |  |                   | 340 |       |          |  | 160        |        |       |          |       |  |  |          | 19         |  |        |          |   |        |  |  | 5          |  |  |        | 13  |  |  |  | 2     |  |  |  |    | 
|Broadcast               |  |                   | 47  |       |          |  |           |        |       |          | 83     |  |  |          | 15         |  |        |          |   |        |  |  | 3          |  |  |        | 13  |  |  |  |      |  |  |  | 7   | 
|EDB Business Partner    |  |                   | 8   |       |          |  | 356        |        |       |          |       |  |  |          | 12         |  |        |          | 16 |        |  |  |           |  |  |        |    |  |  |  |      |  |  |  |    | 
|Others                  |  |                   | (4  | )     |          |  | (22        | )      |       |          | 296    |  |  |          | 25         |  |        |          |   |        |  |  | 15         |  |  |        | 5   |  |  |  | 2     |  |  |  | 35  | 
|                        |  |                   |     |       |          |  |            |        |       |          |        |  |  |          |            |  |        |          |    |        |  |  |            |  |  |        |    
|Total                   |  |                   | 424 |       |          |  | 2,632      |        |       |          | 497    |  |  |          | 104        |  |        |          | 16 |        |  |  | 25         |  |  |        | 282 |  |  |  | 2,194 |  |  |  | 120 | 
|                        |  |                   |     |       |          |  |            |        |       |          |        |  |  |          |            |  |        |          |    |        |  |  |            |  |  |        |    









F-41



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group








15. TANGIBLE AND INTANGIBLE ASSETS


|                                      |  |                   |        |                  |          |             |              |      |            |                  |              |     |           |      |             |             |      |       |              |      |  |              |        |   |  |  |         |   |  |  |        | 
|------------------------------------- |  | ----------------- | ------ | ---------------- | -------- | ----------- | ------------ | ---- | ---------- | ---------------- | ------------ | --- | --------- | ---- | ----------- | ----------- | ---- | ----- | ------------ | ---- |  | ------------ | ------ | - |  |  | ------- | - |  |  | ------ | 
|                                      |  |                   |        | Accumulated cost |          |             |              |      |            |                  |             
|                                      |  |                   |        |                  |          |             |              |      | Acc. depr. |                  |              |    
|                                      |  |                   |        |                  |          | Translation |              |      |            |                  | Depreciation |     |           | and  |             |             | Book |      
|                                      |  | Book value        |        |                  |          |             | adjustm. and |      |            |                  |              | and |           |      | write-downs |             |      | value |             
|                                      |  | December 31,      |        |                  |          |             | Additions    |      |            | reclassification |              |     | Disposals |      |             | write-downs |      |       | December 31, |      |  | December 31, |       
|                                      |  | 2003              |        |                  | 01.01.04 |             |              | 2004 |            |                  | 2004         |     |           | 2004 |             |             | 2004 |       |              | 2004 |  |              | 2004   |  
|                                      |  |                   |        |                  |          |             |              |      |            |                  |              |     |           |      |             |             |      |       |              |      |  |              |        |  
|                                      |  | (in NOK millions) |       
|Local, regional & trunk networks      |  |                   | 10,168 |                  |          |             | 38,989       |      |            |                  | 1,183        |     |           |      | (152        | )           |      |       | (6,194       | )    |  |              | (2,129 | ) |  |  | (24,718 | ) |  |  | 9,108  | 
|Mobile telephone network and switches |  |                   | 9,885  |                  |          |             | 18,273       |      |            |                  | 6,583        |     |           |      | (1,150      | )           |      |       | (333         | )    |  |              | (2,762 | ) |  |  | (10,628 | ) |  |  | 12,745 | 
|Subscriber equipment                  |  |                   | 97     |                  |          |             | 382          |      |            |                  | 70           |     |           |      | 194         |             |      |       | (42          | )    |  |              | (157   | ) |  |  | (465    | ) |  |  | 139    | 
|Switches & equipment                  |  |                   | 2,439  |                  |          |             | 14,053       |      |            |                  | 390          |     |           |      | (378        | )           |      |       | (702         | )    |  |              | (1,033 | ) |  |  | (11,602 | ) |  |  | 1,761  | 
|Radio installations                   |  |                   | 1,018  |                  |          |             | 1,656        |      |            |                  | 13           |     |           |      | 4           |             |      |       |             |      |  |              | (11    | ) |  |  | (648    | ) |  |  | 1,025  | 
|Cable TV equipment                    |  |                   | 791    |                  |          |             | 1,623        |      |            |                  | 50           |     |           |      | (47         | )           |      |       | (95          | )    |  |              | (144   | ) |  |  | (760    | ) |  |  | 771    | 
|Land                                  |  |                   | 711    |                  |          |             | 712          |      |            |                  | 68           |     |           |      | 9           |             |      |       | (10          | )    |  |              | (2     | ) |  |  | (7      | ) |  |  | 772    | 
|Buildings                             |  |                   | 6,468  |                  |          |             | 10,575       |      |            |                  | 783          |     |           |      | 38          |             |      |       | (219         | )    |  |              | (402   | ) |  |  | (4,407  | ) |  |  | 6,770  | 
|Support systems                       |  |                   | 1,719  |                  |          |             | 8,057        |      |            |                  | 1,147        |     |           |      | (874        | )           |      |       | (1,140       | )    |  |              | (1,267 | ) |  |  | (6,151  | ) |  |  | 1,039  | 
|Satellites                            |  |                   | 617    |                  |          |             | 1,790        |      |            |                  | 630          |     |           |      |            |             |      |       |             |      |  |              | (127   | ) |  |  | (1,300  | ) |  |  | 1,120  | 
|                                      |  |                   |        |                  |          |             |              |      |            |                  |              |     |           |      |             |             |      |       |              |      |  |              |        |  
|Sub total(1)                          |  |                   | 33,913 |                  |          |             | 96,110       |      |            |                  | 10,917       |     |           |      | (2,356      | )           |      |       | (8,735       | )    |  |              | (8,034 | ) |  |  | (60,686 | ) |  |  | 35,250 | 
|                                      |  |                   |        |                  |          |             |              |      |            |                  |              |     |           |      |             |             |      |       |              |      |  |              |        |  
|Work in progress(2)                   |  |                   | 1,809  |                  |          |             | 1,809        |      |            |                  | 618          |     |           |      |            |             |      |       |             |      |  |              | (1     | ) |  |  |        |   |  |  | 2,426  | 
|                                      |  |                   |        |                  |          |             |              |      |            |                  |              |     |           |      |             |             |      |       |              |      |  |              |        |  
|Total                                 |  |                   | 35,722 |                  |          |             | 97,919       |      |            |                  | 11,535       |     |           |      | (2,356      | )           |      |       | (8,735       | )    |  |              | (8,035 | ) |  |  | (60,686 | ) |  |  | 37,676 | 
|                                      |  |                   |        |                  |          |             |              |      |            |                  |              |     |           |      |             |             |      |       |              |      |  |              |        |  






|    |                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes book value of NOK 1,943 million for capital leases
    as of December 31, 2004, mainly switches, GSM Mobile
    telephone network, fixed-line network and satellites.
|   
|(2) | Net additions.                                                                                                                                                                





F-42



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




Intangible assets


|                                     |  |                   |        |                  |          |  |              |      |            |                  |        |              |           |      |             |             |      |       |              |      |  |              |        |   |  |  |         |   |  |  |        | 
|------------------------------------ |  | ----------------- | ------ | ---------------- | -------- |  | ------------ | ---- | ---------- | ---------------- | ------ | ------------ | --------- | ---- | ----------- | ----------- | ---- | ----- | ------------ | ---- |  | ------------ | ------ | - |  |  | ------- | - |  |  | ------ | 
|                                     |  |                   |        | Accumulated cost |          |  |              |      |            |                  |       
|                                     |  |                   |        |                  |          |  |              |      | Acc. depr. |                  |        |             
|                                     |  | Book              |        |                  |          |  | Translation  |      |            |                  |        | Depreciation |           |      | and         |             |      | Book  |             
|                                     |  | value             |        |                  |          |  | adjustm. and |      |            |                  |        | and          |           |      | write-downs |             |      | value |             
|                                     |  | December 31,      |        |                  |          |  | Additions    |      |            | reclassification |        |              | Disposals |      |             | write-downs |      |       | December 31, |      |  | December 31, |       
|                                     |  | 2003              |        |                  | 01.01.04 |  |              | 2004 |            |                  | 2004   |              |           | 2004 |             |             | 2004 |       |              | 2004 |  |              | 2004   |  
|                                     |  |                   |        |                  |          |  |              |      |            |                  |        |              |           |      |             |             |      |       |              |      |  |              |        |  
|                                     |  | (in NOK millions) |       
|Goodwill                             |  |                   | 9,224  |                  |          |  | 15,515       |      |            |                  | 7,205  |              |           |      | (409        | )           |      |       | (111         | )    |  |              | (3,133 | ) |  |  | (9,237  | ) |  |  | 12,963 | 
|Other intangible assets              |  |                   |        |                  |          |  |              |      |            |                  |        |              |           |      |             |             |      |       |              |      |  |              |        |   |  |  |         |   |  |  |        | 
|Customer base                        |  |                   | 1,732  |                  |          |  | 2,715        |      |            |                  | 1,603  |              |           |      | (78         | )           |      |       | (3           | )    |  |              | (1,027 | ) |  |  | (1,993  | ) |  |  | 2,244  | 
|Licenses                             |  |                   | 862    |                  |          |  | 1,767        |      |            |                  | 2,801  |              |           |      | (220        | )           |      |       | (4           | )    |  |              | (296   | ) |  |  | (1,207  | ) |  |  | 3,137  | 
|Trademarks                           |  |                   | 477    |                  |          |  | 577          |      |            |                  | 483    |              |           |      | (30         | )           |      |       |             |      |  |              | (79    | ) |  |  | (177    | ) |  |  | 853    | 
|Software and other intangible assets |  |                   | 2,360  |                  |          |  | 5,352        |      |            |                  | 2,699  |              |           |      | 466         |             |      |       | (122         | )    |  |              | (1,647 | ) |  |  | (5,067  | ) |  |  | 3,328  | 
|Work in progress(1)                  |  |                   | 105    |                  |          |  | 105          |      |            |                  | 336    |              |           |      |            |             |      |       |             |      |  |              | (2     | ) |  |  |        |   |  |  | 439    | 
|                                     |  |                   |        |                  |          |  |              |      |            |                  |        |              |           |      |             |             |      |       |              |      |  |              |        |  
|Total other intangible assets        |  |                   | 5,536  |                  |          |  | 10,516       |      |            |                  | 7,922  |              |           |      | 138         |             |      |       | (129         | )    |  |              | (3,051 | ) |  |  | (8,444  | ) |  |  | 10,001 | 
|                                     |  |                   |        |                  |          |  |              |      |            |                  |        |              |           |      |             |             |      |       |              |      |  |              |        |  
|Total intangible assets              |  |                   | 14,760 |                  |          |  | 26,031       |      |            |                  | 15,127 |              |           |      | (271        | )           |      |       | (240         | )    |  |              | (6,184 | ) |  |  | (17,681 | ) |  |  | 22,964 | 
|                                     |  |                   |        |                  |          |  |              |      |            |                  |        |              |           |      |             |             |      |       |              |      |  |              |        |  






|    |              
|--- | -------------
|(1) | Net additions









|                  |       |  |      |  |       |      |  |  |       |  |  |      |     |  |  |  |     | 
|----------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- |  |  | ---- | --- |  |  |  | --- | 
|2005              |       |  | 2006 |  |       | 2007 |  |  | 2008  |  |  | 2009 |    
|                  |       |  |      |  |       |      |  |  |       |  |  |      |    
|(in NOK millions) |      
|                  | 2,895 |  |      |  | 2,219 |      |  |  | 1,116 |  |  |      | 631 |  |  |  | 481 | 

F-43



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Changes in the carrying value of goodwill for the year ended
December 31, 2004:


|                                                           |  |                   |        |   |       |  |      |           |              |  |         |   |  |        |       |   |       |  |      |   |  |  |        |  
|---------------------------------------------------------- |  | ----------------- | ------ | - | ----- |  | ---- | --------- | ------------ |  | ------- | - |  | ------ | ----- | - | ----- |  | ---- | - |  |  | ------ | -
|                                                           |  | Total mobile      |        |   |       |  |      |           | EDB Business |  |         |   |  |       
|                                                           |  | operations        |        |   | Fixed |  |      | Broadcast |              |  | Partner |   |  | Others |       |   | Total | 
|                                                           |  |                   |        |   |       |  |      |           |              |  |         |   |  |        |       |   |       | 
|                                                           |  | (in NOK millions) |       
|Balance as of January 1, 2004                              |  |                   | 5,887  |   |       |  | (343 | )         |              |  | 2,066   |   |  |        | 1,422 |   |       |  | 192  |   |  |  | 9,224  |  
|Goodwill acquired                                          |  |                   | 6,744  |   |       |  | 25   |           |              |  | (23     | ) |  |        | 564   |   |       |  | (105 | ) |  |  | 7,205  |  
|Translation adjustments and reclassification               |  |                   | (317   | ) |       |  | 11   |           |              |  | (2      | ) |  |        | (4    | ) |       |  | (6   | ) |  |  | (318   | )
|Amortization                                               |  |                   | (678   | ) |       |  | 105  |           |              |  | (192    | ) |  |        | (158  | ) |       |  | (16  | ) |  |  | (939   | )
|Write-downs (impairment losses)                            |  |                   | (2,190 | ) |       |  | (2   | )         |              |  |        |   |  |        |      |   |       |  | (2   | ) |  |  | (2,194 | )
|Goodwill written off related to disposal of business units |  |                   |       |   |       |  |     |           |              |  |        |   |  |        |      |   |       |  | (15  | ) |  |  | (15    | )
|                                                           |  |                   |        |   |       |  |      |           |              |  |         |   |  |        |       |   |       | 
|Balance as of December 31, 2004                            |  |                   | 9,446  |   |       |  | (204 | )         |              |  | 1,849   |   |  |        | 1,824 |   |       |  | 48   |   |  |  | 12,963 |  
|                                                           |  |                   |        |   |       |  |      |           |              |  |         |   |  |        |       |   |       | 

Goodwill related to the following subsidiaries and
operations


|                            |  |            |        |     |              |  |             |             |  |  |           | 
|--------------------------- |  | ---------- | ------ | --- | ------------ |  | ----------- | ----------- |  |  | --------- | 
|                            |  | Book value |        |     | Amortization |  |             | Year of     | 
|                            |  | 31.12.04   |        |     | period       |  |             | acquisition | 
|                            |  |            |        |     |              |  |             |             | 
|                            |  | (in NOK    |        |     |              |  |            
|                            |  | millions)  |        |     |              |  |            
|Sonofon Holding A/S         |  |            | 3,738  |     |              |  | 20 years    |             |  |  | 2004      | 
|ProMonte GSM D.O.O          |  |            | 100    |     |              |  | 20 years    |             |  |  | 2004      | 
|EDB Business Partner Group  |  |            | 765    | (1) |              |  | 7-10 years  |             |  |  | 2004/2001 | 
|Pannon GSM Rt.              |  |            | 4,900  |     |              |  | 10-20 years |             |  |  | 2002      | 
|Canal Digital Group         |  |            | 1,568  |     |              |  | 10-15 years |             |  |  | 2002      | 
|Kyivstar GSM JSC            |  |            | 230    |     |              |  | 12-20 years |             |  |  | 2002      | 
|Utfors AB                   |  |            | (207   | )   |              |  | 18 years    |             |  |  | 2002      | 
|DiGi.Com bhd                |  |            | 474    |     |              |  | 15-20 years |             |  |  | 2001      | 
|Canal Digital Sverige AB(2) |  |            | 124    |     |              |  | 10 years    |             |  |  | 2001      | 
|Unigrid AB                  |  |            | 93     |     |              |  | 10 years    |             |  |  | 2001      | 
|Marlink S.A.                |  |            | 121    |     |              |  | 10 years    |             |  |  | 2001      | 
|Fellesdata AS               |  |            | 809    |     |              |  | 20 years    |             |  |  | 2000      | 
|Canal Digital Kabel TV AS   |  |            | 156    |     |              |  | 10 years    |             |  |  | 2000      | 
|Others                      |  |            | 92     |     |              |  | 3-20 years  |             |  |  |           | 
|                            |  |            |        |     |              |  |             |             | 
|Total                       |  |            | 12,963 |     |              |  |             |             |  |  |           | 
|                            |  |            |        |     |              |  |             |             | 






|    |                                      
|--- | -------------------------------------
|(1) | Preliminary allocation.              
|   
|(2) | Sweden On Line AB and Nät Holding AB.

F-44



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


16. FINANCIAL ASSETS


|                                             |  |                   |        |  |      |  |       | 
|-------------------------------------------- |  | ----------------- | ------ |  | ---- |  | ----- | 
|                                             |  | 2003              |        |  | 2004 | 
|                                             |  |                   |        |  |      | 
|                                             |  | (in NOK millions) |       
|Long-term receivables(*)                     |  |                   | 1,629  |  |      |  | 512   | 
|Shares and other investments(**)             |  |                   | 2,219  |  |      |  | 780   | 
|Total other financial assets                 |  |                   | 3,848  |  |      |  | 1,292 | 
|Associated companies and joint ventures(***) |  |                   | 10,166 |  |      |  | 6,428 | 
|                                             |  |                   |        |  |      | 
|Total financial assets                       |  |                   | 14,014 |  |      |  | 7,720 | 
|                                             |  |                   |        |  |      | 

(*) Long-term receivables


|                                                            |  |                   |       |   |      |  |     |  
|----------------------------------------------------------- |  | ----------------- | ----- | - | ---- |  | --- | -
|                                                            |  | 2003              |       |   | 2004 | 
|                                                            |  |                   |       |   |      | 
|                                                            |  | (in NOK millions) |      
|Interest-bearing                                            |  |                   |       |   |      |  |     |  
|Receivables from associated companies and joint ventures(1) |  |                   | 1,456 |   |      |  | 326 |  
|Loans to employees                                          |  |                   | 24    |   |      |  | 10  |  
|Other long-term receivables                                 |  |                   | 27    |   |      |  | 18  |  
|Provision for bad debt                                      |  |                   | (5    | ) |      |  | (3  | )
|Non-interest-bearing                                        |  |                   |       |   |      |  |     |  
|Receivables from associated companies and joint ventures    |  |                   | 1     |   |      |  | 5   |  
|Loans to employees                                          |  |                   |      |   |      |  | 6   |  
|Other long-term receivables                                 |  |                   | 126   |   |      |  | 150 |  
|Provision for bad debt                                      |  |                   |      |   |      |  |    |  
|                                                            |  |                   |       |   |      | 
|Total long-term receivables                                 |  |                   | 1,629 |   |      |  | 512 |  
|                                                            |  |                   |       |   |      | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In 2004, interest-bearing receivables from associated companies
    and joint ventures were primarily loans to Bravida ASA, while in
    2003 they were primarily loans to Bravida ASA and Sonofon
    Holding A/S. As of December 31, 2004, interest-bearing
    receivables from Bravida ASA were NOK 272 million, and
    as of December 31, 2003 interest-bearing receivables on
    Bravida ASA and Sonofon Holding A/S were
    NOK 551 million and NOK 823 million
    respectively.

F-45



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


(**) Shares and other investments:


Specification of shares and other investments as of
December 31, 2004:


|                                             |  |               |            |  |            |           |       |            |  |  |     | 
|-------------------------------------------- |  | ------------- | ---------- |  | ---------- | --------- | ----- | ---------- |  |  | --- | 
|                                             |  | No. of shares |            |  |            |           |      
|                                             |  | owned by      |            |  | Share      |           |       |           
|                                             |  | Telenor       |            |  | owned in % |           |       | Book value | 
|                                             |  |               |            |  |            |           |       |            | 
|                                             |  |               |            |  |            | (in NOK   |      
|                                             |  |               |            |  |            | millions) |      
|Inmarsat Holdings Ltd.                       |  |               | 79,539,869 |  |            |           | 14.9  |            |  |  | 314 | 
|Tiscali AS(1)                                |  |               | 2,080      |  |            |           | 100.0 |            |  |  | 43  | 
|Eutelsat S.A.                                |  |               | 4,127,130  |  |            |           | 0.4   |            |  |  | 36  | 
|Cosmoholding Albania S.A.                    |  |               | 48,000     |  |            |           | 3.0   |            |  |  | 23  | 
|Inmarsat Group Holdings Ltd.                 |  |               | 4,036,143  |  |            |           | 14.9  |            |  |  | 16  | 
|Energivekst AS                               |  |               | 79,349     |  |            |           | 4.4   |            |  |  | 11  | 
|Capital contribution to Telenor Pension Fund |  |               |           |  |            |           |      |            |  |  | 298 | 
|Other(2)                                     |  |               |           |  |            |           |      |            |  |  | 39  | 
|                                             |  |               |            |  |            |           |       |            | 
|Total shares and other investments           |  |               |            |  |            |           |       |            |  |  | 780 | 
|                                             |  |               |            |  |            |           |       |            | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Tiscali AS was purchased in 2004 and is classified as long-term
    shares. The purchase was subject to governmental approval, and
    consequently Telenor did not consolidate Tiscali AS as of
    December 31, 2004. On March 15, 2005, the Norwegian
    Competition Authority accepted the acquisition of Tiscali AS,
    but required Telenor to sell Tiscalis dial-up Internet
    service business. Tiscali AS will be consolidated as a
    subsidiary effective from March 15, 2005.
|   
|(2) | Other includes shares in companies where Telenor owns more than
    10%, which are not specified due to insignificant book values.                                                                                                                                                                                                                                                                                                                                                             

(***) Associated companies and joint ventures


|                                                                                            |  |                   |        |   |      |  |        |      |  |  |        |  
|------------------------------------------------------------------------------------------- |  | ----------------- | ------ | - | ---- |  | ------ | ---- |  |  | ------ | -
|                                                                                            |  | 2002              |        |   | 2003 |  |        | 2004 | 
|                                                                                            |  |                   |        |   |      |  |        |      | 
|                                                                                            |  | (in NOK millions) |       
|Balance as of January 1                                                                     |  |                   | 14,186 |   |      |  | 9,439  |      |  |  | 10,009 |  
|Investments                                                                                 |  |                   | 883    |   |      |  | 1,914  |      |  |  | 150    |  
|Transferred to/from other investments and disposal                                          |  |                   | (1,420 | ) |      |  | (3,167 | )    |  |  | (4,043 | )
|Net income                                                                                  |  |                   | 341    |   |      |  | 329    |      |  |  | 912    |  
|Gains (losses) on disposal(1)                                                               |  |                   | 36     |   |      |  | 1,507  |      |  |  | 32     |  
|Amortization of net excess values                                                           |  |                   | (862   | ) |      |  | (579   | )    |  |  | (226   | )
|Write-downs of net excess values                                                            |  |                   | (1,965 | ) |      |  | (26    | )    |  |  |       |  
|Equity and translations adjustments                                                         |  |                   | (1,760 | ) |      |  | 592    |      |  |  | (532   | )
|                                                                                            |  |                   |        |   |      |  |        |      | 
|Balance as of December 31                                                                   |  |                   | 9,439  |   |      |  | 10,009 |      |  |  | 6,302  |  
|                                                                                            |  |                   |        |   |      |  |        |      | 
|Of which investments carried with a negative value (classified
    as provisions) (note 19) |  |                   | 50     |   |      |  | 157    |      |  |  | 126    |  
|                                                                                            |  |                   |        |   |      |  |        |      | 
|Total associated companies and joint ventures                                               |  |                   | 9,489  |   |      |  | 10,166 |      |  |  | 6,428  |  
|                                                                                            |  |                   |        |   |      |  |        |      | 






|    |                                                                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Gains and losses on disposal in 2003 were primarily the gain on
    the sale of Cosmote and StavTeleSot JSC, which was partially
    offset by the loss on the sale of A-Pressen ASA.



F-46



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




Specifications of investments in associated companies and
joint ventures


|                                       |  |       |       |                    |              |  |        |              |  |              |        |   |  |               |      |   |             |            |      |              |  |  |              |   |  |  |       |   |  |  |       | 
|-------------------------------------- |  | ----- | ----- | ------------------ | ------------ |  | ------ | ------------ |  | ------------ | ------ | - |  | ------------- | ---- | - | ----------- | ---------- | ---- | ------------ |  |  | ------------ | - |  |  | ----- | - |  |  | ----- | 
|                                       |  |       |       |                    |              |  |        |              |  | Amortization |        |   |  |               |      |   |            
|                                       |  |       |       |                    |              |  |        | Share        |  |              | and    |   |  |               |      |   |             | Net excess |     
|                                       |  | Share |       |                    | Book value   |  |        | Investments/ |  |              | of net |   |  | write-downs   |      |   | Equity and  |            |      | Book value   |  |  | values       |  
|                                       |  | owned |       |                    | December 31, |  |        | disposals    |  |              | income |   |  | of net excess |      |   | translation |            |      | December 31, |  |  | December 31, |  
|Company                                |  | in %  |       |                    | 2003         |  |        | during 2004  |  |              | (1)(2) |   |  | values        |      |   | adjustments |            |      | 2004         |  |  | 2004(9)      |  
|                                       |  |       |       |                    |              |  |        |              |  |              |        |   |  |               |      |   |             |            |      |              |  |  |              |  
|                                       |  |       |       | (in NOK thousands) |             
|Sonofon Holding A/S(3)                 |  |       |      |                    |              |  | 3,870  |              |  |              | (3,787 | ) |  |               | (28  | ) |             |            | (55  | )            |  |  |             |   |  |  |      |   |  |  |      | 
|VimpelCom(4)(8)                        |  |       | 29.90 |                    |              |  | 2,380  |              |  |              |       |   |  |               | 854  |   |             |            | (35  | )            |  |  | (232         | ) |  |  | 2,967 |   |  |  | 118   | 
|DTAC(5)(8)                             |  |       | 40.29 |                    |              |  | 586    |              |  |              |       |   |  |               | 84   |   |             |            | (48  | )            |  |  | (49          | ) |  |  | 573   |   |  |  | 211   | 
|UCOM(5)(8)                             |  |       | 24.85 |                    |              |  | 239    |              |  |              |       |   |  |               | 28   |   |             |            | (26  | )            |  |  | (19          | ) |  |  | 222   |   |  |  | 213   | 
|ONE GmbH(6)                            |  |       | 17.45 |                    |              |  | 761    |              |  |              |       |   |  |               | (141 | ) |             |            |     |              |  |  | (14          | ) |  |  | 606   |   |  |  |      | 
|European Telecom S.A (ProMonte GSM)(7) |  |       |      |                    |              |  | 209    |              |  |              | (233   | ) |  |               | 24   |   |             |            |     |              |  |  |             |   |  |  |      |   |  |  |      | 
|Teleringen AS                          |  |       | 47.50 |                    |              |  | 3      |              |  |              |       |   |  |               | 4    |   |             |            |     |              |  |  |             |   |  |  | 7     |   |  |  |      | 
|Wireless Matrix Corporation(8)         |  |       | 23.30 |                    |              |  | 32     |              |  |              |       |   |  |               | (7   | ) |             |            |     |              |  |  | (1           | ) |  |  | 24    |   |  |  |      | 
|Nordialog Oslo AS                      |  |       |      |                    |              |  | 17     |              |  |              | (23    | ) |  |               | 6    |   |             |            |     |              |  |  |             |   |  |  |      |   |  |  |      | 
|Oslo Lufthavn Tele & Data AS           |  |       | 50.00 |                    |              |  | 8      |              |  |              | 1      |   |  |               | 1    |   |             |            |     |              |  |  | (2           | ) |  |  | 8     |   |  |  |      | 
|Glocalnet AB(8)                        |  |       | 37.00 |                    |              |  | 102    |              |  |              |       |   |  |               | 1    |   |             |            | (6   | )            |  |  | (1           | ) |  |  | 96    |   |  |  | 35    | 
|Golden Telecom Inc(8)                  |  |       | 20.32 |                    |              |  | 1,350  |              |  |              | 6      |   |  |               | 98   |   |             |            | (44  | )            |  |  | (168         | ) |  |  | 1,242 |   |  |  | 640   | 
|APR Media Holding AS                   |  |       | 44.80 |                    |              |  | 399    |              |  |              |       |   |  |               | 14   |   |             |            | (11  | )            |  |  |             |   |  |  | 402   |   |  |  | 58    | 
|Otrum Electronics ASA(8)               |  |       | 33.00 |                    |              |  | 91     |              |  |              |       |   |  |               | 3    |   |             |            |     |              |  |  |             |   |  |  | 94    |   |  |  |      | 
|BitCom AB                              |  |       | 49.00 |                    |              |  | 9      |              |  |              |       |   |  |               | 1    |   |             |            | (1   | )            |  |  |             |   |  |  | 9     |   |  |  | 2     | 
|World Wide Mobile Communications AS    |  |       | 45.00 |                    |              |  | 50     |              |  |              | 15     |   |  |               | 8    |   |             |            |     |              |  |  | (19          | ) |  |  | 54    |   |  |  | 10    | 
|HMS Norge AS                           |  |       | 50.00 |                    |              |  | 4      |              |  |              |       |   |  |               | 3    |   |             |            |     |              |  |  |             |   |  |  | 7     |   |  |  |      | 
|Bravida ASA                            |  |       | 47.05 |                    |              |  | (82    | )            |  |              | 27     |   |  |               | (34  | ) |             |            |     |              |  |  | (22          | ) |  |  | (111  | ) |  |  |      | 
|Doorstep AS                            |  |       | 50.00 |                    |              |  | 7      |              |  |              |       |   |  |               |     |   |             |            |     |              |  |  |             |   |  |  | 7     |   |  |  |      | 
|Telenor Renhold & Kantine AS           |  |       | 50.00 |                    |              |  | 4      |              |  |              |       |   |  |               | 4    |   |             |            |     |              |  |  | (3           | ) |  |  | 5     |   |  |  |      | 
|TeleVenture Management AS              |  |       | 23.85 |                    |              |  | 10     |              |  |              |       |   |  |               | 8    |   |             |            |     |              |  |  |             |   |  |  | 18    |   |  |  |      | 
|The Mobile Media Company AS            |  |       | 44.95 |                    |              |  |       |              |  |              | 58     |   |  |               | (26  | ) |             |            |     |              |  |  |             |   |  |  | 32    |   |  |  |      | 
|Polarsat Inc.                          |  |       | 44.12 |                    |              |  | 18     |              |  |              | 5      |   |  |               | (6   | ) |             |            |     |              |  |  |             |   |  |  | 17    |   |  |  | 4     | 
|Maritime Communications Partner AS     |  |       | 23.09 |                    |              |  |       |              |  |              | 25     |   |  |               | (4   | ) |             |            |     |              |  |  |             |   |  |  | 21    |   |  |  |      | 
|Others                                 |  |       |      |                    |              |  | (58    | )            |  |              | 13     |   |  |               | 49   |   |             |            |     |              |  |  | (2           | ) |  |  | 2     |   |  |  | 1     | 
|                                       |  |       |       |                    |              |  |        |              |  |              |        |   |  |               |      |   |             |            |      |              |  |  |              |  
|Total                                  |  |       |       |                    |              |  | 10,009 |              |  |              | (3,893 | ) |  |               | 944  |   |             |            | (226 | )            |  |  | (532         | ) |  |  | 6,302 |   |  |  | 1,292 | 
|                                       |  |       |       |                    |              |  |        |              |  |              |        |   |  |               |      |   |             |            |      |              |  |  |              |  






|    |                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes pretax gains and losses on disposal and Telenors
    share of the companies net income after taxes.                                                                      
|   
|(2) | Share of net income after taxes are partially based on estimates
    and preliminary results for some of the companies. Actual
    figures may deviate from the preliminary figures.

F-47



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




|    |                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | A wholly-owned subsidiary subsequent to the acquisition of the
    remaining shares as of February, 12 2004.                                                                                                                                                                                                                                                                                                                           
|   
|(4) | The merger of VimpelCom and VimpelCom-Region took place on
    November 26, 2004. After the merger Telenor had 26.6% of
    the total voting stock and 29.9% of the total common stock in
    VimpelCom. Prior to the merger Telenor had a direct ownership
    interest in VimpelCom-Region. Telenors share of net income
    (loss) of VimpelCom-Region before the merger is included in the
    figures for VimpelCom in the table.
|   
|(5) | UCOM had an ownership interest of 41.7% in DTAC as of
    December 31, 2004.                                                                                                                                                                                                                                                                                                                                                           
|   
|(6) | ONE GmbH is accounted for as an associated company because of
    Telenors significant influence due to a shareholders
    agreement.                                                                                                                                                                                                                                                                                                
|   
|(7) | A wholly-owned subsidiary subsequent to the purchase of the
    remaining shares as of August 12, 2004. European Telecom
    S.A. has an ownership interest of 100% in ProMonte GSM D.O.O.                                                                                                                                                                                                                                             
|   
|(8) | Market values of listed associated companies as of
    December 31, 2004: VimpelCom: NOK 13,389 million,
    DTAC: NOK 3,036 million, UCOM:
    NOK 1,165 million, Wireless Matrix Corporation:
    NOK 49 million, Glocalnet AB:
    NOK 172 million, Golden Telecom Inc.:
    NOK 1,176 million, Otrum Electronics ASA:
    NOK 202 million.                                                                                         
|   
|(9) | Net excess values are the difference between Telenors
    acquisition cost and Telenors share of equity at
    acquisition of associated companies.                                                                                                                                                                                                                                                                                  

17. CURRENT RECEIVABLES


|                                                         |  |                   |       |   |      |  |        |  
|-------------------------------------------------------- |  | ----------------- | ----- | - | ---- |  | ------ | -
|                                                         |  | 2003              |       |   | 2004 | 
|                                                         |  |                   |       |   |      | 
|                                                         |  | (in NOK millions) |      
|Accounts receivables                                     |  |                   |       |   |      |  |        |  
|Accounts receivables                                     |  |                   | 6,241 |   |      |  | 6,819  |  
|Provision for bad debt                                   |  |                   | (564  | ) |      |  | (715   | )
|                                                         |  |                   |       |   |      | 
|Total accounts receivables                               |  |                   | 5,677 |   |      |  | 6,104  |  
|                                                         |  |                   |       |   |      | 
|Other current receivables                                |  |                   |       |   |      |  |        |  
|Interest-bearing                                         |  |                   |       |   |      |  |        |  
|Receivables from associated companies and joint ventures |  |                   |      |   |      |  | 232    |  
|Other receivables                                        |  |                   | 29    |   |      |  | 20     |  
|Non-interest-bearing                                     |  |                   |       |   |      |  |        |  
|Receivables from associated companies and joint ventures |  |                   | 322   |   |      |  | 132    |  
|Receivable from employees                                |  |                   | 26    |   |      |  | 32     |  
|Other short-term receivables                             |  |                   | 421   |   |      |  | 846    |  
|Provision for bad debt                                   |  |                   | (23   | ) |      |  | (2     | )
|                                                         |  |                   |       |   |      | 
|Total other current receivables                          |  |                   | 775   |   |      |  | 1,260  |  
|                                                         |  |                   |       |   |      | 
|Prepaid expenses and accrued revenues                    |  |                   |       |   |      |  |        |  
|Prepaid expenses                                         |  |                   | 1,260 |   |      |  | 745    |  
|Accrued revenues                                         |  |                   | 1,520 |   |      |  | 2,056  |  
|                                                         |  |                   |       |   |      | 
|Total prepaid expenses and accrued revenues              |  |                   | 2,780 |   |      |  | 2,801  |  
|                                                         |  |                   |       |   |      | 
|Total current receivables                                |  |                   | 9,232 |   |      |  | 10,165 |  
|                                                         |  |                   |       |   |      | 



F-48



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


18. SHORT TERM INVESTMENTS


|                             |  |           |     |  |      |  |     | 
|---------------------------- |  | --------- | --- |  | ---- |  | --- | 
|                             |  | 2003      |     |  | 2004 | 
|                             |  |           |     |  |      | 
|                             |  | (in NOK   |    
|                             |  | millions) |    
|Bonds/ Commercial paper      |  |           | 301 |  |      |  | 317 | 
|Shares(*)                    |  |           | 83  |  |      |  | 576 | 
|                             |  |           |     |  |      | 
|Total short term investments |  |           | 384 |  |      |  | 893 | 
|                             |  |           |     |  |      | 






|    |                                                                                  
|--- | ---------------------------------------------------------------------------------
|(*) | Specification of shares classified as current assets as of
    December 31, 2004.

|                                          |  |                  |           |  |            |           |      |            |  |  |     | 
|----------------------------------------- |  | ---------------- | --------- |  | ---------- | --------- | ---- | ---------- |  |  | --- | 
|                                          |  | No. of shares    |           |  | Share      |           |      |           
|                                          |  | owned by Telenor |           |  | owned in % |           |      | Book value | 
|                                          |  |                  |           |  |            |           |      |            | 
|                                          |  |                  |           |  |            | (in NOK   |     
|                                          |  |                  |           |  |            | millions) |     
|Intelsat Ltd.(1)                          |  |                  | 6,855,530 |  |            |           | 4.1  |            |  |  | 442 | 
|Q-Free ASA(2)                             |  |                  | 3,809,826 |  |            |           | 7.6  |            |  |  | 47  | 
|Metrima AB                                |  |                  | 1,497,572 |  |            |           | 35.6 |            |  |  | 29  | 
|Virtual Garden AS                         |  |                  | 2,900,000 |  |            |           | 18.0 |            |  |  | 11  | 
|Listed shares                             |  |                  |          |  |            |           |     |            |  |  | 36  | 
|Other shares etc.(3)                      |  |                  |          |  |            |           |     |            |  |  | 11  | 
|                                          |  |                  |           |  |            |           |      |            | 
|Total shares classified as current assets |  |                  |           |  |            |           |      |            |  |  | 576 | 
|                                          |  |                  |           |  |            |           |      |            | 






|    |                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------
|(1) | On January 28, 2005 Telenor sold the shares in Intelsat Ltd
    for NOK 828 million.                              
|   
|(2) | On March 9, 2005 Telenor sold the shares in Q-Free ASA for
    NOK 73 million.                                    
|   
|(3) | Includes companies where Telenor owns more than 10%, which are
    not specified due to insignificant book values.



19. PROVISIONS


|                                                                    |  |                   |       |  |      |  |       | 
|------------------------------------------------------------------- |  | ----------------- | ----- |  | ---- |  | ----- | 
|                                                                    |  | 2003              |       |  | 2004 | 
|                                                                    |  |                   |       |  |      | 
|                                                                    |  | (in NOK millions) |      
|Provisions for pensions (Note 7)                                    |  |                   | 338   |  |      |  | 603   | 
|Deferred tax liabilities (Note 13)                                  |  |                   | 816   |  |      |  | 2,057 | 
|Provisions for workforce reduction and loss contracts
    (Note 11) |  |                   | 236   |  |      |  | 230   | 
|Negative values associated companies                                |  |                   | 157   |  |      |  | 126   | 
|Other provisions                                                    |  |                   | 98    |  |      |  | 104   | 
|                                                                    |  |                   |       |  |      | 
|Total provisions                                                    |  |                   | 1,645 |  |      |  | 3,120 | 
|                                                                    |  |                   |       |  |      | 

F-49



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


20. INTEREST-BEARING LIABILITIES


|                                                                                  |  |               |           |                   |         |  |        |         |  |  |        |  
|--------------------------------------------------------------------------------- |  | ------------- | --------- | ----------------- | ------- |  | ------ | ------- |  |  | ------ | -
|                                                                                  |  | Limit         |           |                   |         |  |       
|                                                                                  |  | (in millions) |           |                   | 2003(3) |  |        | 2004(3) | 
|                                                                                  |  |               |           |                   |         |  |        |         | 
|                                                                                  |  |               |           | (NOK in millions) |        
|Euro Commercial paper program (ECP)                                               |  |               | USD 500   |                   |         |  |       |         |  |  |       |  
|U.S. Commercial paper program (USCP)                                              |  |               | USD 1,000 |                   |         |  |       |         |  |  |       |  
|EMTN program                                                                      |  |               | USD 6,000 |                   |         |  | 16,212 |         |  |  | 14,122 |  
|Norwegian Bonds                                                                   |  |               |           |                   |         |  | 3,076  |         |  |  | 2,071  |  
|Capital discount related to bonds                                                 |  |               |           |                   |         |  | (31    | )       |  |  | (20    | )
|Derivatives related to long term interest-bearing liabilities(1)                  |  |               |           |                   |         |  | (776   | )       |  |  | (645   | )
|Revolving credit facility EUR                                                     |  |               | EUR 1,500 |                   |         |  |       |         |  |  |       |  
|                                                                                  |  |               |           |                   |         |  |        |         | 
|Total long-term interest-bearing liabilities Telenor ASA                          |  |               |           |                   |         |  | 18,481 |         |  |  | 15,528 |  
|Long-term interest-bearing liabilities subsidiaries(2)                            |  |               |           |                   |         |  | 4,222  |         |  |  | 5,074  |  
|                                                                                  |  |               |           |                   |         |  |        |         | 
|Total long-term interest-bearing liabilities Telenor Group                        |  |               |           |                   |         |  | 22,703 |         |  |  | 20,602 |  
|Short-term interest-bearing liabilities Telenor ASA                               |  |               |           |                   |         |  | 1,268  |         |  |  | 2,592  |  
|Derivatives related to short term interest-bearing liabilities
    Telenor ASA(1) |  |               |           |                   |         |  | (214   | )       |  |  | (14    | )
|Short-term interest-bearing liabilities subsidiaries(2)                           |  |               |           |                   |         |  | 2,005  |         |  |  | 1,413  |  
|                                                                                  |  |               |           |                   |         |  |        |         | 
|Total short-term interest-bearing liabilities Telenor
    Group(3)                |  |               |           |                   |         |  | 3,059  |         |  |  | 3,991  |  
|                                                                                  |  |               |           |                   |         |  |        |         | 
|Total interest-bearing liabilities Telenor Group                                  |  |               |           |                   |         |  | 25,762 |         |  |  | 24,593 |  
|                                                                                  |  |               |           |                   |         |  |        |         | 






|    |                                                                                                                                                                      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Foreign currency derivatives used to convert the cash flows of a
    debt instrument into another currency.                                                          
|   
|(2) | Specified below.                                                                                                                                                     
|   
|(3) | Interest-bearing liabilities with maturity within the next
    12 months are reported as short-term. This is a change in
    presentation compared to previous years.

Long-term interest-bearing liabilities Telenor ASA






F-50



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




|                  |  |               |      |   |              |  |        |              |  |  |              |  |  |  |        | 
|----------------- |  | ------------- | ---- | - | ------------ |  | ------ | ------------ |  |  | ------------ |  |  |  | ------ | 
|                  |  | Average       |      |   | Amount in    |  |        | Amount in    |  |  | Amount in    | 
|                  |  | interest rate |      |   | currency     |  |        | NOK          |  |  | NOK          | 
|                  |  | December 31,  |      |   | December 31, |  |        | December 31, |  |  | December 31, | 
|                  |  | 2004          |      |   | 2004         |  |        | 2003         |  |  | 2004         | 
|                  |  |               |      |   |              |  |        |              |  |  |              | 
|EMTN program      |  |               |      |   |              |  |        |              |  |  |              |  |  |  |        | 
|AUD               |  |               | 4.38 | % |              |  | 37     |              |  |  | 185          |  |  |  | 174    | 
|CHF               |  |               | 4.37 | % |              |  | 150    |              |  |  | 1,891        |  |  |  | 801    | 
|EUR               |  |               | 5.71 | % |              |  | 1,200  |              |  |  | 10,413       |  |  |  | 9,873  | 
|JPY               |  |               | 2.66 | % |              |  | 19,500 |              |  |  | 1,217        |  |  |  | 1,148  | 
|SEK               |  |               |     |   |              |  |       |              |  |  | 139          |  |  |  |       | 
|USD               |  |               | 5.50 | % |              |  | 350    |              |  |  | 2,336        |  |  |  | 2,113  | 
|Norwegian bonds   |  |               |      |   |              |  |        |              |  |  |              |  |  |  |        | 
|NOK               |  |               | 4.90 | % |              |  | 2,064  |              |  |  | 3,076        |  |  |  | 2,064  | 
|                  |  |               |      |   |              |  |        |              |  |  |              | 
|Total Telenor ASA |  |               |      |   |              |  |        |              |  |  | 19,257       |  |  |  | 16,173 | 
|                  |  |               |      |   |              |  |        |              |  |  |              | 



|                  |  |               |      |   |              |  |       |              |  |  |              |  |  |  |        |  
|----------------- |  | ------------- | ---- | - | ------------ |  | ----- | ------------ |  |  | ------------ |  |  |  | ------ | -
|                  |  | Average       |      |   | Amount in    |  |       | Amount in    |  |  | Amount in    | 
|                  |  | interest rate |      |   | currency     |  |       | NOK          |  |  | NOK          | 
|                  |  | December 31,  |      |   | December 31, |  |       | December 31, |  |  | December 31, | 
|                  |  | 2004          |      |   | 2004         |  |       | 2003         |  |  | 2004         | 
|                  |  |               |      |   |              |  |       |              |  |  |              | 
|Basis swaps       |  |               |      |   |              |  |       |              |  |  |              |  |  |  |        |  
|EUR/NOK           |  |               |     |   |              |  |      |              |  |  |             |  |  |  | (93    | )
|EMTN program      |  |               |      |   |              |  |       |              |  |  |              |  |  |  |        |  
|CZK               |  |               | 3.79 | % |              |  | 461   |              |  |  | 119          |  |  |  | 125    |  
|EUR               |  |               | 3.75 | % |              |  | 585   |              |  |  | 6,297        |  |  |  | 4,822  |  
|GBP               |  |               | 6.21 | % |              |  | 13    |              |  |  | 155          |  |  |  | 151    |  
|NOK               |  |               | 4.87 | % |              |  | 5,980 |              |  |  | 5,949        |  |  |  | 5,980  |  
|SEK               |  |               | 4.75 | % |              |  | 503   |              |  |  | 606          |  |  |  | 460    |  
|USD               |  |               | 3.65 | % |              |  | 333   |              |  |  | 2,225        |  |  |  | 2,013  |  
|Norwegian bonds   |  |               |      |   |              |  |       |              |  |  |              |  |  |  |        |  
|EUR               |  |               |     |   |              |  |      |              |  |  | 396          |  |  |  |       |  
|GBP               |  |               |     |   |              |  |      |              |  |  | 238          |  |  |  |       |  
|NOK               |  |               | 4.98 | % |              |  | 2,070 |              |  |  | 2,496        |  |  |  | 2,070  |  
|                  |  |               |      |   |              |  |       |              |  |  |              | 
|Total Telenor ASA |  |               |      |   |              |  |       |              |  |  | 18,481       |  |  |  | 15,528 |  
|                  |  |               |      |   |              |  |       |              |  |  |              | 

F-51



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Long-term interest-bearing liabilities in subsidiaries


|                                                                 |  |                                        |       |          |     |               |       |                   |              |      |  |              |       |  |  |  |       | 
|---------------------------------------------------------------- |  | -------------------------------------- | ----- | -------- | --- | ------------- | ----- | ----------------- | ------------ | ---- |  | ------------ | ----- |  |  |  | ----- | 
|                                                                 |  |                                        |       |          |     | Average       |       |                   |              |      | 
|                                                                 |  |                                        |       |          |     | interest rate |       |                   |              |      | 
|                                                                 |  |                                        |       |          |     | December 31,  |       |                   | December 31, |      |  | December 31, |      
|Company                                                          |  | Debt instrument                        |       | Currency |     |               | 2004  |                   |              | 2003 |  |              | 2004  | 
|                                                                 |  |                                        |       |          |     |               |       |                   |              |      |  |              |       | 
|                                                                 |  |                                        |       |          |     |               |       | (NOK in millions) |             
|DiGi.Com                                                         |  | Borrowings from financial institutions |       |          | USD |               |       |                   |              |      |  |              | 130   |  |  |  |      | 
|DiGi.Com                                                         |  | Borrowings from financial institutions |       |          | MYR |               |       |                   | 6.41         | %    |  |              | 1,023 |  |  |  | 711   | 
|GrameenPhone                                                     |  | Borrowings from financial institutions |       |          | USD |               |       |                   | 5.94         | %    |  |              | 73    |  |  |  | 111   | 
|GrameenPhone                                                     |  | Borrowings from financial institutions |       |          | NOK |               |       |                   | 2.50         | %    |  |              | 21    |  |  |  | 18    | 
|GrameenPhone                                                     |  | Borrowings from NORAD                  |       |          | NOK |               |       |                   | 3.40         | %    |  |              | 43    |  |  |  | 39    | 
|Kyivstar                                                         |  | Bonds                                  |       |          | USD |               |       |                   | 10.38        | %    |  |              | 1,105 |  |  |  | 1,510 | 
|Sonofon                                                          |  | Finance lease                          |       |          | DKK |               |       |                   | 6,00         | %    |  |              |      |  |  |  | 196   | 
|Telenor Pakistan                                                 |  | GSM License                            |       |          | USD |               |       |                   | 4.70         | %    |  |              |      |  |  |  | 622   | 
|Pannon                                                           |  | UMTS Licenses                          |       |          | HUF |               |       |                   | 8.64         | %    |  |              |      |  |  |  | 154   | 
|EDB Business Partner                                             |  | Borrowings from financial institutions |       |          | NOK |               |       |                   | 2.39         | %    |  |              | 500   |  |  |  | 440   | 
|EDB Business Partner                                             |  | Borrowings from financial institutions |       |          | SEK |               |       |                   | 2.57         | %    |  |              | 56    |  |  |  | 160   | 
|EDB Business Partner                                             |  | Finance lease                          |       |          | NOK |               |       |                   | 5.18         | %    |  |              | 10    |  |  |  | 55    | 
|Business Solutions                                               |  | Finance lease                          |       |          | NOK |               |       |                   | 7.00         | %    |  |              | 14    |  |  |  |      | 
|Satellite Services AS                                            |  | Finance lease(1)                       |       |          | NOK |               |       |                   | 1.50         | %    |  |              | 888   |  |  |  | 763   | 
|Canal Digital                                                    |  | Finance lease(2)                       |       |          |    |               |       |                   |             |      |  |              | 227   |  |  |  | 104   | 
|Miscellaneous                                                    |  |                                        |       |          |    |               |       |                   |             |      |  |              | 132   |  |  |  | 191   | 
|                                                                 |  |                                        |       |          |     |               |       |                   |              |      |  |              |       | 
|Total long-term interest-bearing liabilities in
    subsidiaries |  |                                        | 4,222 |          |     |               | 5,074 |                  
|                                                                 |  |                                        |       |          |     |              






|    |                                                                                 
|--- | --------------------------------------------------------------------------------
|(1) | Satellite leases (Thor II and III). Telenor ASA guarantees this
    financing.  
|   
|(2) | Telenor ASA guarantees this financing. Denominated in DKK, EUR,
    NOK and SEK.





F-52



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Short-term interest  bearing liabilities in
Telenor Group


|                                              |  |                                                 |       |               |       |                   |              |  |       |              |  |  |       | 
|--------------------------------------------- |  | ----------------------------------------------- | ----- | ------------- | ----- | ----------------- | ------------ |  | ----- | ------------ |  |  | ----- | 
|                                              |  |                                                 |       | Average       |       |                   |              |  |      
|                                              |  |                                                 |       | interest rate |       |                   |              |  |      
|                                              |  |                                                 |       | December 31,  |       |                   | December 31, |  |       | December 31, | 
|                                              |  |                                                 |       | 2004          |       |                   | 2003         |  |       | 2004         | 
|                                              |  |                                                 |       |               |       |                   |              |  |       |              | 
|                                              |  |                                                 |       |               |       | (NOK in millions) |             
|Pannon                                        |  | Bonds                                           |       |               | 13.78 | %                 |              |  | 1,076 |              |  |  |      | 
|Pannon                                        |  | UMTS Licenses                                   |       |               | 8.64  | %                 |              |  |      |              |  |  | 251   | 
|DiGi.com                                      |  | Vendor financing and term loans                 |       |               | 6.25  | %                 |              |  | 334   |              |  |  | 346   | 
|Telenor Pakistan                              |  | GSM License                                     |       |               | 4.70  | %                 |              |  |      |              |  |  | 88    | 
|Kyivstar                                      |  | Bonds and borrowing from financial institutions |       |               | 12.09 | %                 |              |  | 37    |              |  |  | 271   | 
|GrameenPhone                                  |  | Borrowings from financial institutions          |       |               | 5.94  | %                 |              |  | 47    |              |  |  | 37    | 
|GrameenPhone                                  |  | Borrowings from financial institutions          |       |               | 2.50  | %                 |              |  | 4     |              |  |  | 4     | 
|GrameenPhone                                  |  | Borrowings from NORAD                           |       |               | 3.40  | %                 |              |  | 7     |              |  |  | 8     | 
|Business Solution                             |  | Finance lease                                   |       |               | 7.00  | %                 |              |  | 54    |              |  |  | 14    | 
|Satellite Services AS                         |  | Finance lease(1)                                |       |               | 1.50  | %                 |              |  | 116   |              |  |  | 125   | 
|EDB Business Partner                          |  | Borrowings from financial institutions          |       |               | 8.03  | %                 |              |  | 27    |              |  |  |      | 
|EDB Business Partner                          |  | Finance lease                                   |       |               | 4.70  | %                 |              |  |      |              |  |  | 28    | 
|Canal Digital                                 |  | Finance lease(2)                                |       |               |      |                   |              |  | 228   |              |  |  | 164   | 
|Telenor ASA                                   |  | Borrowings from financial institutions          |       |               |      |                   |              |  | 1,054 |              |  |  | 2,578 | 
|Miscellaneous                                 |  |                                                 |       |               |      |                   |              |  | 75    |              |  |  | 77    | 
|                                              |  |                                                 |       |               |       |                   |              |  |       |              | 
|Total short-term interest-bearing liabilities |  |                                                 | 3,059 |               |       |                   | 3,991        | 
|                                              |  |                                                 |       |               |       |                  






|    |                                                                                 
|--- | --------------------------------------------------------------------------------
|(1) | Satellite leases (Thor II and III). Telenor ASA guarantees this
    financing   
|   
|(2) | Telenor ASA guarantees this financing. Denominated in DKK, EUR,
    NOK and SEK.

Maturity profile of interest-bearing liabilities as of
December 31, 2004


|                         |  |                   |        |  |      |  |       |      |  |  |       |  |  |      |       |  |      |  |       |      |       |  |       |  |  |      |     |  |      |  |     |  |  |  |       |  |  |  |     | 
|------------------------ |  | ----------------- | ------ |  | ---- |  | ----- | ---- |  |  | ----- |  |  | ---- | ----- |  | ---- |  | ----- | ---- | ----- |  | ----- |  |  | ---- | --- |  | ---- |  | --- |  |  |  | ----- |  |  |  | --- | 
|                         |  | Total as of       |        |  |      |  |       |      |  |  |       |  |  |      |       |  |      |  |       |      | After | 
|                         |  | 31.12.04          |        |  | 2005 |  |       | 2006 |  |  | 2007  |  |  | 2008 |       |  | 2009 |  |       | 2010 |       |  | 2011  |  |  | 2012 |     |  | 2012 | 
|                         |  |                   |        |  |      |  |       |      |  |  |       |  |  |      |       |  |      |  |       |      |       |  |       |  |  |      |     |  |      | 
|                         |  | (NOK in millions) |       
|EMTN program             |  |                   | 14,932 |  |      |  | 1,475 |      |  |  | 3,263 |  |  |      | 2,964 |  |      |  | 1,096 |      |       |  | 2,360 |  |  |      |    |  |      |  | 341 |  |  |  | 3,433 |  |  |  |    | 
|Domestic bonds           |  |                   | 3,062  |  |      |  | 991   |      |  |  |      |  |  |      | 1,873 |  |      |  |      |      |       |  |      |  |  |      |    |  |      |  |    |  |  |  |      |  |  |  | 198 | 
|Other short-term debt    |  |                   | 112    |  |      |  | 112   |      |  |  |      |  |  |      |      |  |      |  |      |      |       |  |      |  |  |      |    |  |      |  |    |  |  |  |      |  |  |  |    | 
|                         |  |                   |        |  |      |  |       |      |  |  |       |  |  |      |       |  |      |  |       |      |       |  |       |  |  |      |     |  |      | 
|Telenor ASA, total       |  |                   | 18,106 |  |      |  | 2,578 |      |  |  | 3,263 |  |  |      | 4,837 |  |      |  | 1,096 |      |       |  | 2,360 |  |  |      |    |  |      |  | 341 |  |  |  | 3,433 |  |  |  | 198 | 
|Subsidiaries, short-term |  |                   | 1,413  |  |      |  | 1,413 |      |  |  |      |  |  |      |      |  |      |  |      |      |       |  |      |  |  |      |    |  |      |  |    |  |  |  |      |  |  |  |    | 
|Subsidiaries, long-term  |  |                   | 5,074  |  |      |  |      |      |  |  | 923   |  |  |      | 760   |  |      |  | 378   |      |       |  | 2,483 |  |  |      | 220 |  |      |  | 94  |  |  |  | 77    |  |  |  | 139 | 
|                         |  |                   |        |  |      |  |       |      |  |  |       |  |  |      |       |  |      |  |       |      |       |  |       |  |  |      |     |  |      | 
|Subsidiaries, total      |  |                   | 6,487  |  |      |  | 1,413 |      |  |  | 923   |  |  |      | 760   |  |      |  | 378   |      |       |  | 2,483 |  |  |      | 220 |  |      |  | 94  |  |  |  | 77    |  |  |  | 139 | 
|                         |  |                   |        |  |      |  |       |      |  |  |       |  |  |      |       |  |      |  |       |      |       |  |       |  |  |      |     |  |      | 
|Telenor Group            |  |                   | 24,593 |  |      |  | 3,991 |      |  |  | 4,186 |  |  |      | 5,597 |  |      |  | 1,474 |      |       |  | 4,843 |  |  |      | 220 |  |      |  | 435 |  |  |  | 3,510 |  |  |  | 337 | 
|                         |  |                   |        |  |      |  |       |      |  |  |       |  |  |      |       |  |      |  |       |      |       |  |       |  |  |      |     |  |      | 

21. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT






F-53



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Interest rate risk












|                                |  |                                                                     |        |   |       |  |       |       |  |  |       |  |  |       |       |  |       |  |      |       |  |  |       |  |  |       |      |  |         |  |      |  |  |  |        |  |  |  |        | 
|------------------------------- |  | ------------------------------------------------------------------- | ------ | - | ----- |  | ----- | ----- |  |  | ----- |  |  | ----- | ----- |  | ----- |  | ---- | ----- |  |  | ----- |  |  | ----- | ---- |  | ------- |  | ---- |  |  |  | ------ |  |  |  | ------ | 
|                                |  | Decrease in fair value due to a 1%-point increase in interest rates |       
|                                |  |                                                                     |       
|                                |  | Face                                                                |        |   | 0-1   |  |       | 1-2   |  |  | 2-3   |  |  | 3-4   |       |  | 4-5   |  |      | 5-6   |  |  | 6-7   |  |  | 7-8   |      |  | Beyond  | 
|Currency                        |  | value                                                               |        |   | years |  |       | years |  |  | years |  |  | years |       |  | years |  |      | years |  |  | years |  |  | years |      |  | 8 years | 
|                                |  |                                                                     |        |   |       |  |       |       |  |  |       |  |  |       |       |  |       |  |      |       |  |  |       |  |  |       |      |  |         | 
|                                |  | (NOK in millions equivalent as of December 31, 2004)                |       
|CZK                             |  |                                                                     | 193    |   |       |  | 0.51  |       |  |  |      |  |  |       |      |  |       |  |     |       |  |  |      |  |  |       |     |  |         |  |     |  |  |  |       |  |  |  |       | 
|DKK                             |  |                                                                     | 147    |   |       |  | 14.71 |       |  |  |      |  |  |       | 0.25  |  |       |  |     |       |  |  |      |  |  |       |     |  |         |  |     |  |  |  |       |  |  |  |       | 
|EUR                             |  |                                                                     | 12,228 |   |       |  | 12.34 |       |  |  | 10.77 |  |  |       | 27.80 |  |       |  | 2.03 |       |  |  | 3.49  |  |  |       | 4.40 |  |         |  | 5.12 |  |  |  | 5.15   |  |  |  | 116.27 | 
|GBP                             |  |                                                                     |       |   |       |  | 0.57  |       |  |  |      |  |  |       |      |  |       |  |     |       |  |  |      |  |  |       |     |  |         |  |     |  |  |  |       |  |  |  |       | 
|HUF                             |  |                                                                     | (210   | ) |       |  | (0.15 | )     |  |  |      |  |  |       | 4.85  |  |       |  |     |       |  |  |      |  |  |       |     |  |         |  |     |  |  |  |       |  |  |  |       | 
|MYR                             |  |                                                                     | 963    |   |       |  | 5.02  |       |  |  |      |  |  |       |      |  |       |  |     |       |  |  |      |  |  |       |     |  |         |  |     |  |  |  |       |  |  |  |       | 
|NOK                             |  |                                                                     | 2,120  |   |       |  | 17.79 |       |  |  | 0.97  |  |  |       | 45.60 |  |       |  | 6.94 |       |  |  | 20.54 |  |  |       |     |  |         |  |     |  |  |  | 101.71 |  |  |  | 9.50   | 
|SEK                             |  |                                                                     | 1,736  |   |       |  | 2.08  |       |  |  |      |  |  |       | 1.17  |  |       |  |     |       |  |  | 7.38  |  |  |       |     |  |         |  |     |  |  |  |       |  |  |  |       | 
|UAH                             |  |                                                                     | 29     |   |       |  | 0.13  |       |  |  |      |  |  |       |      |  |       |  |     |       |  |  |      |  |  |       |     |  |         |  |     |  |  |  |       |  |  |  |       | 
|USD                             |  |                                                                     | 7,317  |   |       |  | 35.53 |       |  |  | 0.91  |  |  |       | 10.78 |  |       |  |     |       |  |  | 0.74  |  |  |       |     |  |         |  |     |  |  |  |       |  |  |  | 37.30  | 
|                                |  |                                                                     |        |   |       |  |       |       |  |  |       |  |  |       |       |  |       |  |      |       |  |  |       |  |  |       |      |  |         | 
|Interest-bearing liabilities(1) |  |                                                                     | 24,523 |   |       |  | 88.53 |       |  |  | 12.65 |  |  |       | 90.45 |  |       |  | 8.97 |       |  |  | 32.15 |  |  |       | 4.40 |  |         |  | 5.12 |  |  |  | 106.86 |  |  |  | 163.07 | 
|                                |  |                                                                     |        |   |       |  |       |       |  |  |       |  |  |       |       |  |       |  |      |       |  |  |       |  |  |       |      |  |         | 






|    |                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------
|(1) | The figure deviates from note 20, due to the inclusion of
    derivatives not related to interest-bearing liabilities.

Exchange rate risk






F-54



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group












|                             |  |                                          |     |   |     |  |      |     |  |  |      |   |  |     |      |   |     |  |        |     |  |  |     |   |  |     |         |   |     |  |         |     |  |  |      |   |  |  |        |   |  |  |     |   |  |  |        |  
|---------------------------- |  | ---------------------------------------- | --- | - | --- |  | ---- | --- |  |  | ---- | - |  | --- | ---- | - | --- |  | ------ | --- |  |  | --- | - |  | --- | ------- | - | --- |  | ------- | --- |  |  | ---- | - |  |  | ------ | - |  |  | --- | - |  |  | ------ | -
|                             |  | AUD                                      |     |   | CHF |  |      | CZK |  |  | DKK  |   |  | EUR |      |   | GBP |  |        | HUF |  |  | JPY |   |  | MYR |         |   | SEK |  |         | UAH |  |  | USD  |  
|                             |  |                                          |     |   |     |  |      |     |  |  |      |   |  |     |      |   |     |  |        |     |  |  |     |   |  |     |         |   |     |  |         |     |  |  |      |  
|                             |  | (Face value in millions, local currency) |    
|Interest-bearing assets      |  |                                          |    |   |     |  |     |     |  |  | 44   |   |  |     |      |   |     |  | 7      |     |  |  |    |   |  |     | 418     |   |     |  |        |     |  |  | 635  |   |  |  |        |   |  |  |    |   |  |  | 95     |  
|Interest-bearing liabilities |  |                                          | (37 | ) |     |  | (350 | )   |  |  |     |   |  |     | (179 | ) |     |  | (1,241 | )   |  |  | (76 | ) |  |     | (12,274 | ) |     |  | (19,500 | )   |  |  | (599 | ) |  |  | (785   | ) |  |  | (26 | ) |  |  | (819   | )
|Currency swaps               |  |                                          | 37  |   |     |  | 350  |     |  |  | (461 | ) |  |     |     |   |     |  | 441    |     |  |  | 63  |   |  |     |        |   |     |  | 19,500  |     |  |  |     |   |  |  | (503   | ) |  |  |    |   |  |  | 17     |  
|Forward contracts            |  |                                          |    |   |     |  |     |     |  |  | (252 | ) |  |     | 70   |   |     |  | (384   | )   |  |  | 13  |   |  |     | 18,000  |   |     |  |        |     |  |  |     |   |  |  | (927   | ) |  |  |    |   |  |  | (411   | )
|                             |  |                                          |     |   |     |  |      |     |  |  |      |   |  |     |      |   |     |  |        |     |  |  |     |   |  |     |         |   |     |  |         |     |  |  |      |  
|Total                        |  |                                          |    |   |     |  |     |     |  |  | (669 | ) |  |     | (109 | ) |     |  | (1,177 | )   |  |  |    |   |  |     | 6,144   |   |     |  |        |     |  |  | 36   |   |  |  | (2,215 | ) |  |  | (26 | ) |  |  | (1,118 | )
|                             |  |                                          |     |   |     |  |      |     |  |  |      |   |  |     |      |   |     |  |        |     |  |  |     |   |  |     |         |   |     |  |         |     |  |  |      |  

Credit risk














F-55



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Liquidity risk










Other market risks




Fair values of financial instruments














F-56



---



##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




|                                                                         |  |                   |         |   |            |  |         |            |  |  |            |   |  |  |         |  
|------------------------------------------------------------------------ |  | ----------------- | ------- | - | ---------- |  | ------- | ---------- |  |  | ---------- | - |  |  | ------- | -
|                                                                         |  | Book value        |         |   | Fair value |  |         | Book value |  |  | Fair value |  
|                                                                         |  | 2003              |         |   | 2003       |  |         | 2004       |  |  | 2004       |  
|                                                                         |  |                   |         |   |            |  |         |            |  |  |            |  
|                                                                         |  | (in NOK millions) |        
|Financial assets                                                         |  |                   |         |   |            |  |         |            |  |  |            |   |  |  |         |  
|Listed shares                                                            |  |                   | 720     |   |            |  | 2,955   |            |  |  | 82         |   |  |  | 97      |  
|Cash and short-term money market investments                             |  |                   | 7,952   |   |            |  | 7,952   |            |  |  | 5,398      |   |  |  | 5,398   |  
|Financial liabilities                                                    |  |                   |         |   |            |  |         |            |  |  |            |   |  |  |         |  
|Long-term interest-bearing liabilities(1)                                |  |                   | (23,479 | ) |            |  | (24,743 | )          |  |  | (21,247    | ) |  |  | (22,528 | )
|Short-term interest-bearing liabilities(1)                               |  |                   | (3,273  | ) |            |  | (3,356  | )          |  |  | (4,005     | ) |  |  | (4,050  | )
|Instruments used for interest rate and exchange rate risk
    management |  |                   |         |   |            |  |         |            |  |  |            |   |  |  |         |  
|Gain interest rate swaps                                                 |  |                   |        |   |            |  | 285     |            |  |  | 7          |   |  |  | 437     |  
|Loss interest rate swaps                                                 |  |                   |        |   |            |  | (377    | )          |  |  |           |   |  |  | (432    | )
|Interest rate options asset                                              |  |                   | 49      |   |            |  | 90      |            |  |  | 54         |   |  |  | 28      |  
|Interest rate options liability                                          |  |                   |        |   |            |  | (24     | )          |  |  | (7         | ) |  |  | (7      | )
|Gain cross currency interest rate swaps(1)                               |  |                   | 1,944   |   |            |  | 2,235   |            |  |  | 1,731      |   |  |  | 2,023   |  
|Loss cross currency interest rate swaps(1)                               |  |                   | (954    | ) |            |  | (670    | )          |  |  | (1,072     | ) |  |  | (1,124  | )
|Gain foreign currency forward contracts                                  |  |                   | 12      |   |            |  | 12      |            |  |  | 122        |   |  |  | 122     |  
|Loss foreign currency forward contracts                                  |  |                   | (62     | ) |            |  | (62     | )          |  |  | (54        | ) |  |  | (54     | )






|    |                                                                                                
|--- | -----------------------------------------------------------------------------------------------
|(1) | These items are included in interest-bearing liabilities in the
    balance sheet, see note 20.

22. NON-INTEREST-BEARING LIABILITIES


|                                                         |  |                   |        |  |      |  |        | 
|-------------------------------------------------------- |  | ----------------- | ------ |  | ---- |  | ------ | 
|                                                         |  | 2003              |        |  | 2004 | 
|                                                         |  |                   |        |  |      | 
|                                                         |  | (in NOK millions) |       
|Accounts payable                                         |  |                   | 3,750  |  |      |  | 3,806  | 
|Government taxes, tax deductions etc.                    |  |                   | 2,135  |  |      |  | 2,072  | 
|Dividends payable                                        |  |                   | 1,776  |  |      |  | 2,603  | 
|Current taxes                                            |  |                   | 641    |  |      |  | 321    | 
|Accrued expenses                                         |  |                   | 4,474  |  |      |  | 4,342  | 
|Prepaid revenues                                         |  |                   | 3,163  |  |      |  | 3,503  | 
|Provision for workforce reductions and loss contracts(1) |  |                   | 432    |  |      |  | 762    | 
|Other current liabilities                                |  |                   | 695    |  |      |  | 732    | 
|                                                         |  |                   |        |  |      | 
|Total current non-interest-bearing liabilities           |  |                   | 17,066 |  |      |  | 18,141 | 
|Long-term non-interest-bearing liabilities               |  |                   | 754    |  |      |  | 572    | 
|                                                         |  |                   |        |  |      | 
|Total non-interest-bearing liabilities                   |  |                   | 17,820 |  |      |  | 18,713 | 
|                                                         |  |                   |        |  |      | 






|    |             
|--- | ------------
|(1) | See note 11.

23. PLEDGES AND GUARANTEES


|                                                       |  |                   |       |  |      |  |       | 
|------------------------------------------------------ |  | ----------------- | ----- |  | ---- |  | ----- | 
|                                                       |  | 2003              |       |  | 2004 | 
|                                                       |  |                   |       |  |      | 
|                                                       |  | (in NOK millions) |      
|Interest-bearing liabilities secured by assets pledged |  |                   | 2,692 |  |      |  | 2,184 | 
|Book value of assets pledged                           |  |                   | 8,148 |  |      |  | 8,752 | 

F-57



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




|           |  |                   |       |  |      |  |       | 
|---------- |  | ----------------- | ----- |  | ---- |  | ----- | 
|           |  | 2003              |       |  | 2004 | 
|           |  |                   |       |  |      | 
|           |  | (in NOK millions) |      
|Guarantees |  |                   | 2,557 |  |      |  | 2,169 | 













24. COMMITMENTS AND CONTINGENCIES






F-58



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group










Disputes mentioned in note 24 to the Telenors
financial statements for 2003, for which a verdict has been
reached.




F-59



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


25. CONTRACTUAL OBLIGATIONS




|                                     |  |                   |       |  |      |  |       |      |  |  |       |       |  |      |     |  |      |  |     |  |  |  |       | 
|------------------------------------ |  | ----------------- | ----- |  | ---- |  | ----- | ---- |  |  | ----- | ----- |  | ---- | --- |  | ---- |  | --- |  |  |  | ----- | 
|                                     |  |                   |       |  |      |  |       |      |  |  |       | After | 
|                                     |  | 2005              |       |  | 2006 |  |       | 2007 |  |  | 2008  |       |  | 2009 |     |  | 2009 | 
|                                     |  |                   |       |  |      |  |       |      |  |  |       |       |  |      |     |  |      | 
|                                     |  | (in NOK millions) |      
|Rent of premises                     |  |                   | 737   |  |      |  | 637   |      |  |  | 514   |       |  |      | 475 |  |      |  | 453 |  |  |  | 1,718 | 
|Rent of cars, office equipment, etc. |  |                   | 63    |  |      |  | 40    |      |  |  | 21    |       |  |      | 6   |  |      |  | 1   |  |  |  |      | 
|Rent of satellite- and net-capacity  |  |                   | 1,052 |  |      |  | 227   |      |  |  | 180   |       |  |      | 156 |  |      |  | 132 |  |  |  | 732   | 
|IT-related agreements                |  |                   | 372   |  |      |  | 202   |      |  |  | 163   |       |  |      | 145 |  |      |  | 294 |  |  |  | 84    | 
|Other contractual obligations        |  |                   | 565   |  |      |  | 123   |      |  |  | 73    |       |  |      | 31  |  |      |  | 31  |  |  |  | 37    | 
|Committed investments                |  |                   |       |  |      |  |       |      |  |  |       |       |  |      |     |  |      |  |     |  |  |  |       | 
|Properties and equipment             |  |                   | 2,478 |  |      |  | 152   |      |  |  | 71    |       |  |      | 30  |  |      |  | 30  |  |  |  | 30    | 
|Other contractual investments        |  |                   | 13    |  |      |  |      |      |  |  |      |       |  |      |    |  |      |  |    |  |  |  |      | 
|                                     |  |                   |       |  |      |  |       |      |  |  |       |       |  |      |     |  |      | 
|Total contractual obligation         |  |                   | 5,280 |  |      |  | 1,381 |      |  |  | 1,022 |       |  |      | 843 |  |      |  | 941 |  |  |  | 2,601 | 
|                                     |  |                   |       |  |      |  |       |      |  |  |       |       |  |      |     |  |      | 





26. RELATED PARTIES










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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




















F-61



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group














27. ADDITIONAL INFORMATION ABOUT CASH FLOW


Purchase and sale of subsidiaries and associated companies




F-62



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




|                                                                                            |  |                   |         |   |      |  |       |      |  |  |        |  
|------------------------------------------------------------------------------------------- |  | ----------------- | ------- | - | ---- |  | ----- | ---- |  |  | ------ | -
|                                                                                            |  | 2002              |         |   | 2003 |  |       | 2004 | 
|                                                                                            |  |                   |         |   |      |  |       |      | 
|                                                                                            |  | (In NOK millions) |        
|Purchase of subsidiaries and associated companies                                           |  |                   |         |   |      |  |       |      |  |  |        |  
|Associated companies                                                                        |  |                   | 962     |   |      |  | 1,552 |      |  |  | 112    |  
|Total other fixed assets                                                                    |  |                   | 17,864  |   |      |  |      |      |  |  | 13,773 |  
|Total current assets                                                                        |  |                   | 2,416   |   |      |  |      |      |  |  | 1,353  |  
|Total liabilities                                                                           |  |                   | (7,308  | ) |      |  |      |      |  |  | (5,883 | )
|Minority interests                                                                          |  |                   | (735    | ) |      |  |      |      |  |  |       |  
|Book value of associated companies at the time of acquisition                               |  |                   | (1,670  | ) |      |  |      |      |  |  | (4,215 | )
|Recorded directly to equity                                                                 |  |                   | 658     |   |      |  |      |      |  |  |       |  
|Purchase price                                                                              |  |                   | 12,187  |   |      |  | 1,552 |      |  |  | 5,140  |  
|Of which cash paid                                                                          |  |                   | (12,551 | ) |      |  | (506  | )    |  |  | (6,421 | )
|Cash in subsidiaries purchased                                                              |  |                   | 319     |   |      |  |      |      |  |  | 140    |  
|Cash payment on purchase of subsidiaries and associated
    companies, net of cash received |  |                   | (12,232 | ) |      |  | (506  | )    |  |  | (6,281 | )
|Sale of subsidiaries and associated companies                                               |  |                   |         |   |      |  |       |      |  |  |        |  
|Associated companies                                                                        |  |                   | 77      |   |      |  | 2,307 |      |  |  | 98     |  
|Total other fixed assets                                                                    |  |                   | 115     |   |      |  | 1,020 |      |  |  | 124    |  
|Total current assets                                                                        |  |                   |        |   |      |  | 370   |      |  |  | 553    |  
|Total liabilities                                                                           |  |                   |        |   |      |  | (247  | )    |  |  | (217   | )
|Minority interests                                                                          |  |                   |        |   |      |  | (35   | )    |  |  | (28    | )
|Gain (loss) and translation adjustments of sales                                            |  |                   |        |   |      |  | 299   |      |  |  | 502    |  
|Sales price                                                                                 |  |                   | 192     |   |      |  | 3,714 |      |  |  | 1,032  |  
|Of which cash received                                                                      |  |                   | 192     |   |      |  | 2,440 |      |  |  | 953    |  
|Cash in subsidiaries sold                                                                   |  |                   | (1      | ) |      |  | (113  | )    |  |  | (104   | )
|Cash received on sale of subsidiaries and associated companies,
    net of cash transferred |  |                   | 191     |   |      |  | 2,327 |      |  |  | 849    |  





Restricted bank accounts


|                             |  |                   |     |  |      |  |    |      |  |  |    | 
|---------------------------- |  | ----------------- | --- |  | ---- |  | -- | ---- |  |  | -- | 
|                             |  | 2002              |     |  | 2003 |  |    | 2004 | 
|                             |  |                   |     |  |      |  |    |      | 
|                             |  | (in NOK millions) |    
|For employees tax deduction |  |                   | 88  |  |      |  | 22 |      |  |  | 6  | 
|Other                        |  |                   | 45  |  |      |  | 32 |      |  |  | 17 | 
|                             |  |                   |     |  |      |  |    |      | 
|Total                        |  |                   | 133 |  |      |  | 54 |      |  |  | 23 | 
|                             |  |                   |     |  |      |  |    |      | 

F-63



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




Material non-monetary transactions


|                                                                     |  |                   |     |  |      |  |       |      |  |  |       | 
|-------------------------------------------------------------------- |  | ----------------- | --- |  | ---- |  | ----- | ---- |  |  | ----- | 
|                                                                     |  | 2002              |     |  | 2003 |  |       | 2004 | 
|                                                                     |  |                   |     |  |      |  |       |      | 
|                                                                     |  | (in NOK millions) |    
|Investments in businesses                                            |  |                   | 105 |  |      |  | 2,403 |      |  |  | 69    | 
|Investments in licenses  part not paid in the year of
    the grant |  |                   |    |  |      |  |      |      |  |  | 1,091 | 
|Financial leases                                                     |  |                   | 346 |  |      |  | 27    |      |  |  |      | 
|                                                                     |  |                   |     |  |      |  |       |      | 
|Total                                                                |  |                   | 451 |  |      |  | 2,430 |      |  |  | 1,160 | 
|                                                                     |  |                   |     |  |      |  |       |      | 



28. MANAGEMENT COMPENSATION ETC.








F-64



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group






|                                                            |  |               |          |  |           |  |          |                  |  |                                                                                                                                                                                                                                                                    |       |  |         |       |  |         |         |  |  |  |   | 
|----------------------------------------------------------- |  | ------------- | -------- |  | --------- |  | -------- | ---------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----- |  | ------- | ----- |  | ------- | ------- |  |  |  | - | 
|                                                            |  |               |          |  |           |  |          | Share            |  |                                                                                                                                                                                                                                                                    | Share |  |         | Share | 
|                                                            |  | Agreed period |          |  | Severance |  |          |                  |  | Options                                                                                                                                                                                                                                                            |       |  | Options |       |  | Options |        
|Name/title                                                  |  | of notice     |          |  | Pay       |  |          | Pension benefits |  | 2002(1)                                                                                                                                                                                                                                                            |       |  | 2003(1) |       |  | 2004(1) |        
|                                                            |  |               |          |  |           |  |          |                  |  |                                                                                                                                                                                                                                                                    |       |  |         |       |  |         |        
|Senior Executive Vice President Arve Johansen(2)            |  |               | 6 months |  |           |  | 6 months |                  |  | 66% of Pension-qualifying income at the date of retirement with
    the right to retire at the age of 60. The Pension-qualifying
    income will be equal to the salary of December 31, 2004,
    with an annual regulation according to the consumer price index. |       |  | 100,000 |       |  |         | 100,000 |  |  |  |  | 
|Senior Executive Vice President and CFO, Torstein Moland(2) |  |               | 6 months |  |           |  | 6 months |                  |  | 66% of Pension-qualifying income at the date of retirement with
    the right to retire at the age of 60. The Pension-qualifying
    income will be equal to the salary of December 31, 2004,
    with an annual regulation according to the consumer price index. |       |  | 100,000 |       |  |         | 100,000 |  |  |  |  | 
|Executive Vice President
    Stig Eide Sivertsen            |  |               | 6 months |  |           |  | No       |                  |  | 66% of Pension-qualifying income at the date of retirement with
    the right to retire at the age of 62. The Pension-qualifying
    income will be equal to the salary of December 31, 2004,
    with an annual regulation according to the consumer price index. |       |  | 75,000  |       |  |         | 75,000  |  |  |  |  | 
|Executive Vice President Jan Edvard Thygesen                |  |               | 6 months |  |           |  | 6 months |                  |  | 66% of Pension-qualifying income at the date of retirement with
    the right to retire at the age of 62. The Pension-qualifying
    income will be equal to the salary of December 31, 2003,
    with an annual regulation according to the consumer price index. |       |  | 75,000  |       |  |         | 75,000  |  |  |  |  | 
|Executive Vice President
    Morten Karlsen Sørby           |  |               | 6 months |  |           |  | 6 months |                  |  | 66% of Pension-qualifying income at the date of retirement with
    the right to retire at the age of 62. The Pension-qualifying
    income will be equal to the salary of December 31, 2002,
    with an annual regulation according to the consumer price index. |       |  | 70,000  |       |  |         | 75,000  |  |  |  |  | 




F-65



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group






|    |                                                                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The share option programs for 2002, 2003 and 2004 are described
    in note 29.                                                                                                                                                                                                                                                                                                             
|   
|(2) | Arve Johansen and Torstein Moland, both have agreements which
    entitle them to a possible transfer to other tasks within the
    organization with the right to compensation of half their
    salary. These agreements relate to a specified time period up to
    the age of retirement. The future pension benefits are based on
    the salary at the time of transfer to other work.







|                       |  |               |        | 
|---------------------- |  | ------------- | ------ | 
|                       |  | Number of     |       
|                       |  | shares as     |       
|                       |  | of 31.12.2004 |       
|                       |  |               |       
|The Board of Directors |  |               |        | 
|Thorleif Enger         |  |               | 2,000  | 
|Bjørg Ven              |  |               | 10,000 | 
|Harald Stavn           |  |               | 3,689  | 
|Per Gunnar Salomonsen  |  |               | 1,857  | 
|Irma Tystad            |  |               | 813    | 
|Deputy Board Members   |  |               |        | 
|Helge Enger            |  |               | 1,582  | 
|Roger Rønning          |  |               | 1,382  | 
|Ragnhild Hundere       |  |               | 275    | 
|Hjørdis Henriksen      |  |               | 275    | 
|The Corporate Assembly |  |               |        | 
|Mona Røkke             |  |               | 200    | 
|Berit Kopren           |  |               | 275    | 
|Stein Erik Olsen       |  |               | 1,035  | 
|Arne Jenssen           |  |               | 407    | 

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


|                     |  |               |        | 
|-------------------- |  | ------------- | ------ | 
|                     |  | Number of     |       
|                     |  | shares as     |       
|                     |  | of 31.12.2004 |       
|                     |  |               |       
|The Group Management |  |               |        | 
|Jon Fredrik Baksaas  |  |               | 29,697 | 
|Torstein Moland      |  |               | 20,199 | 
|Arve Johansen        |  |               | 44,977 | 
|Morten Karlsen Sørby |  |               | 7,639  | 
|Jan Edvard Thygesen  |  |               | 56,123 | 
|Stig Eide Sivertsen  |  |               | 28,610 | 
|Asmund Løset         |  |               | 3,304  | 
|Berit Svendsen       |  |               | 7,939  | 

Fees to the auditors




|                      |  |                                 |      |       |              |  |          |              |  |  |            |  |  |      |     |  |      |  |     |      |  |  |      |  |  |  |     |  |  |  |     | 
|--------------------- |  | ------------------------------- | ---- | ----- | ------------ |  | -------- | ------------ |  |  | ---------- |  |  | ---- | --- |  | ---- |  | --- | ---- |  |  | ---- |  |  |  | --- |  |  |  | --- | 
|                      |  |                                 |      | Audit |              |  | Fees for |              |  | 
|                      |  | Audit fees                      |      |       | related fees |  |          | tax services |  |  | Other fees | 
|                      |  |                                 |      |       |              |  |          |              |  |  |            | 
|                      |  | 2003                            |      |       | 2004         |  |          | 2003         |  |  | 2004       |  |  | 2003 |     |  | 2004 |  |     | 2003 |  |  | 2004 | 
|                      |  |                                 |      |       |              |  |          |              |  |  |            |  |  |      |     |  |      |  |     |      |  |  |      | 
|                      |  | (in NOK millions excluding VAT) |     
|Telenor ASA           |  |                                 |      |       |              |  |          |              |  |  |            |  |  |      |     |  |      |  |     |      |  |  |      |  |  |  |     |  |  |  |     | 
|Group Auditor         |  |                                 | 2.6  |       |              |  | 2.6      |              |  |  | 4.9        |  |  |      | 2.9 |  |      |  | 1.1 |      |  |  | 1.2  |  |  |  |    |  |  |  |    | 
|Other Auditors        |  |                                 |     |       |              |  |         |              |  |  | 1.1        |  |  |      |    |  |      |  |    |      |  |  |     |  |  |  | 0.4 |  |  |  |    | 
|Other Group companies |  |                                 |      |       |              |  |          |              |  |  |            |  |  |      |     |  |      |  |     |      |  |  |      |  |  |  |     |  |  |  |     | 
|Group Auditor         |  |                                 | 21.9 |       |              |  | 26.4     |              |  |  | 12.2       |  |  |      | 7.1 |  |      |  | 5.2 |      |  |  | 4.0  |  |  |  | 1.0 |  |  |  | 0.7 | 
|Other Auditors        |  |                                 | 3.1  |       |              |  | 0.2      |              |  |  | 2.5        |  |  |      |    |  |      |  | 1.3 |      |  |  | 0.1  |  |  |  | 1.1 |  |  |  | 0.1 | 



29. SHARE OPTION PLANS




Option program for shares in Telenor ASA






F-67



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group






|                                      |  |               |           |                        |                   |  |       | 
|------------------------------------- |  | ------------- | --------- | ---------------------- | ----------------- |  | ----- | 
|                                      |  |               |           | Average exercise price |                  
|                                      |  |               |           | at the end             |                  
|Share Options Telenor ASA             |  | Share options |           |                        | of option life(1) | 
|                                      |  |               |           |                        |                   | 
|Options granted in 2002 (February 21) |  |               | 2,520,000 |                        |                   |  | 50.96 | 
|Options granted in 2002 (June 21)     |  |               | 150,000   |                        |                   |  | 42.12 | 
|Options forfeited in 2002             |  |               | 55,000    |                        |                   |  | 50.96 | 
|Balance at December 31, 2002          |  |               | 2,615,000 |                        |                   |  | 50.45 | 
|Options granted in 2003               |  |               | 2,850,000 |                        |                   |  | 26.44 | 
|Options forfeited in 2003             |  |               | 290,000   |                        |                   |  | 32.36 | 
|Options exercised in 2003             |  |               | 71,667    |                        |                   |  | 50.96 | 
|Balance at December 31, 2003          |  |               | 5,103,333 |                        |                   |  | 38.06 | 
|Options granted in 2004               |  |               | 380,000   |                        |                   |  | 48.36 | 
|Options forfeited in 2004             |  |               | 45,000    |                        |                   |  | 26.98 | 
|Options exercised in 2004             |  |               | 1,027,994 |                        |                   |  | 36.28 | 
|Balance at December 31, 2004          |  |               | 4,410,339 |                        |                   |  | 33.97 | 



|                 |       |     |             |                |           |              |             |  |              |  |  |  |         | 
|---------------- | ----- | --- | ----------- | -------------- | --------- | ------------ | ----------- |  | ------------ |  |  |  | ------- | 
|                 |       |     |             | Weighted       |           |              |            
|                 |       |     |             | Average        |           |              | Options     | 
|                 |       |     |             | Remaining Life |           |              | Exercisable | 
|                 |       |     |             | as of          |           |              | as of       | 
|Weighted Average |       |     | Options     |                |           | December 31, |             |  | December 31, | 
|Exercise Price   |       |     | Outstanding |                |           | 2004         |             |  | 2004(1)      | 
|                 |       |     |             |                |           |              |             |  |              | 
|(in NOK)(1)      |       |     |             |                |           |              |            
|                 | 50.96 | (2) |             |                | 1,630,335 |              |             |  | 4 years      |  |  |  | 913,667 | 
|                 | 42.12 | (3) |             |                | 150,000   |              |             |  | 4 years      |  |  |  | 100,000 | 
|                 | 26.44 | (4) |             |                | 2,250,004 |              |             |  | 5 years      |  |  |  | 583,328 | 
|                 | 48.36 | (5) |             |                | 380,000   |              |             |  | 6 years      |  |  |  |        | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Exercise price for the share option programs of 2002 are
    calculated at the latest possible date of exercise, and based on
    12 month NIBOR implied forward rates calculated of the spot
    curve (February 20 and June 20, each year,
    respectively). For the share option programs of 2003 and 2004,
    the exercise prices are fixed throughout the options
    terms. The options may only be exercised in a period right after
    the publication of Telenors quarterly financial results.
|   
|(2) | First possible exercise was February 2003 for 1/3 of the options.                                                                                                                                                                                                                                                                                                                                                                                                                                           

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




|    |                                                                  
|--- | -----------------------------------------------------------------
|(3) | First possible exercise was July 2003 for 1/3 of the options.    
|   
|(4) | First possible exercise was February 2004 for 1/3 of the options.
|   
|(5) | First possible exercise was February 2005 for 1/3 of the options.



Option program for shares in EDB Business Partner ASA










|                             |                           |               |           |                  |                |  |       |       | 
|---------------------------- | ------------------------- | ------------- | --------- | ---------------- | -------------- |  | ----- | ----- | 
|                             |                           |               |           | Weighted average |               
|                             |                           | Share options |           |                  | exercise price | 
|                             |                           |               |           |                  |                | 
|                             |                           |               |           | (NOK)            |               
|Balance at December 31, 2001 |                           |               | 9,955,850 |                  |                |  | 126.7 |      
|                             | Options granted in 2002   |               |           | 269,445          |                |  |       | 67.0  | 
|                             | Options exercised in 2002 |               |           |                 |                |  |       |      | 
|                             | Options forfeited in 2002 |               |           | 528,620          |                |  |       | 129.6 | 
|Balance at December 31, 2002 |                           |               | 9,696,675 |                  |                |  | 124.9 |      
|                             | Options granted in 2003   |               |           | 600,000          |                |  |       | 15.9  | 
|                             | Options exercised in 2003 |               |           |                 |                |  |       |      | 
|                             | Options forfeited in 2003 |               |           | 411,678          |                |  |       | 137.9 | 
|Balance at December 31, 2003 |                           |               | 9,884,997 |                  |                |  | 117.7 |      
|                             | Options granted in 2004   |               |           | 1,014,994        |                |  |       | 45.5  | 
|                             | Options exercised in 2004 |               |           |                 |                |  |       |      | 
|                             | Options forfeited in 2004 |               |           | 9,284,997        |                |  |       | 118.7 | 
|Balance at December 31, 2004 |                           |               | 1,614,994 |                  |                |  | 34.5  |      

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




|                 |       |  |             |          |            |                |       |  |              |  |  |  |         | 
|---------------- | ----- |  | ----------- | -------- | ---------- | -------------- | ----- |  | ------------ |  |  |  | ------- | 
|                 |       |  |             |          |            | Options        |      
|                 |       |  |             |          |            | Exercisable    |      
|                 |       |  |             | Weighted |            |                | as of | 
|Weighted Average |       |  | Options     |          |            | Average        |       |  | December 31, | 
|Exercise Price   |       |  | Outstanding |          |            | Remaining Life |       |  | 2004         | 
|                 |       |  |             |          |            |                |       |  |              | 
|(in NOK)         |       |  |             |          | (in years) |                |       | 
|                 | 15.94 |  |             |          | 600,000    |                |       |  | 5.5          |  |  |  | 200,000 | 
|                 | 45.55 |  |             |          | 989,994    |                |       |  | 1.8          |  |  |  |        | 
|                 | 44.83 |  |             |          | 25,000     |                |       |  | 2.4          |  |  |  |        | 

30. NUMBER OF SHARES, OWNERSHIP ETC.












F-70



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




|                               |  |           |             |  |   |  |       | 
|------------------------------ |  | --------- | ----------- |  | - |  | ----- | 
|                               |  | Number    |             |  |  
|Name of shareholders           |  | of shares |             |  | % | 
|                               |  |           |             |  |   | 
|Ministry of Trade and Industry |  |           | 944,626,908 |  |   |  | 53.99 | 
|State Street Bank (nominee)    |  |           | 94,390,278  |  |   |  | 5.39  | 
|National Insurance Scheme Fund |  |           | 63,193,800  |  |   |  | 3.61  | 
|JPMorgan Chase Bank            |  |           | 38,659,400  |  |   |  | 2,21  | 
|JPMorgan Chase Bank (nominee)  |  |           | 24,876,033  |  |   |  | 1,42  | 
|Mellon Bank AS (nominee)       |  |           | 23,935,009  |  |   |  | 1,37  | 



31. LICENSES




|                                |  |                                           |  |                          |  |                  |          |  |                  |  |                      | 
|------------------------------- |  | ----------------------------------------- |  | ------------------------ |  | ---------------- | -------- |  | ---------------- |  | -------------------- | 
|                                |  |                                           |  |                          |  | License          |          |  | License          | 
|Company                         |  | Licenses                                  |  | Network Type             |  | Granted          |          |  | Expiration Date  | 
|                                |  |                                           |  |                          |  |                  |          |  |                  | 
|Telenor ASA/Telenor Mobil AS    |  | GSM 900
    GSM 900
    GSM 1800
    UMTS |  | GSM/GPRS/EDGE
    W-CDMA |  | 1992200119982000 |          |  | 2005201320102012 | 
|Sonofon Holding A/S             |  | GSM 900
    GSM 1800                      |  | GSM/GPRS                 |  |                  | 19971997 |  |                  |  | 20122007             | 
|Pannon GSM Rt                   |  | GSM 900
    GSM 1800
    UMTS             |  | GSM/GPRS/EDGE
    W-CDMA |  | 199319992004     |          |  | 200820142019     | 
|Kyivstar GSM JSC                |  | GSM 900
    GSM 1800                      |  | GSM/GPRS                 |  |                  | 19972001 |  |                  |  | 20122016             | 
|DiGi.Com bhd                    |  | GSM 1800
    EGSM                         |  | GSM/GPRS/EDGE            |  |                  | 2000     |  |                  |  | 2015                 | 
|GrameenPhone Ltd.               |  | GSM 900                                   |  | GSM                      |  |                  | 1996     |  |                  |  | 2011                 | 
|Telenor Pakistan (Private) Ltd. |  | GSM 900
    GSM 1800                      |  | GSM/GPRS/EDGE            |  |                  | 20042004 |  |                  |  | 20192019             | 
|ProMonte GSM D.O.O.             |  | GSM 900
    GSM 1800                      |  | GSM/GPRS                 |  |                  | 20022002 |  |                  |  | 20172017             | 
|Telenor Telecom Solutions AS    |  | Wimax
    Radio links(1)                  |  | Fixed networks           |  |                  | 20041988 |  |                  |  | 2022Not time limited | 






|    |                                                                                                                                                                                                                                        
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Telenor is dependent on a number of radio links in the fixed
    network business, both in and outside Norway, that to a large
    extent require licenses. The preceding table includes only the
    Norwegian fixed network business.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group








32. UNITED STATES GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES






Reconciliation of net income (loss) from Norwegian GAAP to US
GAAP


|                                                          |  |      |    |                              |      |  |        |      |  |  |       |   |  |  |       |  
|--------------------------------------------------------- |  | ---- | -- | ---------------------------- | ---- |  | ------ | ---- |  |  | ----- | - |  |  | ----- | -
|                                                          |  | Note |    |                              | 2002 |  |        | 2003 |  |  | 2004  |  
|                                                          |  |      |    |                              |      |  |        |      |  |  |       |  
|                                                          |  |      |    | (in NOK millions, except per |     
|                                                          |  |      |    | share amounts)               |     
|Net income (loss) in accordance with Norwegian GAAP       |  |      |    |                              |      |  | (4,298 | )    |  |  | 4,560 |   |  |  | 5,358 |  
|Adjustments for US GAAP:                                  |  |      |    |                              |      |  |        |      |  |  |       |   |  |  |       |  
|Depreciation of capitalized interest associated companies |  |      | 1  |                              |      |  | (3     | )    |  |  | (8    | ) |  |  | (8    | )
|Pensions                                                  |  |      | 2  |                              |      |  | (24    | )    |  |  | (25   | ) |  |  | (25   | )
|Amortization of license costs and related goodwill        |  |      | 3  |                              |      |  | (2     | )    |  |  | (8    | ) |  |  | (7    | )
|Temporary investments in entities                         |  |      | 4  |                              |      |  | 12     |      |  |  | 67    |   |  |  | (14   | )
|Stock compensation                                        |  |      | 7  |                              |      |  |       |      |  |  | (42   | ) |  |  | (54   | )
|Sale and lease back of properties                         |  |      | 8  |                              |      |  | 49     |      |  |  | (3    | ) |  |  | 10    |  
|Derivative financial instruments                          |  |      | 9  |                              |      |  | 47     |      |  |  | (173  | ) |  |  | (58   | )
|Goodwill amortization                                     |  |      | 10 |                              |      |  | 1,631  |      |  |  | 1,038 |   |  |  | 1,193 |  
|Goodwill impairment                                       |  |      | 10 |                              |      |  | (390   | )    |  |  |      |   |  |  | (962  | )
|Measurement date                                          |  |      | 11 |                              |      |  | 12     |      |  |  | (3    | ) |  |  | (5    | )
|Sale of software                                          |  |      | 12 |                              |      |  | (345   | )    |  |  | 78    |   |  |  | 51    |  
|Reversal of write-downs                                   |  |      | 13 |                              |      |  |       |      |  |  | (160  | ) |  |  | 58    |  
|Prepayments on equal terms                                |  |      | 19 |                              |      |  |       |      |  |  | 12    |   |  |  | 578   |  
|Asset retirement obligation                               |  |      | 14 |                              |      |  |       |      |  |  | (38   | ) |  |  | (48   | )
|Amortization net excess value subsequent acquisitions     |  |      | 15 |                              |      |  |       |      |  |  |      |   |  |  | (29   | )
|Sale of business with extension of service contract       |  |      | 22 |                              |      |  |       |      |  |  |      |   |  |  | (256  | )
|Cumulative effect of change in accounting principle       |  |      | 14 |                              |      |  |       |      |  |  | (258  | ) |  |  |      |  
|Other differences                                         |  |      |    |                              |      |  |       |      |  |  | 28    |   |  |  | (71   | )
|Tax effect of US GAAP adjustments                         |  |      | 16 |                              |      |  | (68    | )    |  |  | 90    |   |  |  | (102  | )
|Minority interests                                        |  |      | 7  |                              |      |  | (279   | )    |  |  | (119  | ) |  |  | 30    |  
|                                                          |  |      |    |                              |      |  |        |      |  |  |       |  
|Net income (loss) in accordance with US GAAP              |  |      |    |                              |      |  | (3,658 | )    |  |  | 5,036 |   |  |  | 5,639 |  
|                                                          |  |      |    |                              |      |  |        |      |  |  |       |  

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


|                                                  |                                                                          |      |  |                              |      |  |        |       |   |  |        |       |   |  |        |      | 
|------------------------------------------------- | ------------------------------------------------------------------------ | ---- |  | ---------------------------- | ---- |  | ------ | ----- | - |  | ------ | ----- | - |  | ------ | ---- | 
|                                                  |                                                                          | Note |  |                              | 2002 |  |        | 2003  |   |  | 2004   |      
|                                                  |                                                                          |      |  |                              |      |  |        |       |   |  |        |      
|                                                  |                                                                          |      |  | (in NOK millions, except per |     
|                                                  |                                                                          |      |  | share amounts)               |     
|Net income (loss) per share                       |                                                                          |      |  |                              |      |  |        |       |   |  |        |       |   |  |        |     
|                                                  |  Cumulative effect on prior years of change in
    accounting principle |      |  |                              |      |  |        |      |   |  |        | (0.10 | ) |  |        |      | 
|                                                  |  In accordance with US GAAP (basic)                                     |      |  |                              |      |  |        | (2.06 | ) |  |        | 2.84  |   |  |        | 3.22 | 
|                                                  |  In accordance with US GAAP (diluted)                                   |      |  |                              |      |  |        | (2.06 | ) |  |        | 2.84  |   |  |        | 3.22 | 
|Revenue in accordance with US GAAP                |                                                                          |      |  |                              |      |  | 47,879 |       |   |  | 52,826 |       |   |  | 67,801 |     
|Operating profit in accordance with US GAAP       |                                                                          |      |  |                              |      |  | 479    |       |   |  | 8,297  |       |   |  | 6,422  |     
|Profit (loss) before taxes and minority interests |                                                                          |      |  |                              |      |  | (4,148 | )     |   |  | 7,930  |       |   |  | 9,303  |     
|Taxes in accordance with US GAAP                  |                                                                          |      |  |                              |      |  | 412    |       |   |  | (2,286 | )     |   |  | (2,658 | )   
|Minority interest in accordance with US GAAP      |                                                                          |      |  |                              |      |  | 78     |       |   |  | (609   | )     |   |  | (1,006 | )   

Reconciliation of shareholders equity from Norwegian
GAAP to US GAAP


|                                                                                    |  |      |    |                   |      |  |        |      |  |  |        |  
|----------------------------------------------------------------------------------- |  | ---- | -- | ----------------- | ---- |  | ------ | ---- |  |  | ------ | -
|                                                                                    |  | Note |    |                   | 2003 |  |        | 2004 | 
|                                                                                    |  |      |    |                   |      |  |        |      | 
|                                                                                    |  |      |    | (in NOK millions) |     
|Shareholders equity in accordance with Norwegian GAAP                              |  |      |    |                   |      |  | 37,237 |      |  |  | 37,594 |  
|Adjustments for US GAAP:                                                            |  |      |    |                   |      |  |        |      |  |  |        |  
|Dividends                                                                           |  |      | 17 |                   |      |  | 1,776  |      |  |  | 2,603  |  
|Capitalized interest associated companies                                           |  |      | 1  |                   |      |  | 17     |      |  |  | 9      |  
|Pensions                                                                            |  |      | 2  |                   |      |  | 91     |      |  |  | 66     |  
|Amortization of license costs and related goodwill                                  |  |      | 3  |                   |      |  | 12     |      |  |  | 5      |  
|Temporary investments in entities                                                   |  |      | 4  |                   |      |  | (31    | )    |  |  | (45    | )
|Gains on subsidiaries equity transactions and disposal of
    shares in subsidiary |  |      | 5  |                   |      |  | 700    |      |  |  | 700    |  
|Marketable equity securities  net of tax                                           |  |      | 6  |                   |      |  | 1,676  |      |  |  | 15     |  
|Stock compensation                                                                  |  |      | 7  |                   |      |  | (214   | )    |  |  | (268   | )
|Sale and lease back of properties                                                   |  |      | 8  |                   |      |  | (71    | )    |  |  | (61    | )
|Derivative financial instruments                                                    |  |      | 9  |                   |      |  | (251   | )    |  |  | (298   | )
|Goodwill amortization                                                               |  |      | 10 |                   |      |  | 2,708  |      |  |  | 3,901  |  
|Goodwill impairment                                                                 |  |      | 10 |                   |      |  | (390   | )    |  |  | (1,352 | )
|Measurement date                                                                    |  |      | 11 |                   |      |  | 680    |      |  |  | 675    |  
|Sale of software                                                                    |  |      | 12 |                   |      |  | (267   | )    |  |  | (216   | )
|Minimum pension liability                                                           |  |      | 2  |                   |      |  | (113   | )    |  |  |       |  
|Reversal of write-downs                                                             |  |      | 13 |                   |      |  | (160   | )    |  |  | (102   | )
|Asset retirement obligation                                                         |  |      | 14 |                   |      |  | (296   | )    |  |  | (344   | )
|Subsequent acquisition                                                              |  |      | 15 |                   |      |  | 74     |      |  |  | 109    |  
|Prepayments on equal terms                                                          |  |      | 19 |                   |      |  | 12     |      |  |  | 590    |  
|Sale of business with extension of service contract                                 |  |      | 22 |                   |      |  |       |      |  |  | (256   | )
|Other differences                                                                   |  |      |    |                   |      |  | 28     |      |  |  | (43    | )
|Tax effect of US GAAP adjustments                                                   |  |      | 16 |                   |      |  | (122   | )    |  |  | (317   | )
|Minority interests                                                                  |  |      | 5  |                   |      |  | (561   | )    |  |  | (535   | )
|                                                                                    |  |      |    |                   |      |  |        |      | 
|Shareholders equity in accordance with US GAAP                                     |  |      |    |                   |      |  | 42,535 |      |  |  | 42,430 |  
|                                                                                    |  |      |    |                   |      |  |        |      | 

F-73



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


|                                                               |  |      |  |                   |      |  |         |      |  |  |         | 
|-------------------------------------------------------------- |  | ---- |  | ----------------- | ---- |  | ------- | ---- |  |  | ------- | 
|                                                               |  | Note |  |                   | 2003 |  |         | 2004 | 
|                                                               |  |      |  |                   |      |  |         |      | 
|                                                               |  |      |  | (in NOK millions) |     
|Fixed assets in accordance with US GAAP                        |  |      |  |                   |      |  | 83,729  |      |  |  | 84,180  | 
|Current assets in accordance with US GAAP                      |  |      |  |                   |      |  | 17,359  |      |  |  | 16,991  | 
|Total assets in accordance with US GAAP                        |  |      |  |                   |      |  | 101,088 |      |  |  | 101,171 | 
|Long-term liabilities and provision in accordance with US GAAP |  |      |  |                   |      |  | 39,255  |      |  |  | 34,882  | 
|Short-term liabilities in accordance with US GAAP              |  |      |  |                   |      |  | 15,473  |      |  |  | 19,438  | 

The following table reflects the components of comprehensive
income (loss) under U.S. GAAP




|                                     |  |                  |        |   |      |  |      |      |  |  |        |   |  |     |       |   |     |  |      |        |  |  |       |   |  |     |        |   |  |  |     |   |  |  |        |  
|------------------------------------ |  | ---------------- | ------ | - | ---- |  | ---- | ---- |  |  | ------ | - |  | --- | ----- | - | --- |  | ---- | ------ |  |  | ----- | - |  | --- | ------ | - |  |  | --- | - |  |  | ------ | -
|                                     |  | 2002             |        |   | 2003 |  |      | 2004 | 
|                                     |  |                  |        |   |      |  |      |      | 
|                                     |  | Pretax           |        |   | Tax  |  |      | Net  |  |  | Pretax |   |  | Tax |       |   | Net |  |      | Pretax |  |  | Tax   |   |  | Net |       
|                                     |  |                  |        |   |      |  |      |      |  |  |        |   |  |     |       |   |     |  |      |        |  |  |       |   |  |     |       
|                                     |  | (in NOK million) |       
|Unrealized gain (loss) on securities |  |                  | (58    | ) |      |  | 16   |      |  |  | (42    | ) |  |     | 2,343 |   |     |  | (656 | )      |  |  | 1,687 |   |  |     | (2,311 | ) |  |  | 647 |   |  |  | (1664  | )
|Net investment hedge                 |  |                  | 1,139  |   |      |  | (269 | )    |  |  | 870    |   |  |     | 445   |   |     |  | (150 | )      |  |  | 295   |   |  |     | (751   | ) |  |  | 151 |   |  |  | (600   | )
|Minimum pension liability adjustment |  |                  | (34    | ) |      |  | 10   |      |  |  | (24    | ) |  |     | (79   | ) |     |  | 22   |        |  |  | (57   | ) |  |     | 113    |   |  |  | (32 | ) |  |  | 81     |  
|Foreign currency translation         |  |                  | (3,722 | ) |      |  | 34   |      |  |  | (3,688 | ) |  |     | 586   |   |     |  | (38  | )      |  |  | 548   |   |  |     | 92     |   |  |  | 9   |   |  |  | 101    |  
|Other comprehensive income           |  |                  | (2,675 | ) |      |  | (209 | )    |  |  | (2,884 | ) |  |     | 3,295 |   |     |  | (822 | )      |  |  | 2,473 |   |  |     | (2,857 | ) |  |  | 775 |   |  |  | (2,082 | )

Reconciliation


|                                               |  |                  |        |   |      |  |       |      |  |  |        |  
|---------------------------------------------- |  | ---------------- | ------ | - | ---- |  | ----- | ---- |  |  | ------ | -
|                                               |  | 2002             |        |   | 2003 |  |       | 2004 | 
|                                               |  |                  |        |   |      |  |       |      | 
|                                               |  | (in NOK million) |       
|Net income (loss) in accordance with U.S. GAAP |  |                  | (3,658 | ) |      |  | 5,036 |      |  |  | 5,639  |  
|Other comprehensive income                     |  |                  | (2,884 | ) |      |  | 2,473 |      |  |  | (2,082 | )
|                                               |  |                  |        |   |      |  |       |      | 
|Total comprehensive income (loss)              |  |                  | (6,542 | ) |      |  | 7,509 |      |  |  | 3,557  |  
|                                               |  |                  |        |   |      |  |       |      | 

F-74



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


Components of equity in accordance with U.S. GAAP:


|                                       |                                                  |                  |        |        |              |  |        |              |   |  |        |        |  
|-------------------------------------- | ------------------------------------------------ | ---------------- | ------ | ------ | ------------ |  | ------ | ------------ | - |  | ------ | ------ | -
|                                       |                                                  | December 31,     |        |        | December 31, |  |        | December 31, |  
|                                       |                                                  | 2002             |        |        | 2003         |  |        | 2004         |  
|                                       |                                                  |                  |        |        |              |  |        |              |  
|                                       |                                                  | (in NOK million) |       
|Share capital                          |                                                  |                  | 10,820 |        |              |  | 10,824 |              |   |  | 10,498 |       
|Other paid capital                     |                                                  |                  | 18,634 |        |              |  | 18,656 |              |   |  | 17,539 |       
|Other equity                           |                                                  |                  | 9,423  |        |              |  | 13,685 |              |   |  | 17,633 |       
|Treasury shares                        |                                                  |                  | (169   | )      |              |  | (169   | )            |   |  | (687   | )     
|Accumulated other comprehensive income |                                                  |                  |        |        |              |  |        |              |   |  |        |       
|                                       |  unrealized gain (loss) on securities after tax |                  |        | (24    | )            |  |        | 1,676        |   |  |        | 15     |  
|                                       |  net investment hedge                           |                  |        | 1,432  |              |  |        | 1,841        |   |  |        | 1,079  |  
|                                       |  foreign currency adjustments                   |                  |        | (4,029 | )            |  |        | (3,445       | ) |  |        | (3,353 | )
|                                       |  minimum pension liability adjustments          |                  |        | (34    | )            |  |        | (113         | ) |  |        |       |  
|                                       |  deferred taxes                                 |                  |        | (254   | )            |  |        | (420         | ) |  |        | (294   | )
|                                       |                                                  |                  |        |        |              |  |        |              |  
|Total                                  |                                                  |                  | 35,799 |        |              |  | 42,535 |              |   |  | 42,430 |       
|                                       |                                                  |                  |        |        |              |  |        |              |  

(1)  Capitalized interest






(2)  Pensions












|                                       |  |              |      |   |              |  |     |  
|-------------------------------------- |  | ------------ | ---- | - | ------------ |  | --- | -
|                                       |  | December 31, |      |   | December 31, | 
|                                       |  | 2003         |      |   | 2004         | 
|                                       |  |              |      |   |              | 
|Benefit obligation                     |  |              | 911  |   |              |  | 672 |  
|Plan assets                            |  |              | (78  | ) |              |  | (22 | )
|Intangible assets                      |  |              | (382 | ) |              |  | (47 | )
|Accumulated other comprehensive income |  |              | (113 | ) |              |  |    |  
|Net pension obligations                |  |              | 338  |   |              |  | 603 |  

F-75



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


(3)  Amortization of license costs and related
goodwill






(4)  Temporary investment in entities










(5)  Subsidiaries equity transactions






(6)  Marketable equity securities








F-76



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group






(7)  Share compensation












|                                       |  |           |       |  |          |  |      |            |  |  |              |  |  |  |           | 
|-------------------------------------- |  | --------- | ----- |  | -------- |  | ---- | ---------- |  |  | ------------ |  |  |  | --------- | 
|                                       |  | Risk free |       |  | Dividend |  |      | Volatility |  |  | Weighted     | 
|                                       |  | rate      |       |  | yield    |  |      | factor     |  |  | average life | 
|                                       |  |           |       |  |          |  |      |            |  |  |              | 
|Telenor ASA 2002 programs              |  |           | 6.40% |  |          |  | 2.0% |            |  |  | 31.3%        |  |  |  | 4.5 years | 
|Telenor ASA 2003 program               |  |           | 4.80% |  |          |  | 2.0% |            |  |  | 32.3%        |  |  |  | 4.5 years | 
|Telenor ASA 2004 program               |  |           | 3.13% |  |          |  | 2.0% |            |  |  | 36.5%        |  |  |  | 4.5 years | 
|EDB Business Partner ASA 2003 program  |  |           | 5.05% |  |          |  | 0.0% |            |  |  | 66.9%        |  |  |  | 4.5 years | 
|EDB Business Partner ASA 2004 programs |  |           | 2.50% |  |          |  | 0.0% |            |  |  | 54.4%        |  |  |  | 1.5 years | 



F-77



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


|                                                                                                          |  |                             |        |   |      |  |       |      |  |  |       |  
|--------------------------------------------------------------------------------------------------------- |  | --------------------------- | ------ | - | ---- |  | ----- | ---- |  |  | ----- | -
|                                                                                                          |  | 2002                        |        |   | 2003 |  |       | 2004 | 
|                                                                                                          |  |                             |        |   |      |  |       |      | 
|                                                                                                          |  | (in NOK millions except per |       
|                                                                                                          |  | share amounts)              |       
|Net income (loss) as reported in accordance with US GAAP                                                  |  |                             | (3,658 | ) |      |  | 5,036 |      |  |  | 5,639 |  
|Deduct stock based employee compensation expense included in
    reported net income                      |  |                             |       |   |      |  | 39    |      |  |  | 75    |  
|Add stock based employee compensation expense determined under
    fair value based method for all awards |  |                             | (34    | ) |      |  | (25   | )    |  |  | (15   | )
|                                                                                                          |  |                             |        |   |      |  |       |      | 
|Pro forma net income (loss) in accordance with US GAAP                                                    |  |                             | (3,692 | ) |      |  | 5,050 |      |  |  | 5,699 |  
|                                                                                                          |  |                             |        |   |      |  |       |      | 
|Net income (loss) per share in accordance with US GAAP                                                    |  |                             |        |   |      |  |       |      |  |  |       |  
|Basic as reported in accordance with US GAAP                                                              |  |                             | (2.06  | ) |      |  | 2.84  |      |  |  | 3.22  |  
|Basic pro forma in accordance with US GAAP                                                                |  |                             | (2.08  | ) |      |  | 2.84  |      |  |  | 3.26  |  
|Diluted as reported in accordance with US GAAP                                                            |  |                             | (2.06  | ) |      |  | 2.84  |      |  |  | 3.22  |  
|Diluted pro forma in accordance with US GAAP                                                              |  |                             | (2.08  | ) |      |  | 2.84  |      |  |  | 3.26  |  







(8)  Sale and lease back of properties






(9)  Derivative financial instruments






|                                                               |  |                 |     |  
|-------------------------------------------------------------- |  | --------------- | --- | -
|                                                               |  | in NOK millions |    
|                                                               |  |                 |    
|Adjustments to net income (loss)                               |  |                 |     |  
|Interest rate derivatives used for fair value hedge accounting |  |                 | (47 | )
|Net investment hedge accounting                                |  |                 | (11 | )
|Total adjustments to net income (loss) for US GAAP             |  |                 | (58 | )

F-78



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


|                                                                          |  |                 |     |  
|------------------------------------------------------------------------- |  | --------------- | --- | -
|                                                                          |  | in NOK millions |    
|                                                                          |  |                 |    
|Change in equity adjustment from previous year-end                        |  |                 |     |  
|Interest rate derivatives used in fair value hedge accounting             |  |                 | (47 | )
|Total change in equity adjustments for US GAAP from previous
    year-end |  |                 | (47 | )





Derivative (and nonderivative) instruments designated as fair
value hedging instruments








Derivative instruments designated as cash flow hedging
instruments




Derivative (and nonderivative) instruments designated as
hedging instruments of a net investment in a foreign
operation




F-79



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




Derivatives not designated as hedging instruments






Quantitative information


|                                                         |  |                 |      |  
|-------------------------------------------------------- |  | --------------- | ---- | -
|                                                         |  | in NOK millions |     
|                                                         |  |                 |     
|Fair value hedging relationships                         |  |                 |      |  
|Net loss recognized in 2004 earnings hedged items:       |  |                 | (463 | )
|Net gain recognized in 2004 earnings hedging instruments |  |                 | 472  |  
|Amount of hedge ineffectiveness                          |  |                 | 9    |  



Hedges of foreign currency exposure of a net investment in a
foreign operation;






Cash flow hedging relationships;




(10) Amortization and impairment of goodwill






F-80



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group








|     |                 
|---- | ----------------
|(11) | Measurement date







|     |                 
|---- | ----------------
|(12) | Sale of software





|     |                        
|---- | -----------------------
|(13) | Reversal of write-downs







|     |                             
|---- | ----------------------------
|(14) | Asset retirement obligations

Accounting for Asset Retirement
Obligations


F-81



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group










|                                                 |  |                 |     |   |      |  |     | 
|------------------------------------------------ |  | --------------- | --- | - | ---- |  | --- | 
|                                                 |  | 2003            |     |   | 2004 | 
|                                                 |  |                 |     |   |      | 
|                                                 |  | In NOK millions |    
|Asset retirement obligation at beginning of year |  |                 | 316 |   |      |  | 366 | 
|Liabilities incurred                             |  |                 | 38  |   |      |  | 28  | 
|Liabilities settled                              |  |                 | (10 | ) |      |  |    | 
|Accretion expense                                |  |                 | 22  |   |      |  | 27  | 
|New subsidiaries                                 |  |                 |    |   |      |  | 33  | 
|Asset retirement obligation at end of year       |  |                 | 366 |   |      |  | 454 | 





F-82



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


|                                                                                                 |  |                           |        |   |      |  |       | 
|------------------------------------------------------------------------------------------------ |  | ------------------------- | ------ | - | ---- |  | ----- | 
|                                                                                                 |  | 2002                      |        |   | 2003 | 
|                                                                                                 |  |                           |        |   |      | 
|                                                                                                 |  | (in NOK millions,         |       
|                                                                                                 |  | except per share amounts) |       
|Reported net income (loss)                                                                       |  |                           | (3,658 | ) |      |  | 5,036 | 
|Assets retirement obligations net of tax and minority interests
    (2003 implementation effect) |  |                           | (28    | ) |      |  | 187   | 
|Adjusted net income (loss)                                                                       |  |                           | (3,686 | ) |      |  | 5,223 | 
|Earnings per share                                                                               |  |                           |        |   |      |  |       | 
|Reported earnings (loss) per share                                                               |  |                           | (2.06  | ) |      |  | 2.84  | 
|Adjusted earnings (loss) per share                                                               |  |                           | (2.08  | ) |      |  | 2.94  | 



|     |                                                                  
|---- | -----------------------------------------------------------------
|(15) | Subsequent acquisitions of ownership interest in
    subsidiaries





(16) Taxes




(17) Dividends






(18) Cross border QTE leases








F-83



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




|                                              |  |                   |       | 
|--------------------------------------------- |  | ----------------- | ----- | 
|                                              |  | As of             |      
|                                              |  | December 31,      |      
|                                              |  | 2004              |      
|                                              |  |                   |      
|                                              |  | (in NOK millions) |      
|2005                                          |  |                   | 907   | 
|2006                                          |  |                   | 823   | 
|2007                                          |  |                   | 736   | 
|2008                                          |  |                   | 867   | 
|Later years through 2016                      |  |                   | 5,434 | 
|                                              |  |                   |      
|Total minimum lease payments                  |  |                   | 8,767 | 
|Less amount representing interest             |  |                   | 1,828 | 
|Finance lease obligation under US GAAP        |  |                   | 7,291 | 
|Finance lease obligation under Norwegian GAAP |  |                   | 1,470 | 
|Deferred gain (both Norwegian and US GAAP)    |  |                   | 352   | 



|                   |  |                   |       |  |      |  |       | 
|------------------ |  | ----------------- | ----- |  | ---- |  | ----- | 
|                   |  | 2003              |       |  | 2004 | 
|                   |  |                   |       |  |      | 
|                   |  | (in NOK millions) |      
|Telephony switches |  |                   | 121   |  |      |  | 52    | 
|GSM mobile network |  |                   | 276   |  |      |  | 135   | 
|Fixed-line network |  |                   | 1,133 |  |      |  | 920   | 
|Satellites         |  |                   | 617   |  |      |  | 501   | 
|Set top boxes      |  |                   | 304   |  |      |  | 110   | 
|Buildings          |  |                   |      |  |      |  | 189   | 
|Other              |  |                   | 82    |  |      |  | 36    | 
|                   |  |                   |       |  |      | 
|Total              |  |                   | 2,533 |  |      |  | 1,943 | 
|                   |  |                   |       |  |      | 

(19) Prepayment on equal terms








|     |                    
|---- | -------------------
|(20) | Revenue recognition



F-84



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group








|     |                                            
|---- | -------------------------------------------
|(21) | Consolidation of variable interest entities







F-85



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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group










(22) Sale of business with extension of service
contract






F-86



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group


(23) Non-consolidated investees  100 percent
basis




|                                          |  |                  |        |  |      |  |        | 
|----------------------------------------- |  | ---------------- | ------ |  | ---- |  | ------ | 
|                                          |  | 2003             |        |  | 2004 | 
|                                          |  |                  |        |  |      | 
|                                          |  | (in NOK million) |       
|Income Statement Data                     |  |                  |        |  |      |  |        | 
|Revenues                                  |  |                  | 42,498 |  |      |  | 41,643 | 
|Operating profit                          |  |                  | 3,574  |  |      |  | 6,800  | 
|Income before taxes and minority interest |  |                  | 1,751  |  |      |  | 5,094  | 
|Net income                                |  |                  | 924    |  |      |  | 6,341  | 
|Balance Sheet Data                        |  |                  |        |  |      |  |        | 
|Total fixed assets                        |  |                  | 36,926 |  |      |  | 49,007 | 
|Total current assets                      |  |                  | 12,813 |  |      |  | 13,494 | 
|Total assets                              |  |                  | 49,739 |  |      |  | 62,501 | 
|Shareholders equity                      |  |                  | 6,446  |  |      |  | 24,516 | 
|Minority interests                        |  |                  | 34     |  |      |  | 428    | 
|Total long-term liabilities               |  |                  | 29,255 |  |      |  | 21,095 | 
|Total short-term liabilities              |  |                  | 14,004 |  |      |  | 16,462 | 
|Total equity and liabilities              |  |                  | 49,739 |  |      |  | 62,501 | 

New US Accounting Standards


SFAS 123 (Revised 2004)


Share-Based Payment, Accounting for Stock-Based
Compensation. Accounting for Stock Issued to Employees , Statement of Cash
Flows.


requires


International Financial Reporting Standards (IFRS)






F-87



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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 
(Continued)


Telenor Group




F-88