##### 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

For the fiscal year ended December 31, 2003

OR



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

For the transition period
from                     to                     .

Commission file number: 0-31054

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)


Securities registered or to be registered
pursuant to Section 12(b) of the Act: None



---

Securities registered or to be registered
pursuant to Section 12(g) of the Act: Ordinary Shares,
nominal value NOK 6.00 per share



---

Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act: None



---

The
number of outstanding shares of each of the issuers
classes of capital or common stock as of December 31, 2003:
1,804,021,281 Ordinary Shares, nominal value NOK 6.00 per
share.

Indicate
by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the Registrant
was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days.

Yes X     No

Indicate
by check mark which financial statement item the registrant has
elected to follow.

Item 17      Item 18 X



---








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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                                                   |   |      | 14  | 
|ITEM 5:                                                       |  | OPERATING AND FINANCIAL
    REVIEW AND PROSPECTS                                 |   |      | 78  | 
|ITEM 6:                                                       |  | DIRECTORS, SENIOR MANAGEMENT
    AND EMPLOYEES                                   |   |      | 147 | 
|ITEM 7:                                                       |  | MAJOR SHAREHOLDERS AND
    RELATED PARTY TRANSACTIONS                            |   |      | 157 | 
|ITEM 8:                                                       |  | FINANCIAL INFORMATION                                                            |   |      | 160 | 
|ITEM 9:                                                       |  | THE OFFER AND LISTING                                                            |   |      | 161 | 
|ITEM 10:                                                      |  | ADDITIONAL INFORMATION                                                           |   |      | 162 | 
|ITEM 11:                                                      |  | QUANTITATIVE AND QUALITATIVE
    DISCLOSURES ABOUT MARKET RISK                   |   |      | 172 | 
|ITEM 12:                                                      |  | DESCRIPTION OF SECURITIES
    OTHER THAN EQUITY SECURITIES                       |   |      | 174 | 
|PART II                                                      
|ITEM 13:                                                      |  | DEFAULTS, DIVIDEND
    ARREARAGES AND DELINQUENCIES                              |   |      | 175 | 
|ITEM 14:                                                      |  | MATERIAL MODIFICATIONS TO
    THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS |   |      | 175 | 
|ITEM 15:                                                      |  | CONTROLS AND PROCEDURES                                                          |   |      | 175 | 
|ITEM 16A:                                                     |  | AUDIT COMMITTEE FINANCIAL
    EXPERT                                             |   |      | 175 | 
|ITEM 16B:                                                     |  | CODE OF ETHICS                                                                   |   |      | 175 | 
|ITEM 16C:                                                     |  | PRINCIPAL ACCOUNTANT FEES
    AND SERVICES                                       |   |      | 176 | 
|ITEM 16D:                                                     |  | EXEMPTIONS FROM THE LISTING
    STANDARDS FOR AUDIT COMMITTEES                   |   |      | 177 | 
|ITEM 16E:                                                     |  | PURCHASES OF EQUITY
    SECURITIES BY ISSUER AND AFFILIATED PURCHASERS           |   |      | 177 | 
|PART III                                                     
|ITEM 17:                                                      |  | FINANCIAL STATEMENTS                                                             |   |      | 177 | 
|ITEM 18:                                                      |  | FINANCIAL STATEMENTS                                                             |   |      | 177 | 
|ITEM 19:                                                      |  | EXHIBITS                                                                         |   |      | 178 | 
|EX-1                                                         
|EX-8                                                         
|EX-12                                                        
|EX-13                                                        



2



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##### Table of Contents






PRESENTATION OF FINANCIAL AND OTHER
INFORMATION

Telenor publishes its financial statements in
Norwegian Krone (NOK). Unless otherwise indicated,
all amounts in this annual report are expressed in Norwegian
Krone. In connection with Telenors international
operations, certain amounts denominated in foreign currencies
have been translated into Norwegian Krone, in accordance with
Telenors accounting principles as described in our
consolidated financial statements that form part of this report
under the heading Summary of Significant Accounting
Principles  Foreign currency transactions and
 Foreign currency translation and hedge
accounting for net investments except where otherwise
noted. These translations should not be construed as
representations that the amounts referred to actually represent
such translated amounts or could be converted into the
translated currency at the rate indicated.

Telenors annual audited consolidated
financial statements are prepared in accordance with Norwegian
GAAP, which differ in certain respects from U.S. GAAP. For
a reconciliation of the material differences between Norwegian
and U.S. GAAP as they relate to Telenor, see note 31
to our consolidated financial statements.

As used in this annual report, the terms
Telenor, we or us, unless
the context otherwise requires, refer to Telenor ASA and its
consolidated subsidiaries.




CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS

This annual report contains forward-looking
statements that involve risks and uncertainties. In addition,
other written or oral statements which constitute
forward-looking statements have been made and may in the future
be made by or on behalf of Telenor. In this annual report, such
forward-looking statements include, without limitation,
statements relating to (1) the implementation of strategic
initiatives, (2) the development of revenues overall and
within specific business areas, (3) the development of
operating expenses, (4) the development of personnel
expenses, (5) expenses incurred in the development of
associated companies, (6) the anticipated level of capital
expenditures and associated depreciation and amortization
expense, and (7) other statements relating to
Telenors future business development and economic
performance. The words anticipate,
believe, expect, estimate,
intend, plan and similar expressions
identify certain of these forward-looking statements. Readers
are cautioned not to put undue reliance on forward-looking
statements because actual events and results may differ
materially from the expected results described by such
forward-looking statements.

Many factors may influence Telenors actual
results and cause them to differ materially from expected
results as described in forward-looking statements. These
factors include the following:



| |   |                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.                                                                                                                                

Telenor disclaims any intention or obligation to
update and revise any forward-looking statements, whether as a
result of new information, future events or otherwise.

3



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##### Table of Contents






PART I






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

Not applicable.






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

Not applicable.






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

SELECTED CONSOLIDATED FINANCIAL AND
STATISTICAL DATA

The following tables set forth summary
consolidated financial and statistical data of Telenor. They
should be read together with Item 5: Operating and
Financial Review and Prospects and our consolidated
financial statements, including the notes to those financial
statements included in this report.

Solely for the convenience of the reader, the
financial data at and for the twelve months ended
December 31, 2003 have been translated into
U.S. dollars at the rate of NOK 6.666 to
USD 1.00, the noon buying rate on December 31, 2003.

|                                                                                 |  |                                         |        |       |  |       |        |       |  |       |        |       |  |  |        |   |  |  |        |  |  |  |       | 
|-------------------------------------------------------------------------------- |  | --------------------------------------- | ------ | ----- |  | ----- | ------ | ----- |  | ----- | ------ | ----- |  |  | ------ | - |  |  | ------ |  |  |  | ----- | 
|                                                                                 |  |                                        
|                                                                                 |  | Year ended December 31,                
|                                                                                 |  |                                        
|                                                                                 |  | 1999                                    |        | 2000  |  | 2001  |        | 2002  |  | 2003  |        | 2003 
|                                                                                 |  |                                         |        |       |  |       |        |       |  |       |        |      
|                                                                                 |  | (NOK)                                   |        | (NOK) |  | (NOK) |        | (NOK) |  | (NOK) |        | (USD)
|                                                                                 |  |                                        
|                                                                                 |  | (in millions, except per share amounts)
|Income Statement Data                                                            |  |                                         |        |       |  |       |        |       |  |       |        |       |  |  |        |   |  |  |        |  |  |  |       | 
|Norwegian GAAP                                                                   |  |                                         |        |       |  |       |        |       |  |       |        |       |  |  |        |   |  |  |        |  |  |  |       | 
|Revenues                                                                         |  |                                         | 32,784 |       |  |       | 36,530 |       |  |       | 40,604 |       |  |  | 48,668 |   |  |  | 52,889 |  |  |  | 7,934 | 
|Gain on disposal of fixed assets and operations                                  |  |                                         | 783    |       |  |       | 1,042  |       |  |       | 5,436  |       |  |  | 158    |   |  |  | 232    |  |  |  | 35    | 
|                                                                                 |  |                                         |        |       |  |       |        |       |  |       |        |       |  |  |        |   |  |  |        |  |  |  |       | 
|Total revenues                                                                   |  |                                         | 33,567 |       |  |       | 37,572 |       |  |       | 46,040 |       |  |  | 48,826 |   |  |  | 53,121 |  |  |  | 7,969 | 
|Operating expenses                                                               |  |                                         | 29,565 |       |  |       | 33,943 |       |  |       | 42,863 |       |  |  | 49,146 |   |  |  | 45,561 |  |  |  | 6,835 | 
|                                                                                 |  |                                         |        |       |  |       |        |       |  |       |        |       |  |  |        |   |  |  |        |  |  |  |       | 
|Operating profit (loss)                                                          |  |                                         | 4,002  |       |  |       | 3,629  |       |  |       | 3,177  |       |  |  | (320   | ) |  |  | 7,560  |  |  |  | 1,134 | 
|Share of profit (loss) in associated companies                                   |  |                                         | (1,239 | )     |  |       | (692   | )     |  |       | 8,237  |       |  |  | (2,450 | ) |  |  | 1,231  |  |  |  | 185   | 
|Net income (loss)                                                                |  |                                         | 2,035  |       |  |       | 1,076  |       |  |       | 7,079  |       |  |  | (4,298 | ) |  |  | 4,560  |  |  |  | 684   | 
|Net income (loss) per share  primary
    (excluding treasury shares)            |  |                                         | 1.454  |       |  |       | 0.754  |       |  |       | 3.994  |       |  |  | (2.422 | ) |  |  | 2.569  |  |  |  | 0.385 | 
|Net income (loss) per share  diluted
    (excluding treasury shares)            |  |                                         | 1.454  |       |  |       | 0.754  |       |  |       | 3.990  |       |  |  | (2.422 | ) |  |  | 2.568  |  |  |  | 0.385 | 
|Dividends per share(1)                                                           |  |                                         | n/a    |       |  |       | 0.300  |       |  |       | 0.350  |       |  |  | 0.450  |   |  |  | 1.00   |  |  |  | 0.150 | 
|Weighted average number of shares (in millions of
    shares)  primary          |  |                                         | 1,400  |       |  |       | 1,427  |       |  |       | 1,772  |       |  |  | 1,775  |   |  |  | 1,775  |  |  |  |       | 
|Weighted average number of shares (in millions of
    shares)  diluted          |  |                                         | 1,400  |       |  |       | 1,427  |       |  |       | 1,774  |       |  |  | 1,775  |   |  |  | 1,776  |  |  |  |       | 
|Net income per share from discontinued operations
    (Telenor Media)(2)         |  |                                         | 0.781  |       |  |       | 0.594  |       |  |       | 1.108  |       |  |  |       |   |  |  |       |  |  |  |      | 
|Net income per share from continuing operations
    (excluding Telenor Media)(2) |  |                                         | 0.673  |       |  |       | 0.160  |       |  |       | 2.886  |       |  |  |       |   |  |  |       |  |  |  |      | 

4



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|                                                                                                                              |  |                                         |        |       |  |       |        |       |  |       |        |       |  |  |        |   |  |  |        |   |  |  |       |  
|----------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------- | ------ | ----- |  | ----- | ------ | ----- |  | ----- | ------ | ----- |  |  | ------ | - |  |  | ------ | - |  |  | ----- | -
|                                                                                                                              |  |                                        
|                                                                                                                              |  | Year ended December 31,                
|                                                                                                                              |  |                                        
|                                                                                                                              |  | 1999                                    |        | 2000  |  | 2001  |        | 2002  |  | 2003  |        | 2003 
|                                                                                                                              |  |                                         |        |       |  |       |        |       |  |       |        |      
|                                                                                                                              |  | (NOK)                                   |        | (NOK) |  | (NOK) |        | (NOK) |  | (NOK) |        | (USD)
|                                                                                                                              |  |                                        
|                                                                                                                              |  | (in millions, except per share amounts)
|U.S. GAAP                                                                                                                     |  |                                         |        |       |  |       |        |       |  |       |        |       |  |  |        |   |  |  |        |   |  |  |       |  
|Revenues                                                                                                                      |  |                                         | 32,716 |       |  |       | 36,481 |       |  |       | 40,581 |       |  |  | 47,879 |   |  |  | 52,826 |   |  |  | 7,925 |  
|Net income from continuing operations (excluding
    Telenor Media)                                                           |  |                                         | 1,246  |       |  |       | 854    |       |  |       | 1,889  |       |  |  |       |   |  |  |       |   |  |  |      |  
|Net income                                                                                                                    |  |                                         | 2,188  |       |  |       | 1,082  |       |  |       | 7,004  |       |  |  | (3,658 | ) |  |  | 5,036  |   |  |  | 756   |  
|Net income per share from continuing operations
    (excluding Telenor Media)                                                 |  |                                         | 0.890  |       |  |       | 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  | ) |  |  | (0.02 | )
|Net income per share  primary
    (excluding treasury shares)                                                                |  |                                         | 1.563  |       |  |       | 0.759  |       |  |       | 3.952  |       |  |  | (2.061 | ) |  |  | 2.837  |   |  |  | 0.426 |  
|Net income per share  diluted
    (excluding treasury shares)                                                                |  |                                         | 1.563  |       |  |       | 0.759  |       |  |       | 3.948  |       |  |  | (2.061 | ) |  |  | 2.836  |   |  |  | 0.425 |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Dividends in respect of 2003 will be paid in May
    2004. Per share dividend amounts in respect of years prior to
    2000 are not considered meaningful because such dividends
    reflected our status as wholly-owned by the Kingdom of Norway
    and occurred prior to the recapitalization effected in
    connection with our initial public offering in December 2000.
    See Dividends and Dividend Policy below.
|   
|(2) | Discontinued operations consist of the business
    area Telenor Media.                                                                                                                                                                                                                                                                                                                                                       

|                                       |  |                 |        |       |  |       |        |       |  |       |        |       |  |  |        |  |  |  |         |  |  |  |        | 
|-------------------------------------- |  | --------------- | ------ | ----- |  | ----- | ------ | ----- |  | ----- | ------ | ----- |  |  | ------ |  |  |  | ------- |  |  |  | ------ | 
|                                       |  |                
|                                       |  | At December 31,
|                                       |  |                
|                                       |  | 1999            |        | 2000  |  | 2001  |        | 2002  |  | 2003  |        | 2003 
|                                       |  |                 |        |       |  |       |        |       |  |       |        |      
|                                       |  | (NOK)           |        | (NOK) |  | (NOK) |        | (NOK) |  | (NOK) |        | (USD)
|                                       |  |                
|                                       |  | (in millions)  
|Balance Sheet Data                     |  |                 |        |       |  |       |        |       |  |       |        |       |  |  |        |  |  |  |         |  |  |  |        | 
|Norwegian GAAP                         |  |                 |        |       |  |       |        |       |  |       |        |       |  |  |        |  |  |  |         |  |  |  |        | 
|Total fixed assets                     |  |                 | 37,617 |       |  |       | 80,881 |       |  |       | 66,095 |       |  |  | 74,162 |  |  |  | 68,346  |  |  |  | 10,253 | 
|Total current assets                   |  |                 | 10,409 |       |  |       | 12,804 |       |  |       | 16,528 |       |  |  | 15,296 |  |  |  | 17,764  |  |  |  | 2,665  | 
|                                       |  |                 |        |       |  |       |        |       |  |       |        |       |  |  |        |  |  |  |         |  |  |  |        | 
|Total assets                           |  |                 | 48,026 |       |  |       | 93,685 |       |  |       | 82,623 |       |  |  | 89,458 |  |  |  | 86,110  |  |  |  | 12,918 | 
|                                       |  |                 |        |       |  |       |        |       |  |       |        |       |  |  |        |  |  |  |         |  |  |  |        | 
|Long-term liabilities and provisions   |  |                 | 15,962 |       |  |       | 42,908 |       |  |       | 19,646 |       |  |  | 30,454 |  |  |  | 27,775  |  |  |  | 4,167  | 
|Short-term liabilities                 |  |                 | 10,799 |       |  |       | 12,597 |       |  |       | 17,294 |       |  |  | 21,716 |  |  |  | 17,452  |  |  |  | 2,618  | 
|                                       |  |                 |        |       |  |       |        |       |  |       |        |       |  |  |        |  |  |  |         |  |  |  |        | 
|Total liabilities                      |  |                 | 26,761 |       |  |       | 55,505 |       |  |       | 36,940 |       |  |  | 52,170 |  |  |  | 45,227  |  |  |  | 6,785  | 
|                                       |  |                 |        |       |  |       |        |       |  |       |        |       |  |  |        |  |  |  |         |  |  |  |        | 
|Shareholders equity                   |  |                 | 20,033 |       |  |       | 35,474 |       |  |       | 42,144 |       |  |  | 33,685 |  |  |  | 37,237  |  |  |  | 5,586  | 
|Minority interests                     |  |                 | 1,232  |       |  |       | 2,706  |       |  |       | 3,539  |       |  |  | 3,603  |  |  |  | 3,646   |  |  |  | 547    | 
|                                       |  |                 |        |       |  |       |        |       |  |       |        |       |  |  |        |  |  |  |         |  |  |  |        | 
|Total equity and liabilities           |  |                 | 48,026 |       |  |       | 93,685 |       |  |       | 82,623 |       |  |  | 89,458 |  |  |  | 86,110  |  |  |  | 12,918 | 
|                                       |  |                 |        |       |  |       |        |       |  |       |        |       |  |  |        |  |  |  |         |  |  |  |        | 
|U.S. GAAP                              |  |                 |        |       |  |       |        |       |  |       |        |       |  |  |        |  |  |  |         |  |  |  |        | 
|Total assets                           |  |                 | 53,787 |       |  |       | 99,776 |       |  |       | 90,129 |       |  |  | 97,511 |  |  |  | 101,088 |  |  |  | 15,165 | 
|Long-term interest-bearing Liabilities |  |                 | 19,252 |       |  |       | 46,972 |       |  |       | 24,758 |       |  |  | 33,957 |  |  |  | 34,782  |  |  |  | 5,218  | 
|Shareholders equity                   |  |                 | 21,035 |       |  |       | 36,304 |       |  |       | 42,944 |       |  |  | 35,799 |  |  |  | 42,535  |  |  |  | 6,381  | 

5



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##### Table of Contents



|                                         |  |                         |        |       |  |       |         |       |  |       |         |       |  |  |         |   |  |  |        |   |  |  |        |  
|---------------------------------------- |  | ----------------------- | ------ | ----- |  | ----- | ------- | ----- |  | ----- | ------- | ----- |  |  | ------- | - |  |  | ------ | - |  |  | ------ | -
|                                         |  |                        
|                                         |  | Year ended December 31,
|                                         |  |                        
|                                         |  | 1999                    |        | 2000  |  | 2001  |         | 2002  |  | 2003  |         | 2003 
|                                         |  |                         |        |       |  |       |         |       |  |       |         |      
|                                         |  | (NOK)                   |        | (NOK) |  | (NOK) |         | (NOK) |  | (NOK) |         | (USD)
|Cash Flow and Operating Data             |  |                         |        |       |  |       |         |       |  |       |         |       |  |  |         |   |  |  |        |   |  |  |        |  
|Norwegian GAAP                           |  |                         |        |       |  |       |         |       |  |       |         |       |  |  |         |   |  |  |        |   |  |  |        |  
|Net cash flow from operating activities  |  |                         | 7,052  |       |  |       | 5,915   |       |  |       | 6,993   |       |  |  | 12,858  |   |  |  | 13,676 |   |  |  | 2,052  |  
|Net cash flow from investment activities |  |                         | (8,887 | )     |  |       | (47,308 | )     |  |       | 20,891  |       |  |  | (21,727 | ) |  |  | (3,454 | ) |  |  | (518   | )
|Net cash flow from financing activities  |  |                         | 2,914  |       |  |       | 41,558  |       |  |       | (24,366 | )     |  |  | 8,641   |   |  |  | (7,887 | ) |  |  | (1,183 | )

|                            |  |                         |       |       |  |       |        |       |  |       |        |       |  |  |        |  |  |  |        |  |  |  |       | 
|--------------------------- |  | ----------------------- | ----- | ----- |  | ----- | ------ | ----- |  | ----- | ------ | ----- |  |  | ------ |  |  |  | ------ |  |  |  | ----- | 
|                            |  |                        
|                            |  | Year ended December 31,
|                            |  |                        
|                            |  | 1999                    |       | 2000  |  | 2001  |        | 2002  |  | 2003  |        | 2003 
|                            |  |                         |       |       |  |       |        |       |  |       |        |      
|                            |  | (NOK)                   |       | (NOK) |  | (NOK) |        | (NOK) |  | (NOK) |        | (USD)
|Investments and EBITDA      |  |                         |       |       |  |       |        |       |  |       |        |       |  |  |        |  |  |  |        |  |  |  |       | 
|Norwegian GAAP              |  |                         |       |       |  |       |        |       |  |       |        |       |  |  |        |  |  |  |        |  |  |  |       | 
|Capital Expenditure(1)      |  |                         | 6,415 |       |  |       | 10,421 |       |  |       | 11,634 |       |  |  | 8,889  |  |  |  | 6,454  |  |  |  | 968   | 
|Investment in businesses(2) |  |                         | 6,755 |       |  |       | 40,251 |       |  |       | 7,212  |       |  |  | 12,411 |  |  |  | 563    |  |  |  | 84    | 
|EBITDA(3)                   |  |                         | 9,049 |       |  |       | 9,563  |       |  |       | 14,250 |       |  |  | 13,469 |  |  |  | 18,302 |  |  |  | 2,746 | 






|    |                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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.                                           
|   
|(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.

6



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|                                                                                             |                                                                                   |                         |        |        |   |      |        |        |   |      |        |        |    |  |        |       |    |  |        |       |     | 
|-------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------- | ----------------------- | ------ | ------ | - | ---- | ------ | ------ | - | ---- | ------ | ------ | -- |  | ------ | ----- | -- |  | ------ | ----- | --- | 
|                                                                                             |                                                                                   |                        
|                                                                                             |                                                                                   | Year ended December 31,
|                                                                                             |                                                                                   |                        
|                                                                                             |                                                                                   | 1999                    |        | 2000   |   | 2001 |        | 2002   |   | 2003
|                                                                                             |                                                                                   |                         |        |        |   |      |        |        |   |     
|Other Operating Data                                                                         |                                                                                   |                         |        |        |   |      |        |        |   |      |        |        |    |  |        |       |    |  |        |      
|Mobile telephony (digital) subscriptions inNorway, period end (000s):                        |                                                                                   |                         |        |        |   |      |        |        |   |      |        |        |    |  |        |       |    |  |        |      
|                                                                                             | Contract                                                                          |                         |        | 1,003  |   |      |        | 1,145  |   |      |        | 1,210  |    |  |        | 1,215 |    |  |        | 1,228 |    
|                                                                                             | Prepaid                                                                           |                         |        | 732    |   |      |        | 911    |   |      |        | 1,027  |    |  |        | 1,115 |    |  |        | 1,099 |    
|Mobile telephony churn rates for contract
    subscriptions                                  |                                                                                   |                         | 14.2   | %      |   |      | 12.7   | %      |   |      | 12.5   | %      |    |  | 17.5   | %     |    |  | 21.4   | %    
|Total mobile telephony outgoing minutes in Norway
    (in millions of minutes):              |                                                                                   |                         |        |        |   |      |        |        |   |      |        |        |    |  |        |       |    |  |        |      
|                                                                                             | Digital                                                                           |                         |        | 1,801  |   |      |        | 2,298  |   |      |        | 2,683  |    |  |        | 2,986 |    |  |        | 3,083 |    
|                                                                                             | Analog                                                                            |                         |        | 174    |   |      |        | 108    |   |      |        | 64     |    |  |        | 47    |    |  |        | 36    |    
|Mobile telephony (digital) subscriptions inPannon GSM (Hungary), period end (000s):          |                                                                                   |                         |        |        |   |      |        |        |   |      |        |        |    |  |        |       |    |  |        |      
|                                                                                             | Contract                                                                          |                         |        |       |   |      |        |       |   |      |        |       |    |  |        | 540   |    |  |        | 595   |    
|                                                                                             | Prepaid                                                                           |                         |        |       |   |      |        |       |   |      |        |       |    |  |        | 1,910 |    |  |        | 2,023 |    
|Mobile telephony (digital) subscriptions inDiGi.Com (Malaysia), period end (000s):           |                                                                                   |                         |        |        |   |      |        |        |   |      |        |        |    |  |        |       |    |  |        |      
|                                                                                             | Contract                                                                          |                         |        |       |   |      |        |       |   |      |        | 137    |    |  |        | 97    |    |  |        | 106   |    
|                                                                                             | Prepaid                                                                           |                         |        |       |   |      |        |       |   |      |        | 902    |    |  |        | 1,519 |    |  |        | 2,101 |    
|Mobile telephony (digital) subscriptions inKyivstar (Ukraine), period end (000s):            |                                                                                   |                         |        |        |   |      |        |        |   |      |        |        |    |  |        |       |    |  |        |      
|                                                                                             | Contract                                                                          |                         |        |       |   |      |        |       |   |      |        |       |    |  |        | 384   |    |  |        | 534   |    
|                                                                                             | Prepaid                                                                           |                         |        |       |   |      |        |       |   |      |        |       |    |  |        | 1,472 |    |  |        | 2,503 |    
|Mobile telephony (digital) subscriptions inGrameenPhone (Bangladesh), period end (000s):     |                                                                                   |                         |        |        |   |      |        |        |   |      |        |        |    |  |        |       |    |  |        |      
|                                                                                             | Contract                                                                          |                         |        | 55     |   |      |        | 142    |   |      |        | 185    |    |  |        | 206   |    |  |        | 242   |    
|                                                                                             | Prepaid                                                                           |                         |        | 6      |   |      |        | 49     |   |      |        | 279    |    |  |        | 563   |    |  |        | 899   |    
|Mobile telephony (digital) subscriptions inTelenor Mobile Sverige (Sweden)period end (000s): |                                                                                   |                         |        |        |   |      |        |        |   |      |        |        |    |  |        |       |    |  |        |      
|                                                                                             | Contract                                                                          |                         |        |       |   |      |        |       |   |      |        |       |    |  |        |      |    |  |        | 37    |    
|                                                                                             | Prepaid                                                                           |                         |        |       |   |      |        |       |   |      |        |       |    |  |        |      |    |  |        | 44    |    
|Fixed telephony access channels in Norway,
    period end (000s):                            |                                                                                   |                         |        |        |   |      |        |        |   |      |        |        |    |  |        |       |    |  |        |      
|                                                                                             | Analog (PSTN)                                                                     |                         |        | 1,908  |   |      |        | 1,680  |   |      |        | 1,545  |    |  |        | 1,467 |    |  |        | 1,308 |    
|                                                                                             | Digital (ISDN)                                                                    |                         |        | 1,228  |   |      |        | 1,590  |   |      |        | 1,766  |    |  |        | 1,828 |    |  |        | 1,682 |    
|Fixed telephony traffic in Norway (in millions of
    minutes):                              |                                                                                   |                         |        |        |   |      |        |        |   |      |        |        |    |  |        |       |    |  |        |      
|                                                                                             | National calls, excluding Internet traffic                                        |                         |        | 12,371 |   |      |        | 11,612 |   |      |        | 10,567 |    |  |        | 9,457 |    |  |        | 8,203 |    
|                                                                                             | Internet traffic                                                                  |                         |        | 4,225  |   |      |        | 5,8967 |   |      |        | 6,067  |    |  |        | 5,293 |    |  |        | 4,619 |    
|                                                                                             | International                                                                     |                         |        | 415    |   |      |        | 387    |   |      |        | 383    |    |  |        | 378   |    |  |        | 340   |    
|                                                                                             | Calls to mobile                                                                   |                         |        | 1,246  |   |      |        | 1,295  |   |      |        | 1,412  |    |  |        | 1,499 |    |  |        | 1,442 |    
|                                                                                             | Value-added services and directory calls, etc.                                    |                         |        | 447    |   |      |        | 599    |   |      |        | 624    |    |  |        | 710   |    |  |        | 781   |    
|Internet, period end (000s):                                                                 |                                                                                   |                         |        |        |   |      |        |        |   |      |        |        |    |  |        |       |    |  |        |      
|                                                                                             | Internet access subscriptions and registered
    users, residential market Norway |                         |        | 400    |   |      |        | 625    |   |      |        | 831    |    |  |        | 960   |    |  |        | 1,031 |    
|                                                                                             |                                                                                   |  of which ADSL         |        |        |  |      |        |        |  |      |        |        | 23 |  |        |       | 90 |  |        |       | 163 | 
|                                                                                             | ADSL business subscriptions, Norway                                               |                         |        |       |   |      |        |       |   |      |        | 1      |    |  |        | 4     |    |  |        | 14    |    
|Pay television subscribers in the Nordic region,
    period end (000s):                      |                                                                                   |                         |        |        |   |      |        |        |   |      |        |        |    |  |        |       |    |  |        |      
|                                                                                             | Cable TV                                                                          |                         |        | 282    |   |      |        | 357    |   |      |        | 561    |    |  |        | 571   |    |  |        | 604   |    
|                                                                                             | Small antenna networks (SMATV)                                                    |                         |        | 937    |   |      |        | 1,086  |   |      |        | 1,193  |    |  |        | 1,133 |    |  |        | 1,098 |    
|                                                                                             | Home satellite dish (DTH)(1)                                                      |                         |        | 405    |   |      |        | 506    |   |      |        | 569    |    |  |        | 701   |    |  |        | 763   |    
|                                                                                             | Total                                                                             |                         |        | 1,624  |   |      |        | 1,949  |   |      |        | 2,323  |    |  |        | 2,405 |    |  |        | 2,465 |    
|Number of full-time equivalent employees                                                     |                                                                                   |                         | 21,968 |        |   |      | 20,150 |        |   |      | 21,000 |        |    |  | 22,100 |       |    |  | 19,450 |      






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

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DIVIDENDS AND DIVIDEND POLICY

Under Norwegian law, dividends may only be paid
in respect of a financial period for which audited financial
statements have been approved by the annual general meeting of
shareholders, and any proposal to pay a dividend must be
recommended by the directors, accepted by the corporate assembly
and approved by the shareholders at a general meeting. The
shareholders at the annual general meeting may vote to reduce,
but may not increase, the dividend proposed by the directors.

Dividends may be paid in cash or in kind and are
payable only out of distributable reserves, which are calculated
from the parent companys balance sheet. Distributable
reserves consist of:



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

after deduction for uncovered losses, the book
value of research and development, goodwill, net deferred tax
assets recorded in the balance sheet for the preceding financial
year, the aggregate value of treasury shares that we have
purchased or been granted security in during preceding financial
years and of credit and security given pursuant to
sections 8-7 to 8-9 of the Norwegian Public Limited
Companies Act, and for any part of our annual profits that would
be compatible with good and careful business practice to retain
with due regard to any losses which we may have incurred after
the last balance sheet date or which we may expect to incur. We
cannot distribute any dividends if our equity, according to our
balance sheet, amounts to less than 10% of the total assets
reflected on our balance sheet without following a creditor
notice procedure as required for reducing the share capital.
These amounts are calculated on the basis of Telenor ASAs
unconsolidated financial statements.

The following table shows the aggregate dividends
we paid or expect to pay, for each of the past five fiscal years.

|        |  |                  |       |       |  |  |     | 
|------- |  | ---------------- | ----- | ----- |  |  | --- | 
|        |  |                 
|        |  | Total           
|        |  | (in millions)(1)
|        |  |                 
|Year    |  | (NOK)            |       | (USD)
|        |  |                  |       |      
|1999    |  |                  | 500   |       |  |  | 58  | 
|2000    |  |                  | 532   |       |  |  | 60  | 
|2001    |  |                  | 621   |       |  |  | 69  | 
|2002    |  |                  | 799   |       |  |  | 115 | 
|2003(2) |  |                  | 1,776 |       |  |  | 266 | 






|    |                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Dividends are presented in aggregate as
    comparisons between year 2000 and 2001 per share amounts and
    those in prior years are not meaningful as dividends declared
    prior to our initial public offering in December 2000 reflected
    our status as wholly-owned by the Kingdom of Norway.                                                                      
|   
|(2) | A dividend of NOK 1.00 per share with respect to
    2003 was proposed by our board of directors, due for acceptance
    by the corporate assembly and approval at the annual general
    meeting on May 6, 2004. The dividend, if approved by the
    general meeting and the corporate assembly, will be paid on
    May 25, 2004, to the holders of record on May 6, 2004.

Prior to our initial public offering in 2000,
dividends we paid reflected our status as wholly-owned by the
Kingdom of Norway and should not be considered indicative of our
future dividends.

Since our initial public offering in 2000 and up
to and including the fiscal year ended December 31, 2002,
our stated dividend policy had been to declare and distribute an
annual dividend in an amount equal to 20%-30% of our annual net
income after taxes adjusted for the effect of one-time gains or
losses, if any. Effective from the fiscal year ended
December 31, 2003, our board of directors revised our
dividend policy to state our intention to distribute an annual
dividend in an amount equal to 40%-60% of our normalized net
income. However, the amount of any dividends proposed by the
board of directors may vary from year to year at the
boards discretion.

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Because we will only pay dividends in Norwegian
Krone, exchange rate fluctuations will affect the
U.S. dollar amounts received by holders of ADSs after the
ADR depositary converts cash dividends into U.S. dollars.

EXCHANGE RATES

The table below shows the average noon buying
rates in The City of New York for cable transfers in
foreign currencies as certified for customs purposes by the
Federal Reserve Bank of New York for Norwegian Krone per
USD 1.00. The average is computed using the noon buying
rate on the last business day of each month during the period
indicated.

|                        |  |         |        | 
|----------------------- |  | ------- | ------ | 
|Year ended December 31, |  | Average
|                        |  |        
|1999                    |  |         | 7.8350 | 
|2000                    |  |         | 8.9363 | 
|2001                    |  |         | 9.0380 | 
|2002                    |  |         | 7.9253 | 
|2003                    |  |         | 7.0627 | 

The table below shows the high and low noon
buying rates for each month during the six months prior to the
date of this annual report.

|             |  |     |        |      |  |  |        | 
|------------ |  | --- | ------ | ---- |  |  | ------ | 
|             |  | Low |        | High
|             |  |     |        |     
|October 2003 |  |     | 6.9670 |      |  |  | 7.1120 | 
|November     |  |     | 6.8240 |      |  |  | 7.2240 | 
|December     |  |     | 6.6440 |      |  |  | 6.8285 | 
|January 2004 |  |     | 6.6586 |      |  |  | 7.0730 | 
|February     |  |     | 6.8416 |      |  |  | 7.0675 | 
|March        |  |     | 6.8150 |      |  |  | 7.1408 | 

On March 31, 2004, the noon buying rate for
Norwegian Krone was USD 1.00 = NOK 6.86.

Fluctuations in the exchange rate between the
Norwegian Krone and the U.S. dollar will affect the
U.S. dollar amounts received by holders of ADSs on
conversion of dividends, if any, paid in Norwegian Krone on the
ordinary shares and may affect the U.S. dollar price of the
ADSs on the NASDAQ National Market.

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.

We are experiencing increasing competition from
competing service providers in the Norwegian market for
telecommunications services. Generally, the Norwegian regulatory
regime poses few barriers to entry for new competitors.

In fixed network services, a number of regulatory
measures have been introduced that have strengthened and may
strengthen the position of our competitors. Pursuant to
regulatory requirements, we introduced carrier pre-selection for
our customers in November 2000, enabling them to select
alternative service providers. In April 2000, we began offering
interconnection services for our local access network, or local
loop, at cost-oriented prices. Competitors may also use
alternative technologies, such as cable or wireless local loop
connections, to provide telecommunications services, and in
March 2000 the Norwegian regulator awarded licenses to our
competitors to provide wireless access services. From 2003
onwards, we have offered wholesale line rental (PSTN and ISDN)
to other operators, enabling the operators of telephony traffic
to

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deliver also the fixed telephony subscription to
their customers, based on our fixed network. Such unbundled
telephony access also means that subscriptions and traffic may
be delivered separately by different operators.


In the mobile market, there are two Universal
Mobile Telephony Service (UMTS) license holders apart from us,
one of which is our primary competitor in the Norwegian mobile
market, NetCom. The second license holder, Hi3G, a new entrant
to the Norwegian mobile market, was awarded its license in
August 2003. Apart from enjoying more favorable license
conditions than NetCom and us, Hi3G may also immediately claim
national roaming in the existing GSM networks.

Currently, several mobile service providers
utilize our infrastructure, or that of our primary competitor,
and the regulator may require us to reduce the prices we charge
to these service providers. You should read Risks related
to regulatory matters for further information. We have
also launched an MVNO (Mobile Virtual Network Operator) offer in
the market. Furthermore, pursuant to regulatory requirements, we
provide network access to external providers of short messaging
services (SMS).

As competition continues to intensify, we expect
that market pressures may require us to reduce tariffs further
and to increase our marketing and sales expenses. However, we
may nonetheless lose further market share, which may adversely
affect our revenue growth and profit margin since the effect of
lost market share in the retail market is unlikely to be fully
offset by providing wholesale services to competing service
providers.

For additional information on the regulatory
requirements to which we are subject, you should read
Item 4: Information on the Company 
Regulation  Regulatory Issues and Licensing
(Norway)  Interconnection and Access,
 Local Loop Unbundling and
 Carrier Selection.

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.

Because of our high market share, the current
high penetration rate and increased competition in the mobile
telephony market in Norway and certain more mature international
markets in which we operate, such as Denmark and Hungary, we
expect that further revenue growth in mobile communications in
these countries will depend on our ability to successfully
develop and market new applications and services or have third
parties provide services using our network. In particular, it is
our goal to stimulate demand for value-added services. Failure
to successfully do so may impair our ability to achieve further
revenue growth in mobile communications services in these
countries.

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

As part of our strategy, we continue to intend to
expand our minority ownership interests in, and gain control of,
some of our investments in order to exercise a controlling
influence over key business decisions, including the approval of
strategy and business plans. If we fail to increase our
ownership interests and gain control, our cost savings and
revenue enhancement from these operations may be limited. In
addition, if the other shareholders fail to adequately support
these companies, they may not be able to compete effectively and
the value of our investments may be impaired.

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

Some of the countries in which we have operations
or in which we have made significant equity investments in
telecommunications operators have political, economic and legal
systems that are unpredictable. Political or economic upheaval
or changes in laws or their application may harm the operations
of the companies in which we have invested and impair the value
of these investments to us. A significant risk of operating in
emerging market countries is that foreign exchange restrictions
could be established. This could effectively prevent us from
receiving profits from, or from selling our investments in,
these countries.

10



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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.

An increasing proportion of our revenues and
profits are derived from our international mobile operations and
investments. Fluctuations in currency exchange rates between the
Norwegian Krone and the currencies, in particular the
U.S. dollar, in which our international operations or
investments report and operate, could adversely affect our
reported earnings and the value of these businesses. We attempt
to mitigate the effect of fluctuations in foreign currency
exchange rates through foreign currency hedging. However, there
can be no assurance that our efforts will be successful.

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.

Our ability to offer third generation mobile
services, either directly, or through our international
associated companies, depends upon our obtaining UMTS licenses
or entering into agreements with operators that have been
awarded such licenses in markets in which we are, or intend to
be, present. Failure to establish ourselves or our associated
companies among the providers of third generation mobile
services may limit our ability:



| |   |                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.                                                           

Delays in the development of handsets may
continue to prevent us from providing UMTS-based services in the
near future, while the success of the UMTS technology is still
uncertain.

The development of UMTS technology for commercial
launch has taken longer than anticipated. Both in terms of
quality and brand variety, there are not sufficient handsets
commercially available so far. Furthermore, we intend to
increase our capital expenditures in 2004 in order to invest in
new mobile technology in Norway. Once developed and launched,
UMTS technology may not prove superior to existing technologies
and may fail to meet commercial acceptance. The delays in
supplier and technology performance and the uncertainties
regarding the commercial success of the new UMTS technology
could prevent us from recouping our investments and could have a
negative effect on our business, financial condition and results
of operations.

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

The services we offer are technology-intensive.
The development of new technologies may render our services
non-competitive. We may have to make substantial additional
investments in new technologies to remain competitive. New
technologies we choose may not prove to be commercially
successful. As a result, we could lose customers, fail to
attract new customers or incur substantial costs in order to
maintain our customer base.

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

The operation of satellites is subject to the
risk of in-orbit failure, which could arise from various causes,
such as a failure of satellite components, solar or other
astronomical events or space debris. It is not feasible to
repair satellites in space. The satellites themselves are
insured in such cases, but we do not insure against lost
revenues in the event of a total or partial loss of the
communications capacity of a satellite while in orbit.

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

Concern has been expressed that the
electromagnetic signals from mobile handsets and base stations
and chemicals leaking from mobile handsets may pose health risks
or interfere with the operation of electronic equipment,
including automobile braking and steering systems. Actual or
perceived risks of mobile handsets or base stations and related
publicity, regulation or litigation could reduce our mobile
telephone customer base, make it difficult to find attractive
sites for base stations or cause mobile telephone customers to
use their mobile phones less.

Risks Related to Regulatory Matters

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

Our operations are subject to extensive
regulatory requirements in Norway. In particular, we must comply
with requirements regulating the licensing, construction and
operation of our telecommunications, cable TV, broadcasting
and satellite networks and services, and there are governmental
authorities which monitor and enforce competition laws and
consumer protection laws applicable to the telecommunications
industry. It is difficult for us to predict the precise impact
of any proposed or potential changes in regulatory environment
or government policies on our operations. If regulators decide
to expand or introduce restrictions and obligations applicable
to our business operations or to extend them to new services and
markets, this could adversely affect our business operations and
competitiveness in existing and new markets.

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.

We are considered by the Norwegian Post and
Telecommunications Authority to have significant market power
with regard to both our fixed and our mobile operations in the
markets for voice telephony, transmission capacity and
interconnection services. As a result, we are subject to
specific obligations regarding pricing, accounting and reporting
with respect to these services. In particular, we are required
to offer these services to our wholesale customers and end users
at cost-oriented prices and on non-discriminatory terms.

These and other new requirements may impair our
flexibility in setting tariff structures or may require us to
further reduce tariffs, which may adversely affect our revenues
and net income. In addition, if we are required to reduce
interconnection prices or change the terms on which we provide
certain services as a result of our obligation to provide
cost-oriented pricing and non-discriminatory terms for
interconnection and access, our competitors may be at an
advantage, depending on the services provided.

This regulatory environment also provides the
grounds for several legal proceedings brought against us by our
competitors and customers, alleging that our failure or delay in
providing access to our network on the terms required by law has
caused them loss. Our alleged failures and delays include
failing to deliver cost-oriented pricing and late implementation
of carrier pre-selection. For additional information on these
legal proceedings, you should read Item 8: Financial
Information  Legal Proceedings below.

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.

In February 2002, the European Union (EU) adopted
a number of directives with the objective of developing a
harmonized regulatory framework for electronic communications
networks and services throughout the EU. In Norway, the new
regulatory framework was implemented by the Electronic
Communications Act of July 2003. The impact of the introduction
of the new framework is still uncertain, in part because it will
depend on the regulators interpretation of the framework
and their assessment of the competitive situation in the
relevant markets. Our ability to compete effectively in our
existing or new

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geographical and product markets could be
adversely affected by the regulators decision to extend
the scope of the restrictions we are currently subject to, to
new services and markets in the face of continuing convergence
of information and communications services. You should read
Item 4: Information on the Company 
Regulation  Regulatory Environment 
Norway  Regulatory developments and
 European Union regulation 
Liberalization and harmonization of telecommunications
regulation for more information on the new regulatory
framework.


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.

We derive an increasing portion of our revenues
and profits (or losses) from our international mobile operations
and investments, which in recent years have been subject to
increased regulation. As a consequence, regulatory uncertainty
or unfavorable regulatory developments in certain countries
could adversely affect our results and business prospects.

We must comply with an extensive range of
requirements that regulate the licensing, construction and
operation of our telecommunications networks and services or
restrict our ability to invest or increase our investment in
local companies in these countries. In particular, there are
agencies which regulate and supervise the allocation of
frequency spectrum and which monitor and enforce regulation and
competition laws which apply to the mobile telecommunications
industry. Decisions by regulators regarding the granting,
amendment or renewal of licences, to us or to third parties,
could adversely affect our future operations in these countries.

For example, our subsidiary Pannon has been
identified as having significant market power in the mobile and
interconnection markets in Hungary, and has been required to
contribute to a fund established by the Hungarian authorities to
compensate universal service providers. In Malaysia, we are
required to reduce our current 61% ownership interest in our
mobile subsidiary DiGi.Com to below 50% by 2006. In the Ukraine,
a calling party pays regime was introduced in
September 2003, but it may still be revised or replaced. In
Thailand, where we operate through our associated mobile company
TAC, we are exposed to uncertainty relating to the licensing
system, the consequences of the build, operate and transfer
regime applicable to mobile networks operated by private
investors and uncertainty relating to restrictions on foreign
investment in Thailand, in particular with respect to the cap on
our ownership interest in TAC. In Russia, the regulatory
authority responsible for the telecommunications sector has
claimed that the agreement between our associated company
Vimpelcom and its subsidiary KB Impuls, which officially holds
Vimpelcoms GSM license for the Moscow region, does not
explicitly grant Vimpelcom the right to provide services in
Moscow on behalf of KB Impuls. For additional information on
these regulatory developments outside Norway, you should read
Item 4. Information about the Company 
Telenor Mobile  Mobile Operations Outside
Norway.

Some of the emerging markets in which we operate
are in the process of transition to market economies, stable
political institutions and comprehensive regulatory systems. For
example, Hungary will join the European Union in 2004 and,
therefore, we expect its overall regulatory framework to
converge with that of the European Union. However, some other
emerging market countries in which we operate lack the
institutional continuity and strong procedural and regulatory
safeguards typical of the more established countries in which we
operate, such as Norway or Denmark. In addition, in countries
with a large and complicated structure of government and
administration, such as Russia, national, regional, local and
other governmental bodies may issue inconsistent decisions. As a
result, in these emerging countries we are exposed to regulatory
uncertainty, which could increase uncertainty for our business
and our cost of regulatory compliance, and we enjoy less
comprehensive protection for some of our rights.

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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.

The Kingdom of Norway holds 53.1% (54.4% if our
treasury shares are excluded) of our shares. Accordingly, the
Kingdom of Norway continues to have the power to determine
certain matters submitted for a vote of shareholders, including
electing a majority of the corporate assembly which in turn has
the power to elect our board of directors, as well as the power
of approval of the annual financial statements and declarations
of dividends. The interests of the Kingdom of Norway in deciding
these matters and the factors it considers in exercising its
votes could be different from 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.

The trading price of our ordinary shares and ADSs
could fluctuate widely in response to factors such as quarterly
variations in our operating results, adverse business
developments, interest rate changes, changes in financial
estimates by securities analysts, announcements of technological
or other developments by us or our major customers or
competitors, changes to the regulatory environment in which we
operate or the actual or expected sale of a large block of
shares by the Kingdom of Norway.

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

Holders of ADSs may instruct the ADR depositary
to vote the ordinary shares underlying the ADSs. However, in
order to exercise their voting rights at meetings, holders of
ADSs must instruct the ADR depositary to cause the temporary
transfer of the underlying ordinary shares so as to register
their ownership of such ordinary shares directly in our share
register in the VPS (Norwegian Central Securities Depository
System) prior to the meeting. In addition, the ADR holder must
cause the delivery of such holders ADSs to a blocked
account with The Depository Trust Company for the account of the
ADR depositary and notify the ADR depositary that such ADSs are
being held in a blocked account. The ADSs must remain in the
designated account until the conclusion of the meeting at which
such voting rights are to be exercised by the ADR depositary.
There is no guarantee that you will receive voting materials in
time to instruct the ADR depositary to vote and it is possible
that you, or persons who hold their ADSs through brokers,
dealers or other third parties, will not have the opportunity to
exercise a right to vote.




ITEM 4:  INFORMATION ON THE
COMPANY

THE COMPANY

We are the leading telecommunications company in
Norway. We also have substantial international operations,
particularly in the areas of mobile telephony, satellite
operations and pay television services.

Telenor ASA is a public limited company organized
under the laws of Norway.

We were incorporated on July 21, 2000. We
are subject to the provisions of the Norwegian Act relating to
Public Limited Liability Companies. Our principal offices are
located at Snarøyveien 30, N-1331 Fornebu,
Norway. Telephone number: +47 810 77 000.

Our agent in the United States is Telenor
Satellite Services Holdings Inc., 1101 Wootton Parkway,
Rockville, Maryland.

OVERVIEW

We are the leading telecommunications company in
Norway, which is among the most advanced telecommunications
markets in the world. Norway has the highest, or one of the
highest, penetration rates of

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mobile phone, fixed line digital telephony,
personal computer and Internet usage worldwide. We also have
substantial international operations, particularly in the areas
of mobile telephony services, satellite operations and pay
television services. In 2003, we had consolidated total revenues
of NOK 53 billion and a net profit of NOK 4.6 billion.


Our predecessors and we have been responsible for
telecommunications in Norway since 1855. We were established in
1994 as a limited liability company wholly-owned by the Kingdom
of Norway. In December 2000, we completed our initial public
offering, which reduced the ownership of the Kingdom of Norway
to 79%, and our shares were listed on the Oslo Stock Exchange
and the NASDAQ National Market. In 1988, the Norwegian
government began opening sectors of the telecommunications
market to competition and, on January 1, 1998, the market
was opened to full competition. Liberalization of the market for
telecommunications services in Norway has proceeded generally in
line with, and in some respects ahead of, the European Union.
For additional information concerning our history, you should
read Item 7: Major Shareholders and Related Party
Transactions  Relationship between Telenor and the
Kingdom of Norway.

Effective January 1, 2003, we introduced a
new company structure to realign our core business areas and
better distinguish between services aimed at residential
customers and services aimed at the business market in Norway.

Telenor Mobile

We are the leading provider of mobile
telecommunications services in Norway, with 2.36 million
subscriptions at December 31, 2003. Internationally, we
have interests in mobile operations in 10 countries, with
principal investments in five operations:



| |   |                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a 100% ownership interest in Pannon GSM in
    Hungary, with 2.62 million subscriptions at
    December 31, 2003;                                                                                                
|
| |  | a 61% ownership interest in DiGi.Com in Malaysia,
    with 2.21 million subscriptions at December 31, 2003;                                                                                                      
|
| |  | a 55.35% ownership interest in Kyivstar in
    Ukraine, with 3.04 million subscriptions at
    December 31, 2003;                                                                                                
|
| |  | a 51% ownership interest in GrameenPhone in
    Bangladesh, with 1.14 million subscriptions at
    December 31, 2003; and                                                                                        
|
| |  | a 53.5% ownership interest in the Sonofon joint
    venture in Denmark, with 1.02 million subscribers at
    December 31, 2003. On February 12, 2004, we increased
    our ownership interest in Sonofon to 100%.

In addition, we have participations in five other
mobile operators in Europe and Southeast Asia. The number of
subscriptions in our international mobile operations, calculated
on the basis of our proportionate ownership interest in each
company, was 13.2 million at December 31, 2003 and
10.0 million at December 31, 2002.

Telenor Fixed

We are the leading provider of fixed network
telecommunications services in Norway, offering a full range of
services to residential, business and wholesale customers. As of
December 31, 2003, we provided 3.0 million fixed line
access channels in the residential and business markets. These
included 1.7 million digital, or integrated services
digital network (ISDN), access channels provided to
approximately 732,000 subscriptions, which represented one of
the highest rates of ISDN penetration in the world. ISDN refers
to a digital technology that permits more than one stream of
information (voice, text, data and image) to be transmitted on a
single copper line and which provides higher bandwidths than
dial-up modems. As of December 31, 2003, we had
177,000 ADSL subscribers. ASDL uses existing copper wire
networks for services that require a higher capacity in one
direction than the other, e.g. video on demand.

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We are the leading provider of Internet access
and services to the residential market in Norway with
approximately 1,031,000 subscriptions and registered users as of
December 31, 2003. We provide both basic and value-added
communication services as well as managed services to the
business market in the countries in which we operate. We provide
interconnection and transit services to other carriers and
service providers in the wholesale market both in Norway and
internationally. We also have international operations in
Sweden, Slovakia and the Czech Republic and own a 20.5% interest
in the listed Russian telecom operator Golden Telecom.

Telenor Broadcast

We provide broadcasting services to customers in
the Nordic region. We are the leading provider of television
services in the Nordic countries through satellite dish, cable
networks and small antenna TV-networks systems. As at
December 31, 2003, we had approximately 2.5 million
subscribers to our television services.

We operate the national terrestrial broadcast
network in Norway and we are the leading provider of satellite
broadcasting services in the Nordic region, utilizing three
geo-stationary satellites.

Other Businesses

We conduct significant operations related to our
core business areas through other businesses. EDB Business
Partner, our 51.8%-owned publicly listed subsidiary, is a
leading information technology company in Norway. Our
wholly-owned subsidiary Satellite Networks offers
satellite-based communications networks and services to a wide
variety of governmental, intergovernmental and commercial
organizations, while our wholly-owned subsidiary Satellite
Services is one of the worlds leading providers of global
mobile communications services, directed at the maritime, land
mobile and aeronautical markets.

STRATEGY

Our primary objective is to create value for our
shareholders, customers, employees and joint venture partners,
as well as society in general. To achieve this objective, we
base our strategy on being dynamic, innovative, and
responsible, our core values, and on ideas that
simplify, our core vision. We intend to be a driving force
in creating, simplifying and introducing communication and
content solutions to the market. We are committed to creating,
developing and launching new solutions that simplify our
customers workday. We believe that by simplifying our own
organization and routines we can achieve competitive power and
value-creation.

Moreover, our strategy to achieve our primary
objective has the following focus:



| |   |                                                                                                                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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 our Scandinavian
    mobile operations through our recently established Nordic Mobile
    unit, which comprises and coordinates these operations.                                                                                                                                                                         
|
| |  | To ensure value creation in our mobile portfolio
    by maximizing cash flow in mature markets, securing continued
    subscriber growth in our international portfolio 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 Norwegian
    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.                                                                                                                                                                                     

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Our combined portfolio of companies and products
will form the basis for our future growth in both the short and
long term. In order to achieve this growth objective, our
portfolio must include a balanced combination of mature activity
in mature markets and new activity in emerging growth areas.

We operate in an international market alongside
global players. We focus on three geographical areas: Norway and
the Nordic region, Central and Eastern Europe and Southeast
Asia. In our existing portfolio, the mature activity consists of
fixed and mobile network operations in Norway and broadcasting
operations in the Nordic region, while our new activity in
emerging growth areas consists of our international mobile
operations, Internet and broadband access in Norway, business
communications in Scandinavia, as well as TV and content
distribution in the Nordic region. We intend to constantly
evaluate which businesses it is critical for us to have control
of, to consider partnerships for certain other businesses and to
develop new businesses.

We intend to continue to be a driving force in
the development of new services and solutions. We believe that
new opportunities may arise from the development of new services
and established customer relationships. We are developing new
services based on our experience from challenging and mature
markets. We intend to coordinate product development and
operations across our portfolio in order to provide greater
competitive power through improved products and lower costs. As
a result, we expect to be well-positioned in markets where the
range of services on offer is being steadily expanded and where
both industry-specific and customer-oriented solutions are
required. As a medium-sized telecommunications company in
Europe, we have to compete on the basis of a market and customer
driven culture and organization, expertise, well-designed
services, quality and the ability to innovate.

We aim:

To be the leading provider of
communications services in Norway.

In Norway, we have a competitive advantage in our
customer base and a strong market position in all parts of the
value chain consisting of the network and services we offer. The
relationship with our customers is crucial to us and we aim to
support them through a strong Telenor brand and improved
customer interaction.

We intend to further develop our leading position
within telecommunications in Norway. With high market shares and
a broad range of services in both the residential and business
markets, we will seek to improve profit performance in the fixed
and mobile areas by introducing new services and through a wide
range of cost-cutting initiatives. We intend to facilitate and
promote the development and introduction of new communication
and content services from other suppliers which can supplement
our own services, and create a new flow of revenue from the
market. For these purposes, we pursue an open value chain
strategy, by which we offer wholesale services to other service
providers in order to encourage market growth and maximize the
traffic carried on our networks.

In Norway, our strategic focus is on simplifying
our operations to the benefit of our customers and reducing
costs. A controlled and gradual migration from the current
circuit-switched technology platform to packet-switched Internet
Protocol (IP)-based platforms is expected to improve cost
efficiency and expand our service offerings.

Our fixed network is targeted at satisfying our
customers needs for content services and high bandwidth.
Capacity in our transport network is expected to increase as a
result of a more efficient utilization of optical technology,
while in the access network customers will have access to
broadband services through xDSL. We believe that customer demand
will influence the pace of the rollout of these services.

To strengthen our position in
Scandinavia.

We intend to continue to streamline our mobile
and fixed operations in Scandinavia by exploiting the benefits
resulting from economies of scale and cross-border synergies. We
believe our Scandinavian presence will improve support to our
customers by building upon our expertise in, and our range of,
both mobile and fixed services.

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To strengthen our position as an
international mobile operator.

We intend to strengthen our portfolio of
international mobile operations by obtaining control over
selected mobile companies. Control is essential for us to
benefit from cross-borders synergies, such as scale in
procurement, development of new services and implementation of
best practices, to improve operational efficiency and to
increase our overall profitability. We intend to manage our
non-strategic investments as financial investments and to exit
from international mobile operations where we cannot obtain
control over time.

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

We will continue to develop new opportunities to
strengthen our strategic position as a leading distributor of
subscription-based television in the Nordic region. We will
focus on attracting new subscribers and increasing revenue per
user by providing attractive content and new interactive
services.

Organization

Effective from January 1, 2004, we are
organized in the business areas Telenor Mobile, comprising all
of our mobile communication operations in and outside Norway,
Telenor Fixed, Telenor Broadcast and Other activities. In
addition, we have grouped all sales and marketing activities for
our fixed and mobile services in Telenor Norway, a separate
market unit, in order to simplify and strengthen our position in
the domestic market.

In order to realize synergies across our
Scandinavian mobile operations, effective February 12, 2004
we completed the acquisition of the remaining 46.5% ownership
interest in Sonofon and we created Telenor Nordic Mobile, our
new business unit within Telenor Mobile. Telenor Nordic Mobile
is responsible for managing and coordinating our mobile
operations in Norway, Denmark and Sweden, which under Nordic
Mobile share the same management structure, a common marketing
approach and harmonized IT and service platforms and can offer
new and improved mobile services available across the Nordic
region.

Telenor Fixed includes fixed line development and
operations in Norway. Financial reporting from Telenor Fixed
covers all Norwegian fixed line activities, including those
undertaken by the market unit Telenor Norway.

Telenor Broadcast encompasses all our
broadcasting activities and networks.

TELENOR MOBILE

Overview

We are the largest mobile telecommunications
operator in Norway and a significant international operator. We
are also the second largest operator in Hungary through our
wholly-owned subsidiary Pannon GSM, the third largest GSM
operator in Malaysia through our 61%-owned subsidiary DiGi.Com,
the second largest operator in Ukraine through our 55.3%-owned
subsidiary Kyivstar GSM, the largest operator in Bangladesh
through our 51%-owned subsidiary GrameenPhone and the second
largest operator in Denmark through our wholly-owned subsidiary
Sonofon. On February 12, 2004, we increased our ownership
interest in Sonofon from 53.5% to 100% by acquiring the
remaining 46.5% ownership interest in Sonofon from our joint
venture partner Bell South for a purchase price of Danish Kroner
3,050 million. In addition, we have participations in five
other mobile operators in Europe and Southeast Asia. In 2003,
our mobile communications business area generated external
revenues of NOK 22.5 billion, representing 42% of our total
consolidated revenues. We delivered 43% of our external mobile
communications revenues in 2003 from our operations in Norway
and 57% from our consolidated foreign subsidiaries.

Our Telenor Mobile business area currently
consists of Telenor Mobil, our Norwegian mobile operations, and
the following foreign mobile operations:

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|                                             |  |                      |        | 
|-------------------------------------------- |  | -------------------- | ------ | 
|                                             |  | Telenor Ownership   
|                                             |  | Interest at         
|                                             |  | December 31, 2003(1)
|                                             |  |                     
|                                             |  | %                   
|Consolidated Subsidiaries:                   |  |                      |        | 
|Pannon GSM (Hungary)                         |  |                      | 100.00 | 
|DiGi.Com (Malaysia)                          |  |                      | 61.00  | 
|Kyivstar GSM (Ukraine)                       |  |                      | 55.35  | 
|GrameenPhone (Bangladesh)                    |  |                      | 51.00  | 
|Telenor Mobile Sverige AS (Sweden)           |  |                      | 100.00 | 
|Associated companies and Joint
    Ventures: |  |                      |        | 
|TAC (Thailand)                               |  |                      | 40.29  | 
|Sonofon (Denmark)                            |  |                      | 53.50  | 
|VimpelCom (Russia)                           |  |                      | 28.98  | 
|ONE (Austria)                                |  |                      | 17.45  | 
|ProMonte GSM (Montenegro)                    |  |                      | 44.10  | 






|    |                                                           
|--- | ----------------------------------------------------------
|(1) | Including both direct and indirect ownership
    interest.

We believe that our acquisition of the
outstanding ownership interest in Sonofon will allow us to
pursue the effective integration of our Nordic operations in
order to realize synergies. We also believe that it places us in
a stronger position to serve pan-Scandinavian customers. The new
Nordic Mobile unit has a single management structure and a
common marketing approach. We expect that synergies will be
realized primarily through lower expenses resulting, for
example, from harmonized IT and service platforms and common
product development.

Telenor Mobil  Norway

We are the leading provider of mobile
telecommunications services in Norway. We offer a broad range of
digital services to the Norwegian corporate and consumer market
and have extensive experience in providing mobile services and
operating mobile communication networks in Norway.

Technology

GSM (Global System for Mobile
Communications)

Our digital network covers over 99% of
Norways population. Currently, the only other network
operator of digital mobile phone services in Norway is NetCom,
which is owned by the telecommunications company TeliaSonera.

We hold three licenses for the provision of
GSM-based services. The first GSM 900 license was granted to us
in 1992 and is due to expire at the end of 2005. NetCom was
granted a similar license at the same time. We were granted a
second GSM 1800 license in 1998, which is due to expire in 2010.
NetCom and Teletopia are the other licensees within this
frequency band. We were awarded the third license on additional
frequencies in the GSM 900 band, which expires in 2013, as a
result of an auction in 2001.

The Ministry of Transportation and Communications
is currently considering the process for renewal of the licenses
it granted in 1992. We have filed an application for extension
of our current license until 2013 or alternatively until 2010,
in each case to coincide with the expiry of one of our other GSM
licenses. The Ministry will decide on the renewal of the
licences for the GSM 900 frequencies no later than
October 31, 2004. For a description of the conditions under
the licenses, you should read Regulation 
Regulatory Issues and Licensing (Norway)  Service
licenses.

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GPRS (General Packet Radio Service)

General Packet Radio Service, or GPRS, is a key
element in the provision of advanced mobile data services, such
as multimedia messaging services (MMS), wireless application
protocol (WAP), machine-to-machine communications and intranet/
Internet access. We have recorded over 900,000 end users who
have connected to and used our GPRS network since the service
was launched in 2001. We offer simple and secure connection from
mobile devices to corporate customers intranet systems.
When using GPRS, customers are charged only for the amount of
data that is actually transferred.

UMTS (Universal Mobile Telecommunications
System)

We are one of three license holders for UMTS in
Norway. As of December 2002, our rolled-out UMTS network could
provide geographic coverage to the homes of approximately
1.5 million people with a minimum bit rate of 128 kbit/s,
thus complying with the initial minimum coverage requirements
under the terms of our UMTS license. However, as of December
2003, the required number of brands and quality of UMTS
terminals continued not to be commercially available in Norway.
In response to these delays in supplying UMTS equipment, in 2003
the Norwegian government proposed that UMTS license holders may
elect to delay the roll-out schedule for up to an additional
15 months. For additional information on the delay of the
roll-out schedule you should read Regulation 
Regulatory Issues and Licensing (Norway)  Service
licenses, for more information about UMTS you should also
read Network and Competition.

NMT (Nordic Mobile Telephone)

We are the only provider of analog mobile
telephony services in Norway through our NMT 450 network.
Our NMT 900 network was phased out in March 2001 and our
paging system was terminated in September 2003. The vast
majority of analog customers have now migrated to digital
services, although in some customer segments analog services
remain attractive due to NMT 450s superior coverage
in some remote areas. We are licensed to continue providing
NMT 450 services until the end of 2004. We will stop
providing NMT services as of December 31, 2004. To
compensate for the loss of NMT coverage, we have decided to
increase GSM coverage along the Norwegian coast and in some
mountain areas by utilizing extended cell technology which
doubles the range of coverage.

Services

Our mobile communications business generates
revenues from voice traffic and value added services (non-voice
services).

Voice Services

Voice traffic revenues consist of traffic charges
paid by mobile subscribers, interconnection fees, roaming
traffic charges from calls made by subscribers of foreign mobile
network operators while in Norway and calls made or received
outside of Norway by our subscribers using another mobile
operators network. Voice traffic revenues depend
principally upon the total number of subscriptions, traffic
volume, the mix of services utilized by subscribers and tariff
applicable to such services

Although we intend to continue developing new
advanced value-added services to add to our portfolio, we
anticipate the bulk of our revenues to continue to come from
core voice services. Therefore, we are focusing our efforts on
renewing our tariff plans, improving existing services and
developing new voice services to meet the everyday needs of
customers in all segments.

One example of our success in core voice services
is our corporate solution ProffNett. The first version was
launched in 2001 and has since been modified and improved. This
solution provides corporate subscribers with functions
previously only associated with fixed line networks, including
internal extension numbers, call transfer and callback.
Accordingly, employees in a company that uses this solution only
require one (mobile) phone and phone number and there is no need
for fixed line voice services.

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Value-added services

We offer an extensive portfolio of value-added
services to our customers, including call waiting, caller
identification, call forwarding, itemized invoicing, voice mail,
short messaging services (SMS) and mobile content services,
mCommerce, multimedia messaging services (MMS) and data services.

SMS and Content Services.The use of SMS has continued to grow.
Content services based on premium SMS (Content Provider Access,
or CPA), such as downloads of ring tones, logos, pictures,
Java-based games and directory enquiries, is another area of
growth. This solution is simple to use, is available
automatically to all contract and prepaid customers and has
quickly gained wide acceptance in the market. Approximately 70%
of all our customers purchased premium rate content services in
2003. CPA is available to any content provider who wishes to
deliver content to our customers.

The average number of sent messages per month per
subscriber was 61 in 2002 and 70 in 2003, which presents an
annual increase of 13%. In terms of the total number of
messages, our customers sent 14% more messages in 2003 compared
to 2002.

mCommerce.We
provide mCommerce services secured by public key infrastructure
(PKI) technology, a secure identification system for mobile
payments, banking and other electronic transactions. The
mCommerce platform supports payments from bank accounts secured
by PKI based on digital signatures. The most attractive
mCommerce service has proved to be the service, which enables
our customers to recharge their prepaid subscriptions.
Recharging prepaid phones through mCommerce reduces the total
commissions paid to retailers for distribution of prepaid
to up cards.

MMS (Multimedia Messaging Services).We launched a commercial service in
November 2002. From June to November 2003, we offered all our
customers free use of MMS. This resulted in a substantial
increase in the number of sent MMS messages and in many
customers purchasing mobile phones with MMS functionality. This
development is expected to generate future growth in MMS
revenues. In close cooperation with the largest content
providers in Norway, we provide MMS content services that offer
a substantially richer customer experience than SMS content
services. Multimedia messaging is primarily expected to
complement SMS messaging and content services and to create
substantial new revenue streams both from person-to-person
communication and content-based services.

Data.We offer fast
and reliable circuit and packet switched data transmission.
Circuit switched data services are based on GSM low speed and
high speed technology. Packet switched transmission is currently
based on GPRS and WLAN, and in the future will also be based on
UMTS. These services enable mobile phone users to send and
receive e-mail, to connect to corporate networks through a PC or
a mobile phone and to use the Internet. The majority of the
packet switched revenues are currently related to WAP and we
have seen a growth rate of nearly 400% from 2002 to 2003.

Customers

Between 1997 and 2000, we experienced strong
growth in our customer base due to the rapid increase in mobile
penetration rates in Norway. Since 2001, the growth rate has
been slowing down, although total subscriptions in the market
are still increasing. We were not able to maintain our strong
growth in subscribers from previous years in 2003 mainly due to
increased competition from other service providers and our
decision to focus more on growing in terms of contract
subscribers. The number of our subscribers decreased during the
first half of 2003. However, this decrease was offset by an
increase during the second half of 2003 due to the positive
effects of the marketing measures which we had taken at the
beginning of the year.

As of December 31, 2003, we had
approximately 2.3 million GSM subscriptions in Norway for
digital mobile telephone services, which represent 57% of the
total market in Norway. We estimate that there were over
4.1 million mobile subscriptions in Norway, which we
estimate represents a mobile penetration rate of approximately
90% of the Norwegian population, up from 84% at the end of 2002.
The total number of net new digital subscribers in the Norwegian
market in 2003 was approximately 285,000. Our net growth in new
subscribers as an operator was 178,000, which reflected a
decline in the number of direct subscribers and

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strong growth in the number of wholesale
subscribers. You should read  Wholesale
for more information on our mobile wholesale operations.


The table below shows selected subscription data
for our Norwegian digital and analog services on the dates
specified. Wholesale subscriptions are not included.

|                                   |         |                 |                     |      |       |       |  |      |       |       |  |    |       |       |  |    |       |       |  |    |       |       | 
|---------------------------------- | ------- | --------------- | ------------------- | ---- | ----- | ----- |  | ---- | ----- | ----- |  | -- | ----- | ----- |  | -- | ----- | ----- |  | -- | ----- | ----- | 
|                                   |         |                
|                                   |         | At December 31,
|                                   |         |                
|Subscriptions at end of period(1): |         | 1999            |                     | 2000 |       | 2001  |  | 2002 |       | 2003 
|                                   |         |                 |                     |      |       |       |  |      |       |      
|                                   |         |                
|                                   |         | (in thousands) 
|By type of service:                |         |                 |                     |      |       |       |  |      |       |       |  |    |       |       |  |    |       |       |  |   
|                                   | Digital |                 |                     |      |       |       |  |      |       |       |  |    |       |       |  |    |       |       |  |    |      
|                                   |         | Contract        |                     |      | 1,003 |       |  |      | 1,145 |       |  |    | 1,210 |       |  |    | 1,215 |       |  |    | 1,228 |      
|                                   |         | Prepaid(2)      |                     |      | 732   |       |  |      | 911   |       |  |    | 1,027 |       |  |    | 1,115 |       |  |    | 1,099 |      
|                                   | Analog  |                 |                     | 216  |       |       |  | 143  |       |       |  | 70 |       |       |  | 52 |       |       |  | 36 |      
|                                   |         |                 |                     |      |       |       |  |      |       |       |  |    |       |       |  |    |       |       |  |   
|                                   |         |                 | Total subscriptions |      |       | 1,951 |  |      |       | 2,199 |  |    |       | 2,307 |  |    |       | 2,382 |  |    |       | 2,363 | 
|                                   |         |                 |                     |      |       |       |  |      |       |       |  |    |       |       |  |    |       |       |  |   






|    |                                                                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The number of subscriptions at end of period is
    calculated based on the number of contract and prepaid services
    subscribed to by our customers. A customer may subscribe to more
    than one subscription service.
|   
|(2) | For purposes of calculating our number of prepaid
    subscriptions, we only include prepaid customers that have had
    incoming or outgoing traffic during the last three months.                                        

Similar to other operators, we experience
customer turnover, commonly referred to as churn. We
calculate churn as the total number of customers who terminated
their connections from our network subscriptions during the
period, divided by the average number of customers in the period.

We distinguish between voluntary customer
disconnections and involuntary disconnections. A voluntary
disconnection occurs when a customer terminates mobile service
or switches to a competing service, and an involuntary
disconnection occurs when we terminate service due to
non-payment. The following table shows our annualized churn
rates in Norway for the periods specified, excluding internal
churn due to migration from our analog to our digital services.

|                                       |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|-------------------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|                                       |  |                        
|                                       |  | Year ended December 31,
|                                       |  |                        
|                                       |  | 1999                    |       | 2000 |  | 2001 |       | 2002 |  | 2003
|                                       |  |                         |       |      |  |      |       |      |  |     
|Churn rates for contract subscriptions |  |                         | 14.2% |      |  |      | 12.7% |      |  |      | 12.5% |  |  |  | 17.5% |  |  |  | 21.4% | 

As the leading mobile service provider in Norway,
we are facing increased competition from all other mobile
service providers, especially those that have a service provider
arrangement with us to use our network. Our increase in churn
from direct subscribers is mitigated by a growth in service
provider subscribers. Our market share measured by number of
subscribers as an operator is therefore unchanged at 69% at end
of 2003 and 2002.

Mobile tariffs

We offer a range of mobile service packages
designed to appeal to specific customer segments. We offer
residential subscribers six different tariff plans, four
postpaid and two prepaid subscriptions. In the corporate
segment, we offer two postpaid tariff plans and corporate
solutions. All tariff plans include free access to a variety of
value-added services, including voice mail, SMS, MMS, and GPRS.

According to Eurodata and the OECD, the tariffs
that we offer to our customers in Norway are below average for
OECD countries based on price baskets. We reduced our tariffs
for SMS in May and December 2003 and we further reduced our
tariffs for voice services in June and August 2003. In addition
to reducing prices, we have simplified our pricing structure and
changed the names of our tariff plans in order to distinguish
more clearly between our offerings to individuals and those to
corporate customers. Since 2000, djuice has been our WAP and
mobile Internet venture, but in June 2003 it was relaunched as
two separate

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youth tariff plans, which are tailored to younger
mobile users. Djuice offers lower and simpler prices on calls
and SMS, in addition to an extensive package containing a
specified volume of free SMS, MMS, WAP usage and Java games.


We do not charge customers for incoming calls
within Norway. These calls are billed to the caller, as is
customary for digital mobile telephony subscriptions in Europe.
Typically, the mobile operator terminating the call receives
most of the tariff for the call.

Tariffs for international calls generally vary by
country and tariff plan. Rates for roaming outside Norway vary
depending on the terms of the various roaming agreements and the
relevant foreign mobile operators.

Marketing

The Norwegian market is a highly developed and
competitive market characterized by active regulatory forces.
Following the introduction of mobile number portability in
November 2001, the mobile market has seen increased churn
levels, consolidation among service providers and increased
marketing efforts by various providers targeting both low and
high value segments.

As the leading operator in the Norwegian market
for mobile telephony services, we are an organization that makes
a great effort to understand its customers various needs,
to offer competitive pricing and good geographical coverage, and
to provide superior customer service. To address the increased
challenges in our market, we are currently implementing steps to
maintain a more focused control over our current and near future
revenue streams, as well as exploiting more cost-effective
measures to serve and communicate with our customers.

During 2003, we focused our efforts on churn
reduction through holdback activities, i.e., activities aimed at
retaining our most valuable subscribers. We have reduced
selected prices, simplified our mobile tariffs and
differentiated commissions in connection with the sale of new
terminals so that customers signing up for minimum contract
periods generate higher commissions for our dealers, which are
reflected in the price of new terminals for our customers. Our
marketing efforts have been focused on improving network quality
and customer service levels. At the same time, we have been
successful in maintaining a high level of sales on new
subscriptions through our dealers and winback activities, i.e.,
activities aimed at regaining recently churned customers.

We believe that our 24-hour customer service is a
high quality tool for communicating with our customers. We
intend to further exploit this channel to increase subscription
sales, convert customers to more suitable tariff plans and
encourage the use of value-added services.

Traffic

The following table sets forth selected traffic
data in our home market, excluding traffic generated by
subscribers which are service providers. Digital data includes
both contract and prepaid customers in both of our digital
networks (GSM 900 and GSM 1800), while analog data includes
customers in our Nordic Mobile Telephone networks (NMT 450 and,
up until March 2001, NMT 900).

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|                                                                                     |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|------------------------------------------------------------------------------------ |  | ----------------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | ----- |  |  |  | ----- | 
|                                                                                     |  |                        
|                                                                                     |  | Year ended December 31,
|                                                                                     |  |                        
|                                                                                     |  | 1999                    |       | 2000 |  | 2001 |       | 2002 |  | 2003
|                                                                                     |  |                         |       |      |  |      |       |      |  |     
|Digital:                                                                             |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Traffic:                                                                             |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Total outgoing traffic (in millions of minutes)                                      |  |                         | 1,801 |      |  |      | 2,298 |      |  |      | 2,683 |  |  |  | 2,986 |  |  |  | 3,083 | 
|Total incoming traffic (in millions of minutes)                                      |  |                         | 1,188 |      |  |      | 1,545 |      |  |      | 1,861 |  |  |  | 1,974 |  |  |  | 2,100 | 
|Average monthly incoming and outgoing traffic
    (minutes per digital subscription) |  |                         | 169   |      |  |      | 173   |      |  |      | 176   |  |  |  | 180   |  |  |  | 188   | 
|Number of outgoing SMS and content messages
    (in millions)                        |  |                         | 361   |      |  |      | 902   |      |  |      | 1,373 |  |  |  | 1,692 |  |  |  | 1,926 | 
|Analog:                                                                              |  |                         |       |      |  |      |       |      |  |      |       |  |  |  |       |  |  |  |       | 
|Total outgoing traffic (in millions of minutes)                                      |  |                         | 174   |      |  |      | 108   |      |  |      | 64    |  |  |  | 47    |  |  |  | 36    | 
|Total incoming traffic (in millions of minutes)                                      |  |                         | 108   |      |  |      | 70    |      |  |      | 31    |  |  |  | 20    |  |  |  | 14    | 

Prior to 2002, growth in outgoing digital traffic
minutes was mainly due to significant growth in our customer
base. From 2002 onwards, there has been low growth in the number
of subscribers and, as a result, the growth in total traffic
generated by our direct subscribers has not been as significant
as in previous years. The growth in traffic is therefore mainly
a result of growth in minutes per user.

Future growth in revenue per user will depend on
a number of factors, including pricing, the availability of new
services, the competitive environment and the ability to
identify and attract the best customers.

Total traffic in our network is growing at a
higher rate than is set forth in the table due to an increase in
the number of service providers subscribing to our network
services. For additional information on service providers you
should read  Wholesale below.

Distribution

We distribute our mobile telecommunications
services through retail stores, the Internet and independent
distributors. Our total number of distribution outlets for both
contract and prepaid customers was approximately 12,000 at
December 31, 2003. All of our distribution outlets offer
prepaid cards, while approximately 1,150 offer contract
subscriptions. Prepaid cards can now be purchased in kiosks,
petrol stations and supermarkets across Norway. For the
convenience of our prepaid customers, in addition to prepaid
cards, ATMs and mCommerce may be used to recharge prepaid
accounts.

We maintain high standards of training and
performance for our sales personnel. We require our selling
agents to sign contracts certifying the competence and training
of their sales personnel, the space and prominence of our
products in the retail space and the means of promoting our
products.

Wholesale

We have several service providers connected to
our network. Each service provider is granted access to purchase
mobile traffic and SIM cards from us in order to resell its
services under its own brand name in the Norwegian market. It is
the service providers responsibility to handle customer
services, invoicing, marketing and sales to the end user. We
have developed an online subscription administration system that
enables the service providers to administer their customers more
efficiently. We have also given service providers the
possibility to develop their own prepaid solutions and decide
their own tariff plans. At the end of 2003, we had
487,000 service provider subscribers in our network, up
from 306,000 subscriptions at the end of 2002. At the end
of 2003, service provider subscribers accounted for 17% of our
digital subscriber base, compared to 12% at end of 2002.

We signed a Mobile Virtual Network Operator
(MVNO) agreement with Tele2 for Norway in September 2002, which
allows Tele2 to offer public mobile telecommunications based on
our GSM and UMTS networks. The commercial launch of Tele2s
GSM services in Norway under the MVNO agreement occurred in the
second quarter of 2003. Our agreements with MVNOs and service
providers are expected to further

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stimulate competition and contribute to the
continued development of the Norwegian mobile telephony market.


Customer service

We believe that customer care and service
management are key factors that distinguish us from our
competitors in the mobile telephony market, which is
characterized by increasing competition. We believe that the
provision of high-quality customer service is the foundation of
long-term customer relationships and an important element of our
growth strategy. Our customer service center supported by
computer-telephone-integration directs our customers calls
to agents with the right skills to address our residential and
business customers demands. Within Norway, our customer
service may be used free of charge.

We own and operate our customer service center,
which serves our customers and our dealers. The customer service
center provides product information and guidance, maintains our
subscriber database, answers billing inquiries, responds to
customer complaints, checks customer credit, opens new
subscriptions and sells additional value-added services to
existing customers.

In 2003, our customer service center in Norway
handled, on average, 252,000 calls from our customers and
29,500 calls from our dealers each month. Our customer
service call centers operate 24 hours a day, 365 days
a year. In addition, our customers may use our automated
customer care service to check account balances and to activate
additional value-added services. Our automated service is
available both by phone and on the Internet.

Subscriber management, billing and
activation of contract subscriptions

Each new contract subscriber, also known as
post-paid subscriber, undergoes a credit check. As a result of
the credit analysis, we either activate a subscription after the
payment of any outstanding claims or we require the customer to
pay a deposit. Subscribers receive bills including subscription
charges, airtime and value-added services. We maintain
continuous supervision of customers with high usage as well as
those involved in credit disputes. Outstanding claims are sent
to external debt collecting agencies. We have developed and
introduced an enhanced electronic invoicing service for
customers both in the residential and business market. These
enhanced solutions provide customers in the business market with
more billing options and easier handling of our electronic
invoices.

Network

We believe that a significant competitive
advantage of our Norwegian operations historically has been the
quality of service, both in terms of coverage and capacity, in
our mobile network. In 2003, we delivered a 99% success rate in
completing all calls in our digital network.

We have taken several steps to improve the
quality of our network and to expand the services we offer. In
addition to our launch of higher speed mobile data transmission
capability in November 1999, we enhanced our digital network
with GPRS starting in February 2001. We are also in the process
of increasing GSM coverage in selected areas by using extended
cell technology. This technology provides about twice the
coverage of an ordinary GSM base station.

The infrastructure of a mobile communications
network includes the following components:



| |   |                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | a radio network comprised of base stations, which
    communicate by radio signal with mobile handsets, antenna
    systems and masts;                                                                                                         
|
| |  | a switching network comprised of base station
    controllers, which control call set-up, signaling and
    maintenance functions, as well as the use of radio channels in
    one or more base stations, and other network management systems;
|
| |  | mobile switching centers, which control the
    switching network;                                                                                                                                                                             

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| |   |                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------
| |  | home location registers, which contain
    information about subscribers using the network and authorize
    network usage; and
|
| |  | cabling and other transmission devices connecting
    different components within the network.                                 

Most of the costs associated with radio networks
relate to base station infrastructure. At December 31,
2003, we had approximately 6,250 digital radio transmission
cells in Norway. In addition to usage for our own mobile
services, many of our sites are also used for other purposes,
including competitors networks and public mobile radio
services.

Ericsson and Nokia are our primary suppliers of
radio network equipment. We purchase equipment from multiple
sources to spread technology risk and retain influence over the
development of new technology-related features. All of our radio
base stations are connected via leased lines (cables or radio
relay links) and are equipped with emergency back-up power.

Our mobile switching systems have been designed
to provide high levels of service, quality and reliability. The
switching systems have redundant central systems and are
monitored 24 hours a day. We have network repair personnel
on call at all times. We locate our switching centers in secure
facilities with limited physical access.

The Norwegian regulatory authorities awarded us a
UMTS license in late 2000. At December 31, 2002, the
rollout of our UMTS network complied with the license
requirement that we cover approximately 1.5 million people
with a minimum bit rate of 128 kbit/s. At December 31,
2003, our UMTS network covered 1.7 million people. You
should read  Technology  UMTS
(Universal Mobile Telecommunications System) above
Competition below and Regulation 
Regulatory Issues and Licensing (Norway)  Service
licenses for additional information on our UMTS license.

Currently, the infrastructure of our UMTS network
includes:



| |   |                                                                                                           
| | - | ----------------------------------------------------------------------------------------------------------
| |  | a radio network comprised of 250 Node
    Bs (base stations);                                            
|
| |  | a core network and two RNCs (radio network
    controllers, one from each vendor); and                    
|
| |  | two small test networks from each vendor to be
    used for testing of new software releases and services.

Some nodes of the existing GSM network, such as
home location register and billing nodes, are utilized by UMTS.
In the future, GSM and UMTS core nodes will be merged into one
common core network.

Interconnection

Existing regulations require us to provide
interconnection, directly or indirectly, to our mobile
communications network for calls to and from all domestic and
international operators of public telephony. We have various
agreements with other operators whose networks interconnect
directly with ours, through which we receive fees for
terminating incoming calls and pay fees for calls from our
network to other operators networks. The amount of these
fees is based upon the network where the call terminates and our
agreement with that network. Norwegian telecommunications
regulations impose cost-oriented pricing requirements for
traffic terminating in mobile networks of operators with
significant market power in the national market for
interconnection. We have been found to have such a position of
significant market power. In accordance with a recommendation by
the Norwegian Post and Telecommunication Authority we reduced
our interconnection charges from NOK 0.68 to NOK 0.63 per minute
(excluding VAT) as of February 1, 2004. You should read
Regulation  Regulatory Issues and Licensing
(Norway)  Interconnection and access 
Interconnection for a discussion of these cost-oriented
pricing requirements.

International roaming

We have entered into international roaming
agreements with a large number of telecommunications operators
outside Norway, enabling our subscribers to make and receive
calls while traveling outside our

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network area. These agreements also allow foreign
network subscribers to use our network while visiting Norway.


At December 31, 2003, we had international
roaming agreements with 216 digital mobile telephony operators
in 127 countries and territories, including digital mobile
telephony operators in all European countries. We have also
entered into roaming agreements with PCS 1900 providers in North
and South America, allowing our customers to access foreign
networks by using their own SIM cards and satellite compatible
handsets.

GPRS roaming is available in 41 countries, and
high speed data roaming is available in 23 countries at the
end of 2003.

In October 2003, we entered into a European
Mobile Alliance with eight other mobile operators. The alliance
will initially comprise the European territories of its members
and reach more than 40 million subscribers. Apart from
providing for roaming among its members, the alliance aims to be
quick to market with new, innovative cross-border products and
services, as well as to enable cooperation on operating
initiatives, including technology, sourcing and sales. You
should read  Mobile Operations Outside
Norway  Overview for more details on the
European Mobile Alliance.

Competition

Our main competitor in Norway is NetCom, the
other GSM network operator in Norway, which is wholly-owned by
TeliaSonera. In addition, there are more than ten service
providers and one mobile virtual network operator operating in
the Norwegian wireless market. We compete in the Norwegian
market for mobile telephony primarily on the basis of price,
quality of network service, quality of customer service and the
range of advanced products and services offered. We believe that
we have been able to sustain a high market share in part through
new market offers and by focusing on customer care.

Current Norwegian telecommunications regulations
impose cost-oriented pricing requirements on mobile network
operators with significant market power in the national market
for interconnection. Both NetCom and we have been found to have
significant market power in this market. However the tarrifs
charged by NetCom for terminating mobile traffic is still higher
than our tarrifs. You should read Regulation 
Regulatory Issues and Licensing (Norway) 
Interconnection and access  Interconnection for
a discussion of these cost-oriented pricing requirements.

Currently, three operators hold UMTS licenses in
Norway. We and NetCom, the two GSM incumbents, were granted
licenses in late 2000, along with two other operators, one of
which went bankrupt while the other returned its license. The
authorities invited bids for the licenses in an auction during
the summer of 2003. The Hutchison-Whampoa owned company Hi3G was
awarded one of the idle licenses for NOK 62 millions. The
license awarded to Hi3G only provides for limited roll-out
obligations and it grants access to existing 2G networks on a
national roaming basis from day one.

Mobile Operations Outside Norway

Overview

We have made a number of significant investments
in mobile telecommunications companies outside Norway. As at
December 31, 2003, we had subsidiaries in Hungary,
Malaysia, Ukraine, Bangladesh, and Sweden, and we owned an
interest in six other international mobile operations. We had
13.2 million proportionate subscribers as of
December 31, 2003, calculated on the basis of our ownership
interests in each company.

In accordance with our strategy of seeking to
gain control of certain international mobile operations, while
disposing of certain others, in order to maximize the synergies
attainable by coordinating our efforts across a number of
national markets:

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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | We entered into an agreement with our joint
    venture partner Bell South in December 2003 to acquire its 46.5%
    ownership interest in Sonofon. The transaction, which increased
    our ownership to 100%, was completed on February 12, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | In December 2003, we increased our ownership
    interest in GrameenPhone from 46.4% to 51.0%. Our voting
    interest of 51% remained unchanged.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | On October 24, 2003, the Extraordinary
    General Meeting of Shareholders of VimpelCom approved the
    statutory merger of VimpelCom and its subsidiary
    VimpelCom-Region (VIP-R) and the related issuance of new shares
    of VimpelCom in exchange for the 44.7% stake in VIP-R owned by
    Eco Telecom and us. Upon completion of the merger, which is
    currently still pending subject to regulatory approval and
    satisfaction of certain other conditions precedent linked to
    regulatory approvals, we will own approximately 26.6% and 29.9%
    and Eco Telecom will own approximately 32.9% and 24.5% of
    VimpelComs total voting stock and total common stock,
    respectively.
|
| |  | On April 30, 2003, we announced the sale of
    a 9% ownership interest in the leading Greek mobile telecom
    operator Cosmote, raising total proceeds of NOK
    2.1 billion, representing a financial gain before tax of
    approximately NOK 1.5 billion. On February 26, 2004,
    we announced the sale of our remaining 9% shareholding in
    Cosmote, raising total proceeds of NOK 3.1 billion,
    representing a financial gain before tax of approximately NOK
    2.6 billion.                                                                                                                                                                                                                 
|
| |  | Our 20% interest in the Portuguese mobile company
    OniWay was sold in June 2003.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | With effect from April 25, 2003, our
    ownership interest in Kyivstar increased by 1.15% to 55.35%                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

You should read note 1 to our consolidated
financial statements for additional information on the
transactions mentioned above.

We expect that our international investments will
benefit from the products, services and technical expertise
which we have developed in our domestic operations. In general,
we have been actively engaged in the management of each of our
investments. In many cases, particularly where we have
management control of the operation, we have seconded key
managerial, technological and marketing personnel to our
international companies. Our personnel assist the local
management in achieving rapid network roll-out, good network
quality and sound marketing strategies, and attempt to transfer
the skills we have developed in our operations.

In 2003, we successfully realized synergies, in
particular in the area of procurement of network and information
system/IT equipment and sharing of best practices. In the long
term, we are working to harmonize technology platforms of our
operations in order to achieve further operational synergies.
Throughout 2003, we were engaged in launching a new youth
subscription branded djuice® through our subsidiaries
Telenor Mobile Sverige (Sweden), Telenor Mobil (Norway) and
Pannon GSM (Hungary). The common brand for our mobile youth
venture in Sweden, Norway, and Hungary, is expected to provide
opportunities for cross-border technological, marketing and
product related benefits.

In October 2003, the following nine leading
independent mobile operators announced the formation of the
Mobile Alliance to provide seamless, enhanced voice and data
solutions for business and consumer customers across Europe:
Amena (Spain), O2 (Germany, UK and Ireland), ONE (Austria),
Pannon GSM (Hungary), sunrise (Switzerland), Telenor Mobil
(Norway) and Wind (Italy). On April 1, 2004, Sonofon joined
the Mobile Alliance.

This new alliance will initially operate in the
European territories of its members and reach more than
40 million subscribers. It aims to be quick to market with
new, innovative cross-border products and services as well as to
enable cooperation on operational initiatives, including
roaming, technology, sourcing and sales. It is intended to
expand the alliance to cover other key regions in order to
further enhance the reach and home-away-from-home
experience of its customers, backed by the same simplicity,
convenience and service quality to which they are accustomed in
their home country.

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##### Table of Contents



In February 2003, the GSM Association (GSMA)
presented the members of its new board, consisting of 21 of the
worlds leading telecom operator executives, including the
senior executive vice-president of Telenor Mobile. The board is
expected to position the GSMA as the global trade organization
in the mobile telecommunications industry and intends to focus
on a high-profile series of commercial and strategic wireless
industry initiatives.

The following table provides an overview of the
principal investments in our international portfolio during the
periods and for the dates specified below.

|                                                |  |        |            |              |  |                  |      |            |  |               |                |              |  |               |      |  |  |  |        |  |  |  |        |   |  |  |     | 
|----------------------------------------------- |  | ------ | ---------- | ------------ |  | ---------------- | ---- | ---------- |  | ------------- | -------------- | ------------ |  | ------------- | ---- |  |  |  | ------ |  |  |  | ------ | - |  |  | --- | 
|                                                |  |        |            |              |  |                  |      |            |  |               |                |              |  | Telenors    
|                                                |  |        |            | Mobile       |  |                  |      |            |  |               |                |              |  | Share of Net 
|                                                |  |        |            | Telephony    |  |                  |      |            |  |               |                | Telenors    |  | Income/(Loss)
|                                                |  |        |            | Penetration  |  |                  |      | Date of    |  | Telenors     |                | Ownership    |  | After Tax(4) 
|                                                |  |        |            | by Market    |  | Date of          |      | Initial    |  | Investment(3) |                | Interest     |  | Year ended   
|                                                |  |        |            | December 31, |  | Commencement     |      | Telenor    |  | December 31,  |                | December 31, |  | December 31, 
|Company                                         |  | Market |            | 2003(1)      |  | of Operations(2) |      | Investment |  | 2003          |                | 2003         |  | 2003         
|                                                |  |        |            |              |  |                  |      |            |  |               |                |              |  |              
|                                                |  |        |            |              |  |                  |      |            |  | (NOK in       |                |              |  | (NOK in      
|                                                |  |        |            |              |  |                  |      |            |  | millions)     |                |              |  | millions)    
|Subsidiaries                                    |  |        |            |              |  |                  |      |            |  |               |                |              |  |               |      |  |  |  |        |  |  |  |        |   |  |  |     | 
|Pannon GSM(5)                                   |  |        | Hungary    |              |  |                  | 78,5 | %          |  |               | March 1994     |              |  |               | 1993 |  |  |  | 8,606  |  |  |  | 100.00 | % |  |  |     | 
|DiGi.Com                                        |  |        | Malaysia   |              |  |                  | 44   | %          |  |               | May 1995       |              |  |               | 1999 |  |  |  | 5,483  |  |  |  | 61.00  | % |  |  |     | 
|Kyivstar GSM                                    |  |        | Ukraine    |              |  |                  | 13.7 | %          |  |               | October 1997   |              |  |               | 1998 |  |  |  | 1,071  |  |  |  | 55.35  | % |  |  |     | 
|GrameenPhone(6)                                 |  |        | Bangladesh |              |  |                  | 1.3  | %          |  |               | March 1997     |              |  |               | 1997 |  |  |  | 267    |  |  |  | 51.00  | % |  |  |     | 
|Telenor Mobile Sverige AS                       |  |        | Sweden     |              |  |                  | 95   | %          |  |               | June 2001      |              |  |               | 2001 |  |  |  | 652    |  |  |  | 100.00 | % |  |  |     | 
|Associated
    companies and
    Joint Ventures |  |        |            |              |  |                  |      |            |  |               |                |              |  |               |      |  |  |  |        |  |  |  |        |   |  |  |     | 
|TAC(7)                                          |  |        | Thailand   |              |  |                  | 35   | %          |  |               | September 1991 |              |  |               | 2000 |  |  |  | 4,834  |  |  |  | 29.94  | % |  |  | 71  | 
|Sonofon(8)                                      |  |        | Denmark    |              |  |                  | 84   | %          |  |               | July 1992      |              |  |               | 2000 |  |  |  | 14,205 |  |  |  | 53.50  | % |  |  | 19  | 
|VimpelCom(9)                                    |  |        | Russia     |              |  |                  | 25.1 | %          |  |               | June 1994      |              |  |               | 1999 |  |  |  | 2,334  |  |  |  | 28.98  | % |  |  | 544 | 
|ONE                                             |  |        | Austria    |              |  |                  | 85   | %          |  |               | October 1998   |              |  |               | 1997 |  |  |  | 1,653  |  |  |  | 17.45  | % |  |  | -94 | 
|ProMonte GSM                                    |  |        | Montenegro |              |  |                  | 60   | %          |  |               | July 1996      |              |  |               | 1997 |  |  |  | 56     |  |  |  | 44.10  | % |  |  | 35  | 






|    |                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Based on our and the local regulatory
    authorities estimates unless otherwise stated. This also
    applies to the market penetration information set forth in the
    other tables of this section  Mobile Operations
    Outside Norway.      
|   
|(2) | Date company commenced operations to provide
    commercial mobile services.                                                                                                                                                                           
|   
|(3) | Includes guarantees, capital contributions, loans
    and other advances.                                                                                                                                                                              
|   
|(4) | Excluding amortization of excess values/
    goodwill, as shown in note 16 to our consolidated financial
    statements for the Group.                                                                                                                 
|   
|(5) | Investment includes both our direct investment in
    Pannon GSM and our indirect investment through our wholly-owned
    subsidiary, Telenor Hungary.                                                                                                 
|   
|(6) | In December 2003, our ownership interest
    increased from 46.4% to 51.0%. Our voting interest of 51%
    remained unchanged.                                                                                                                         
|   
|(7) | Our ownership interest in TAC includes our direct
    ownership interest of 29.94% in TAC and our indirect interest
    held through our 24.85% shareholding in UCOM, giving us a
    combined direct and indirect ownership interest in TAC of 40.29%.
|   
|(8) | On February 12, 2004, we increased our
    ownership interest in Sonofon from 53.5% to 100% by acquiring
    the remaining interest in Sonofon from our joint venture
    partner, BellSouth.                                                          
|   
|(9) | Investment and share of net income includes both
    VimpelCom and VimpelCom-Region.                                                                                                                                                                   

29



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##### Table of Contents



The following table provides information on the
number of subscriptions of our principal international mobile
operations for 2002 and 2003. The explanations in the notes to
the table also apply to subscriber information set forth in the
other tables of this section  Mobile Operations
Outside Norway unless otherwise stated.

|                                               |  |                                  |       |          |  |           |        |  |  |  |       |  
|---------------------------------------------- |  | -------------------------------- | ----- | -------- |  | --------- | ------ |  |  |  | ----- | -
|                                               |  |                                 
|                                               |  | Subscriptions                   
|                                               |  | (Total per company in thousands)
|                                               |  |                                 
|                                               |  |                                 
|                                               |  | December 31,                    
|                                               |  |                                 
|                                               |  |                                  |       | % change
|                                               |  | 2002                             |       | 2003     |  | 2003/2002
|                                               |  |                                  |       |          |  |          
|Subsidiaries(1)                                |  |                                  |       |          |  |           |        |  |  |  |       |  
|Pannon GSM                                     |  |                                  | 2,450 |          |  |           | 2,618  |  |  |  | 6.9   | %
|DiGi.com                                       |  |                                  | 1,616 |          |  |           | 2,207  |  |  |  | 36.6  | %
|Kyivstar GSM                                   |  |                                  | 1,856 |          |  |           | 3,037  |  |  |  | 63.6  | %
|GrameenPhone                                   |  |                                  | 769   |          |  |           | 1,141  |  |  |  | 48.4  | %
|Telenor Mobile Sverige (Sweden)                |  |                                  | 54    |          |  |           | 81     |  |  |  | 50.0  | %
|Associated companies and joint
    ventures(2) |  |                                  |       |          |  |           |        |  |  |  |       |  
|TAC                                            |  |                                  | 5,455 |          |  |           | 6,550  |  |  |  | 20.1  | %
|Sonofon(3)                                     |  |                                  | 1,103 |          |  |           | 1,112  |  |  |  | 0.8   | %
|VimpelCom(4)                                   |  |                                  | 5,153 |          |  |           | 11,437 |  |  |  | 121.9 | %
|ONE                                            |  |                                  | 1,348 |          |  |           | 1,427  |  |  |  | 5.9   | %
|Pro Monte GSM                                  |  |                                  | 177   |          |  |           | 241    |  |  |  | 36.2  | %






|    |                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(1) | Subscriber figures based on three months churn
    for prepaid.                                                                       
|   
|(2) | According to figures published by the companies
    unless otherwise stated.                                                          
|   
|(3) | Subscriber figures published by the Danish
    National Telecom Agency (excluding service providers and based
    on 12 months churn).
|   
|(4) | Including 100% of subscribers in regional joint
    ventures and based on 6-month prepaid churn.                                      

Consolidated Subsidiaries

Pannon GSM (Hungary)

Our wholly-owned subsidiary Pannon is the second
largest mobile operator in Hungary measured by number of
subscribers. As of December 31, 2003, Pannon estimates that
it had a market share of approximately 35.8%. At
December 31, 2003, Westel Mobile is believed to have had a
market share of 47.4%, while Vodafone is believed to have had a
market share of 16.8%.

The number of mobile telephone subscribers in
Hungary has grown significantly over the past three years, from
approximately 1.6 million subscribers at December 31,
1999 to 2.6 million subscribers at December 31, 2003.
Market penetration reached 79% at December 31, 2003.
Therefore, subscriber growth is declining and competition for
new subscribers is intensifying. The majority of Pannons
subscriber base subscribes to various prepaid tariff plans. In
the future, Pannon expects its main subscriber growth to come
from the prepaid consumer segment.

Pannon currently offers prepaid and contract
services, short messaging services, and international calls over
Internet protocol and wireless application protocol. In
September 2000, Pannon introduced Internet service provider, or
ISP, services. Pannon launched GPRS in mid-2001 as the first
operator in Hungary with national GPRS coverage. GPRS roaming
for pre-paid subscribers was launched in 2003. MMS was launched
at the end of 2002. The Hungarian authorities have announced
that the tender for UMTS licenses will be launched during 2004.
Pannon plans to participate in the UMTS license auction if the
conditions are favorable.

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Pannon has made significant investments in
establishing its brand name and positioning itself as a provider
of high-quality services, with up-to-date features, competitive
pricing and good customer service. Most recently, it has
launched a new brand djuice for the youth segment.

Pannon has designed and built its network and
supporting information technology systems to take advantage of
current digital technology and to provide high-quality services
on a nationwide basis in Hungary. Synchronized Digital Hierarchy
(SDH) backbone rings have been rolled-out to improve the
stability and quality of the network. Ongoing investments in the
network are part of the plan to provide greater capacity in
order to maintain a high-quality network and expand the range of
services.

In addition to 41 regional service centers,
Pannon sells its products through a nationwide network of
dealers and outlets on an exclusive basis. The quality, number
and location of the outlets are continuously evaluated as Pannon
seeks to optimize its distribution profile for the market.
Pannon also has a direct sales force, including dedicated
salespersons responsible for major account sales.

In October 2002, the Arbitration Committee (HDB)
of the Hungarian Communications Authority designated Pannon as
having significant market power (SMP) in the mobile market and
in the national market for interconnection. An operator which
has been identified as an SMP operator is under an obligation to
meet various strict legal requirements, such as applying a
certain cost model as a basis for interconnection tariffs. If
the designation of Pannon as an SMP operator in the national
market for interconnection were to be upheld by the courts,
Pannons mobile termination prices could be adversely
affected in the future.

Pannon filed a complaint against the
above-mentioned decision relating to interconnection SMP and the
immediate effectiveness of this decision was suspended by the
Municipal Court of Budapest, acting as court of first instance.
Following an unfavorable decision by this court on the merits of
the case in February 2003, Pannon filed an appeal with the
Supreme Court. Due to procedural errors, the Supreme Court
remanded the case to the Municipal Court for re-evaluation in
November 2003. Shortly after the decision of the Supreme Court
in November 2003, Pannon was once again identified by HDB as
having SMP in the mobile and interconnection markets. Pannon
again contested the decision on interconnection SMP before the
Municipal Court in Budapest on the grounds that there had been
no significant market changes justifying a new decision and that
the first case had not yet been decided. However, the court did
not suspend the immediate effectiveness of the decision.
Hearings are currently ongoing in both cases, but no decision
has been issued yet. Since the effectiveness of the second
decision by the HDB was not suspended, Pannon was required to
disclose the cost basis for its interconnection prices to the
Hungarian Communications Authority by March 1, 2004.
Although the underlying issue of Pannons qualification as
an operator with SMP in the national market for interconnection
has not yet been resolved, Pannon provided the information
requested on March 29, 2004.

During 2002, in accordance with the chapter on
universal service obligations in the Hungarian Telecom Law,
Hungarian authorities established a Universal Service Fund (USF)
with the aim of compensating universal service providers, i.e.,
fixed line operators, for offering low tariff packages to
certain customer segments, mainly residing in rural areas. All
fixed and mobile operators are required to contribute to the USF
in proportion to their revenues, and in 2003 legislation was
adopted which fixes the contributions at 0.5% of operators
annual revenues from 2004 onwards. Pannon paid the required USF
contribution of HUF 1.5 billion for 2002, but it has
appealed against the requirement. Pannon also expects that it
will be required to make a contribution to the USF for the year
2003.

Pannon is involved in a legal dispute with
Vivendi, the second largest fixed line operator in Hungary.
Vivendi has argued for a reduction of fixed to mobile
termination charges since the new Telecommunications Act was
published in December 2001. Following a complaint by Vivendi,
HDB ruled in June 2002 that Pannons method of calculating
termination charges is not in line with the provisions of the
law, stating that interconnection charges should be determined
on the basis of objective criteria, following the principle of
equal treatment and transparency in a verifiable manner. Pannon
appealed this decision and the case is pending before the
Hungarian Supreme Court.

In February 2002, the Hungarian Competition
Office (GVH) commenced an investigation against the Hungarian
mobile operators, including Pannon, and the fixed line operator
Matav relating to pricing

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mechanisms and market practice for call
termination charges between 1998 and 2001. A report issued in
connection with this investigation alleged that the Hungarian
mobile operators abused their dominant position on the call
termination market and formed a price cartel in respect of call
termination charges. The allegation of abuse of dominant
position was dropped due to lack of evidence, while the cartel
charges were upheld. In July 2003, the Competition Counsel, an
independent body within GVH, found the mobile operators
activities had lead to a distortion of competition and Pannon
was fined HUF 150 million. Pannon has appealed this
decision before the Municipal Court of Budapest, but no decision
has been issued yet. The fine will not be increased on appeal.


The following table sets forth certain operating
data for Pannon.

|                                         |          |                         |      |       |       |      |    |       |       |  |      |       |       | 
|---------------------------------------- | -------- | ----------------------- | ---- | ----- | ----- | ---- | -- | ----- | ----- |  | ---- | ----- | ----- | 
|                                         |          |                        
|                                         |          | Year ended December 31,
|                                         |          |                        
|                                         |          | 2001                    |      | 2002  |       | 2003
|                                         |          |                         |      |       |       |     
|Mobile subscriptions (period end, 000s): |          |                         |      |       |       |      |    |       |       |  |      |      
|                                         | Contract |                         |      | 556   |       |      |    | 540   |       |  |      | 595   |      
|                                         | Prepaid  |                         |      | 1,321 |       |      |    | 1,910 |       |  |      | 2,023 |      
|                                         |          | Total                   |      |       | 1,877 |      |    |       | 2,450 |  |      |       | 2,618 | 
|Mobile telephony penetration in Hungary  |          |                         | 49.6 | %     |       |      | 68 | %     |       |  | 78.5 | %    

DiGi.Com (Malaysia)

We hold a 61% ownership interest in DiGi.Com.
Under current Malaysian law, we are required to reduce our
ownership interest in DiGi.Com to below 50% by 2006. DiGi.Com is
listed on the Malaysia Securities Exchange Berhad (MSEB)
(formerly known as the Kuala Lumpur Stock Exchange). One of the
MSEBs listing requirements is that no less than 25% of
DiGi.Coms shares be publicly held, including shares held
by institutional investors. DiGi.Com currently does not comply
with this requirement. Under the revised listing rules, DiGi.Com
made an application to the MSEB for the MSEB to exercise its
discretion to recognize DiGi.Coms then existing free float
of 20.3% as being in compliance with the MSEB requirement. The
MSEB informed DiGi.Com in January 2004 that DiGiComs
application was accepted. The recognition is subject to further
review by the MSEB and to DiGi.Com notifying the MSEB of any
change to its free float percentage, its amount of issued and
paid up capital and its number of public shareholders.

DiGi.Com, with a market share of 20% as of
December 2003, is one of three mobile operators in the Malaysian
market and currently holds a public license for the operation
and provision of GSM 1800 MHz digital mobile telecommunications
networks and related services. The Malaysian mobile
telecommunications industry consolidated during 2003, resulting
in a reduction from five to three operators. The other operators
are Celcom (merger of Celcom and Telekom Malaysias mobile
unit  GSM 900, GSM 1800, E-TACS, D-AMPS, NMT 450),
with a market share of approximately 40%, and Maxis (acquired
TIMECel in 2003  GSM 900, GSM1800) also with a market
share of approximately 40%.

Maxis and Telekom Malaysia were awarded UMTS
licenses and are required to offer network access to MVNOs.
DiGi.Com intends to operate as an MVNO on one of the UMTS
networks in addition to providing services over its existing
GSM/GPRS/EDGE infrastructure.

Malaysian authorities require the network
operators to share infrastructure facilities, while national
roaming, which is currently only implemented on a limited trial
basis between the three operators, is not actively pursued by
the regulator. In addition, the USO contribution factor for
mobile businesses was doubled in 2004 compared to 2003. The USO
funds are available for tender by licensed operators to roll out
telephony services to designated rural areas using wireless
network infrastructure.

DiGi.Com offers mobile voice, roaming and
value-added services through prepaid and contract services.
DiGi.Com is currently one of the leading operators in the
prepaid segment, which is the fastest-growing segment in the
Malaysian mobile market. With various valued-added services,
such as multimedia messaging, advanced short messaging services
and discount voucher logo, DiGi.Coms prepaid services are
perceived as advanced and trendy by the market. DiGi.Com
launched the first and only prepaid advanced tariff plan which
offers automatically adjusted rates according to customers
usage. The company also offers different

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subscription plans to suit the various needs of
its contract customers. It also provides a range of
international carrier services.


To reach its customers, DiGi.Com has established
more than 20 DiGi.Com Centers and cooperates with a large number
of dealers throughout Malaysia, in addition to offering
efficient and innovative ways for customers to communicate with
DiGis customer service functions via phone or Internet.

Seconded Telenor personnel are serving as chief
executive officer, head of mobile, and managers and expert
advisors in various departments of DiGi.Com.

The following table sets forth certain operating
data for DiGi.Com.

|                                         |          |                         |    |      |       |      |    |       |       |  |    |       |       | 
|---------------------------------------- | -------- | ----------------------- | -- | ---- | ----- | ---- | -- | ----- | ----- |  | -- | ----- | ----- | 
|                                         |          |                        
|                                         |          | Year ended December 31,
|                                         |          |                        
|                                         |          | 2001                    |    | 2002 |       | 2003
|                                         |          |                         |    |      |       |     
|Mobile subscriptions (period end, 000s): |          |                         |    |      |       |      |    |       |       |  |    |      
|                                         | Contract |                         |    | 137  |       |      |    | 97    |       |  |    | 106   |      
|                                         | Prepaid  |                         |    | 902  |       |      |    | 1,519 |       |  |    | 2,101 |      
|                                         |          | Total                   |    |      | 1,039 |      |    |       | 1,616 |  |    |       | 2,207 | 
|Mobile telephony penetration in Malaysia |          |                         | 31 | %    |       |      | 37 | %     |       |  | 44 | %    

Kyivstar (Ukraine)

We have a 55.35% ownership interest in Kyivstar
GSM, a leading mobile operator in the Ukraine. Effective
September 1, 2002, we consolidated Kyivstar as a
subsidiary. The other shareholder in the company is Storm
(44.65%), after it bought Omegas 3.7% interest in January
2004. On January 30, 2004, a new shareholders
agreement between Storm and us entered into effect to reflect
the new ownership structure.

An affiliate of the Alfa Group, our partner in
VimpelCom, became the main shareholder of Storm in July 2002. In
November 2002, Kyivstar increased its share capital by USD
35 million. Former shareholder Omega did not participate in
this share capital increase, resulting in a dilution of its
ownership share down to 3.7% and a corresponding pro-rata
increase in share ownership for Storm and us with effect from
April 25, 2003.

Kyivstar owns a GSM 900 license and a GSM 1800
license. In addition to voice telephony, Kyivstar provides short
text and voice messaging services as well as mobile Internet
services based on WAP. In December 2001, Kyivstar introduced the
content provider access (CPA) concept and, in February 2002,
Kyivstar launched GPRS. Kyivstars GSM network had
geographical coverage of approximately 60% and population
coverage of 80% as of December 31, 2003.

As of December 31, 2003, Kyivstar estimates
that it had a market share of approximately 47% in the Ukrainian
mobile telecommunications market and it is now the market leader
in the prepaid market, just ahead of Ukrainian Mobile
Communications (UMC). The company had approximately
3.037 million subscribers at December 31, 2003, of
which 82% were prepaid. Kyivstar expects growth, especially in
the prepaid segment, in the years to come. In 2003,
Kyivstars main competitor, UMC, was acquired by Mobile
TeleSystems (MTS), VimpelComs main competitor in Russia.
In addition, one of the smaller operators in the Ukraine,
Digital Cellular Communication (DCC), has announced plans to
become a third national GSM operator with Türkcell as one
of the major investors. Kyivstar has invested significant
resources in establishing a strong brand name and its Ace
and Base prepaid products have been successful.

Telenor personnel are seconded to Kyivstar to
serve as chief operating officer, marketing director, technical
director, financial director, and distribution expert.

On September 19, 2003, an amendment to the
1995 telecommunications law entered into force, prohibiting
operators from charging their own customers for incoming calls.
This led to the implementation of the calling party pays (CPP)
regime in Ukraine as of that date. As a result, both usage per
subscriber and subscriber uptake have increased. However, the
regulatory authorities have yet to decide whether the CPP regime
will be extended beyond June 30, 2004. In November, the
President signed the new 2003 telecom law,

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setting the direction for development towards
conformity with EU requirements. This new law supersedes the
1995 telecom law, as amended.


The following table sets forth certain operating
data for Kyivstar.

|                                         |          |                            |   |      |       |      |   |       |       |  |    |       |       | 
|---------------------------------------- | -------- | -------------------------- | - | ---- | ----- | ---- | - | ----- | ----- |  | -- | ----- | ----- | 
|                                         |          |                           
|                                         |          | Year ended December 31,(1)
|                                         |          |                           
|                                         |          | 2001                       |   | 2002 |       | 2003
|                                         |          |                            |   |      |       |     
|Mobile subscriptions (period end, 000s): |          |                            |   |      |       |      |   |       |       |  |    |      
|                                         | Contract |                            |   | 401  |       |      |   | 384   |       |  |    | 534   |      
|                                         | Prepaid  |                            |   | 694  |       |      |   | 1,472 |       |  |    | 2,503 |      
|                                         |          | Total                      |   |      | 1,095 |      |   |       | 1,856 |  |    |       | 3,037 | 
|Mobile telephony penetration in Ukraine  |          |                            | 5 | %    |       |      | 8 | %     |       |  | 14 | %    






|    |                                           
|--- | ------------------------------------------
|(1) | Figures are based on management estimates.

GrameenPhone (Bangladesh)

In December 2003, we increased our ownership
interest in GrameenPhone from 46.4% to 51.0% for a consideration
of NOK 86 million. Our voting interest remained unchanged
at 51%. The non-voting shares were purchased from a syndicate of
three banks which previously held a 9% ownership interest in
GrameenPhone, but sold their shares in proportionate amounts to
the holders of voting shares. In addition to us, the other
shareholders in GrameenPhone are Grameen Telecom (35.0%),
Marubeni Corporation (9.5%), and Gonofone Development Corp. USA
(4.5%).

As of December 31, 2003, GrameenPhone
estimates that it had a market share of approximately 62%.
Besides GrameenPhone there are three other mobile operators in
Bangladesh: Sheba (with a market share of approximately 3%),
Aktel (with a market share of approximately 21%) and Citycell
(with a market share of approximately 14%).

GrameenPhone offers contract and prepaid services
as well as value-added services, including short text and voice
messaging services. GrameenPhone services are perceived as
having the most advanced and up-to-date features, for example
through the launch of WAP in 2001 and interactive SMS in 2003.
Additionally, GrameenPhone is the only operator in Bangladesh to
offer nationwide coverage. We believe that the
GrameenPhone brand has been established as a best
quality brand.

GrameenPhone sells its services through a
nationwide network of independent dealers, wholesalers and
retailers. GrameenPhone also establishes strong relationships
with leading dealers and wholesalers based on exclusive
arrangements. To service its customers, GrameenPhone has
established customer service centers through a corporate direct
sales unit and through six sales and info centers.

Seconded Telenor personnel are currently serving
as managing director, technical director, and managers/ experts
in various departments of GrameenPhone.

The following table sets forth certain operating
data for GrameenPhone.

|                                           |          |                         |     |      |     |      |     |     |     |  |     |     |       | 
|------------------------------------------ | -------- | ----------------------- | --- | ---- | --- | ---- | --- | --- | --- |  | --- | --- | ----- | 
|                                           |          |                        
|                                           |          | Year ended December 31,
|                                           |          |                        
|                                           |          | 2001                    |     | 2002 |     | 2003
|                                           |          |                         |     |      |     |     
|Mobile subscriptions (period end, 000s):   |          |                         |     |      |     |      |     |     |     |  |     |    
|                                           | Contract |                         |     | 185  |     |      |     | 206 |     |  |     | 242 |      
|                                           | Prepaid  |                         |     | 279  |     |      |     | 563 |     |  |     | 899 |      
|                                           |          | Total                   |     |      | 464 |      |     |     | 769 |  |     |     | 1,141 | 
|Mobile telephony penetration in Bangladesh |          |                         | 0.5 | %    |     |      | 0.9 | %   |     |  | 1.3 | %  

Telenor Mobile Sverige (Sweden)

In September 2002, we entered into a framework
agreement and two MVNO roaming agreements with Tele2 allowing
each of us to provide mobile telecommunications services based
on the others respective

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GSM and UMTS networks in Norway and Sweden. The
agreements have a duration of five years. We launched GSM
services as an MVNO in Sweden through our wholly-owned
subsidiary Telenor Mobile Sverige at the end of the first
quarter 2003.


We have been operating in the Swedish mobile
market as a service provider through an agreement with
Europolitan AB (Vodafone SE) under the djuice brand since 2001.
As of December 31, 2003, djuice had approximately
81,000 subscribers, with 30,000 subscribers under the
service provider agreement with Europolitan and
51,000 subscribers under the MNVO agreement with Tele2.
This represented approximately 32% of the subscribers serviced
by service providers in Sweden.

The Swedish mobile market is a mature market with
a penetration rate of about 95.4%. The three network operators
TeliaSonera, Europolitan (Vodafone SE) and Tele2 have a total
market share of 97%. SweFour became the fourth company to win a
GSM license in May 2002 and, through its subsidiary Spring
Mobil, it operates as a provider of network capacity to
companies. Through their joint venture Svenska UMTS-nät AB,
TeliaSonera and Tele2 hold one UMTS license. Svenska
UMTS-nät AB has agreed to purchase another UMTS license
held by Orange Sverige AB, subject to the approval of this
transaction by the authorities. TeliaSonera launched some
UMTS-based services at the beginning of March 2004, but Tele2 is
waiting until there are more functional handsets available on
the market. Hi3G Access holds the third of the four UMTS
licenses, and has launched UMTS-based services commercially
under the brand name 3. Europolitan (Vodafone) holds
the fourth UMTS license, but has only launched a Mobile Connect
PC card for its mobile office services (used by business
customers) on its UMTS network in Sweden.

As a member state of the EU, Sweden is
implementing the EU telecommunications framework. For more
information on the EU telecommunications framework you should
read Regulation  Regulatory
Environment  European Union regulation.

Associated Companies and Joint
Ventures

Total Access Communication PCL and United
Communication Industry PCL (Thailand)

In 2000, we acquired 29.9% of Total Access
Communication PCL (TAC) and 24.9% of its former parent company,
United Communication Industry PCL (UCOM), giving us a combined
direct and indirect ownership interest in TAC of 40.3%. TAC is
Thailands second largest mobile operator and its shares
are listed on the Singapore Stock Exchange. UCOM is a major Thai
telecommunications group and its shares are listed on the
Thailand Stock Exchange. UCOM owns 41.6% of TAC.

At December 31, 2003, TAC had
6.55 million mobile subscribers, up from 5.5 million
mobile subscribers at December 31, 2002, 82% of TACs
subscriber base consists of prepaid subscribers. TAC estimates
its market share in Thailand as of December 31, 2003 to be
approximately 29%.

The market leader in Thailand, AIS, also owns
97.5% of the fifth largest operator in Thailand, DPC. At
December 31, 2003, we estimate that the combined market
share of AIS and DPC was 59%. The third largest operator is TA
Orange and we estimate that its market share at
December 31, 2003 was 8%. The fourth largest operator
Hutchinson-CAT Wireless Multimedia, launched its services in
Bangkok in February 2003 based on the CDMA technology. We
estimate that its market share at December 31, 2003 was 2%.
The sixth and smallest operator is Thai Mobile. We estimate that
Thai Mobiles market share was 1% at December 31,
2003. Thai authorities have not yet announced any plans for the
issuance of UMTS licenses.

TAC offers mobile voice, roaming and value-added
services to its customers through contract and prepaid tariff
plans as well as mobile Internet services based on WAP. At
December 31, 2003, TAC was the only operator in Thailand to
offer GPRS services to both post and prepaid subscriptions on a
nationwide basis.

Telenor personnel are seconded to TAC to serve as
co-chief executive officer, chief financial officer, deputy
chief financial officer and deputy chief technical officer.

All private telecommunications operators in
Thailand operate on a build, transfer and operate
(BTO) basis. Under this structure, the concessionaire, that is,
the operator, must build out the telecommunication

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infrastructure and transfer the ownership of the
infrastructure to the government in return for being granted the
right to operate the system for a set period of time and pay a
concession fee. Operators operate under a sender keeps
all regime since no interconnection regime is in place.
The exception to this rule is that concessionaries of the
Communications Authority of Thailand (CAT), such as TAC, must
compensate the Telephone Organization of Thailand (TOT) for the
use of its fixed network. Concessionaries of TOT, however, do
not pay access charges to TOT. The establishment of a new
interconnection regime, as provided for in the new
Telecommunications Business Act, is currently being discussed.


Under the new Telecommunications Business Act
(2001), any company wishing to operate a telecommunications
business is required to obtain a license from the National
Telecommunication Commission. The government has officially
stated its intention to convert concessions into licenses.
Several frameworks for conversions have been proposed, but no
proposal has been adopted yet. The Telecommunications Business
Act also limits foreign investments in public telecommunications
companies to 25% of the total issued share capital, down from
the previous 49%. The cabinet approved an amendment to the Act
to increase the foreign ownership limit back to the original
49%, but no legislative amendment has been adopted yet. The
foreign ownership limitation would apply automatically once
TACs concession is converted into a license. However, the
Thai regulatory authorities may also decide to apply this
limitation to concessionaires. The announced amending
legislation to increase the percentage to 49% has not yet been
passed, although it has already been tabled in parliament.

Sonofon (Denmark)

Our wholly-owned subsidiary Sonofon Holding A/S
is the second largest mobile operator in Denmark measured by
number of subscribers. In December 2003, we entered into an
agreement with our joint venture partner BellSouth to purchase
the remaining 46.5% interest in Sonofon for 3,050 million
Danish Kroner, thus raising our ownership interest from 53.5% to
100%. The transaction was completed on February 12, 2004
and we will consolidate Sonofon as of that date.

We estimate that Sonofon had a 23% market share
in Denmark at December 31, 2003, based on number of
subscriptions, excluding subscriptions of service providers, and
on 12-month churn on prepaid.

In addition to Sonofon, there are three other GSM
network operators in Denmark: TDC Mobile (with a market share of
37%), Telia DK (with a market share of 7%) and Orange DK (with a
market share of 10%). In 1999, Debitel Danmark (with a market
share of 7%) began operations as the first service provider in
the market. In 2001, two service providers called CBB
(previously named Club Blah Blah) and Telmore entered the Danish
market focusing on the prepaid market through web distribution.
Telmore had a market share of 10% at year end 2003. At the end
of January 2004, it was announced that TDC, who previously held
20% of the shares in Telmore, had exercised its option to buy
the remaining shares in Telmore. During the fourth quarter of
2003, a new operator named 3 (Hi3G) entered the Danish market
and commenced operations based on its UMTS license and a
national roaming agreement with TDC on GSM. By the end of 2003,
3 had approximately 3,000 subscribers.

Since its commercial launch of GSM services in
1992, Sonofon has positioned itself as an innovative and quality
operator within all segments, focusing its products and services
on simplicity and user friendliness, including various services
such as WAP and mCommerce. In addition to its core business of
mobile telephony, Sonofon offers fixed-network telephony, data
services and Internet access primarily to the business segment
and mainly based on Fixed Wireless Access (FWA) technology.
Sonofon also provides wholesale mobile network services to
service providers, in particular Debitel Danmark and CBB.

As of December 31, 2003, Sonofon marketed
and distributed its mobile telephone services and equipment
through approximately 6,700 points of sale, including 86
wholly-owned outlets named Sonofon Partner.

Sonofon holds no UMTS licenses, as it did not
submit a tender in connection with the auction. The four UMTS
license holders are TDC Mobile, Orange DK, Telia DK and Hi3G.
TDC Mobile, Orange DK, Telia DK are expected to launch
commercial services in 2004 on UMTS infrastructure in accordance
with license

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conditions set by the Danish regulatory
authorities. Hi3G commercially launched UMTS services during the
fourth quarter of 2003. Sonofon intends to pursue cooperation
with one of the existing license holders in order to offer UMTS
products and services to its existing and new customers.
However, the nature of the cooperation and timing of an
agreement is uncertain.


As a member of the EU, Denmark has implemented
the EU telecommunications framework. For more information on the
new EU framework, you should read Regulation 
Regulatory Environment  European Union
regulation.

Sonofon has been designated as an operator with
significant market power (SMP) in the market for mobile
communications services. As an SMP operator, Sonofon is obliged
to meet all reasonable requests for establishing or modifying
interconnection agreements on transparent, objective and
non-discriminatory terms. Furthermore, such agreements shall be
made publicly available.

The following table sets forth certain operating
data for Sonofon.

|                                           |                                         |                         |     |      |     |      |     |     |       |  |     |     |       | 
|------------------------------------------ | --------------------------------------- | ----------------------- | --- | ---- | --- | ---- | --- | --- | ----- |  | --- | --- | ----- | 
|                                           |                                         |                        
|                                           |                                         | Year ended December 31,
|                                           |                                         |                        
|                                           |                                         | 2001                    |     | 2002 |     | 2003
|                                           |                                         |                         |     |      |     |     
|Mobile subscriptions (period end, 000s):   |                                         |                         |     |      |     |      |     |     |       |  |     |    
|                                           | Contract(1)                             |                         |     | 745  |     |      |     | 855 |       |  |     | 827 |      
|                                           | Prepaid                                 |                         |     | 195  |     |      |     | 248 |       |  |     | 285 |      
|                                           |                                         | Total(2)                |     |      | 940 |      |     |     | 1,103 |  |     |     | 1,112 | 
|                                           | Subscriptions through service providers |                         |     | 97   |     |      |     | 155 |       |  |     | 407 |      
|Fixed-line customers (000s)                |                                         |                         | 320 |      |     |      | 495 |     |       |  | 448 |    
|Mobile telephony penetration in Denmark(3) |                                         |                         | 74  | %    |     |      | 83  | %   |       |  | 89  | %  






|    |                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Selvhenter customers, a category of prepaid
    customers that is registered and therefore classified as
    contract customers by Sonofon, are included in the contract
    subscriptions for 2003. At December 31, 2003, there were
    approximately 55,000 Selvhenter customers in Sonofons
    customer base.
|   
|(2) | Subscriber figures exclude service providers and
    are based on 12-month prepaid churn.                                                                                                                                                                                                                          
|   
|(3) | Source: Telecom statistics from The National IT
    & Telecom Agency, Denmark.                                                                                                                                                                                                                                     

VimpelCom (Russia)

We initially invested in the Russian mobile
operator VimpelCom in 1999 and we owned 28.98% of the common
shares and 25% plus 13 shares of the companys voting
stock at December 31, 2003. VimpelCom was the first Russian
company to be listed on the New York Stock Exchange. Eco Telecom
Limited, part of the Russian Alfa Group, is our partner in
VimpelCom and participates in developing VimpelCom as a national
operator. The companys mobile activities outside the city
of Moscow and the Moscow region are largely operated through
VimpelComs subsidiary VimpelCom-Region (VIP-R) and its
subsidiaries. We invested in VIP-R in November 2002. In August
2003, Eco Telecom increased its ownership interest in VIP-R to
29.8% following an investment of USD 58.5 million in
exchange for VIP-R shares. As a result, we currently hold an
ownership stake of 14.89% in VIP-R, down from 17.5% at
December 31, 2002.

On October 24, 2003, the extraordinary
general meeting of the shareholders of VimpelCom approved the
statutory merger of VimpelCom and VIP-R and the related issuance
of new shares of VimpelCom in exchange for the 44.7% stake in
VIP-R owned by Eco Telecom and us. Upon completion of the
merger, which is currently still pending subject to regulatory
approval and satisfaction of certain other conditions precedent
linked to regulatory approvals, we will own approximately 26.6%
and 29.9% and Eco Telecom will own approximately 32.9% and 24.5%
of VimpelComs total voting stock and total common stock,
respectively.

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As of December 31, 2003, the shareholdings
of common stock in VimpelCom of Eco Telecom and ourselves was:

|                                                   |  |                    |       |                  |  |  |                 | 
|-------------------------------------------------- |  | ------------------ | ----- | ---------------- |  |  | --------------- | 
|                                                   |  | Economic ownership |       | Voting ownership
|                                                   |  |                    |       |                 
|Eco Telecom Ltd., a part of the Russian Alfa Group |  |                    | 13.05 | %                |  |  | 25% +  2 shares | 
|Telenor through Telenor East Invest AS             |  |                    | 28.98 | %                |  |  | 25% + 13 shares | 

As of December 31, 2003, 48.4% of
VimpelComs outstanding voting shares were owned by ADR
holders.

The mobile penetration in Russia as of
December 31, 2003 reached 25.1%. As at December 31,
2003, VimpelCom held a market share of 31% in terms of
subscribers, with a subscriber base of 11.4 million
subscribers. The companys number of subscribers increased
by approximately 6.3 million during 2003. VimpelComs
main competitors Mobile Telesystems (MTS) and Megafon have a
market share of 37% and 17%, respectively. VimpelComs GSM
license portfolio covers approximately 92% of Russias
population (134 million people) and seven out of eight
Russian regions. VimpelCom operates under the brand name
Bee-Line, which is among the most recognized brand
names in Russia.

On January 31, 2003, VIP-R acquired 90% of
StavTelesot, a company in which Telenor held an ownership
interest and which holds a GSM license for the Stavropol region.
The remaining 10% stake was acquired in September 2003.

In May 2003, VimpelCom, through an indirect
subsidiary, successfully completed an offering of
ruble-denominated three-year bonds in an amount equivalent to
approximately USD 97 million. The bonds are due in May 2005
and bondholders have a put option that is exercisable in May
2004 at 100% of nominal value.

In November 2003, VimpelCom was awarded
Brand of the Year in Russia by an international
jury, based on creative marketing and strategy results.

A seconded Telenor employee is currently serving
with VimpelCom as Deputy Chief Technical Officer. Another
Telenor employee held the position of Chief Executive Officer
until October 2003, when he was appointed Chairman of the Board
of VimpelCom. In addition, several Telenor employees served in
certain managerial positions for part of 2003.

The Moscow market.VimpelCom currently is the market
leader in Moscow with 5.7 million subscribers and a 49%
market share. Penetration in Moscow was 68% as of
December 31, 2003. VimpelComs main competitors in
Moscow are MTS and Megafon with a market share of 42.7% and
7.4%, respectively.

VimpelCom operates a GSM 900/1800 network in
addition to a minor D-AMPS (Digital Advanced Mobile Phone
Services) operation, targeting both business and mass-market
consumers. The company currently offers GSM contract and prepaid
voice services, messaging services (SMS, MMS), basic GSM
services, Mobile Internet services, Internet, data and fax
transmission services, content information and interactive
services, roaming services, m-commerce, special services for
corporate clients as well as customer convenience and loyalty
services.

In addition to 41 VimpelCom mobile sales offices,
VimpelCom distributes its products through 74 independent
dealers and 3,704 points of sale in addition to a dedicated
sales force that focuses on sales to corporate subscribers. As
of December 31, 2003, prepaid scratch cards could be
purchased at more than 5,000 locations. Retail distribution
channels for prepaid include large chains of electronics stores
and other consumer retail stores.

The regions outside Moscow.VIP-R was formed to concentrate on the
development of VimpelComs regional GSM license portfolio.
In November 2002, Alfa Group and Telenor invested USD
58.5 million each in VIP-R. In August 2003, Alfa Group
invested an additional USD 58.5 million in VIP-R. Following
this investment, VimpelComs ownership interest in VIP-R is
approximately 55.3%. We hold approximately 14.9% and Alfa Group
approximately 29.8% of the companys voting and common
stock. VIP-R is still in the roll-out stage outside Moscow. At
December 31, 2003, VIP-R had established operations in 55
of a total of 72 licensed areas. The total number of
license areas in Russia is 89. VIP-Rs estimated subscriber
base as of December 31, 2003 was approximately
5.7 million subscribers with a market share of 23%.
Penetration in the

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regions has reached 19%. As in Moscow, the main
competitors in the regions are MTS and Megafon, holding a market
share of 35% and 21.3%, respectively.


VIP-R offers the same types of services as
VimpelCom and distributes its products through regional sales
offices as well as independent dealers, wholesalers and retail
stores.

The new law on telecommunication for the Russian
Federation came into force on January 1, 2004. The process
for the adoption of secondary legislation implementing the new
law is still ongoing and according to the Russian ministry of
communications is expected to be concluded during the first half
of 2004. Accordingly, the exact implications of the new law for
Russian telecommunications operators are still unclear. For
example, it is not clear from the wording of the law which
operators will be obliged to pay a fee to the Universal Service
Fund, how this fee will be calculated and what its level will be.

Gossvyaznadzor, the state body in charge of
monitoring compliance with telecommunications regulations in
Russia that reports to the Russian ministry of communications,
completed an unscheduled inspection of VimpelCom on
December 24, 2003. In a notice received on January 9,
2004 by KB Impuls, VimpelComs wholly-owned subsidiary
which officially holds the Vimpelcom groups Moscow GSM
license, Gossvyaznadzor asserted that KB Impuls does not have
any agreements with its subscribers and, therefore, has violated
Russian law, and that the agency agreement between KB Impuls and
VimpelCom, also in violation of Russian law, does not
specifically provide that VimpelCom may sign subscriber
agreements on behalf of KB Impuls.

VimpelCom rejected the claims and noted that
Gossvyaznadzor had completed several inspections over the years
without any remarks on this issue. VimpelCom filed an
application with the Arbitrazh Court of Moscow for an
injunction, and on January 22, 2004, the Arbitrazh Court of
Moscow granted the injunction. On March 18, 2004, the court
ruled in VimpelComs and KB Impuls favor, by
invalidating a provision contained in the notice received by
KB Impuls from Gossvyaznadzor. However, it is expected that
Gossvyaznadzor will appeal the decision and VimpelCom is
continuing a dialog with the regulatory bodies in an effort to
resolve these issues in a mutually satisfactory manner.

The following table sets forth certain key
figures for VimpelCom:

|                                            |  |                         |       |      |  |      |       |   |  |  |        |  
|------------------------------------------- |  | ----------------------- | ----- | ---- |  | ---- | ----- | - |  |  | ------ | -
|                                            |  |                        
|                                            |  | Year ended December 31,
|                                            |  |                        
|                                            |  | 2001                    |       | 2002 |  | 2003
|                                            |  |                         |       |      |  |     
|Mobile subscriptions (period end, 000s)(1): |  |                         | 2,112 |      |  |      | 5,153 |   |  |  | 11,437 |  
|Mobile telephony penetration in Russia      |  |                         | 5.6   | %    |  |      | 12.4  | % |  |  | 25.1   | %






|    |                                 
|--- | --------------------------------
|(1) | Figures based on 6 months churn.

ONE (Austria)

We have a 17.45% interest in ONE (former Connect
Austria), which is the third largest mobile operator by number
of subscribers of the five currently operating mobile operators
in the Austrian market. ONE is a joint venture between E.ON
(50.1%), Orange (17.45%), TeleDanmark (15%) and Telenor.

As of December 31, 2003, ONE had a customer
base of 1.427 million subscribers and an estimated market
share of 20.6%. The penetration of the Austrian mobile
telecommunications market was 85%. ONE offers a full range of
mobile services including prepaid, voice mail, SMS, high-speed
data transmission and WAP services. GPRS was launched in 2002.

In November 2000, ONE acquired a UMTS license.
ONEs commercial launch of UMTS services is expected to
occur during 2004.

ProMonte GSM (Montenegro)

We indirectly hold a 44.1% ownership interest in
ProMonte GSM, a mobile operator in Montenegro, through our 44.1%
interest in ETL Luxembourg, which holds 100% of ProMonte GSM.
ProMonte GSM

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commenced providing basic mobile telephony
services in July 1996 and launched prepaid services at the end
of June 2000. As of December 31, 2003, penetration in
Montenegro was 60%. ProMonte held a market share of 58%.


TELENOR FIXED

Through our Telenor Fixed business area, we are
the leading provider of fixed network telecommunications
services in Norway, where we provide telecom solutions to the
residential and business markets, including analog and digital
fixed line telephony services, asynchronous digital subscriber
lines, Internet access, value-added services and leased lines.
We also provide telecom solutions to the Norwegian wholesale
market, including interconnection to our networks and domestic
and international transit and capacity services. In addition, we
provide both basic and value-added communication services and
managed services to the business market in Sweden, the Czech
Republic and Slovakia. We also own a 20.5% ownership interest in
the listed Russian telecom operator Golden Telecom.

Overview and Background

Fixed Norway



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Residential market.We provide traditional analog voice
    telephony services and digital fixed telephony service, commonly
    known as integrated services digital network (ISDN). We provide
    narrowband (PSTN/ISDN) and broadband (ADSL) Internet access and
    services to homes across Norway. At December 31, 2003, we
    had approximately 1,096,000 analog subscriptions,
    454,000 ISDN basic rate access subscriptions and 163,000
    ADSL subscriptions in the residential market. As of
    December 31, 2003, our Internet customer base consisted of
    294,000 subscribers and 574,000 users of Frisurf, our free
    subscription service.                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Business market.We
    provide traditional analog, ISDN, ADSL and leased lines services
    to businesses in Norway, including public sector entities. At
    December 31, 2003, we had approximately 212,000 analog
    subscriptions, 270,000 basic rate and 8,000 primary rate ISDN
    access subscriptions and 14,000 ADSL subscriptions in this
    market. In addition, we provide integrated voice and data
    telecommunications, access and network services in Norway. These
    integrated services include advanced network services, Internet
    Protocol (IP) based communication services, including Internet
    access and IP Virtual Private Network (VPN), data communication
    services, telephone-based customer contact solutions, messaging,
    hosting solutions and value-added voice services. We also offer
    a broad portfolio of managed services to businesses in Norway.
    These services include communication network access, workstation
    management, design services and support, among others.
|
| |  | Wholesale market.We
    provide a range of interconnection and capacity services,
    including leased lines, in the Norwegian market, allowing 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 offering. We provide
    international operators with transit and capacity services for
    international voice and data traffic into or through Norway. We
    also provide switchless resale of voice services to allow
    resellers to offer their own services in the market. We provide
    ADSL and from 2003 onwards, we have offered unbundled telephony
    access (PSTN and ISDN) to other operators.                                                                                                                                                                                                                                                                                      

Fixed Sweden

We provide telephony, IP-based communication
services, data communication services and advanced network
services to the business market, and telephony, xDSL and
IP-based communication services to the wholesale market in
Sweden through our Swedish subsidiary Telenor AB/Utfors.

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Fixed Russia

We provide voice and data telecommunication
services to the Russian business market. On December 1,
2003, we exchanged the shares in our consolidated subsidiary
Comincom for an ownership interest in the listed company Golden
Telecom, which going forward will be reported as an associated
company.

Fixed Norway

Market shares, traffic, access and
penetration

Measured by the percentage of traffic minutes
carried over our network, our market share of traffic was 67% in
the residential market and 74% in the business market in 2003.
Due to the fact that prefix traffic with Telenor Plus was
eliminated and Internet access and subscriptions are now
provided directly by Telenor Fixed, our market share has
increased by 7.6 percentage points compared to the market
share of Telenor Networks in 2002. Traffic minutes decreased by
6% in our residential market and by 11% in our business market
in 2003 compared to 2002. Overall, the total volume of traffic
minutes in our network, including traffic generated by other
operators, decreased by 8% in 2003 compared to 2002. These
developments were primarily due to migration to mobile traffic
and transition to ADSL, where traffic is not measured in minutes
but in capacity.

The usage of the Internet and other data
applications has led to increased demand for access channels
with higher capacity, or bandwidth, allowing data to be
transmitted at higher speeds. A basic rate ISDN line provides a
capacity of 128 Kbps. Our network has one of the highest
penetration rates of ISDN lines in the world, with over 98% of
our local access lines able to accommodate an ISDN line and 35%
of our access subscribers using an ISDN line at
December 31, 2003.

ADSL provides broadband capacity, which means
that data can be transmitted at much greater speeds than analog
or ISDN lines over the existing installed copper line without
interfering with the normal voice telephone connection. We
currently provide ADSL lines, with a capacity of up to 2,048
Kbps for data transmitted to the subscriber and up to 448 Kbps
for data transmitted from the subscriber. Unlike analog and
ISDN, ADSL traffic is not measured by network minutes, but by
the number of customers and capacity. As at December 31,
2003, 67% of our local access lines were able to accommodate an
ADSL line and 9% of our access subscribers were ADSL
subscribers. The high penetration rate of ISDN has had a
positive impact on the roll-out of ADSL lines, since local
access lines which are able to accommodate ISDN lines are easy
to adapt for ADSL. At December 31, 2003 we had 177,000 ADSL
subscribers.

Approximately 473,000 access lines had carrier
pre-selection with another carrier at December 31, 2003,
compared to approximately 395,000 access lines at
December 31, 2002. We provided a total of 3.0 million
fixed line access channels at December 31, 2003. These
included 1.7 million ISDN access channels provided to
732,000 subscriptions.

The number of access lines as a percentage of the
population of Norway was 70% at December 31, 2003.

Retail Markets

Residential Market

We are the leading provider of telecommunications
services to the residential market in Norway. At
December 31, 2003, we had approximately 1.6 million
residential customers.

Services

Our principal services in the residential market
in Norway are analog access lines, ISDN access lines, ADSL and
Internet subscriptions and a broad range of value-added services.

Analog.We offer
analog access service, which involves providing connections via
copper wire between a customers premises and our fixed
network for the provision of basic voice, facsimile and dial-up
Internet

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services. Each analog access line provides a
single telecommunications channel. Analog is the main access
line for the residential market. Under the universal service
obligation in our fixed telephony license, we are required to
make analog services accessible at an affordable price for all
households and enterprises in Norway.


ISDN.We also offer
ISDN access. ISDN allows a single copper wire access line to be
used for a number of purposes simultaneously, including voice,
data and facsimile transmission. ISDN also provides a higher
quality connection with faster transmission of signals and
increases the bandwidth capacity. ISDN basic rate access
provides two digital channels. Customers install their own ISDN
lines on a plug & play basis or by ordering
installation.

Approximately 29% of our residential access
customers subscribed to an ISDN line at December 31, 2003.
At December 31, 2003, Norway had one of the highest ISDN
penetration rates in the world, according to Jupiter Strategic
Planning Services. In 2003, we sold over 44,000 new ISDN
subscriptions. Due to the offering of unbundled access wholesale
products as of 2003, there was a decrease of approximately 9.2%
in the number of end user subscriptions.

ADSL.ASDL uses
existing copper wire networks for services that require a higher
capacity in one direction than the other, e.g. video on demand.
We provide broadband Internet access (ADSL) over the existing
copper wire without interfering with the normal voice telephone
connection. The main segmentation variables are price and
different speed/ bandwidth. At December 31, 2003, we
provided residential ADSL access to 163,000 customers, compared
to 90,000 at the end of 2002 and we expect this trend to
continue. Customers install their own ADSL lines on a plug
& play basis or by ordering installation.

Internet.We are the
leading provider of Internet access to residential customers in
Norway. At December 31, 2003, we provided residential
Internet access and services to 1,031,000 customers. Our
online narrowband customers in Norway pay a monthly access fee
for our Online subscription services, while our
FriSurf subscription provides free Internet access
with customers paying for use of the Internet only.

Value-added services.We offer a broad range of value-added
services on a subscription or usage basis. Our
subscription-based services, for which we charge a monthly fee,
include caller identification, call waiting, voice mail and
remote call diversion. Our usage-based services, for which we
charge a per-minute fee, include a call back when
occupied service, three-party conference calling and an
international calling card service.

Fees
and tariffs

In 2002, we increased both the connection and
subscription fees to further adapt pricing to underlying costs.
In 2003, connection fees and call tariffs were kept stable at a
level which we regard as competitive. At December 31, 2003,
we offered various discounts with our Familie &
Venner (family and friends) programs. ADSL is priced based
on a combination of speed and capacity for downloading (except
the top product without any capacity restrictions).

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Access

The following table shows information regarding
our analog (PSTN) and digital (ISDN) access lines and channels,
including courtesy and service lines as well as payphones, ADSL
and Internet accesses in the residential market as at
December 31, 2001, 2002 and 2003.

|                                 |  |                    |       |      |  |      |       |  |  |  |       | 
|-------------------------------- |  | ------------------ | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                 |  |                   
|                                 |  | As of December 31,
|                                 |  |                   
|                                 |  | 2001               |       | 2002 |  | 2003
|                                 |  |                    |       |      |  |     
|                                 |  |                   
|                                 |  | (in thousands)    
|Analog (PSTN) lines              |  |                    | 1,253 |      |  |      | 1,210 |  |  |  | 1,096 | 
|Digital (ISDN) lines:            |  |                    |       |      |  |      |       |  |  |  |       | 
|Basic rate access lines(1)       |  |                    | 489   |      |  |      | 500   |  |  |  | 454   | 
|Digital access channels(2)       |  |                    | 979   |      |  |      | 1,000 |  |  |  | 908   | 
|ADSL access                      |  |                    | 23    |      |  |      | 90    |  |  |  | 163   | 
|Internet access:                 |  |                    |       |      |  |      |       |  |  |  |       | 
|Online subscriptions             |  |                    | 371   |      |  |      | 377   |  |  |  | 294   | 
|Frisurf registered user accounts |  |                    | 437   |      |  |      | 533   |  |  |  | 574   | 






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

Traffic

The following table shows information on minutes
of traffic generated by residential analog and ISDN subscribers
for each year in the three-year period ended December 31,
2003. The migration to ADSL decreases the number of traffic
minutes as the use of ADSL is measured in capacity and not in
minutes.

|                                           |  |                         |        |                     |  |      |        |           |  |           |        |   |  |  |       |   |  |  |       |  
|------------------------------------------ |  | ----------------------- | ------ | ------------------- |  | ---- | ------ | --------- |  | --------- | ------ | - |  |  | ----- | - |  |  | ----- | -
|                                           |  |                         |        |                    
|                                           |  | Year ended December 31, |        | Increase (decrease)
|                                           |  |                         |        |                    
|                                           |  | 2001                    |        | 2002                |  | 2003 |        | 2002/2001 |  | 2003/2002
|                                           |  |                         |        |                     |  |      |        |           |  |          
|                                           |  |                         |        |                     |  |      |        | %         |  | %        
|Traffic (millions of minutes):             |  |                         |        |                     |  |      |        |           |  |           |        |   |  |  |       |   |  |  |       |  
|National calls, excluding Internet traffic |  |                         | 6,478  |                     |  |      | 5,835  |           |  |           | 5,202  |   |  |  | (9.9  | ) |  |  | (10.8 | )
|Internet traffic                           |  |                         | 4,410  |                     |  |      | 3,812  |           |  |           | 3,323  |   |  |  | (14.0 | ) |  |  | (13.0 | )
|Calls to mobile phones                     |  |                         | 836    |                     |  |      | 889    |           |  |           | 847    |   |  |  | 6.3   |   |  |  | (4.7  | )
|International                              |  |                         | 222    |                     |  |      | 225    |           |  |           | 207    |   |  |  | 1.8   |   |  |  | (8.0  | )
|Other                                      |  |                         | 409    |                     |  |      | 472    |           |  |           | 520    |   |  |  | 15.4  |   |  |  | 10.2  |  
|                                           |  |                         |        |                     |  |      |        |           |  |           |        |   |  |  |       |   |  |  |       |  
|Total                                      |  |                         | 12,355 |                     |  |      | 11,233 |           |  |           | 10,099 |   |  |  | (9.3  | ) |  |  | (10.2 | )
|                                           |  |                         |        |                     |  |      |        |           |  |           |        |   |  |  |       |   |  |  |       |  
|Market share (based on minutes):           |  |                         |        |                     |  |      |        |           |  |           |        |   |  |  |       |   |  |  |       |  
|Total residential(1)                       |  |                         | 71     | %                   |  |      | 70     | %         |  |           | 67     | % |  |  |       |   |  |  |       |  






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

Competition

In the residential market, our main competitor in
the area of fixed telephony and dial-up Internet is Tele2, which
offers services based on carrier pre-selection. Dial-up Internet
is also provided by several smaller information service
providers (ISPs), such as Tiscali, Sense and Powertech. Our
market share in fixed telephony and dial-up Internet has
stabilized over the past two years. Competition in fixed
telephony has increased as a result of our offer of unbundled
telephony access as of 2003. The migration from dial-up to
broadband access solutions impacts competition in the Internet
segment by introducing new market players. The residential
broadband access market is increasingly dominated by ADSL
providers. We are the major ADSL provider, but significant
competition is offered by LLUB operators NextGenTel and Catch,
as well as from other providers utilizing our ADSL wholesale
line rental offer.

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Business Market

We are the leading provider of telecommunications
services to the business market in Norway. Our objective is to
provide our business customers with innovative communications
services. Similar to our objectives in the residential market,
we are seeking to develop and manage long-term customer
relationships with our business customers.

Services

Basic network services.The principal services offered to our
business customers are basic network services. These include
analog, ISDN basic rate access and ISDN primary rate access
lines, the latter being more advanced lines that provide 12 to
30 access channels. As of December 31, 2003, we had
approximately 490,000 telephone subscriptions in the
business market and 57% of our business customers had an ISDN
connection. We offer three levels of business discounts from the
basic traffic charges. The discounts are based on the volume of
traffic.

Leased Lines.We
also provide leased lines to businesses. Under the universal
service obligation in our fixed telephony license, we are
obligated to offer leased lines with a capacity of 64 Kbps
and 2 Mbps on equal terms to all players in the market.
Demand for capacity has generally increased as customers are
migrating from analog lines to digital lines and to higher
capacity lines. The number of leased lines, however, has
decreased as customers are migrating to ADSL.

Internet access.We
offer a range of solutions for Internet access, from basic
connection for single users to advanced and comprehensive
solutions for large companies with many users. We offer
companies and organizations several different options to access
the Internet. Multiple users can choose among a leased line,
ISDN, ADSL, asynchronous transfer mode or frame relay technology
to connect their local network to the Internet. Included in the
portfolio are also new secure services for Wireless Local Area
Networks (WLAN). Our ADSL offerings are mainly positioned
towards the small and medium enterprise (SME) segment and our
current offerings range from 640 to 2048 Kbps
connections. ADSL technology enables always-on
Internet connections by utilizing the existing telephony
infrastructure. The deployment of ADSL is one of our priorities
in the SME segment.

VPN.We offer
Virtual Private Network (VPN) solutions through which our
customers may link their companys sites and networks
together and support their remote users. Based on a combination
of authentication, encryption and protection of data, our VPN
solutions are designed to ensure the secure transfer of data and
help reduce costs for our customers communication
infrastructure.

Nordicom.Nordicom
is our broadband network in the Nordic countries. This network:



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

Value-added telephony services.We offer our business customers basic
voice communication services as well as advanced routing and
service access, including:



| |   |                                                                                                                
| | - | ---------------------------------------------------------------------------------------------------------------
| |  | 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.We
provide domestic and international messaging services based on a
wide range of integrated and user-friendly e-mail communications
packages. These services include our IMAP-based mailboxes for
the professional market, which facilitate users access to
e-mail, faxes, cellular phones and pagers, as well as receiving
and sending of e-mail messages from both central and remote
locations.

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Hosting.Our
business customers may outsource their own server maintenance
through our hosting solutions. Our Internet hosting services
range from the storage of simple web pages to advanced
multimedia and e-commerce solutions.

Managed Services.In
2003, we offered a broad portfolio of managed services to
businesses in Norway. Our business customers outsource their IT
resources and infrastructure by using our services, which
provide cost-efficient IT support and helpdesk functions at a
fixed price for a package of services. The services can include
communication network access, workstation management, design
services and office support. As part of these services:



| |   |                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------
| |  | we store customers software and data on
    central servers located in our secure underground facilities; and                                  
|
| |  | our users subscribe to a screen display and
    computing power, which we make available through one of our many
    telecom connection options.

Our managed services are normally provided under
long-term contracts with an average duration of three years.
Typically, these contracts are awarded through competitive
bidding. Our managed services operation currently consists of
26 external customers. At December 31, 2003, we had a
market share of approximately 20% of the Norwegian managed
service market, which is in line with prior years.

On March 26, 2004, Telenor Fixed and EDB
Business Partner entered into an agreement, effective
May 1, 2004, to transfer to EDB Business Partner Telenor
Fixeds existing IT operations for a net consideration of
NOK 132 million. Telenor Fixed will also transfer to EDB
Business Partner 470 employees and its existing contracts for
the provision of IT operating services with 26 customers in the
private and public sectors in Norway. The aggregate value of
these contracts is currently estimated to be NOK 800
million.

Access

The following table shows information regarding
our analog (PSTN) and digital (ISDN) access lines and channels,
including courtesy and service lines as well as payphones, ADSL
and Internet access in the business market as of
December 31, 2001, 2002 and 2003.

|                             |  |                    |     |      |  |      |     |  |  |  |     | 
|---------------------------- |  | ------------------ | --- | ---- |  | ---- | --- |  |  |  | --- | 
|                             |  |                   
|                             |  | As of December 31,
|                             |  |                   
|                             |  | 2001               |     | 2002 |  | 2003
|                             |  |                    |     |      |  |     
|                             |  |                   
|                             |  | (in thousands)    
|Analog (PSTN) lines          |  |                    | 292 |      |  |      | 257 |  |  |  | 212 | 
|Digital (ISDN) lines:        |  |                    |     |      |  |      |     |  |  |  |     | 
|Basic rate access lines(1)   |  |                    | 284 |      |  |      | 297 |  |  |  | 270 | 
|Primary rate access lines(1) |  |                    | 7   |      |  |      | 8   |  |  |  | 8   | 
|Digital access channels(2)   |  |                    | 787 |      |  |      | 828 |  |  |  | 774 | 
|ADSL access                  |  |                    | 1   |      |  |      | 4   |  |  |  | 14  | 
|Internet access:             |  |                    |     |      |  |      |     |  |  |  |     | 
|Online subscriptions         |  |                    | 15  |      |  |      | 13  |  |  |  | 16  | 






|    |                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | A basic rate digital (ISDN) line provides two
    access channels and a primary rate 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.

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Traffic

The following table shows information on minutes
of traffic generated by analog and ISDN subscribers in the
business market for each year in the three-year period ended
December 31, 2003. The migration of fixed traffic from
analog and ISDN to mobile and decreasing market shares led to
lower traffic minutes in 2003.

|                                           |  |                         |       |                     |  |      |       |           |  |           |       |   |  |  |       |   |  |  |       |  
|------------------------------------------ |  | ----------------------- | ----- | ------------------- |  | ---- | ----- | --------- |  | --------- | ----- | - |  |  | ----- | - |  |  | ----- | -
|                                           |  |                         |       |                    
|                                           |  | Year ended December 31, |       | Increase (decrease)
|                                           |  |                         |       |                    
|                                           |  | 2001                    |       | 2002                |  | 2003 |       | 2002/2001 |  | 2003/2002
|                                           |  |                         |       |                     |  |      |       |           |  |          
|                                           |  |                         |       |                     |  |      |       | %         |  | %        
|Traffic (millions of minutes):             |  |                         |       |                     |  |      |       |           |  |           |       |   |  |  |       |   |  |  |       |  
|National calls, excluding Internet traffic |  |                         | 4,089 |                     |  |      | 3,622 |           |  |           | 3,001 |   |  |  | (11.4 | ) |  |  | (17.1 | )
|Internet traffic                           |  |                         | 1,657 |                     |  |      | 1,481 |           |  |           | 1,296 |   |  |  | (10.6 | ) |  |  | (12.5 | )
|Calls to mobile phones                     |  |                         | 576   |                     |  |      | 610   |           |  |           | 595   |   |  |  | 5.9   |   |  |  | (2.5  | )
|International                              |  |                         | 161   |                     |  |      | 153   |           |  |           | 133   |   |  |  | (5.0  | ) |  |  | (13.1 | )
|Other                                      |  |                         | 215   |                     |  |      | 238   |           |  |           | 261   |   |  |  | 10.7  |   |  |  | 9.7   |  
|                                           |  |                         |       |                     |  |      |       |           |  |           |       |   |  |  |       |   |  |  |       |  
|Total                                      |  |                         | 6,698 |                     |  |      | 6,104 |           |  |           | 5,286 |   |  |  | (8.9  | ) |  |  | (13.4 | )
|                                           |  |                         |       |                     |  |      |       |           |  |           |       |   |  |  |       |   |  |  |       |  
|Market share (based on minutes):           |  |                         |       |                     |  |      |       |           |  |           |       |   |  |  |       |   |  |  |       |  
|Total business(1)                          |  |                         | 77    | %                   |  |      | 76    | %         |  |           | 74    | % |  |  |       |   |  |  |       |  






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

Competition

The competition in the business market is most
significant in the central industrial regions of Norway, where
Song Networks, BKK, Priority Telecom and TDS Norge AS have
invested in their own network infrastructures and challenged us
with competitive offerings of fixed line access, leased lines,
broadband and data communication services. Parts of the leased
line and data communication markets are also being challenged by
the LLUB operators NextGenTel and Catch, who offer VPN solutions
connecting business locations and home offices through xDSL
access lines.

Distribution
and marketing

We distribute our products and services in our
business market segment through a variety of channels. These
include our key account managers and our direct sales force for
our larger business customers. Our internal direct sales force
is dedicated to our large corporate customer segment. In
addition to our sales force, we use a number of independent
agents for distributing our services to medium and smaller
business customers. We have also implemented a strategic program
to improve our customer relationship management capabilities in
this market segment.

Wholesale Market

Domestic wholesale

Interconnection services.In Norway, we provide interconnection
services consisting of call termination, call transit and call
origination, on both a carrier select and carrier pre-select
basis. We are required to price our services on a cost-related
basis. A significant amount of interconnection traffic is
generated by the use of the Internet. To capture this traffic
and secure Internet service providers as customers, we have
introduced interconnection services targeted at these providers
in the form of special network access. Our objective is to
develop these services to maintain a leading position as a
supplier of interconnection to Internet service providers. We
offer interconnection services in Norway through 11 regional
areas, which are divided into a total of 23 local areas.

Local loop unbundling.We deliver local loop unbundling
(LLUB) to other telecom suppliers as required by regulation.
Local loop access provides operators with access to our copper
access network. We

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also deliver shared access to the local loop.
Through shared access, operators are able to provide end users
with broadband.


ADSL.We have
launched ADSL in the wholesale market. ADSL access allows
Internet service providers and other service providers to
provide ADSL-based products and offerings without having to
install any sort of technical devices in connection with the
copper pairs.

Intelligent network services.We also provide access to intelligent
network services allowing service providers to offer value-added
services hosted on our network. Intelligent network services
allow sophisticated routing of calls depending on the time of
the call, the area of origination, and menu of selection.

Switchless resale voice services.We offer switchless resale voice
services designed to allow resellers to offer their own services
in the market, but through our network. Potential customers are
virtual operators/ resellers.

Wholesale line rental.In 2003, we started to provide
telephony access (PSTN and ISDN) on a wholesale basis to other
operators, and service providers which allows them to sell
subscriptions to the end customer.

Tariffs

The following table shows our principal
interconnection prices, excluding VAT, as of December 31,
2003.

|                      |  |            |       |                |  |          |       |  |  |  |       | 
|--------------------- |  | ---------- | ----- | -------------- |  | -------- | ----- |  |  |  | ----- | 
|                      |  |            |       |               
|                      |  |            |       | Traffic Tariff
|                      |  | Call       |       | per Minute    
|                      |  | Initiation |       |               
|                      |  | Fee        |       | Peak           |  | Off-peak
|                      |  |            |       |                |  |         
|                      |  |           
|                      |  | (NOK)     
|Termination:          |  |            |       |                |  |          |       |  |  |  |       | 
|Within local area     |  |            | 0.054 |                |  |          | 0.041 |  |  |  | 0.029 | 
|Within regional area  |  |            | 0.059 |                |  |          | 0.050 |  |  |  | 0.035 | 
|Outside regional area |  |            | 0.074 |                |  |          | 0.063 |  |  |  | 0.049 | 
|Transit:              |  |            |       |                |  |          |       |  |  |  |       | 
|Within regional area  |  |            | 0.015 |                |  |          | 0.020 |  |  |  | 0.020 | 
|Outside regional area |  |            | 0.015 |                |  |          | 0.040 |  |  |  | 0.040 | 
|Carrier selection:    |  |            |       |                |  |          |       |  |  |  |       | 
|Within local area     |  |            | 0.054 |                |  |          | 0.041 |  |  |  | 0.029 | 
|Within regional area  |  |            | 0.059 |                |  |          | 0.050 |  |  |  | 0.035 | 
|Outside regional area |  |            | 0.074 |                |  |          | 0.063 |  |  |  | 0.049 | 

Access

The following table shows information regarding
our analog (PSTN) and digital (ISDN) access lines and channels,
including courtesy and service lines as well as payphones, ADSL
and LLUB subscriptions in the wholesale market as of
December 31, 2001, 2002 and 2003.

|                             |  |                    |    |      |  |      |    |  |  |  |     | 
|---------------------------- |  | ------------------ | -- | ---- |  | ---- | -- |  |  |  | --- | 
|                             |  |                   
|                             |  | As of December 31,
|                             |  |                   
|                             |  | 2001               |    | 2002 |  | 2003
|                             |  |                    |    |      |  |     
|                             |  |                   
|                             |  | (in thousands)    
|Analog (PSTN) lines          |  |                    |   |      |  |      | 7  |  |  |  | 104 | 
|Digital (ISDN) lines:        |  |                    |    |      |  |      |    |  |  |  |     | 
|Basic rate access lines(1)   |  |                    |   |      |  |      | 3  |  |  |  | 57  | 
|Primary rate access lines(1) |  |                    |   |      |  |      |   |  |  |  | 0   | 
|Digital access channels(2)   |  |                    |   |      |  |      | 6  |  |  |  | 126 | 
|ADSL access                  |  |                    |   |      |  |      | 15 |  |  |  | 56  | 
|LLUB access                  |  |                    | 12 |      |  |      | 42 |  |  |  | 80  | 




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|    |                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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.

International wholesale  Telenor Global
Services

We provide a broad range of services in the
international wholesale market, including broadband capacity and
worldwide traffic. Our objective is to be the leading supplier
of voice and capacity services to and from Norway and a
successful niche player in the wholesale traffic market in
Europe.

International direct dialing.We offer inbound call termination for
international traffic terminating in our network. We receive
payments from other carriers under a system of settlement
arrangements. This business also purchases termination services
from foreign carriers for outbound international traffic
originating in our networks. We also provide wholesale services
for traffic that is transited through our network, both switched
traffic that is subject to the international settlement
arrangements system and non-traditional transit traffic sold in
the carrier-to-carrier market. Our wholesale voice traffic
services utilize state-of-the-art traffic management systems.

Roaming.Telenor
Global Services offers complete international roaming solutions
which integrate IP connectivity with traditional voice
services. Our roaming GSM service is global, with more than
220 international roaming partners through one single
access line. The roaming GRX connects mobile networks via a
high-security and cost-efficient IP network. We are a registered
GRX provider in the GSM Association.

Leased capacity services.We offer leased capacity services,
which provide fixed and dedicated connections. Leased lines are
available in both analog and digital interfaces and with
different capacities. We deliver these services within Norway
through our own telecoms network and in most other countries in
the world in cooperation with reputable operators. These
services are well suited to users that generate a higher volume
of traffic between fixed locations, for instance, connections
between different local area networks (LANs) or private branch
exchanges (PBXs). Leased lines are also a basic element in the
production of other services such as mobile phone and point of
sale terminals.

Competition

Our main competitor with national coverage in the
market for wholesale services is BaneTele. In addition, we face
competition from a number of focused local or niche providers,
specializing in smaller segments of both the residential and
business markets. Some of these are local broadband initiatives
supported or owned by municipalities and local utility
companies. In the residential market we also face competition
from cable networks

Network Operations

Domestic infrastructure

Our domestic network is one of the most
technologically advanced fixed line networks in the world. It
supports our residential, business and wholesale service
offerings, and also provides services to our other business
areas.

Trunk transmission network.Our national trunk transmission
network comprises national and regional network layers that are
in turn connected to our local access network. The national
network uses a chained ring formation with 19 nodes, or
connection or switching points, and 46 rings distributed on
12 chained ring structures. The trunk network includes two
international switching exchanges.

We have a national ring topology backbone network
using synchronous digital hierarchy equipment on fiber optic
cables. Synchronous digital hierarchy provides faster and less
expensive network interconnection than the traditional PDH
technology. PDH is the conventional multiplexing technology for
network

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transmission systems. For the regional backbone
network we have a similar structure based on similar technology.


Our national backbone network is 100% based on
optical dense wavelength division multiplexing. Dense wavelength
division multiplexing is a transmission technology in which up
to 200 optical channels are transmitted through the same
fiber. We use systems based on this technology with 8, 16 and 32
optical channels at 2.5 Gbps (billion bits per second). The new
dense wavelength division multiplexing systems are prepared for
10 Gbps. The national core network is prepared to be the carrier
for any transmission technology used on a higher layer. This may
include synchronous digital hierarchy, asynchronous transfer
mode (ATM) or IP technology.

Our regional network layer comprises more than
300 installed connection or switching points in 145 rings
distributed on 71 ring structures. The implementation of
ring topology in the regional network has improved the quality
of service of the network.

Access network.Our
local access network connects nearly 4,000 digital telephony
switches and concentrators to virtually all homes and businesses
in Norway. The network currently includes approximately
5.8 million kilometers of installed twisted pair copper
wire. At December 31, 2003, the access network connected
approximately 1,412,000 analog telephone lines, 781,000 ISDN
basic rate and 8,200 ISDN primary rate access lines, 64,000
leased lines, 80,000 LLUB lines and 233,000 ADSL lines.

Subscribers are connected to our network through
approximately 50 combined tandem and subscriber exchanges,
150 subscriber exchanges and 3,500 concentrators.

In larger cities in Norway, we also provide
optical fiber connections directly to larger businesses,
universities and municipal locations, and in total to more than
2,300 locations.

The access network is well positioned for the
roll-out of ADSL broadband access services as a result of the
investment in increased capacity made as a part of expanding the
ISDN coverage of the network in the period from 1998 to 2001. We
have been expanding our ADSL network since 2002 and in 2003 we
invested a total of NOK 1,388 million in our networks, of
which NOK 265 million was invested in ADSL

International infrastructure

International wholesale network.We offer an international wholesale
network in the Nordic region between Oslo, Stockholm and
Copenhagen. Our network capacity is one wavelength and is
upgradeable.

Our international switch in Oslo includes seven
points of presence (PoPs), in Amsterdam, New York, London,
Stockholm, Copenhagen, Paris and Frankfurt. These PoPs represent
points of international interconnection with our customers and
suppliers.

Transatlantic submarine cable.We hold a 3.5% interest in the TAT-14
transatlantic submarine cable. The TAT-14 cable provides
connection between five cable stations in Europe and two in
North America. Service was launched on July 3, 2001,
enabling us to provide capacity including backhaul between New
York and major cities in Europe. In 2003, the capacity market
continued to be unstable and uncertain.

Fixed Sweden

In 2003, Fixed Sweden provided telephony, data
communication services, broadband and advanced network services
to the business market, and telephony, xDSL and IP-based
communication services to the wholesale market in Sweden.

We provide our customers in Sweden with access to
our Nordic data communications network. We believe that the
Swedish business market provides significant growth
opportunities due to the size and the growth rate of the market,
the fact that we have a first class national data communications
network including last mile (customer access), and the fact that
Swedish business customers prefer single vendor relationships
and outsourcing.

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In December 2002, we acquired a 90% ownership
interest and a bond convertible into an additional 2% equity
interest in Utfors AB, a Swedish data communications company.
Our fixed operations in the Swedish business market, grouped
under Telenor Business Solutions AB (TBS AB), were
simultaneously contributed to Utfors, in exchange for a bond
convertible into an additional 4.1% ownership interest in
Utfors, which was consolidated as of December 31, 2002. In
December 2003, after acquiring slightly more than 90% of
Utors shares, we initiated a compulsory acquisition
procedure in accordance with Swedish law for the remaining
outstanding shares of Utfors. We also launched a cash offer to
purchase the remaining outstanding shares in Utfors in order to
accelerate the process. After the expiration of the tender
period under the cash offer at the end of January 2004, we held
an ownership interest of 98.4% in Utfors. At the end of March
2004, we applied for a delisting of Utfors from the Swedish
stock exchange Nya Marknader.

TBS ABs and Utfors operations were
integrated during 2003, thus strengthening our portfolio by
combining the customer bases and offerings of the two companies.
Utfors is currently Swedens second largest provider of
business data communication services, as well as the second
largest wholesale provider of fixed network services after
TeliaSonera.

During 2002, the residential costumer base of
former Telenordia Privat was sold to Glocalnet in exchange for a
37.2% share in Glocalnet. Glocalnet is the third biggest service
provider within the fixed residential segment after TeliaSonera
and Tele 2. In the third quarter of 2003, the remaining
part of our residential customers (Utfors Privat) was sold to
Glocalnet at a price of SEK 80 million in cash.

During 2003, all of Glocalnets traffic was
migrated to our production platform in Fixed Sweden. In addition
to fixed voice and dial-up services, Glocalnet offers ADSL and
mobile telephony services to its customers.

Fixed Russia

In 2000, we acquired 75% less one share in the
company CominCom/ Combellga, which provided a one-stop shop of
high-tech integrated telephony services to corporate clients. In
June 2003, we acquired the remaining shares in CominCom/
Combellga.

On December 1, 2003, we closed a share
exchange transaction with Golden Telecom, Inc., under which
Golden Telecom received 100% of the shares in CominCom,
including its wholly-owned subsidiary Combellga, in exchange for
19.5% of the shares in Golden Telecom. Further acquisitions of
additional shares in the market gave us a 20.4% interest in
Golden Telecom at December 31, 2003, which was worth
approximately USD 204 million based on the closing
share price of Golden Telecom at December 31, 2003.

Golden Telecom, Inc., a listed company, is one of
the largest providers of voice, data and Internet services in
Russia and other countries of the Commonwealth of Independent
States (CIS). The company had a market share of approximately
35% in the business market for voice and data communications.

Comincom/ Combellga was consolidated up until
December 1, 2003, as of which time Golden Telecom is
reported as an associated company.

We believe that growth opportunities in the
Russian telecom sector are promising. This sector has expanded
by an average of approximately 15% each year since 1999,
primarily as a result of strong general market growth and the
introduction of new services by companies operating in this
sector.

The main competitive advantages CominCom/
Combellga added to Golden Telecom were its modern infrastructure
in Moscow, including proprietary last mile solutions, and its
premium business customer base both in Moscow and other selected
Russian cities.

CominCom/ Combellga had also developed and
operated networks in other Russian cities. These local networks,
together with the long-distance transport backbone of CominCom/
Combellga to which they were connected, provide one of the most
reliable solutions to business customers in Russia for
telephony, data and Internet traffic. By using modern technology
and local partnerships, CominCom/ Combellga was able to offer
competitive tariffs for long distance and international calls.

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Fixed International Other

We also provide xDSL, Internet access and data
communication services in the SME market and xDSL, local
multipoint distribution systems (LMDS) and IP capacity in the
wholesale market in the Czech Republic and Slovakia.

TELENOR BROADCAST

Overview

During 2003, our Telenor Broadcast business area
comprised our activities in broadcasting services to consumers
and enterprises in the Nordic region. We are the leading
provider of television services to consumers in the Nordic
countries. We operate the national terrestrial broadcast network
in Norway and are the leading provider of satellite broadcasting
services in the Nordic region, utilizing three geostationary
satellites. Our main objective is to strengthen our position as
the leading TV distributor in the Nordic region.

In 2003, the Telenor Broadcast business area
comprised the following business lines:

Distribution.We are
the largest provider of television services to consumers in the
Nordic region. We offer basic tier TV services, pay
television and interactive services throughout the Nordic region
to subscribers with satellite dish, cable TV subscribers and
operators, and households in small antenna TV networks. Through
our cable network division we also offer cable TV Internet
access subscriptions in certain areas. We provide broadcasting
services and TV distribution services to more than
2.5 million households and businesses.

Transmission.We
provide transmission services for broadcasters through Satellite
Broadcasting and Norkring, the Norwegian incumbent analogue
terrestrial radio and television transmission system operator.

Other.Other
consists of Conax, which offers conditional access systems, the
corporate support functions of Broadcast, and related interests.

The activities formerly organized in the Content
and Interactive unit are now organised under Distribution and
Others.

Distribution

The Nordic operations through Telenor Vision,
Telenor Avidi, Canal Digital, Zonavi and Sweden Online were
reorganized under Canal Digital in 2003. Simultaneously,
activities relating to the development of interactive TV
services have been reduced. After the reorganization, Canal
Digital is the leading TV content provider in the Nordic Region,
distributing a wide range of national and international
TV channels. Canal Digital has the exclusive distribution
rights to the Canal+ movie channels and sport rights, including
Premier League and NHL, to subscribers with satellite dish in
the Nordic Region.

We had a total of 2.5 million subscribers to
our different television services, as of December 31, 2003,
consisting of 763,000 subscribers with satellite dish, 604,000
cable TV subscribers and 1,098,000 households in small antenna
TV networks. In 2003, we changed our former subscriber
categories DTH, SMATV and CATV as follows: Subscribers
with satellite dish corresponds to the former category of
DTH subscribers, less institutional subscribers and small
antenna TV network subscribers with a decoder. Households
in small antenna TV networks corresponds to the previous
category SMATV, plus small antenna TV network subscribers with a
decoder. Cable TV subscribers corresponds to the
category CATV subscribers.

In addition, we had 31,000 cable TV Internet
access subscribers. In 2003, our distribution area generated
external revenues of NOK 3,8 billion. In 2003, we derived
47.8% of our distribution revenues from our operations in Norway
and 52.2% from our consolidated subsidiaries in the Nordic
region.

In January 2004, the exclusive distribution
arrangements on Canal+ content entered into between us and Canal
Digital in connection with the acquisition of the remaining 50%
of Canal Digital from Canal+ in 2002 were cleared by the EU
competition authority.

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The table below shows our subscriber base per
country as of December 31, 2003.

|                                        |  |        |         |        |  |         |         |         |  |       |         |  |  |  |        |  |  |  |           | 
|--------------------------------------- |  | ------ | ------- | ------ |  | ------- | ------- | ------- |  | ----- | ------- |  |  |  | ------ |  |  |  | --------- | 
|                                        |  | Norway |         | Sweden |  | Denmark |         | Finland |  | Total
|                                        |  |        |         |        |  |         |         |         |  |      
|Subscribers Broadcast                   |  |        |         |        |  |         |         |         |  |       |         |  |  |  |        |  |  |  |           | 
|Subscribers with satellite dish         |  |        | 274,000 |        |  |         | 334,000 |         |  |       | 109,000 |  |  |  | 46,000 |  |  |  | 763,000   | 
|Cable TV subscribers                    |  |        | 382,000 |        |  |         | 222,000 |         |  |       | 0       |  |  |  | 0      |  |  |  | 604,000   | 
|Households in small antenna TV networks |  |        | 159,000 |        |  |         | 251,000 |         |  |       | 638,000 |  |  |  | 50,000 |  |  |  | 1,098,000 | 
|                                        |  |        |         |        |  |         |         |         |  |       |         |  |  |  |        |  |  |  |           | 
|Broadcasting                            |  |        | 815,000 |        |  |         | 807,000 |         |  |       | 747,000 |  |  |  | 96,000 |  |  |  | 2,465,000 | 
|                                        |  |        |         |        |  |         |         |         |  |       |         |  |  |  |        |  |  |  |           | 

Satellite dish

We distribute subscription-based and free to air
TV services via satellite to 1.0 million households in the
Nordic region. We distribute more than 70 Nordic and
international channels and offer both basic tier and extended
services, including premium pay TV, interactive and
video-on-demand services. The satellite dish operations achieved
revenues of NOK 2.5 billion in 2003, an increase of 21%
compared to 2002.

The following table shows key operating
information for the satellite dish operations over the past
three years:

|                                |  |                         |         |      |  |      |         |  |  |  |           | 
|------------------------------- |  | ----------------------- | ------- | ---- |  | ---- | ------- |  |  |  | --------- | 
|                                |  |                        
|                                |  | Year ended December 31,
|                                |  |                        
|                                |  | 2001                    |         | 2002 |  | 2003
|                                |  |                         |         |      |  |     
|Subscribers at period end(1)    |  |                         |         |      |  |      |         |  |  |  |           | 
|Subscribers with satellite dish |  |                         | 569,000 |      |  |      | 701,000 |  |  |  | 763,000   | 
|                                |  |                         |         |      |  |      |         |  |  |  |           | 
|Smart Cards only                |  |                         | 418,000 |      |  |      | 240,000 |  |  |  | 241,000   | 
|                                |  |                         |         |      |  |      |         |  |  |  |           | 
|Total Smart Cards(2)            |  |                         | 987,000 |      |  |      | 941,000 |  |  |  | 1,004,000 | 
|                                |  |                         |         |      |  |      |         |  |  |  |           | 






|    |                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The former subscriber category DTH was changed in
    2003. Subscribers with satellite dish corresponds to
    the former category DTH subscribers, less institutional
    subscribers and small antenna TV network subscribers with
    decoder.                     
|   
|(2) | Canal Digital sells subscriptions via Smart
    Cards. Subscribers insert these cards into set-top boxes
    and receive programming. Total Smart Cards includes digital
    subscribers and smart card only customers which just receive
    free to air TV services.

We believe that the growth in the number of
subscribers over the past few years is primarily due to the
success of our high-quality program packages that combine
international content and local language programming.

Cable TV

We operate a cable television network that served
604,000 subscribers as of December 31, 2003, of which
382,000 subscribers were located in Norway and 222,000 in
Sweden. The cable TV revenues were NOK 882 million in 2003,
of which 82% came from our Norwegian operation.

In Norway, we market a basic access service
bundled with an analogue basic tier package comprising
17-24 channels to individual households, landlords and
housing associations. In addition, we sell digital Pay-TV
packages to subscribers with a decoder and cable TV Internet
access subscriptions to households connected to our upgraded
networks. We market our cable television services through our
own sales organization, which includes a national call centre,
regional offices and sales representatives throughout Norway.

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The following table sets forth details of our
cable operations for the years indicated.

|                          |                                   |                         |         |        |  |      |         |        |  |  |         |        | 
|------------------------- | --------------------------------- | ----------------------- | ------- | ------ |  | ---- | ------- | ------ |  |  | ------- | ------ | 
|                          |                                   |                        
|                          |                                   | Year ended December 31,
|                          |                                   |                        
|                          |                                   | 2001                    |         | 2002   |  | 2003
|                          |                                   |                         |         |        |  |     
|Subscribers at period end |                                   |                         |         |        |  |      |         |        |  |  |         |       
|Basic tier                |                                   |                         | 561,000 |        |  |      | 571,000 |        |  |  | 604,000 |       
|                          | Of which Digital Pay-TV           |                         |         | 28,000 |  |      |         | 33,000 |  |  |         | 35,000 | 
|                          | Of which cable TV Internet access |                         |         | 12,000 |  |      |         | 21,000 |  |  |         | 31,000 | 

Most of our Internet access subscribers are
located in the area around Oslo. In early 2000, we launched
digital Pay-TV services in some parts of our cable TV network.
As at December 31, 2003, 100% of our basic subscribers in
Norway were able to receive digital Pay-TV services.

Small Antenna Networks

We are the leading reseller of analogue and
digital television channels and television services to
privately-owned small antenna networks, such as housing
associations, in the Nordic region. We also provide technical
services relating to small antenna networks. Revenue from the
small antenna networks TV operations for 2003 was NOK
336 million.

The following table sets forth operating
information for our small antenna networks TV operations.

|                                               |  |                         |           |      |  |      |           |  |  |  |           | 
|---------------------------------------------- |  | ----------------------- | --------- | ---- |  | ---- | --------- |  |  |  | --------- | 
|                                               |  |                        
|                                               |  | Year ended December 31,
|                                               |  |                        
|                                               |  | 2001                    |           | 2002 |  | 2003
|                                               |  |                         |           |      |  |     
|Subscribers at period end(1)                   |  |                         |           |      |  |      |           |  |  |  |           | 
|Households in small antenna TV networks served |  |                         | 1,193,000 |      |  |      | 1,133,000 |  |  |  | 1,098,000 | 






|    |                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Subscribers defined as Households in small
    antenna TV networks correspond to the previous category
    SMATV subscribers and small antenna TV network subscribers with
    decoder.

Competition

With regard to satellite dishes, we compete with
Viasat, a subsidiary of the Swedish media conglomerate Modern
Times Group (MTG). Providers of digital terrestrial television
(DTT) services mark a new type of competitors, with Boxer in
Sweden as the most important in the Nordic region.

Within cable television in Norway our primary
competitor is UPC Norway, a subsidiary of United Pan-Europe
Communication NV. Within cable television in Sweden our primary
competitors are Comhem, a former subsidiary of TeliaSonera sold
to EQT partners in 2003, UPC Sweden, a subsidiary of United
Pan-Europe Communication NV, and Kabelvision, a subsidiary of
Tele2. Within the Nordic market for wholesale services to small
antenna TV networks our primary competitor is Viasat. In the
Danish market, we face competition from TDCs subsidiary
OnCable and TeliaSoneras subsidiary Stofa in some segments.

We compete in the Nordic market for satellite
dishes primarily on the basis of price, quality of content and
quality of customer service. With regard to the small antenna TV
services we compete on the basis of price, breadth of content
portfolio and value-added services such as technical support and
advice. In geographical areas where cable companies have
overlapping networks, they compete on the basis of technical
reliability and their ability to offer other access services and
to tailor the content portfolio to the preferences of the
majority of the households in the area.

Transmission

We are the leading provider of television
transmission services in the Nordic region through satellite
broadcasting, and through Norkring we are the sole provider of
analogue terrestrial radio and television transmission in Norway.

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Satellite broadcasting

We are the largest provider of commercial
satellite services for the transmission of television and radio
programs and multimedia services to cable and home satellite
dish television operators and other distributors in the Nordic
region.

We provide our services through a fleet of three
geostationary satellites: the Thor II and III satellites
and the Intelsat 707 satellite on which we lease 14
transponders. We expect to substitute the lease of Intelsat
707 capacity with capacity from the new satellite Intelsat
10-02, in which Satellite Broadcasting has an ownership
interest, in the course of 2004. Transponders are the main
devices that satellites use to receive and transmit signals. The
three satellites are located in orbit approximately
36,000 kilometres above the equator at approximately
1 degree west. 1 degree west is an advantageous position
for transmitting signals to the Nordic region and we estimate
that over 90% of the households satellite antennas in the Nordic
region can receive transmission from our satellites.

We are currently one of two satellite
transmitters of digital signals to home satellite dish receivers
and cable TV companies in the Nordic region. Using digital
transmission, each transponder can transmit six to eight
channels simultaneously, while a transponder used for analogue
transmission can only transmit one channel.

|                                |  |                         |    |      |  |      |    |  |  |  |    | 
|------------------------------- |  | ----------------------- | -- | ---- |  | ---- | -- |  |  |  | -- | 
|                                |  |                        
|                                |  | Year ended December 31,
|                                |  |                        
|                                |  | 2001                    |    | 2002 |  | 2003
|                                |  |                         |    |      |  |     
|Transponders at period end      |  |                         |    |      |  |      |    |  |  |  |    | 
|Used for digital transmission   |  |                         | 24 |      |  |      | 27 |  |  |  | 32 | 
|Used for analogue transmission  |  |                         | 15 |      |  |      | 7  |  |  |  | 6  | 
|Spare capacity                  |  |                         | 6  |      |  |      | 9  |  |  |  | 5  | 
|Total number of transponders(1) |  |                         | 45 |      |  |      | 43 |  |  |  | 43 | 






|    |                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Of the total number of transponders, 31 are used
    for broadcasting services and three are used for satellite
    network and mobile services. Transponders are measured in 36 MHz
    equivalents.

As at December 31, 2003, we transmitted 120
TV channels (five analog) and 60 radio channels on behalf
of more than 30 content providers. Revenues from Satellite
Broadcasting in 2003 were NOK 782 million.

Terrestrial broadcasting

Norkring owns an analog and digital terrestrial
radio and television transmission system in Norway, with
revenues of NOK 51 million in 2003.

Norkring provides its analogue services to two
national television broadcasters, NRK and TV2, and three
national radio broadcasters, as well as local television and
radio stations. Norkring also provides digital audio
broadcasting (DAB) and limited digital terrestrial TV services.
Norkrings network consists of approximately 2,700 large
and small transmitting stations in Norway and covers more than
99% of the Norwegian population. Norkring currently delivers DAB
with 50% households and main roads coverage in Norway.

In February 2004, the Norwegian Parliament
approved the development of a DTT network in Norway and decided
shut down of the analogue terrestrial network in 2007 subject to
conditions outlined by the Parliament. Norsk Televisjon (NTV), a
company co-owned by the national broadcaster NRK and the
commercial channel TV2, has been awarded the concession as the
content and subscriber management operator. Norkring has
developed DTT on a test basis in limited areas, and is a
possible contractor for the construction and technical operation
of a DTT network throughout Norway.

Competition

Our principal competitor in satellite
broadcasting is Nordiska Satellitaktiebolaget (NSAB), but we
also face competition from INTELSAT, EUTELSAT and SES Global.
NSAB is owned by the Swedish Space

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Corporation (50%) and SES Global (50%) and
operates three satellites, Sirius 2 and 3 at 5 degrees east and
Sirius W at 13 degrees west. SES is based in Luxembourg and
operates ASTRA, the largest satellite system for home satellite
dish transmission in Europe.


Other

Conditional access systems

We believe that conditional access systems are
essential for creating good business models for content
irrespective of terminal or access method. Access control via
Smart Card is most widely used in the Pay-TV area. Through
Conax, we provide these services both for broadcasting networks
and Internet/ intranet and other types of networks. Our services
enable video broadcasters and content providers to encrypt their
digital services so that programming may only be viewed by
authorized subscribers, i.e. viewers who pay a subscription.

Conax generated revenues of NOK 159 million
in 2003, of which approximately 75% was from other Telenor
companies.

Related interests

Following the sale of our 29% ownership interest
in A-pressen in exchange for shares in APR Media Holding in
2003, we currently own 44.8% of the shares in APR Media Holding.
APR Media Holding in turn holds 100% of the shares in A-pressen,
which is the majority owner of 45 local and regional newspapers
and some local television channels. A-pressen also owns a 33%
interest in the Norwegian television channel TV2 and in other
related interests.

We own 33% in Otrum, which is a leading supplier
of hotel TV solutions. Otrum is listed on the Oslo Stock
exchange.

Corporate functions

Corporate functions of Broadcast include IT and
administrative support functions.

EDB BUSINESS PARTNER ASA

Overview

Our 51.8%-owned subsidiary, EDB Business Partner
ASA, is a leading Norwegian information technology company
providing consulting services, software solutions and computer
operations. EDB Business Partners customers are
principally large and medium-sized companies and organizations
with a special focus on banking and finance, telecommunications
and the public sector. Although its primary market is Norway,
EDB Business Partner also has operations in Sweden, the United
Kingdom, Spain, Switzerland, and the United States. EDB Business
Partner had total revenues in 2003 of NOK 4,289 million, of
which NOK 3,210 million were external sales and NOK
1,060 million were sales to other Telenor businesses. EDB
Business Partners shares are listed on the Oslo Stock
Exchange.

EDB Business Partner was created by the merger of
our software and IT business with EDB, a publicly traded
company, in May 1999.

Strategy and recent developments

EDB Business Partners strategy is:



| |   |                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | to be a leading expertise-based IT business,
    focusing on systems (software and service) and computer
    operating services; 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

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| |  |                                                                                                                                                                                                 
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | growth of Internet applications, application
    service provisioning, e-commerce, Internet banking, mobile
    telephony/ wireless application protocol and business critical
    applications.

At the beginning of 2003, EDB Business Partner
announced a new business plan calling for a stronger focus on
the business areas Computer Operating Services,
Banking&Finance and Telecom. As a consequence, the
Consultancy Services business area was closed down as of
July 1, 2003. Part of the business was integrated into the
business areas IT Operations and Telecom, while the remainder
was divested.

On March 26, 2004, Telenor Fixed and EDB
Business Partner entered into an agreement, effective
May 1, 2004, to transfer to EDB Business Partner Telenor
Fixeds existing IT operations for a net consideration of
NOK 132 million. Telenor Fixed will also transfer to EDB
Business Partner 470 employees and its existing contracts for
the provision of IT operating services with 26 customers in the
private and public sectors in Norway. The aggregate value of
these contracts is currently estimated to be NOK 800
million.

We also agreed to extend the duration of our
existing outsourcing agreement, pursuant to which EDB Business
Partner provides us with operating services, until May 1,
2011.

Concurrent with this agreement, EDB Business
Partner also agreed to sell a substantial part of the operations
currently grouped in its Telecom business area to Accenture, the
international consultancy firm, for NOK 400 million
effective May 1, 2004. As of that same date, 360 current
employees of EDB Business Partner will be transferred to
Accenture.

Business Areas and Services

EDB Business Partner has the following three
business areas:

IT Operations

EDB Business Partner is one of the largest
suppliers of IT operating services in the Nordic region. This
business area:



| |   |                                                                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | provides both the centralized and remote
    operation of computer systems, application service provisioning
    (ASP), data communications and services related to backup,
    security and publishing;
|
| |  | serves customers in all industries and sectors;
    and                                                                                                                                                 
|
| |  | comprises EDB IT Operations (former EDB Teamco),
    the subsidiary PDS AS and the Swedish company EDB Unigrid AB.                                                                                      

EDB IT Operations operates the largest computer
center in Norway and provides computer operating services for
large and medium-sized companies in both the private and public
sector. EDB IT Operations provides operation and monitoring
services for both centralized computer systems and decentralized
local area network servers.

Bank and Finance

Through its wholly-owned subsidiary, EDB Bank and
Finans AS (formerly EDB Fellesdata AS), EDB Business Partner is
a leading full service application, IT operating systems and
consultancy provider to the banking and finance sector in
Norway. The Bank and Finance business area further includes the
subsidiaries SysCon AS and Accept Data AS in addition to the
Swedish company Infovention AB. The BeNeLux based company
Maxware BV and EDB Ster Polska in Poland were sold in 2003.

Telecom

The Telecom business area:



| |   |                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------
| |  | operates in Europe through EDB Telesciences AS
    and in the United States through Telesciences Inc.;

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| |   |                                                                                                                                                                                                                                                                                
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | comprises the sale of software application
    solutions and consultancy services to the telecommunications
    sector; and                                                                                                                                                    
|
| |  | focuses in particular on the customer care and
    billing (CCB) as well as the mediation product areas. EDB
    Business Partner is a leading player in the market for mediation
    systems, i.e., data interfaces between network switches and
    business support systems.

EDB Telesciences is a leading European software
supplier specializing in the development of operational support
systems for the telecommunications industry, flexible and
advanced software systems, systems integration, implementation
support and consultancy services.

In 2003, we were EDB Telesciences principal
customer and we accounted for a majority of its revenues.

The 44% interest in the
Washington D.C.-based consulting firm Logan Orviss Inc. was
sold in 2003.

Competition

The market in which EDB Business Partner operates
is highly competitive and is characterized by the need for a
high level of expertise and experience, as well as extensive
capital investment. It is of critical importance that EDB
Business Partners software products are seen to be secure
and reliable as well as competitive in terms of system design,
functionality, performance, interface, user friendliness and a
high degree of standardization. It is also important that its
products meet all the market requirements from time to time for
interaction with industry standard software and hardware.

SATELLITE SERVICES

Overview

We provide global satellite mobile communications
services for a full range of telephony and data communications
to and from mobile units all over the world. This includes
communications to, from and between units at sea, on land, or in
airplanes. Our maritime customers include commercial and naval
vessels and oil installations. We are one of the worlds
largest operators of this type of mobile service. We provide our
satellite mobile services through our Eik land earth station
(LES) in Norway and, after the acquisition of COMSAT Mobile
Communications (CMC), now named Telenor Satellite Services,
Inc., through the Southbury and Santa Paula LESs in the United
States. Revenues from our satellite mobile communication
operations were NOK 1,996 million in 2003, including
external revenues of NOK 1,942 million.

Our overall objective is to maintain and expand
our leading position within satellite-based mobile
communications. In 2001 and 2002, we completed two significant
acquisitions in order to achieve this objective:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | In January 2002, we completed the acquisition of
    COMSAT Mobile Communications (CMC) from Lockheed Martin Global
    Telecommunications and organized the CMC assets and operations
    in the newly established company Telenor Satellite Services,
    Inc. (TSSI). The acquisition strengthens our position as a major
    global satellite mobile operator and makes us one of the largest
    Inmarsat operators in the world. CMCs operations include
    two LES facilities in Southbury, Connecticut, and Santa Paula,
    California. By adding these facilities to our Eik LES in Norway,
    we can provide coverage in all four Inmarsat satellite regions
    and offer a truly global and seamless satellite mobile
    communication services. The acquisition has improved our
    operational efficiency and further expanded our already wide
    range of services.
|
| |  | In March 2001, we acquired SAIT Communication
    S.A. from SAIT-STENTO for approximately NOK 190 million.
    The company was renamed Marlink SA after the acquisition. We
    consolidated Marlink SA effective March 1, 2001. Marlink is
    one of the leading companies in retail sales of satellite
    communication services through Inmarsat. As a result of this
    acquisition, we expanded our activity in the retail market.                                                                                                                                                                                                                                                                                                                                                                                                                                                

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In order to continue to maintain and expand our
leading position within satellite-based mobile communications,
we intend to increase our offering of value-added services to
the market and to enhance our presence in the area of billing
and accounting services to support retail end users. This would
allow us to both capture a larger market share and introduce
value-added services to a larger group of customers.

We were the largest individual shareholder in
Inmarsat, the international maritime consortium, We handled
approximately 22% of worldwide traffic over Inmarsat in 2003. In
December 2003, the shareholders of Inmarsat, including us,
accepted an offer by Grapeclose Limited (a company
controlled by Apax Partners and Permira) to purchase all of the
issued share capital of Inmarsat for a total cash consideration
of approximately US$ 1.5 billion, or
US$ 15 per share. Under the offer, shareholders were
able to elect to receive a portion of the consideration for
their shares in the form of equity in the new holding company of
the Inmarsat Group, up to a maximum stake equal to each
shareholders current stake in Inmarsat representing no
more than 43.3 per cent of the new holding company in
aggregate. Due to the strategic value of our ownership in
Inmarsat relative to our other assets in the mobile satellite
sector, we chose to maintain equity ownership of approximately
15% in the new holding company. In addition, we received a cash
payment of approximately US$ 122 million upon closing of
the transaction on December 31, 2003.

Services

We offer a full range of analog and digital
Inmarsat services in addition to leased circuits utilizing other
space segments.

In November 1999, we were the first land earth
station operator (LESO) to receive certification to commence
commercial operation of Inmarsats then newest satellite
service Global Area Network (GAN). GAN services, together with
an easy-to-operate GAN mobile satellite terminal, provide the
user with a high degree of flexibility and accessibility at all
times. GAN services provide access at speeds up to 64 Kbps for
data, comparable to a fixed network ISDN line. The GAN service
has picked up significantly. In 2003, our market share was
approximately 30%. We supplemented our GAN services when we were
the first LESO to receive commercial authorization from Inmarsat
for the Mobile Packed Data Service extension in August 2001.

We were also the first LESO to be approved by
Inmarsat for commercial operation of the next generation of
maritime services, Fleet, which were launched in the market in
2002.

Our main aeronautical services are primarily
passenger voice and cockpit voice/data services for the airlines.

We have gathered all our retail activities under
the brand name Marlink since its launch in March 2002. Marlink
offers airtime and traffic accounting services based on Inmarsat
as well as Iridium satellite capacity. In addition, Marlink
offers light terminals. Value-added services in connection with
the aforementioned services are marketed under the brand name
@SEA, which is especially known for its multi-user
mail system.

Marlink traffic accounting includes all services
with authority to operate as the billing authority on behalf of
all Inmarat LESs in 76 countries. As a PSA (Point of
Service Activation), Marlink activates terminals in the Inmarsat
system on behalf of 114 countries worldwide. No other PSA
in the Inmarsat system covers a similar number of nations. In
addition, for renewal of radio licenses, Marlink is accredited
for four countries: Hong Kong, Liberia, Marshall Islands
and Panama. Marlink has offices in 9 countries and several
states in the US.

We offer heavy users of maritime communications
dedicated leased lines through either our Inmarsat space segment
or our own total communication solution Sealink, which is a
permanent satellite leased line for data transmissions and
establishes customized communications solutions between a fleet
of mobile sites and one or more land-based sites. Our Sealink
business is growing. At the end of 2003, we operated high
capacity Sealink installations on board approximately
260 deep ocean going vessels in global operations.

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Competition

The other larger participants in this market are
Xantic, Stratos, France Telecom, KDDI and SingTel. We also
compete with a number of smaller players operating their own
land earth stations. Subsequent to the consolidation among the
LESOs, Telenor, Xantic, Stratos and France Telecom are the four
largest operators and account for approximately 85% of the
Inmarsat traffic. Fierce competition in the markets has reduced
margins and we expect this pressure to continue. In the light
end of the market (the voice only market) we are facing
increasing competition from new mobile satellite systems such as
Iridium, Globalstar and Thuraya. However, in the data market,
Inmarsat continues to have a very strong position.

In the Inmarsat System, a customer can select to
place a call through any land earth station that serves the
respective area. As a result, operators compete mainly on the
basis of pricing, value-added services, global coverage and
brand name.

TELENOR SATELLITE NETWORKS

Through Satellite Networks, we provide
satellite-based communications networks and services to a wide
variety of governmental, intergovernmental and commercial
organizations utilizing Very Small Aperture Terminal (VSAT)
technology. VSATs are small, direct to business satellite earth
stations and the most common satellite modem in use today. Our
services range in complexity from the provision of point to
point data links to complex satellite networks providing access
to a full suite of telecommunications services including voice,
data, Internet, video-conferencing etc. We act as a network
operator and integrator, aggregating all levels of the value
chain to deliver a complete network service solution for the
customer. This includes network design, implementation,
operation, maintenance and the provision of satellite and
terrestrial communications capacity.

We act as a single supplier of services on a
global scale and our satellite services are particularly
attractive to customers with communication needs that span a
number of countries. Our services are also attractive to
customers operating in markets lacking competitive terrestrial
infrastructure.

We serve the following niche market segments:



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

We operate through subsidiaries in several
European countries. Our Polish subsidiary performing
communication solutions for corporate and public organizations
in Poland was sold in November 2003. Thus this activity is no
longer part of our business end of year 2003. The main network
operating centers for our satellite networks are located at
Nittedal earth station, just north of Oslo in Norway. The VSAT
terminals and additional equipment are supplied from selected
major suppliers. We have access to necessary satellite capacity
from INTELSAT, INMARSAT, EUTELSAT and other major satellite
operators.

Since 2000, we have radically restructured our
operations with the objective of bringing the cost-base in line
with revenue generating capabilities. Business activities have
been refocused towards high-growth and high-margin segments and
loss-making operations have been closed down. Revenue from our
Satellite Networks operations was NOK 570 million in 2003
and included external revenues of approximately NOK
507 million. Revenue is generated principally on the basis
of long-term contracts with our customers. During 2002, we
signed a number of key contracts with major international
organizations and corporations that led to increased sales.

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TELESERVICE AS

Our wholly-owned subsidiary Teleservice AS is
responsible for the Directory Enquiries products, supplied to
consumers both electronically and manually, and Contact Center
services. Effective January 1, 2004, we transferred MeetAt,
which provides our telephone and data conference services, from
Teleservice to Telenor Fixed. The company aims to simplify and
rationalize the customers working day by making
information and communication services easily accessible to
users.

Since 2002, manual directory enquiries have been
opened for competition in Norway. Teleservice had a market share
for directory enquiries of approximately 72% at
December 31, 2003. Teleservice reduced its workforce during
2002 and 2003 due to a general reduction in demand for manual
directory enquiries services and increased competition. Our
revenues in 2003 were approximately NOK 725 million, a 4%
decrease compared to 2002. The demand for electronic directory
enquiries has increased in 2003, and is supplied by SMS and on
web.

SOFTWARE SERVICES

This division offers software that facilitates
surveillance, IT management, security and service level
measurements, with related consulting and implementation
services, through strategic sales and marketing alliances with,
among others, Computer Associates (CA). Building key
partnerships is an important element of our strategy within
Software Services. We believe that our alliances, which in
addition to the main CA partnership include companies such as
iCan, Managed Objects and Citrix, provide valuable opportunities
for improving and expanding the applications of our
communications technology and for continuing to innovate and
simplify business communications for our business customers.

In 2000, we announced a major initiative with CA
to jointly address market opportunities in the Nordic region. We
have a license agreement with CA which has a seven-year term
running from June 30, 2000. Telenor Business Solutions
decided to write down the book value of the license agreement by
NOK 295 million in 2002, reflecting the anticipated
reduced sale of licenses in the period up to the expiration date
of the license agreement due to the weak market development..
The license agreement with Computer Associates was re-negotiated
during the first half of 2002 and adjusted somewhat to reflect
the general downturn in the market place and expected
utilization within Telenor in the future. This agreement was
re-negotiated again in second half of 2003 where the
responsibility for the three strategic customers was taken over
by CA and Telenor made a single payment to CA of NOK
300 million to reduce future liabilities.

NEXTRA INTERNATIONAL

After the sale of Telenor Business Solutions UK
to 2escape2 in July 2003, Nextra Internationals
operational activities were phased out.

In the first quarter of 2004, the Nextra
operations in the Czech and Slovak Republics were transferred to
Telenor Fixed and merged with Telenor Fixeds wireless
local loop activities in these two countries. The sale of Nextra
Italy to Tiscali was completed during the second quarter 2003.
The transactions regarding Nextra Hungary and Nextra Austria
closed during the first quarter 2003.

Remaining activities in Nextra International are
focused on maximizing the collection of deferred purchase price
payments and minimizing the exposure based on representations
and warranties and indemnities.

RESEARCH AND DEVELOPMENT

Telenor has Research and Development (R&D)
capabilities focusing on new technology and applications in the
information and communication technologies (ICT) field This is
executed in close contact with the business areas with the aim
of supporting present business and new business under
development. We had approximately 230 employees in our
Research and Development activities at the end of 2003. Our
efforts give

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us access to the results of other institutions
and companies research through extensive cooperation with
leading research establishments at home and abroad.


In 2003, R&D participated in 40 international
projects, mainly under the direction of the EU and EURESCOM, in
addition to substantial participation within various
standardization bodies.

Our R&D activities are mainly directed
towards two areas: the future broadband network and future
mobile systems. R&D contributes new concepts and product
ideas to our business activities. Testing and demonstrating new
services form an essential part of this activity.

New technologies, services or regulatory
developments may bring about radical changes to how the field of
information and communication technology is traditionally
organized. Based on the awareness of new trends and ahead of
market changes, R&D analyses so-called disruptive
technologies and alternative business models to determine how we
should address new challenges.

REGULATION

Regulatory Environment

Norway

Since the early 1980s, the Norwegian
telecommunications markets have gradually been opened up to
competition. By January 1, 1998, the Norwegian market was
fully liberalized and Telenors remaining monopoly was
abolished. Although Norway is not a member of the European Union
(EU), the Norwegian regulatory environment has been heavily
influenced by the initiatives undertaken by the EU. As a member
of the European Economic Area (EEA), Norway is required to adapt
its regulatory framework to the legislative and regulatory
framework established by the EU for the regulation of the
European telecommunications market to the extent that the EU
directives relating to such market are adopted by the EEA
pursuant to the EEA Agreement. The EEA Agreement is the
constitutive agreement of the EEA entered into between the
European Union, on the one hand, and the member states of the
European Free Trade Association (EFTA), except Switzerland, on
the other hand. Among other matters, the EEA Agreement provides
the framework for the implementation of EU legislation in the
EEA. In practice, Norwegian policymakers and regulators follow
the EU telecommunications framework. As a result of the EEA
Agreement, our operations are subject to both Norwegian and
European regulation.

The telecommunications sector in Norway is
regulated through both sector-specific and general laws and
regulations, including the Norwegian Electronic Communications
Act of July 25, 2003 (which replaced the former
Telecommunications Act of 1995), or ECA, the secondary
legislation under this act and the EU directives implemented in
accordance with the EEA Agreement. The EU directives to which
the Electronic Communications Act refers have not yet been
formally adopted in the EEA pursuant to the EEA Agreement.
Norwegian and EU/EEA competition laws also apply to our
telecommunications activities and our other core activities. In
addition, our core activities are governed by various other
laws, such as intellectual property rights legislation, the
Norwegian Personal Data Act and other consumer protection laws.
The Norwegian Broadcasting Act of December 4, 1992
(Broadcasting Act) and secondary legislation under this act are
applicable to our cable television and terrestrial broadcasting
network activities.

International obligations such as the General
Agreement on Trade in Services (GATS) (including the Agreement
on Basic Telecommunications) and International
Telecommunications Union (ITU) regulations are also relevant to
the Norwegian regulatory environment.

Regulatory framework and authorities

The telecommunications sector is regulated by the
Electronic Communications Act and the secondary legislation
under this act, which provide general rules and principles for
all electronic communications activities, including our public
networks and public telecommunications services, terminal
equipment and frequencies. Under the transition rules of the
ECA, we are still considered to have significant market power

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(SMP) in the markets for voice telephony (both
fixed and mobile), transmission capacity and interconnection
(both our fixed and mobile operations) and, therefore, we are
required to comply with the specific regulatory provisions
applicable to operators with SMP. However, this regulatory
framework currently applicable to us may change as a result of
the market analysis to be undertaken by the Norwegian Post and
Telecommunications Authority (PT) under the ECA. For further
information on these provisions, you should read
Regulatory developments and  Regulatory
Issues and Licensing (Norway). The Electronic
Communications Act, however, has abolished the current regime
for service licenses, maintaining a licensing regime only for
the use of scarce resources, such as numbers and frequencies.
Universal service obligations and special service obligations
will be addressed by designating an operator with universal
service obligations and through purchasing agreements between
the government and a preferred service provider. In addition,
the ECA marks a shift towards sector-specific regulation of
electronic communications networks and services based on
competition law methodology.


The Norwegian Ministry of Transport and
Communications (Ministry) has overall responsibility for the
telecommunications sector. The Ministrys responsibilities
mainly include preparing legislation for the Storting (the
Norwegian parliament) and deciding on secondary legislation,
including regulations. The Ministry also grants mobile licenses.
Primary legislation is adopted by the Storting, but the Ministry
prepares most of the legislative proposals submitted to the
Storting. The PT is the principal regulatory body under the
Electronic Communications Act and is responsible for day-to-day
supervision of the telecommunications sector, including general
authorizations, supervision of the telecommunications market and
handling initial complaints and legal disputes. The
PT reports directly to the Ministry. However, under the
Electronic Communications Act the PT exercises the
functions within its authority independently of the Ministry.
The director general of the PT is not a political appointee
and is not required to resign upon a change in government. As a
practical matter, the PT exercises considerable discretion
in the interpretation of national legislation, and soft
law from the EU, like recommendations, communications and
guidelines, may influence the PTs decisions.

Appeals against decisions issued by the
PT are submitted to the Ministry, which has and exercises
the final decision-making authority on these matters. In
addition, private parties may bring actions before the Norwegian
courts.

Regulations on the provision of networks and
telecommunications services

Generally, the Norwegian regulatory regime poses
few barriers to entry for new service providers. Its regulations
establish general rules regarding, among other matters,
registration, information on terms of subscription,
interconnection, universal service obligations, special service
obligations and appeal procedures and sanctions. Operators that
are deemed to have significant market power in markets that are
susceptible to sector specific regulation may be subject to
additional regulatory requirements in such areas as network
access, transparency, non-discrimination, accounting separation
and price control. These regulations also regulate number
allocation, number portability and carrier selection, which are
important elements of the regulatory regime for
telecommunications operators.

The Norwegian authorization requirements are both
liberal and low cost. There is no maximum number of
registrations or licenses that may be granted under the
Electronic Communications Act. However, since the radio spectrum
is a limited resource, frequencies may not be available in
sufficient quantity. As a result, the number of licenses that
are granted may be limited. Before granting a mobile license,
the Ministry is required to announce publicly that there are new
licenses available. The PT prepares a frequency usage plan
and the use of frequency bands are linked to the license. When a
network is closed down, the PT will review the
corresponding frequency band to determine whether it may be
publicly reallocated.

Fees, set by regulation, apply to registrations
and licenses as well as to frequencies and number allocation.
The fees are set to cover the administrative costs of the
regulator. Certain standard fees apply and in addition the
PT may charge an estimated fee for networks and services on
an individual basis.

The Electronic Communications Act marks a shift
towards regulation of electronic communications more generally
based on competition law methodology. The ECA introduced the
principles of market analysis to

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identify the markets susceptible to specific
regulation and the operators with SMP in accordance with the
principles of competition law and the EU regulatory framework.
The market analysis will be undertaken by the PT on a
regular basis and, therefore, new market developments could lead
to the imposition of new regulatory measures or to the amendment
or withdrawal of existing regulatory measures.


The ECA also provides for certain transition
rules that will apply until the PT completes its market
analysis of the relevant markets, identifies the
SMP-operator(s), if any, and decides on regulatory remedies,
if any. Such transition rules also provide that decisions
made under the former Telecommunications Act are valid unless
suspended by a new decision under the Electronic Communications
Act and that Telenors special obligations, such as our
current SMP-obligations, are effective until the
PT completes its market analysis.

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

Our satellite activities are mainly governed by
the regulations relating to technical requirements and
allocation of frequencies in the Electronic Communications Act
and the secondary legislation under the ECA. Satellite
activities are also governed by international rules issued by
the ITU. The PT is formally responsible, on behalf of the
Kingdom of Norway, for dealing with the ITU with regard to the
international coordination process.

In the countries where we have satellite
installations we must have licenses to operate radio equipment
and use frequencies from the national regulators and we must
comply with technical rules, including rules for type approval
in the relevant jurisdictions. In addition, we follow the
decisions and recommendations from European Conference of Postal
and Telecommunications Administrations (CEPT) and ITU. We are
also required to adhere to the general international space law
principles and conventions on liability and registration.

Our cable television activities are governed by
both the Electronic Communications Act and the Broadcasting Act
and secondary legislation under these acts. The most important
regulations relate to must-carry rules for public broadcasters,
subscriber choice for programs/ channels, re-transmission of
broadcast channels with an unlawful content and authorizations
required for the cable television operators own
broadcasting activities.

Parties other than the Norwegian Broadcasting
Corporation (NRK) must obtain a license in order to engage in
national or local broadcasting. However, simultaneous and
unaltered retransmission by way of cable networks of broadcasts
that is sanctioned by law does not require a special license.
Cable owners have a duty to retransmit the television broadcasts
of the NRK, the broadcast company TV 2 and certain terrestrial
local public television services. Programs subject to obligatory
retransmission must be transmitted via channels that are
available to every subscriber to the network.

In connection with our terrestrial broadcasting
network, we have been granted, in accordance with the Electronic
Communications Act, radio line and transmitter network licenses
authorizing us to, among other things, sell or lease capacity to
broadcasting companies and to transmit programs for
broadcasting. These licenses are valid until November 2006 and
can be renewed after such date. The licenses may be withdrawn if
numerous or substantial breaches of the terms of the licenses
occur, subject to a fourteen-day prior notice period.

Regulatory developments

The Electronic Communications Act reflects and
implements under Norwegian law the new EU regulatory framework
adopted in 2002. For more information on this framework, you
should read  European Union
regulation  Liberalization and harmonization of
telecommunications regulation. The Ministry issued the
secondary legislation under the ECA on February 16, 2004.
Such legislation completes the transposition of the new
EU-directives into national legislation. However, formally the
EU regulatory framework has not yet been adopted pursuant to the
EEA agreement and, therefore, the consultative powers of the
EFTA Surveillance Authority (ESA) under the ECA are not yet
effective. Pending such adoption in the

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EEA pursuant to the EEA Agreement, certain
provisions of the ECA that seek to ensure consistency between
Norwegian regulation and the European framework are not yet
effective. Accordingly, notifications to the ESA of operators
with significant market power and decisions with respect to the
adoption of special regulatory measures may not yet be made.


The Ministry has advocated sustainable and viable
competition in the telecommunications market and emphasizes the
importance of investment and risk-taking in the Norwegian
market, thus signaling expectations of a shift in the regulatory
practice of the PT. Regulation of the end user market is
expected to become relevant only if other measures, such as
regulation of the wholesale market, fail. However, the
Electronic Communications Act simultaneously confers broad
discretion to the PT with regard to a variety of tasks,
such as analysis of relevant markets, identification of SMP
operators, dispute resolution, the imposition, amendment or
withdrawal of interconnection and access obligations and retail
price control mechanisms.

The PT has published guidelines for the
methodology of market analysis and must follow the
recommendation on relevant markets and the guidelines of the EU
Commission in its approach to each market. The PT expects
to complete its market analysis and its assessment of effective
competition in the relevant markets and to adopt special
regulatory measures, if any, in the fall of 2004, following an
extensive public consultation process. Once the EU directives
have been adopted pursuant to the EEA-Agreement, the PT can
start the consultation process with the ESA; final decisions
with respect to SMP notifications and regulatory remedies are
expected to be taken no earlier than in the fall of 2004. So
far, consultative documents have been issued for 12 out of a
total of 18 relevant markets; we have been identified as
operator with SMP in each of these seven markets.

In the secondary legislation under the ECA, the
Ministry has also focused on consumer protection issues, such as
privacy in connection with communications and traffic data,
network security and customer consent to the processing and use
of customer data. The universal service obligations have been
maintained, but a new requirement to secure cost control on
public telephony spending has been introduced.

It is difficult to predict the nature and extent
of a shift in the regulation of our businesses due to the new
regulatory framework and the market analysis process provided
for under the new legislation. However, we believe that it is
likely that the PT will continue to regulate our currently
regulated services in both fixed and mobile telephony in the
short and medium term. There is also some uncertainty as to the
crucial question of whether the PT will expand the scope of
its regulation to other markets, such as broadband, as a result
of its market analysis of such markets. You should read
Item 3: Key Information  Risk
factors.

Competition

We are subject to the competition rules of the
Norwegian Competition Law (Competition Law) and the competition
rules of the EEA Agreement. The competition rules of the EEA
Agreement contain identical competition rules to those of the EC
(Amsterdam) Treaty (Article 81 and 82 and the European
Community Merger Regulation).

The Norwegian Competition Authority (Competition
Authority) is responsible for the surveillance and regulation of
all aspects of competition in Norway, including the
telecommunications industry. The Competition Authority has been
involved in a number of cases concerning telecommunications and
we were involved in several of these cases. The Competition Law
became effective on January 1, 1994. It was amended
effective May 5, 2000 and applies to actions that have or
may have an effect in Norway, including mergers. The Competition
Law applies fully to the telecommunications, satellite, Internet
and other related markets in which we operate, and generally
conforms to, the rules of competition of the EU.

The Competition Law empowers the Competition
Authority to intervene and declare a specific behavior
anti-competitive (similar to the prohibition of abuse of a
dominant position in a market under EEA and EU competition
rules). Contrary to EEA and EU rules (Articles 54/82 of the
EEA Agreement/EC Treaty, respectively), the behavior is not
considered illegal until the Competition Authority has made a
formal decision, and only continued anti-competitive behavior in
breach of a decision may be subject to fines. The Competition
Authority also may intervene against acquisitions or mergers of
enterprises, if such acquisition

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creates or strengthens a significant restriction
of competition. The Competition Law also contains several
prohibitions and general exceptions and grants discretionary
power to the Competition Authority to grant individual
exceptions from various prohibitions, including prohibitions
against price fixing, resale price maintenance, bid rigging and
market sharing. Violations of the Competition Law may result in
fines and/or imprisonment up to six years. In October 2003, a
proposal for a new Competition Law was submitted to parliament.
The proposal seeks to further align Norwegian Competition Law
with the EEA and EU rules. The proposal was passed by parliament
in March 2004, and the new Competition Law will become effective
on May 1, 2004.


The competition rules in the EEA Agreement have a
direct effect in the EEA member states, and under certain
conditions the rules of the EC Treaty apply to us. The primary
EEA and EU competition rules are contained in
Articles 53/81 and 54/82 of the EEA Agreement and EC
Treaty, respectively (formerly Articles 85 and 86 of the
Treaty of Rome). Articles 53/81 of the EEA Agreement/EC
Treaty prohibits agreements or collusive behavior between
companies that may affect trade between Member States and which
restrict, are intended to restrict or have an effect of
restricting, competition within the EU/EEA. Articles 54/82
of the EEA/EC Treaty prohibit any abuse of a dominant position
within a substantial part of the EU/EEA, which may affect trade
between Member States. The European Commission and the EFTA
Surveillance Authority (ESA), in cooperation with the national
competition authorities, enforces these rules. The European
Commission/ESA may impose fines in the event of a breach
amounting to up to 10% of a companys revenues on a
consolidated basis in the preceding financial year. In addition,
national courts have jurisdiction to apply EU/EEA competition
law and award damages in the event of a breach.

The European Commission and ESA may intervene
against concentrations with a EU/EEA dimension (a transaction
has a EU/EEA dimension if certain thresholds concerning turnover
are fulfilled), which creates or strengthens a dominant position
as a result of which effective competition would be
significantly impeded in the common market.

European Union regulation

EU legislation can take a number of forms.
Regulations have general application and are binding in their
entirety and directly applicable in Member States. Directives
are binding, but national authorities may choose the form and
method of implementation. As noted above in the discussion of
our Norwegian operations, EU directives are generally also
made applicable to Norway through the EEA Agreement. The
accession countries that will soon become Member States of the
EU are expected to undergo a process of transposition and
implementation of EU legislation into national legislation prior
to formal entry.

Liberalization and harmonization of
telecommunications regulation

Since 1987, the EU has adopted a substantial
amount of legislation to liberalize and harmonize
telecommunications legislation in the Member States. The
European Commission, through its powers under
Article 86(3) of the Treaty of Rome, has addressed
directives or decisions to Member States providing for
liberalization, i.e. abolishing monopoly rights of state owned
telecommunications operators in all markets, including the
mobile market.

The main harmonizing directives, the Open Network
Provision Directives (ONP Directives), had established the basic
rules for access to the public telecommunications network for
users and competitors, including mobile operators and Internet
service providers. The ONP Directives applied to
telecommunications operators with SMP over leased lines, mobile
and/or fixed public telephony networks, and mobile and/or fixed
public voice telephony services. Operators with SMP were
generally required to provide access to their network on an
objective, transparent and non-discriminatory basis. A European
Parliament and Council Regulation for unbundled access to the
local loop was formally adopted on December 18, 2000 and
came into force on January 2, 2001.

The new EU regulatory framework consists of five
directives: the Directive 2002/21/EC on a common regulatory
framework for electronic communications networks and services
(Framework Directive); the Directive 2002/20/EC on the
authorization of electronic communications networks and services
(Authorization

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Directive); the Directive 2002/19/EC on access
to, and interconnection of, electronic communications networks
and associated facilities (Access Directive); and the Directive
2002/22/EC on universal service and users rights relating
to electronic communications networks and services (Universal
Service Directive). These four directives were adopted on
February 14, 2002, and published in the Official Journal on
April 24, 2002. Directive 2002/58/EC, the fifth directive,
concerning the processing of personal data and protection of
privacy in the electronic communications sector (Data Protection
Directive), was adopted on June 25, 2002, and published in
the Official Journal on July 30, 2002. These directives
replaced the ONP Directives.


The deadline for the implementation of these
directives in both the EU and EEA Member States was
July 25, 2003 and October 31, 2003, respectively.
However, most member states have not implemented these
directives yet. The main policy objectives of the new framework
are to create a harmonized regulatory framework in the EU and
the EEA for electronic communications networks and services, to
create legal certainty combined with regulatory flexibility, to
base the regulation on technological neutrality and to only
require a minimum level of regulation. Reducing regulation
progressively as competition in the market develops will
contribute to fulfilling these policy objectives.

The regulatory framework provides for market
analysis to be undertaken throughout the EU and EEA. The
definition of relevant markets and the assessment of significant
market power will be undertaken in accordance with the
principles of competition law. The result of the market analysis
will determine which markets are to be regulated according to
the directives. The approach to market analysis is a three-stage
process. First, markets susceptible to preemptive regulation are
identified. The EU commission has published a recommendation
that lists 18 relevant markets which national regulatory
authorities must analyze in accordance with the principles set
forth in the recommendation and in additional guidelines.
Second, significant market power is determined based on the
criteria for dominance, under which it is determined whether an
undertaking is able to behave independently of its competitors,
its customers and, ultimately, its consumers. The third step of
the process is the imposition of one or more remedies on
undertakings deemed to have significant market power. The
standard remedies provided by the directives are transparency,
non-discrimination, accounting separation, access, price control
and accounting obligation. As a result, the main principles and
obligations set forth in the ONP Directives will be maintained
in markets where it is determined that there is insufficient
competition, that are markets with SMP operators. The market
analysis will be undertaken on a regular basis and, therefore,
new market developments could possibly lead to the imposition of
new regulation or to the amendment or withdrawal of existing
regulation. The obligations imposed shall be proportionate to
regulatory need and to the policy objectives of the new
regulation. Where the market analysis indicates that there is
effective competition in a relevant market, no obligations shall
be imposed, and competition law shall form the sole basis for
regulation. The scope of the new directives is broader than that
of the ONP Directives as all electronic communications networks
and services are encompassed and national regulatory authorities
are given discretionary power with respect to regulation based
upon their regular market analysis, restricted only by the
harmonization procedure of the directives.

As it develops, EU legislation will continue to
have a significant effect on our markets, including future
developments relating to the convergence of Internet, media and
information technology.

WTO obligations

55 members (representing 69 governments) of the
World Trade Organization (WTO), representing over 90% of the
worlds basic telecommunications revenues, including the
members of the European Union and the United States, have
entered into a Basic Telecommunications Agreement (BTA) to
provide market access to some or all of their basic
telecommunications services. In addition, 8 members and
governments have made additional commitments in the field of
basic telecommunications. The BTA is the fourth protocol of the
General Agreement on Trade in Services (GATS), which is
administered by the WTO and entered into force on
February 5, 1998. Under the BTA, Norway and the other
signatories have made commitments to provide market access,
under which they are to refrain from imposing certain quotas or
other quantitative restrictions in specified telecommunications
services sectors. Signatories are also to provide national
treatment, under which they are to avoid treating foreign
telecommunications service suppliers differently from national
service suppliers. In addition, a number of signatories,
including Norway, agreed to abide by certain pro-competitive

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principles set forth in a reference paper
relating to the prevention of anti-competitive behavior,
interconnection, universal service, transparency of licensing
criteria, independence of the regulator and non-discriminatory
allocation of scarce resources.


Since Norway is a member of the EEA, EU and EEA
regulations on telecommunications apply to our operations within
the EEA. As a result, the WTO agreement is mainly of importance
to us when we wish to set up operations outside the EEA and of
importance for companies outside of the EEA wishing to set up
operations in Norway or any other country within the EEA.

The countries in which we have invested are all
members of, or are negotiating accession to, the WTO. Those that
are already WTO members are also signatories to the BTA. As a
result, the regulatory framework of these countries must comply
with their obligations with respect to telecommunication
resulting from services and services in general these
multilateral agreements on telecommunications services and on
services in general.

Regulatory Issues and Licensing
(Norway)

Service licenses

We are the only company that holds a license for
fixed public telephony services and transmission capacity in
Norway (e.g. leased lines) due to the fact that we are the only
company deemed to have significant market power. The license
contains conditions that impose obligations on us to provide
certain services, such as directory services, universal services
and defense-related services, national geographic coverage and
information. However, the ECA and the secondary legislation
under the ECA have introduced a new regime for such universal
and special service obligations. Under this regime, our license
will expire on April 25, 2004. Certain provisions of our
current license are already reflected in the provisions of the
ECA and/or the secondary legislation under the ECA. With respect
to our universal service obligations, which are currently set
forth in our license, we expect the Ministry to notify us of our
status as an operator with, and to set forth, such obligations
under the ECA later in the year. In accordance with the ECA, we
also expect the government, through the relevant ministries, to
engage in the negotiation of purchasing agreements between the
government and a preferred service provider relating to the
provision of special services and special defense-related
services. Our obligations with respect to these services are
currently set forth in our license. Under our 40 GHz
wireless local loop license, valid from April 2000 until April
2012, we are required to build out access in the cities
specified in the license by 2005.

In the mobile market, we hold a license in the
450 MHz frequency band (NMT  analog system), the
900 MHz and 1800 MHz frequency band (GSM 
digital systems) and a license for provisioning of third
generation (3G) mobile system services based on UMTS technology.
Other license holders are NetCom GSM, with licenses for
GSM 900, GSM 1800 and UMTS, BaneTele, with one license
for GSM 900, Teletopia, with one license for GSM 1800,
and Hi3G with one license for UMTS. BaneTele has not yet built a
mobile/ radio network or offered mobile services using its own
mobile network. Teletopia commenced offering mobile services on
its own mobile network in 2003. The third UMTS license awarded
in 2000 was withdrawn from Broadband Mobiles following its
bankruptcy in 2001 and Tele2 returned its UMTS license after
entering into certain MVNO agreements with us in September 2002.
Hi3G was awarded its UMTS license in September 2003, but it has
not yet started to roll out its network. Our NMT license expires
on December 31, 2004, the GSM 900 licenses expire
on November 1, 2005 and December 31, 2013, and the
GSM 1800 license expires on March 9, 2010. Our
UMTS license expires on December 1, 2012. Under the terms
of the mobile licenses, the licensee is required to communicate
to the Ministry of Communications prior to the expiration of the
license whether it intends to extend the license or close down
the network. We have informed the Ministry that we will
discontinue the operation of our NMT450 network on
December 31, 2004. In October 2003, we informed the
Ministry that we are interested in renewing our GSM900 license.
The Ministry will decide on the renewal of the licenses for the
GSM900 frequencies no later than October 31, 2004.

Licenses granted for mobile communications
systems contain geographical coverage requirements and specific
roll-out schedules. We have fulfilled these requirements for our
NMT and GSM licenses. With respect to the UMTS license, the
coverage requirement and roll-out schedule reflect our offer in
the application as

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modified by the Ministry and is specified in the
license. We have met the roll-out requirements, but we have only
partly met the capacity requirements due to delays in the
delivery of equipment. On February 20, 2002, the Ministry
decided that no penalties or other sanctions be imposed on us as
a result of the delays incurred in 2001. The Ministry stated in
its Mobile report that the coverage and capacity requirements of
the already awarded UMTS licenses will not be amended; however,
a license holder may elect to delay the roll-out schedule for up
to additional 15 months. On April 29, 2003, the
Norwegian parliament rejected the proposal set forth in the
Mobile report under which license holders would have to pay a
compensation fee if they elect to extend their roll-out
schedule. As a result, we and NetCom GSM have elected to delay
the rollout of our respective UMTS network for
15 additional months. Our UMTS license has been modified
accordingly with respect to roll out schedule and minimum
capacity requirement. Our GSM 900, 1800 and UMTS licenses
contain a change of control clause. This clause provides that
changes in our ownership which would lead to changes as to who
has decisive influence over us must be formally approved by the
Ministry.


Universal service obligations and special
service obligations

Universal service obligations (USO)

The regulatory framework for USO in Norway
primarily covers the fixed public telephony service, leased
lines (connections up to 2 Mbps) and certain data services.
In practice, USO requires that fixed public telephony services
must be accessible at an affordable price for all households and
enterprises, while leased lines and data services must be
accessible for all enterprises. The secondary legislation under
the ECA has introduced a new specific requirement to provide
consumers with a cost control measure for their fixed telephony
spending. The exact terms and implications of this new
regulatory measure have not been clearly set out yet. However,
we expect that, if and when we are designated as an operator
with USO, we may be required to provide more flexibility for our
customers with respect to their usage of our fixed telephony
services. For example, we may be required to enable our
customers not to receive or make premium rate calls or to set a
limit for their monthly spending on calls. We may have to
upgrade our information systems as a result of these measures,
although we expect to have reasonable time to develop the
necessary functionality after we are notified of our status as
an USO provider under the ECA. In addition, some specific
services are classified as USO, including public pay phones and
services for the disabled. In 1999, the Storting restated that
we are obliged to satisfy our USO without compensation, unless
our obligations are extended, our market share decreases
substantially or if the USO becomes concentrated on the least
profitable parts of the market. The regulatory framework,
however, implies that if the provision of universal services is
an unfair burden on the designated operator(s), the net cost of
providing universal services must be calculated and compensation
by a (transparent) cost sharing arrangement among the market
players must be introduced.

The outcome of the market analysis of the
relevant end-user markets for fixed public telephony service and
leased lines under the Electronic Communications Act may result
in future additional regulation of these markets.

Special service obligations (SSO)

We are also required to provide special
defense-related services, coastal radio and services for the
arctic islands of Svalbard. The government compensates us for
the incremental cost of these services on a case by case basis.
Under the ECA, we expect that in the future we will negotiate
the scope and our compensation for our SSO directly with the
competent ministries.

Non-discrimination, transparency and
objectivity requirements

As an operator with significant market power, we
are required to follow certain principles with respect to our
agreements with end users and service providers. In particular,
we are required to offer our services in a manner that avoids
discrimination between the buyers of our services, unless
different conditions can be justified on objective grounds. Our
agreements must be open and terms must be transparent.

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The PT has increasingly focused on the
non-discrimination requirement, with respect to both external
services providers access to networks and special
discounts for certain segments of our markets. The PT has
requested us to submit a number of internal agreements among our
business areas for the authoritys review.

We expect that, following completion of the
market analysis under the Electronic Communications Act, these
requirements will continue to apply in the relevant markets
where it is determined that there are operators with SMP.

Cost and price regulation

General

As an operator with SMP, we are required to
follow certain principles for pricing, accounting and reporting
on public telephony service, interconnection and transmission
capacity. These licensed services must be offered to our
customers at cost-oriented prices. Prices must be determined in
an objective and non-discriminatory manner and independent of
the purpose for which the customer wishes to use the service. We
are responsible for specifying, implementing and maintaining
cost accounts as a basis for monitoring that our prices for
licensed services are cost-oriented, objective and
non-discriminatory. The PT also continuously evaluates our
compliance with cost-orientation with respect to our licensed
services. With regard to any special offers in the market, we
are required to furnish to the PT documentation relating to
the relevant cost savings upon request. Furthermore, the
PT also evaluates discounts from the point of view of
non-discrimination.

According to the PT, the requirement for
cost-orientation means that prices are calculated based on
costs, plus a reasonable rate of return. Since 1999, based on
decisions from the PT and taking into account, among other
things, the ratio between our equity and long-term debt, we have
used 13% as our reasonable rate of return in our annual ONP
(Open Network Provision) report until our 2002 report, in which
we used 14% as our reasonable rate of return. We are required to
furnish our ONP report to the PT on June 1 of each
year and the report contains financial and other required
information about our licensed services for the previous fiscal
year. In practice, the PT reviews our compliance with the
requirements for costing, pricing, and transparency through its
review of our ONP report and based on specific requests for more
detailed information.

In December 2003, the PT decided that the
ONP-report for 2003 will be prepared in accordance with the
principles of the former regulatory regime and that the first
report to be prepared pursuant to the principles of new
accounting separation and, more generally, the new regulatory
regime introduced by the ECA may be that for 2004 at the
earliest. We expect the PT to set forth the guidelines for
the new reporting system following completion of the PTs
market analysis of the relevant markets. We expect the outcome
of the PTs market analysis under the Electronic
Communications Act to shape the PTs future approach to
price and cost regulation, accounting separation and reporting
in general.

The following table sets forth our operating
profit and average capital employed for our licensed services as
reported in our ONP reports for 2000, 2001 and 2002.

|                 |                          |                   |  |        |  |      |  |        |  |  |  |        | 
|---------------- | ------------------------ | ----------------- |  | ------ |  | ---- |  | ------ |  |  |  | ------ | 
|                 |                          | 2000              |  | 2001   |  | 2002
|                 |                          |                   |  |        |  |     
|                 |                          |                  
|                 |                          | (NOK in millions)
|Fixed telephony  |                          |                   |  |        |  |      |  |        |  |  |  |       
|                 | Operating profit         |                   |  | 1,937  |  |      |  | 2,172  |  |  |  | 2,184  | 
|                 | Average capital employed |                   |  | 12,047 |  |      |  | 12,644 |  |  |  | 11,735 | 
|Mobile telephony |                          |                   |  |        |  |      |  |        |  |  |  |       
|                 | Operating profit         |                   |  | 1,797  |  |      |  | 2,591  |  |  |  | 2,221  | 
|                 | Average capital employed |                   |  | 3,331  |  |      |  | 3,633  |  |  |  | 3,431  | 
|Leased lines     |                          |                   |  |        |  |      |  |        |  |  |  |       
|                 | Operating profit         |                   |  | 441    |  |      |  | 195    |  |  |  | 295    | 
|                 | Average capital employed |                   |  | 2,633  |  |      |  | 2,971  |  |  |  | 3,287  | 

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In considering whether our rate of return for our
licensed services in a certain year is reasonable, we believe
that other factors should be duly taken into account, including,
without limitation, the long-term perspective of our underlying
investments, as well as the risks associated with such
investments.

To a large extent, the PT has focused on
rates in the interconnection and wholesale market more than on
the tariffs in end user markets to ensure promotion of
competition and has requested additional cost information in
specific cases related to such products. In 2002 and 2003, the
PT in several cases focused on surveillance and regulation
of prices of wholesale mobile services. You should read
 Interconnection and access for additional
information on the PTs price regulation.

With regard to price regulation in the mobile
market, the Ministry stated in its recent reports on the mobile
communications market that mobile service providers should be
subject to conditions and access prices reflecting the total
risk-adjusted cost and the general cost and demand conditions of
the market. The reports also state that the government
intervention should not lead to more dependence on regulations,
but it should rather stimulate and reward companies making the
market more efficient and sustainable without regulation. In
2003, the Ministry decided on certain appeals relating to
Telenors mobile wholesale services consistently with its
stated policy. We expect that the PT will set forth any
changes in its regulatory practice as part of its market
analysis under the Electronic Communications Act.

The decision of the Ministry on the appeal by
Tele2 denying retroactive adjustments to our interconnection
prices makes it clear that the telecommunication authorities may
not decide that prices shall be adjusted with retroactive
effect. You should read  Interconnection and
Access  Interconnection for more information on
this decision.

In December 2001, following its review of a
service agreement between us and NBBL, the largest housing
co-operative in Norway, the PT set forth the extent of our
pricing flexibility with regard to special offers for large user
groups for our fixed telephony services. The PT also
required us to determine and publish the criteria on the basis
of which we may determine discounts for our customers in
accordance with the principle of non-discrimination. In August
2002, the PT requested additional information about our
determination of discounts. The PT notified us in March
2003 that it intends to object to our cost justification for the
discounts. Following its examination of Telenors cost
justification for the discounts, in July 2003 the
PT decided that the discounts must be reduced from 20% to
5%. Telenor filed an appeal with the Ministry, and in March 2004
the Ministry set aside the PTs decision.

Accounting separation and reporting

Our accounts for the provision of public
telephony services, public networks, transmission capacity and
interconnection are required to be maintained separately from
our accounts for other business activities. We are obliged to
supply the PT with an annual ONP report, including
documentation of the principles, assessments and data that
comprise the basis for setting prices and discount arrangements.
The accounts are subjected to a limited review by an external
accountant and must be made publicly available. Based on our ONP
report, the PT reviews our compliance with the regulatory
requirements for cost, pricing and transparency and determines
whether we have set our prices in a non-discriminatory manner.

The PT may instruct operators with
significant market power to abide by certain principles for
accounting. In this respect, the PT, in a letter dated
April 9, 2001, instructed us to implement a new model for
accounting separation and reporting in accordance with EU
recommendations. The new model would result in a more detailed
accounting separation in relation to our regulated activities,
especially activities relating to interconnection and/or network
access. In May 2001, we filed an appeal against the PTs
instructions with the Complaints Board, which issued a
recommendation unfavorable to us to the Ministry in February
2002. In June 2003, the Ministry rejected Telenors appeal
against this decision. As a result, we engaged in consultations
with the PT in order to comply with this decision.

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Costing methodology

The PT may instruct operators with
significant market power to use certain cost calculation methods
when determining the price for public telephony services,
transmission capacity and interconnection services. We base our
pricing of these services on the principle of fully distributed
historical costs. The only exception to this principle is the
price for the wholesale product providing access to the
subscriber line (the local loop), which is priced on the basis
of current cost, limited by our end-user prices. In the
PTs decision of April 9, 2001 relating to a new
accounting separation and reporting model, which is discussed
under  Accounting separation and
reporting above, the PT also required us to apply the
principle of current cost instead of that of historical cost. In
June 2003, the Ministry rejected our appeal against the
decision, but our approach of using historical costs as the
basis for our pricing policies and terms was accepted.

Price cap regulation

In 2002, the Ministry continued to apply the
price cap imposed on our fixed public telephony services for
both the residential and business markets and for leased lines.
However, the Ministry required no reduction in real prices for
the period January 1, 2002 to January 1, 2003. For
telephony, the regulated prices include a fixed rate and a
tariff for calls within the country, calls to mobile networks,
international calls and calls to the directory inquiry service.
The regulated price structure for leased lines consists of the
tariff for both digital and analog lines for all rate
categories. In 2003 and 2004, no price cap regulation was
imposed on Telenor. Price-cap as a future regulatory remedy will
be evaluated as part and as a result of the PTs market
analysis under the Electronic Communications Act.

Interconnection and access

General

We are required to offer interconnection services
and access to our fixed and mobile networks to our competitors
in the wholesale market. As a result of this obligation, we are
required to provide our wholesale services in a manner that
avoids discrimination between our competitors and our business
units, unless different conditions can be justified on objective
grounds. Our current obligations with respect to interconnection
and access will be evaluated as part of the PTs market
analysis of relevant wholesale markets under the ECA.

Operators without significant market power are
required to negotiate interconnection agreements with other
telecommunication operators, but they are under no obligation to
enter into such interconnection agreements.

Interconnection

The rates that are charged for fixed network
interconnection must be cost-oriented if the operator has
significant market power. Mobile network interconnection tariffs
must also be cost-oriented if the PT has notified the
mobile operator that it has significant market power in the
national market for interconnection. The PT has
the authority to investigate whether the interconnection tariffs
applied by operators with significant market power are
cost-oriented and to mandate that tariffs be changed if they do
not satisfy the cost-orientation requirement. We are required to
have cost-oriented interconnection tariffs for fixed and mobile
services. On May 6, 2003, the PT decided to classify
NetCom as an operator with significant market power in the
national market for interconnection and, in a letter dated
October 31, 2003 it informed the company that it intends to
require NetCom to implement accounting separation of the mobile
termination product.

Since 1997, we have continuously informed the
PT of our interconnection costs and pricing and submitted
detailed accounts on our fixed interconnection tariffs. Fixed
network interconnection tariffs are also calculated on the basis
of forecasted costs and volumes. On June 19, 2001, the
PT required us to adjust prices for some of our
interconnection products. However, the PT confirmed that
our rate of return on fixed interconnection in the aggregate is
within what it regards as reasonable. As a result of this
decision, we reduced our termination and origination charges by
2% in October 2001. In August 2001, Tele2 filed an

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appeal with the Complaints Board against the
PTs decision on the grounds that this decision should
apply retroactively and should address certain more specific
aspects of the pricing of our interconnection services. On
June 17, 2002, the Complaints Board issued its
recommendation to the Ministry that the PT decision should
be set aside. The Ministry issued its final decision in this
important case as to whether the PT has the authority to
require us to adjust prices with retroactive effect on
December 19, 2002. The Ministry rejected the complaint and
upheld the PTs decision. The Ministry clarified that the
PTs authorization with respect to price decisions may not
have retroactive effect.


The PT has taken the position that certain
expenses may not be included in the calculation of the
termination charges in the mobile network. After considering
Telenor Mobiles reported costs for the calculation of the
termination charges as of April 20, 2001, the
PT ordered Telenor Mobile to immediately align the price to
the underlying relevant costs as earlier defined by the PT. In
June 2001, we filed an appeal against the PTs decision
with the Complaints Board, which issued its recommendation to
the Ministry that the PTs decision be upheld. On
July 4, 2002 the Ministry issued its final decision, which
confirmed the PTs decision. Further, in July 2002 the
PT notified us that it intends to require us to lower our
mobile termination rates based on the rate of return on mobile
interconnection in our ONP report for 2001. In the second half
of 2002, we submitted several written objections to the proposed
decision to the PT, which did not issue any decision. We agreed
to lower our mobile termination charge by 0.05 NOK by January
2004, thus annulling the PTs notice of July 2002.
Such changes became effective on February 1, 2004.

Access

Access for resellers in the fixed network
(Wholesale line rental).We launched
switchless resale products in the fixed network in 2001. These
products are designed to allow resellers to offer their own
services in the market through our network. However, on
October 1, 2001, the PT required us to offer unbundled
access and traffic products to other telephony service
providers. This decision was based on the regulatory principle
of non-discrimination. We filed an appeal against this decision
with the Complaints Board. In November 2002, the Complaints
Board issued its recommendation to the Ministry to confirm the
PTs decision. In its final decision of June 10, 2003
the Ministry set aside the PTs decision as unwarranted.
However, the secondary legislation under the ECA provides that
the PT may consider introducing such measure following
completion of the PTs market analysis under the ECA.
During the product development process, the terms in our
reference unbundled access product agreement has continuously
been discussed with the PT and modified. The
PT required us to change both the sign on fee and the price
for switching service provider in the reference offer. We were
required to distribute the costs of product development
(approximately NOK 70 million) proportionally between
internal and external service providers. The PT accepted
our price on the wholesale line rental product, that is 18%
below the end user price. In 2003, we started to provide
unbundled telephony access (PSTN and ISDN) on a wholesale basis
to other operators. This wholesale line rental product allows
telephony traffic operators to deliver fixed telephony access to
their customers, through our fixed network.

Access for Mobile Virtual Network Operators
(MVNOs).An MVNO provides mobile
services without controlling radio spectrum or radio network
facilities. The MVNO buys radio spectrum and access to core
network components such as base stations, but keeps control over
traffic routing and SIM-card production. In 1999, the Ministry
concluded that mobile operators are not required to provide
MVNOs access to their networks. Notwithstanding this decision,
in December 2001, we publicly signaled our willingness to
negotiate commercial agreements with MVNOs. We entered into
certain MVNO roaming agreements with the Swedish company Tele2
on commercial terms in 2002. In a report to the Storting, the
Ministry suggested that mobile operators with significant market
power should be required to give access to their networks to
MVNOs on non-discriminatory commercial terms. The secondary
legislation under the ECA provides that the PT may consider
introducing such measure following completion of the PTs
market analysis under the ECA.

Access for mobile service providers.Both we and NetCom have signed
wholesale agreements with mobile service providers. By the end
of 2000, there were 14 mobile service providers with agreements
to provide mobile services based on our or NetComs
infrastructure. However, in 2001 the number of service providers
decreased due to consolidation in the market. Unlike MVNOs,
service providers buy all network

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services, including SIM-cards, from the mobile
operators. The PT mediated upon request from a mobile
service provider (Sense) renegotiating its contract with Telenor
Mobile. The mediation was without result, and the
PT required us to reduce our wholesale prices by at least
25% with effect from January 1, 2002 and also requested
changes in several other clauses in our service provider
contract. We filed an appeal against the price adjustment. Two
other mobile service providers have also appealed the
PT decision. In a preliminary decision, the Ministry ruled
that, until the Ministry issues its final decision on the
appeal, the price adjustment shall have effect from October 2002
and not from January 1, 2002. We adjusted the prices set
forth in the agreement according to the PTs decision, but
the service provider claims that our adjustments have not
correctly implemented the decision. We have provided the
PT with information regarding our new prices. In a letter
dated January 29, 2003, the PT requested additional
information on external costs, product rate of return in 2002
and projections for 2003. We rejected a request from Sense
regarding certain yearly price adjustments. In the fall of 2003,
the PT informed us that we have an obligation to negotiate
and that we are required to comply with the requirements set
forth in the decision of October 7, 2002 and in the
transition rules of the Electronic Communications Act. In March
2004, the Ministry decided that the price adjustments shall have
effect from October 7, 2002 and that the requirement to
reduce our wholesale prices by at least 25% applies to telephony
services (subscription and traffic) only and it does not also
apply to other services, such as SMS, covered by the agreement.
The Ministry thus regards our prices in the wholesale agreement
to be cost-oriented and the adjustments to our prices to be
effective as of the correct date. In November 2003, Sense filed
a civil action on a related matter before the Oslo District
Court. You should read Item 8: Financial
Information  Legal Proceedings for additional
information about this litigation.


Based on a complaint by the mobile service
provider Sense, the PT required us to amend a portion of
our wholesale agreement with Sense in order to give Sense the
opportunity to control its traffic terminating abroad. We filed
an appeal and in December 2003 the Ministry set aside the
PTs decision.

Access for value-added telephony service
providers.We are required to provide
network access for external providers of value-added telephony
services. The terms and conditions must be non-discriminatory
and similar to what is offered to our internal providers of such
services, that is our business units. We offer access to all our
competitors via standardized network external interfaces. In
July 2001, the PT decided on the service provider
Teletopias request that it be granted access to our mobile
network in order to provide SMS and voice mail services through
our network. The PT required Telenor Mobile to reach a
special network access agreement with Teletopia. In August 2001,
we filed an appeal against the PTs decision with the
Ministry, which confirmed the PTs decision in January 2002
and required us to submit a proposal for such agreement no later
than March 1, 2002. The negotiation with Teletopia and the
following mediation by PT was without result, and the
PT decided in a letter dated January 7, 2003 to set
the price of the wholesale SMS service. We have filed a
complaint and requested that the effectiveness of the price set
by the PT be suspended until the Ministry issues a final
decision. The Ministry accepted our request and in October 2003
the Ministry set the price per SMS at NOK 0.48.

Local loop unbundling

Unbundling of access to the copper (physically
twisted metallic pair) local loop permits our competitors to
have physical access to, as well as lease capacity in, our
copper local loop, and, as a result, our competitors may offer
one billing relationship with the end user. Local loop
unbundling has increased competition with respect to access to
networks. Competitors may also install supplementary equipment,
such as ADSL, on leased local loops to offer higher bandwidth
services. On February 6, 2001, the Ministry issued revised
regulations that require us to offer local loop unbundling in
accordance with EU regulation. Since April 1, 2000, we have
been offering to our competitors the ability to lease capacity
in the local loop and we allow competing operators to deploy
technical equipment in connection with our installations. This
offering is equivalent to full unbundled access to the local
loop. As a result of the revised regulations, in October 2001 we
expanded our product portfolio to include shared
access to the local loop, that is we offer the telephony
service and the new entrant offers broadband data services. The
terms in the reference offer for the shared access product have
continuously been discussed with the PT and modified. Since
October 2001, we have

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also offered access to the local sub loops.
However, so far none of our competing operators has requested
such access. Our pricing structure is based on cost.


Carrier selection

Since January 1, 1998, all operators
providing access to the fixed network have been required to
allow their customers to select other operators to handle their
calls. This can be done on a call-by-call basis by dialing a
four-digit prefix in addition to the called telephone number, or
by means of carrier pre-selection. With carrier pre-selection
subscribers have the ability to make two pre-selections, which
may be with two different carriers. The first pre-selection
includes national traffic to geographical, most non-geographical
and mobile numbers (traffic to numbers with extreme traffic
fluctuations have been exempted) while the other pre-selection
includes all international traffic.

The PT has expressed some concern about an
alleged misuse of fixed carrier pre-selection data by our
customer service and sales and marketing divisions to win back
our customers that have selected another carrier to handle their
calls. As a result, in January 2003 it required us to develop
and implement different levels of authorizations in our support
systems and to revise our procedures for handling carrier
pre-selection customers. Our sales and marketing divisions are
required not to receive any information about carrier
pre-selection. We lodged an appeal against the PTs
decision. The Ministry rejected our appeal in March 2004.

There has been a regulatory requirement for
call-by-call carrier selection in mobile networks since
January 1, 1998. However, at this time, no agreements exist
between mobile operators and alternative carriers regarding
carrier selection in mobile networks. After a consultation
period during the summer of 2000, the PT decided in
December 2000 that carrier pre-selection is not required in
mobile networks.

Mobile national roaming

Mobile operators with significant market power
(currently both us and NetCom) are required to provide national
roaming to other mobile operators in areas where the requesting
operators network does not have geographical coverage. The
Ministry may set forth the conditions and the effective date for
national roaming. GSM 1800 licenses require the licensee to
build a network covering the four largest cities in Norway
(Oslo, Bergen, Trondheim and Stavanger) before being entitled to
have national roaming. Currently, the third GSM 1800
licensee does not meet the minimum coverage requirements and,
consequently, no national roaming between GSM networks has been
implemented in the Norwegian mobile market yet. However,
Teletopia did commence operating a GSM network during 2003 and
requested to enter into a national roaming agreement with us
without accepting the terms and conditions of our standard
roaming agreement. The PT was involved in a mediation
between Telenor and Teletopia. However, the PT determined
that Teletopia had not yet satisfied the minimum coverage
requirement and, therefore, may not request to enter into a
national roaming agreement with us yet.

The Ministry stated that the UMTS licensees have
the right to have national roaming from GSM operators with
significant market power for mobile services (Telenor and
NetCom) in areas where the 3G operators network does
not have coverage. There will be no requirement for the 3G
operator to build its own network in specific areas before it is
entitled to have national roaming with GSM operators. The
provision of national roaming among 3G operators is not expected
to be mandated in the short term.

Numbering and number
portability

Numbering

The PT is responsible for managing national
numbering plans for telecommunications networks and services,
including telephone numbers. Providers of public
telecommunications services are allocated numbering resources
from the PT upon specific application and the payment of a
fee. The fees cover only the costs incurred by the PT in
administering the relevant numbering resources.

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Directory Inquiry Services

In January 2002, the PT amended the
numbering regulations in order to create more competition in the
area of directory inquiry services. The new regulation requires
providers of public telephony services to deliver their basic
subscriber data (unique identification code, name, address and
telephone number) to providers of directory inquiry services.

The PT has also introduced a new 4-digit
numbering range for directory inquiry services, from 1850 to
1899, which entered into service on February 15, 2002. The
numbers 1881, 1882 and 1883 have replaced our old directory
inquiry numbers 180 and 181. Six service providers, including
us, have so far been assigned numbers from this numbering range.
In practice, three operators are competing in the market for
directory inquiry services. We have engaged in a dialogue with
the PT regarding our obligation to furnish to other service
providers certain basic customer information that is of the same
quality as the information furnished to Findexa. Currently, part
of this information is the property of Findexa pursuant to the
terms of our agreement with Findexa.

Number Portability

In October 1998, the PT decided to introduce
number portability for telephone numbers in the fixed network
(PSTN and ISDN) and for numbers for most non-geographical
services (e.g. freephone, shared cost and premium rate
services). Number portability allows subscribers to keep their
telephone numbers when changing service providers. All public
service providers must support number portability. Number
portability in the fixed network was introduced in two phases in
Norway. On June 1, 1999, the first phase, a simple call
forwarding solution was implemented. The second phase, which
offers a better technical solution optimizing routing of calls,
was introduced during the second and third quarters of 2001.

In February 2001, the PT decided to extend
number portability to mobile telephone numbers, with the
exception of our NMT service. Number portability in mobile
networks became effective on November 1, 2001. In Norway,
there is no requirement for cross portability between fixed and
mobile telephone numbers. In addition, pursuant to the secondary
legislation under the ECA we are exempt from any portability
obligation for IP-telephony numbers.

Rights of way

The Electronic Communications Act and the general
Norwegian Expropriations Act give us certain rights to compel
the landowner to accept the necessary steps to use his land for
telecommunications purposes. The owner of the relevant premises
is, however, entitled to compensation for any inconveniences
caused, except where the right was acquired in order to connect
the property concerned to a public telecommunications network.
The level of compensation to be paid, if not agreed by the
parties, is determined by official valuation according to
applicable legal procedures. In the vast majority of cases, the
parties independently agree on the level of compensation.

We have disputes with Vegdirektoratet, the
Norwegian public highway operator, and, more recently, some
local municipalities. We only accept to cover the costs which
the owners or concessionaires of public property may incur due
to cabling activities, while Vegdirektoratet and the
municipalities see compensation as an opportunity to generate
additional income from the public property it administers. The
level of compensation is important for our cost base, although
its net effect would be offset by potential increases in service
prices. We expect the Ministry to resolve this dispute with
Vegdirektoratet and we believe that a decision by the Ministry
would also set a precedent for the municipalities.

Competition Issues

From time to time, our competitors and customers
file complaints with the Norwegian Competition Authority and the
EFTA Surveillance Authority (ESA) alleging that we are abusing
our dominant market position in various respects or in respect
to mergers. Moreover, these authorities may also start
investigations on their own initiative.

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EFTA Surveillance Authority
(ESA)

Viasat complained in July 2001 to the ESA against
an exclusive distribution agreement between TV2 and Canal
Digital AS. Canal Digital answered a request for information in
December 2001. ESA has thereafter issued further requests for
information. Canal Digital responded to the latest request in
November 2002. The distribution agreement has previously been
considered by the Norwegian Competition Authority, which decided
not to intervene against the agreement. The parties have amended
their agreement and are awaiting the ESAs decision.

We entered into two Mobile Virtual Network
Operator (MVNO) roaming agreements with the Swedish company
Tele2 in September 2002. These agreements are designed to allow
us to enter into the Swedish market by using Tele2s mobile
networks and Tele2 to enter into the Norwegian market by using
our mobile networks, in each case as a full service mobile
operator. We and Tele2 informed the European Commission and the
ESA of our MVNO arrangements by submitting an informal
briefing paper dated November 12, 2002. We met
with the Commission and the ESA in February 2003 and these
authorities subsequently informed us that they had suspended
their review of our agreements.

The ESA has requested information on
Telenors ADSL pricing, both wholesale and to end users.

EU Commission

On December 29, 2003, the EU Commission
issued a decision under Regulation 19 granting an
individual exemption for the exclusive distribution arrangements
on the DTH platform between Canal Digital and Canal Plus
regarding distribution of premium channels and a negative
clearance regarding the video-on-demand distribution
arrangements. This exemption was granted for a period of five
years.

Norwegian Competition Authority
(NCA)

There are several cases pending before the
Norwegian Competition Authority.

Due to a complaint filed by Universal Pan-Europe
Norge AS on July 1, 2002, the Norwegian Competition
Authority requested information concerning a service agreement
between Telenor and NBBL, the largest Norwegian housing
co-operative, in connection with our special offers to large
user groups for our fixed telephony services. In May 2003, the
NCA issued a statement of objection, to which Telenor responded.
In October 2003, the NCA stroke out an exclusivity clause
related to marketing and a clause making the rebate conditional
on a certain minimum number of subscribers within NBBL. The NCA
issued its decision even though we had voluntarily implemented
these changes prior to the NCAs decision. You should read
 Cost and price regulation 
General for information about the PTs own
investigation relating to our service agreement with NBBL.

In 2002, the Norwegian Competition Authority
requested information concerning our business practices for the
ADSL-wholesale product. We responded to the NCAs request
and we confirmed that such practices are not discriminatory and
that we enable wholesalers to provide a product equal to, and
that can compete with, ours. We have not received any further
communication from the NCA since we submitted our response. This
matter had also been investigated by the PT, which decided not
to pursue this case.

Three cases have been initiated by NetCom AS. In
January 2002, NetCom sought the NCAs intervention towards
Telenor Mobil ASs pricing policy after having changed its
own pricing structure. Previously, NetCom had priced calls
terminating in Telenor Mobils network higher than calls
terminating in its own network. Telenor Mobil AS charges higher
prices for calls terminating in NetComs network. After
receiving a letter from Telenor Mobil that rejected the
allegations made by NetCom, the NCA issued a statement of
objections to which Telenor Mobil replied in writing in August
2003. Several meetings between the NCA and Telenor Mobil have
taken place subsequent to our written response. The PT had
dismissed this case on the grounds that this pricing policy does
not have an adverse effect on competition. The NCA finally
decided not to proceed against us. However, it also stated its
intention to monitor the call termination market. In November
2001, NetCom also complained to the Competition Authority
alleging that Telenor Mobil AS forecloses the market for
distribution of mobile subscriptions to end users in Norway
through the use of

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exclusive distribution agreements. The NCA found
that Telenor Mobile AS distribution agreements restricted
competition and, accordingly, decided to prohibit Telenor Mobil
AS use of exclusive distribution agreements in the
Norwegian market. The decision became effective on
January 1, 2003. In January 2004, the Norwegian Competition
Authority received a complaint from NetCom relating to fixed to
mobile pricing. The NCA notified Telenor of this complaint and
it requested information about the alleged restrictive behavior.
We responded in writing on February 23, 2004.


We do not believe that the cases pending before
the ESA and the cases before the Norwegian Competition Authority
are likely to have a material adverse effect on us.

Consumer Protection Issues

From time to time, our competitors and customers
file complaints with the Norwegian Data Inspectorate
(Datatilsynet) or with the Consumer Ombudsman
(Forbrukerombudet). Especially the Consumer Ombudsman has
actively monitored our and other telecommunications
operators marketing activities and standard consumer
contracts in 2003. Among other things, the Consumer Ombudsman
has required mobile operators to restrict the duration of
lock-in periods and the conditions for terminating the contract
within the specified lock in period.

We do not believe the cases pending before the
Norwegian Data Inspectorate (Datatilsynet) or with the Consumer
Ombudsman (Forbrukerombudet) are likely to have a material
adverse effect on us.

ORGANIZATIONAL STRUCTURE

Telenor ASA is a holding company that holds a
majority of the group assets through various subsidiaries, which
it owns or invests in. Each of the following are significant
subsidiaries of Telenor ASA: Telenor Mobile
Communications AS, Telenor Telecom Solutions AS,
Telenor Interkom Verwaltung GmbH, Telenor KB AS,
Telenor Mobil AS, Telenor Telecom Solutions AS,
Kyivstar GSM JSC, Pannon GSM RT and
GrameenPhone Ltd. You should read Item 19:
Exhibits  Exhibit 8 for additional
information on our significant subsidiaries. For information on
our new business structure, you should read
Strategy  Organization.

PROPERTY, PLANTS AND EQUIPMENT

Our principal executive offices are located at
Snarøyveien 30, N-1331 Fornebu, Norway and comprise 147,000
square meters of office space. The total area of all our
properties comprise 780,000 square meters. Substantially
all of these properties are used for telecommunications and
computer installations, service outlets, research and design
centers and offices. Generally, we own most of our properties,
although we also lease space in a number of locations. We
currently lease approximately 220,000 square meters of office
space pursuant to lease agreements

Set forth below is a summary of our lease
obligations through 2008:

|                        |  |      |     |      |  |                   |     |      |  |      |     |            |  |  |    |  |  |  |    |  |  |  |     | 
|----------------------- |  | ---- | --- | ---- |  | ----------------- | --- | ---- |  | ---- | --- | ---------- |  |  | -- |  |  |  | -- |  |  |  | --- | 
|                        |  | 2004 |     | 2005 |  | 2006              |     | 2007 |  | 2008 |     | After 2008
|                        |  |      |     |      |  |                   |     |      |  |      |     |           
|                        |  |      |     |      |  |                   |     |     
|                        |  |      |     |      |  | (NOK in millions) |     |     
|Total lease obligations |  |      | 237 |      |  |                   | 187 |      |  |      | 111 |            |  |  | 73 |  |  |  | 65 |  |  |  | 306 | 

Our headquarters comprise approximately 147,000
square meters of office space with a capacity for 7,000 to 8,000
employees. Surplus square meters available have been sub-let or
sold.

We are actively engaged in the management of our
properties. Through our division Telenor Eiendom Holding AS, we
ensure that we have the use of sufficient office premises and
floor space to enable our principal business activities to be
carried out effectively and on favorable terms without
substantial capital expenditures.

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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 31 to our consolidated
financial statements.

We implemented changes to our business area
structure effective January 1, 2003. Accordingly, we
restated our financial statements to reflect our new business
area structure. The following discussion reflects and is based
on our restated financial statements. You should read
Item 4: Information on the Company 
Strategy  Organization for additional
information on our new business area structure from 2003.

We are exposed to risks and uncertainties which
could have a material adverse effect on our business, financial
condition, liquidity, results of operations or prospects. Such
risks and uncertainties relate to, among other things:



| |   |                                                                                                
| | - | -----------------------------------------------------------------------------------------------
| |  | increased competition;                                                                         
|
| |  | the political, economic and legal environment in
    the foreign countries in which we operate;
|
| |  | our exposure to currency exchange rate
    fluctuations;                                       
|
| |  | regulatory developments both in and outside
    Norway.                                        

You should read Item 3: Key
Information  Risk Factors for a more detailed
discussion of these risks and uncertainties. In addition, this
Item 5 may contain certain forward-looking statements.
You should read Cautionary Statement Regarding
Forward-Looking Statements in this annual report on
Form 20-F for a more detailed discussion of forward-looking
statements.

GROUP OVERVIEW

In 2003, our group results improved. Profit
before taxes was NOK 7.4 billion in 2003 compared to a loss
of NOK 5.1 billion in 2002. The loss in 2002 was
mainly due to write-downs. The underlying improvement, taking
into account gains and losses, expenses for workforce
reductions, loss contracts and exit from activities and
write-downs, was mainly due to increased revenues and improved
margins. During 2002 and 2003, we also improved the efficiency
of our operations due in part to the continued effective
implementation of our program, Delta 4. Acquisitions and
disposals of operations also had a positive effect on our
results.

Our international mobile operations, especially
those in emerging markets, experienced a significant growth in
2003 and are increasingly important for our business and results
of operations. In our Norwegian fixed-line operations, a mature
market with increased competition, we managed to stabilize our
revenues and increase our margins through efficiency improvement
measures. In Broadcast, we increased our number of subscribers,
revenues and EBITDA and we improved our operational efficiency,
in each case primarily as a result of the consolidation and
integration of Canal Digital.

We reduced our capital expenditure in 2003
compared to 2002 mainly due to reduced capital expenditure in
Norway. We expect capital expenditure to increase in 2004
compared to 2003 due to the purchase of satellite capacity, the
consolidation of Sonofon and our investments in a new mobile
technology in Norway. The actual amounts and the timing of our
capital expenditure may vary substantially from our estimates.

Concurrent with the decrease in our capital
expenditure, we also generated significant positive cash flows
from our operations in 2003. These developments resulted in a
significant reduction of our net debt during 2003. Our current
strategic focus is on preserving our market shares and
continuing to streamline and realize synergies across our
operations.

For an overview of the results of Mobile, Fixed
and Broadcast, our main business areas, you should read
 Results of Operations by Business
Area  Telenor Mobile  Overview,
 Results of Operations by Business
Area  Telenor Fixed  Overview and
 Results of Operations by Business
Area  Telenor Broadcast  Overview.

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RESULTS OF OPERATIONS 
GROUP

Revenues

|                                                                                 |  |                   |        |      |  |      |        |  |  |  |        | 
|-------------------------------------------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                                                                 |  | 2001              |        | 2002 |  | 2003
|                                                                                 |  |                   |        |      |  |     
|                                                                                 |  |                  
|                                                                                 |  | (NOK in millions)
|External revenues                                                                |  |                   |        |      |  |      |        |  |  |  |        | 
|External revenues excluding gains on disposal of
    fixed assets and operations |  |                   |        |      |  |      |        |  |  |  |        | 
|Mobile                                                                           |  |                   | 11,001 |      |  |      | 19,079 |  |  |  | 22,483 | 
|Fixed                                                                            |  |                   | 17,818 |      |  |      | 18,338 |  |  |  | 18,787 | 
|Broadcast                                                                        |  |                   | 2,408  |      |  |      | 3,366  |  |  |  | 4,641  | 
|EDB Business Partner                                                             |  |                   | 3,312  |      |  |      | 3,383  |  |  |  | 3,210  | 
|Other business units                                                             |  |                   | 1,258  |      |  |      | 4,255  |  |  |  | 3,539  | 
|Corporate functions and Group activities                                         |  |                   | 4,527  |      |  |      | 247    |  |  |  | 229    | 
|Media(1)                                                                         |  |                   | 280    |      |  |      |       |  |  |  |       | 
|Eliminations                                                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|Total external revenues excluding
    gains                                      |  |                   | 40,604 |      |  |      | 48,668 |  |  |  | 52,889 | 
|Gains on disposal of fixed assets and operations                                 |  |                   | 5,436  |      |  |      | 158    |  |  |  | 232    | 
|Total external revenues                                                          |  |                   | 46,040 |      |  |      | 48,826 |  |  |  | 53,121 | 






|    |                  
|--- | -----------------
|(1) | 9 months in 2001.

External revenues excluding gains on disposal of
fixed assets and operations increased by 8.7% in 2003 compared
to 2002. In 2003, 43% of our external revenues derived from the
Mobile business area, compared to 39% in 2002. Part of the
increase in external revenues in Mobile was due to the full-year
effect of the consolidation of Kyivstar and Pannon GSM. In
addition, there was an underlying growth in Mobile both in
Norway and abroad. Measured in Norwegian Krone, the increase was
partially offset by the strengthening of the Norwegian Krone
compared to some other currencies, especially the Malaysian
Ringgit, the functional currency of DiGi.Com, and the Takka, the
functional currency of GrameenPhone in Bangladesh. However, the
growth in Norway decreased compared to previous years, mainly
due to a reduction in the number of subscriptions and reduced
prices. We also experienced increased competition both in Norway
and abroad, especially in the more mature markets, such as
Hungary.

External revenues in Fixed increased by 2.4% in
2003 compared to 2002, mainly due to the consolidation of Utfors
AB in Sweden from December 31, 2002. External revenues in
Fixed  Norway slightly decreased in 2003 compared to
2002 due to a decrease in the number of subscriptions and
reduced market shares, partially offset by increased sales of
ADSL and increased sales in the wholesale market. Effective from
December 1, 2003 we sold our operations in
Fixed  Russia in exchange for an equity interest in
the listed Russian fixed-line operator Golden Telecom. This
transaction is expected to result in a decrease in our revenues
from Fixed-Russia in 2004 as Golden Telecom is accounted for as
an associated company using the equity method. External revenues
in Broadcast increased by 37.9%, mainly due to the full-year
effect of the consolidation of Canal Digital, partially offset
by reduced revenues from analog satellite transmission. EDB
Business Partners external revenues decreased by 5.1% due
to reduced overall demand, except for IT Operations, and the
discontinuance of the Consulting area. External revenues from
Other business units decreased by 16.8% mainly due to disposals
of operations and a decrease in revenues in Satellite Services
due to the strengthening of the Norwegian Krone against the
US Dollar.

External revenues excluding gains on disposal of
fixed assets and operations increased by 19.9% in 2002 compared
to 2001. In 2002, 39% of external revenues derived from Mobile,
compared to 27% in 2001. The formerly associated companies,
DiGi.Com, which we consolidated from September 1, 2001,
Pannon GSM, which we consolidated from February 4, 2002,
and Kyivstar, which we consolidated from September 1, 2002,
generated 87% of the increase in Mobiles external
revenues. Our mobile operations both in Norway and outside
Norway showed a healthy growth. Fixeds external revenues
increased compared to 2001, mainly due to the full year effect
of consolidation of Telenordia in Sweden (subsidiary from
October 1, 2001). The increase in Broadcasts external
revenues was mainly due to the consolidation of Canal Digital
from June 30,

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2002. External revenues in EDB Business Partner
showed a marginal increase due to the effect of acquired
businesses in its IT Operating area. Excluding the effect of
such acquisition, there was an underlying decrease in revenues
in EDB Business Partner due to weak market conditions. The
decrease in external revenues for Other business units was due
to decreased revenues from our former subsidiary Itworks,
disposal of operations in Nextra International and reduced sales
of software, offset in part by the acquisition of businesses in
Satellite Services and increased sales in Satellite Networks.


Gains on disposal of fixed assets and operations
in 2003 were mainly due to sales of properties in corporate
functions and Group activities and the disposal of businesses in
most business areas. Gains on disposal of fixed assets and
operations in 2002 were due primarily to the sale of properties
and some operations in corporate functions and Group activities.
Gains on disposal of fixed assets and operations in 2001 were
primarily related to the sale of Telenor Media with a gain of
NOK 5,000 million, the sale of the subsidiary Norcom
Network Communication Inc. with a gain of NOK 259 million
and sale of properties.

The table below shows our revenues broken down by
operations in and outside Norway. Our proportional share of
revenues from our associated companies and joint ventures are
not included in our consolidated revenues. Some of our
international operations are carried out in associated companies
and joint ventures, especially mobile operations. The revenues
in the table for consolidated companies are based on company
location and do not include gains on disposal of fixed assets
and operations. Revenues outside Norway have increased in recent
years due to the increased number of consolidated foreign
entities as well as underlying growth in existing operations,
especially in our Mobile business area. Effective from
February 12, 2004, we have consolidated Sonofon in Denmark,
which we expect to result in increased revenues outside Norway.
This will partially be offset by reduced revenues from Fixed
 Russia and Nextra International due to the disposal of
these operations in 2003.

|                               |  |                   |        |      |  |      |        |  |  |  |        | 
|------------------------------ |  | ----------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                               |  | 2001              |        | 2002 |  | 2003
|                               |  |                   |        |      |  |     
|                               |  |                  
|                               |  | (NOK in millions)
|Consolidated revenues          |  |                   |        |      |  |      |        |  |  |  |        | 
|Norway                         |  |                   | 34,032 |      |  |      | 33,085 |  |  |  | 33,409 | 
|Outside Norway                 |  |                   | 6,572  |      |  |      | 15,583 |  |  |  | 19,480 | 
|                               |  |                   |        |      |  |      |        |  |  |  |        | 
|Total revenues excluding gains |  |                   | 40,604 |      |  |      | 48,668 |  |  |  | 52,889 | 
|                               |  |                   |        |      |  |      |        |  |  |  |        | 

Operating Expenses

Costs of materials and traffic
charges

|                                           |  |                   |        |      |  |      |        |  |  |  |        | 
|------------------------------------------ |  | ----------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                           |  | 2001              |        | 2002 |  | 2003
|                                           |  |                   |        |      |  |     
|                                           |  |                  
|                                           |  | (NOK in millions)
|Traffic charges  network capacity         |  |                   | 4,853  |      |  |      | 6,463  |  |  |  | 7,183  | 
|Traffic charges  satellite capacity       |  |                   | 1,190  |      |  |      | 1,527  |  |  |  | 1,343  | 
|Costs of materials etc.                    |  |                   | 4,161  |      |  |      | 4,495  |  |  |  | 4,569  | 
|                                           |  |                   |        |      |  |      |        |  |  |  |        | 
|Costs of materials and traffic
    charges |  |                   | 10,204 |      |  |      | 12,485 |  |  |  | 13,094 | 
|                                           |  |                   |        |      |  |      |        |  |  |  |        | 

Traffic charges  network capacity
consist mainly of traffic charges for providing fixed and mobile
services, primarily in our Mobile and Fixed business areas. The
increase in network capacity costs in 2003 compared to 2002 was
primarily due to acquired businesses in the Mobile and Fixed
business areas and increased sales in Mobile. This was partially
offset by the effect of the strengthening of the Norwegian Krone
against several currencies and the disposals of some operations
in Other business units. Fixed had also a reduction in network
capacity costs due to reduced volume and prices for some of the
products.

Traffic charges  satellite capacity
are related to sales of satellite mobile services (Satellite
Services), satellite broadcasting services (Broadcast) and
satellite capacity services (Satellite Networks). The decrease
in satellite capacity costs was mainly due to lower volumes,
lower prices and the strengthening of the Norwegian Krone
against the US Dollar.

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The Mobile and Broadcast business areas in the
aggregate generated approximately three-fourth of our total
costs of materials etc. in 2003, primarily due to sales of
customer equipment in Mobile and TV-program fees in Broadcast.
The increase in costs of materials etc. was primarily due to the
full-year effect of the consolidation of Canal Digital, which
more than offset the decrease due to the disposal of operations
in Other business units and discontinuance of
revenues and costs of materials for handsets in GrameenPhone in
2003. Fixed  Norway also reduced costs of materials
due to lower production within operating services.

The increase in network capacity costs in 2002
compared to 2001 was due primarily to consolidation of formerly
associated companies in Mobile and Fixed in 2001 and 2002. The
increase in satellite capacity costs in 2002 compared to 2001
was due to the acquisition of COMSAT Mobile Communications
(included in Telenor Satellite Services Inc.) in 2002. We
incurred costs of materials etc in each of our business areas.
In particular, Mobile and Broadcast in the aggregate generated
approximately two-thirds of our total costs of materials in
2002, due primarily to sales of customer equipment in Mobile and
TV-program fees in Broadcast. The increase in costs of materials
etc. was due primarily to Pannon GSM and Canal Digital, which we
consolidated during 2002, which more than offset the decrease
due to the disposal of our former subsidiaries Telenor Media in
2001 and Itworks in 2002. Adjusted for acquisitions and
disposals of companies, costs of materials etc. decreased in
most business areas in 2002 compared to 2001 due primarily to a
decrease in sales of equipment.

Own work capitalized

|                             |  |                   |       |      |  |      |     |  |  |  |     | 
|---------------------------- |  | ----------------- | ----- | ---- |  | ---- | --- |  |  |  | --- | 
|                             |  | 2001              |       | 2002 |  | 2003
|                             |  |                   |       |      |  |     
|                             |  |                  
|                             |  | (NOK in millions)
|Costs of materials etc.      |  |                   | 220   |      |  |      | 29  |  |  |  | 25  | 
|Salaries and personnel costs |  |                   | 396   |      |  |      | 303 |  |  |  | 301 | 
|Other operating expenses     |  |                   | 386   |      |  |      | 235 |  |  |  | 245 | 
|                             |  |                   |       |      |  |      |     |  |  |  |     | 
|Total own work capitalized   |  |                   | 1,002 |      |  |      | 567 |  |  |  | 571 | 
|                             |  |                   |       |      |  |      |     |  |  |  |     | 

Own work capitalized is presented as a separate
caption and is not netted against the related expenses in the
profit and loss statement. The various Group companies
consolidated in Telenor perform work on their own long-lived
assets, which is capitalized, if appropriate. The Group
companies expense the related costs in the line items costs of
materials, salaries and personnel costs, or other operating
expenses as appropriate. The costs that are capitalized are then
reversed as change in own work capitalized. Several companies in
the Group perform work on and deliver long-lived assets to other
Group companies. The purchasing company capitalizes these
long-lived assets. For the Group as a whole this is regarded as
a change in own work capitalized and the expenses recorded in
the selling companies are reversed as a change in own work
capitalized for the Group. Own work capitalized in 2003 was in
line with 2002. The decrease in 2002 compared to 2001 was due to
the lower level of capital expenditure.

Salaries and personnel costs

|                                            |  |                   |        |      |  |      |        |  |  |  |       | 
|------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ |  |  |  | ----- | 
|                                            |  | 2001              |        | 2002 |  | 2003
|                                            |  |                   |        |      |  |     
|                                            |  |                  
|                                            |  | (NOK in millions)
|Salaries and holiday pay                    |  |                   | 7,897  |      |  |      | 7,659  |  |  |  | 7,248 | 
|Social security tax                         |  |                   | 1,132  |      |  |      | 1,168  |  |  |  | 1,151 | 
|Pension costs including social security tax |  |                   | 591    |      |  |      | 789    |  |  |  | 760   | 
|Other personnel costs                       |  |                   | 508    |      |  |      | 488    |  |  |  | 402   | 
|                                            |  |                   |        |      |  |      |        |  |  |  |       | 
|Total salaries and personnel costs          |  |                   | 10,128 |      |  |      | 10,104 |  |  |  | 9,561 | 
|                                            |  |                   |        |      |  |      |        |  |  |  |       | 

The decrease in salaries and personnel costs in
2003 compared to 2002 was primarily due to workforce reductions
as a consequence of Telenors program for improving
operational efficiency, Delta 4, and due to the net effect of
disposals and acquisitions of businesses. Social security tax
increased in percent of Salaries and holiday pay compared to
2002 mainly due different rates for social security tax in
different countries.

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The number of full-time equivalent employees at
December 31, 2003 decreased by approximately 2,700 compared
to December 31, 2002, mainly due to workforce reductions
and disposals of operations. Disposal of businesses in 2003
reduced the total number of our full time equivalent employees
by approximately 1,600. The average number of full-time
equivalent employees was estimated to be lower by approximately
1,200 in 2003 compared to 2002.

Pension costs, including social security tax in
2003, were approximately in line with 2002. Increased
amortization of actuarial losses and increased interest expenses
offset the positive effect of workforce reductions and a lower
than estimated increase in salaries. During 2003, long-term
interest rates in Norway were significantly reduced and we
reduced our estimated discount rate as of December 31, 2003
accordingly. This contributed to an increase in the net present
value of our pension obligations and non-amortized actuarial
losses as of December 31, 2003, which was partially offset
by higher than estimated return on pension plan assets resulting
primarily from the increase in share prices. Pension costs,
including social security tax, may increase in the future due to
increased non-amortized actuarial losses. You should read
Critical Accounting estimates under Norwegian GAAP
and note 7 to our consolidated financial statements for
additional information about our pension costs.

The decrease in salaries and personnel costs in
2002 compared to 2001 was primarily due to the disposal of
certain businesses, especially Telenor Media, Itworks and
companies in Nextra International. This was offset by the
consolidation of formerly associated companies as well as the
acquisition of COMSAT. Adjusted for acquisition and disposal of
companies, total salaries and personnel costs were in line with
2001. There was a decrease in some activities due to weak market
conditions. This decrease was partly offset by wage inflation.
In 2002, we started implementing our program for improving
operational efficiency, Delta 4. During 2002, particularly at
the end of the year, certain employees were offered voluntary
termination. Many of these employees were still employed as of
December 31, 2002. As a result, although this decrease in
the number of employees had limited effect on salaries and
personnel costs in 2002, the effect was more significant during
2003. Expenses for workforce reduction are recorded as a part of
Other operating expenses and are not included in
salaries and personnel costs.

The number of full-time equivalent employees at
December 31, 2002 increased by approximately 1,100 compared
to December 31, 2001, due to the consolidation of
companies. The consolidation of Pannon GSM as of
February 4, 2002, Canal Digital as of June 30, 2002,
and Kyivstar as of September 1, 2002, increased the total
number of our full-time equivalent employees by approximately
2,700. The average number of full-time equivalent employees was
higher in 2002 than for 2001.

Pension costs, including social security tax,
increased in 2002 compared to 2001, primarily as a result of a
one time NOK 82 million effect related to the accounting of
previously granted pension benefits in Teleservice and Fixed, an
increase in salaries that was higher than we had estimated,
increased interest cost and increased amortization of actuarial
losses. Actuarial losses increased in the period 1999 to 2002
mainly due to the reduction in the discount rate implemented as
of December 31, 1999, as well as lower actual return on
plan assets than estimated resulting from the reduction in share
prices in the course of the period 1999 to 2002. In addition,
salary increases and pensions adjustments, which were higher
than we had originally estimated, contributed to an increase in
actuarial losses.

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Other operating expenses

|                                                                      |  |                   |        |      |  |      |        |  |  |  |        | 
|--------------------------------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                                                      |  | 2001              |        | 2002 |  | 2003
|                                                                      |  |                   |        |      |  |     
|                                                                      |  |                  
|                                                                      |  | (NOK in millions)
|Costs of premises, vehicles, office equipment, etc                    |  |                   | 2,267  |      |  |      | 2,196  |  |  |  | 1,876  | 
|Operation and maintenance                                             |  |                   | 2,673  |      |  |      | 3,418  |  |  |  | 3,477  | 
|Travel and travel allowances                                          |  |                   | 750    |      |  |      | 560    |  |  |  | 474    | 
|Postage, freight, distribution and
    telecommunication              |  |                   | 343    |      |  |      | 327    |  |  |  | 281    | 
|Concession fees                                                       |  |                   | 130    |      |  |      | 425    |  |  |  | 505    | 
|Marketing and sales commission                                        |  |                   | 1,787  |      |  |      | 2,069  |  |  |  | 2,583  | 
|Advertising                                                           |  |                   | 598    |      |  |      | 916    |  |  |  | 1,187  | 
|Bad debt                                                              |  |                   | 362    |      |  |      | 337    |  |  |  | 209    | 
|Consultancy fees and external personnel                               |  |                   | 2,246  |      |  |      | 1,394  |  |  |  | 1,298  | 
|Workforce reductions, loss contracts and exit
    from activities (1) |  |                   | 625    |      |  |      | 982    |  |  |  | 287    | 
|Other                                                                 |  |                   | 616    |      |  |      | 564    |  |  |  | 329    | 
|                                                                      |  |                   |        |      |  |      |        |  |  |  |        | 
|Total other operating expenses                                        |  |                   | 12,397 |      |  |      | 13,188 |  |  |  | 12,506 | 
|                                                                      |  |                   |        |      |  |      |        |  |  |  |        | 

|                                                                                                                           |  |                   |     |      |  |      |       |  |  |  |     |  
|-------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | --- | ---- |  | ---- | ----- |  |  |  | --- | -
|                                                                                                                           |  | 2001              |     | 2002 |  | 2003
|                                                                                                                           |  |                   |     |      |  |     
|                                                                                                                           |  |                  
|                                                                                                                           |  | (NOK in millions)
|(1)  Specification of expenses for
    workforce reductions, loss contracts and exit from activities by
    business area: |  |                   |     |      |  |      |       |  |  |  |     |  
|Mobile                                                                                                                     |  |                   |    |      |  |      | 120   |  |  |  | (21 | )
|Fixed                                                                                                                      |  |                   | 89  |      |  |      | 311   |  |  |  | 6   |  
|Broadcast                                                                                                                  |  |                   | 49  |      |  |      | 65    |  |  |  | 7   |  
|EDB Business Partner                                                                                                       |  |                   | 170 |      |  |      | 111   |  |  |  | 223 |  
|Other business units                                                                                                       |  |                   | 243 |      |  |      | 56    |  |  |  | 38  |  
|Corporate functions and Group activities                                                                                   |  |                   | 74  |      |  |      | 272   |  |  |  | 34  |  
|Eliminations                                                                                                               |  |                   |     |      |  |      | 47    |  |  |  |     |  
|                                                                                                                           |  |                   |     |      |  |      |       |  |  |  |     |  
|Total                                                                                                                      |  |                   | 625 |      |  |      | 982   |  |  |  | 287 |  
|                                                                                                                           |  |                   |     |      |  |      |       |  |  |  |     |  
|Other business units  previously
    granted pension benefits in Teleservice                                              |  |                   |     |      |  |      | 66    |  |  |  |     |  
|                                                                                                                           |  |                   |     |      |  |      |       |  |  |  |     |  
|Total(1)                                                                                                                   |  |                   | 625 |      |  |      | 1,048 |  |  |  | 287 |  
|                                                                                                                           |  |                   |     |      |  |      |       |  |  |  |     |  






|    |                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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.

Other operating expenses decreased by
approximately NOK 0.7 billion, or 5.2%, in 2003 compared to
2002. Reduced expenses for workforce reductions, loss contracts
and exit from activities of NOK 0.7 billion was partially
offset by the net effect of approximately NOK 0.5 billion
from companies acquired and disposed of during 2002 and 2003. In
2002, we began implementing our program to improve operational
efficiency, Delta 4, which contributed to reducing other
operating expenses in both 2002 and 2003.

Reduced costs of premises, vehicles and office
equipment in 2003 compared to 2002 were due to the replacement
of leased properties with owned properties, especially our new
headquarters at Fornebu outside of Oslo, and increased cost
efficiency.

Increased operation and maintenance expenses in
2003 compared to 2002 were mainly due to the full-year effect of
the consolidation of companies in Mobile and Broadcast and
higher activity in our international Mobile operations. The
increase was partially offset by decreased activity in EDB
Business Partner and cost reductions in Fixed and Mobile in
Norway.

Our total marketing, sales commissions and
advertising expenses increased by NOK 0.8 billion in 2003
compared to 2002. The increase occurred mainly in our Mobile
business area, partially due to the full-year

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effect of consolidation of companies and
partially as a result of increased competition and a growth in
the gross inflow of subscriptions.


Reduction in bad debt was due to our increased
focus on collection and reduced need for provisions for losses.

In 2003, expenses for workforce reductions, loss
contracts and exit from activities were mainly incurred in EDB
Business Partner. You should read note 11 to our
consolidated financial statements for additional information
about costs for workforce reductions, loss contracts and exit
from activities. The following table shows the breakdown of
expenses for workforce reductions, loss contracts and exit from
activities by business area in 2001, 2002 and 2003.

Other operating expenses increased by
approximately NOK 0.8 billion, or 6.4%, in 2002 compared to
2001. Adjusted for the increased costs for workforce reductions,
loss contracts and exit from activities of approximately NOK
0.4 billion and the net increase of approximately NOK
1.4 billion related to companies acquired and disposed of
(excluding costs for workforce reductions, loss contracts and
exit from activities), operating expenses decreased by
approximately NOK 1 billion. In 2002, we began implementing
our program to improve operational efficiency, Delta 4, which
contributed to reducing other operating expenses, in particular
consultancy fees, external personnel and travel costs. In 2002,
we incurred expenses related to workforce reductions, loss
contracts and exit from activities of NOK 982 million, an
increase of NOK 357 million compared to 2001. Of the amount
expensed in 2002, approximately NOK 0.7 billion was related
to workforce reduction, and NOK 0.2 billion was related to
loss contracts, especially leases of property which we have
vacated.

Reduced costs of premises, vehicles and office
equipment in 2002 compared to 2001 were due to the replacement
of leased properties with owned properties, especially our new
headquarters at Fornebu outside of Oslo, and lower activity in
some areas. This was partly offset by the effect of
consolidating additional companies in Mobile.

Increased operation and maintenance expenses in
2002 compared to 2001 were related to new companies in Mobile
and new operations in EDB Business Partner.

Our total marketing, sales commissions and
advertising expenses increased by NOK 0.6 billion in 2002
compared to 2001 due to the net effect of companies acquired and
disposed of, especially Pannon GSM, DiGi.Com, Kyivstar and Canal
Digital. Adjusted for these companies, we had a reduction in
these expenses mainly in Mobile in Norway due to lower sales of
new subscriptions and lower level of sales commission per
subscription, as well as lower marketing activity and reduced
activity in Nextra International in Other business units.
Marketing, sales commissions and advertising expenses related to
ADSL increased. Approximately NOK 0.2 billion of the
increase in concession fees in 2002 compared to 2001 related to
DiGi.Com and Pannon GSM. The line item other
included expenses of NOK 136 million related to legal
proceedings in our Fixed Business area in 2002.

Losses on disposal of fixed assets and
operations

Losses on disposal of fixed assets and operations
totaled NOK 229 million in 2003, of which the disposal of
Nextra International companies contributed NOK 176 million.
Losses of NOK 147 million in 2002 included losses in
connection with the disposal of companies, mainly related to the
bankruptcy of our former subsidiary Itworks AS. Losses totaled
NOK 63 million in 2001 primarily due to discontinuance of
equipment and sales of properties.

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Depreciation, Amortization and
Write-downs

|                                                     |  |                   |        |      |  |      |        |  |  |  |        | 
|---------------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                                     |  | 2001              |        | 2002 |  | 2003
|                                                     |  |                   |        |      |  |     
|                                                     |  |                  
|                                                     |  | (NOK in millions)
|Depreciation of tangible assets                      |  |                   | 5,863  |      |  |      | 7,624  |  |  |  | 7,986  | 
|Amortization of goodwill                             |  |                   | 668    |      |  |      | 1,002  |  |  |  | 686    | 
|Amortization of other intangible assets              |  |                   | 720    |      |  |      | 1,610  |  |  |  | 1,925  | 
|                                                     |  |                   |        |      |  |      |        |  |  |  |        | 
|Total depreciation and amortization(1)               |  |                   | 7,251  |      |  |      | 10,236 |  |  |  | 10,597 | 
|                                                     |  |                   |        |      |  |      |        |  |  |  |        | 
|Write-downs of tangible assets                       |  |                   | 1,430  |      |  |      | 424    |  |  |  | 104    | 
|Write-downs of goodwill                              |  |                   | 2,266  |      |  |      | 2,632  |  |  |  | 16     | 
|Write-downs of other intangible assets               |  |                   | 126    |      |  |      | 497    |  |  |  | 25     | 
|Total write-downs(2)                                 |  |                   | 3,822  |      |  |      | 3,553  |  |  |  | 145    | 
|                                                     |  |                   |        |      |  |      |        |  |  |  |        | 
|Total depreciation, amortization and
    write-downs |  |                   | 11,073 |      |  |      | 13,789 |  |  |  | 10,742 | 
|                                                     |  |                   |        |      |  |      |        |  |  |  |        | 



|    |                                                                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Specification of depreciation of tangible
    assets, amortization of goodwill and amortization of other
    intangible assets by business area in 2001, 2002 and
    2003:

|                                         |  |                   |       |          |  |            |     |          |  |          |     |            |  |          |       |          |  |            |       |  |  |  |       |  |  |  |       |   |  |  |     |   |  |  |       | 
|---------------------------------------- |  | ----------------- | ----- | -------- |  | ---------- | --- | -------- |  | -------- | --- | ---------- |  | -------- | ----- | -------- |  | ---------- | ----- |  |  |  | ----- |  |  |  | ----- | - |  |  | --- | - |  |  | ----- | 
|                                         |  |                   |       |          |  |           
|                                         |  | 2001              |       | 2002     |  | 2003      
|                                         |  |                   |       |          |  |           
|                                         |  |                   |       | Other    |  |            |     | Other    |  |          |     | Other     
|                                         |  | Tangible          |       |          |  | intangible |     | Tangible |  |          |     | intangible |  | Tangible |       |          |  | intangible
|                                         |  | assets            |       | Goodwill |  | assets     |     | assets   |  | Goodwill |     | assets     |  | Assets   |       | Goodwill |  | assets    
|                                         |  |                   |       |          |  |            |     |          |  |          |     |            |  |          |       |          |  |           
|                                         |  |                  
|                                         |  | (NOK in millions)
|Mobile                                   |  |                   | 1,187 |          |  |            | 105 |          |  |          | 258 |            |  |          | 2,232 |          |  |            | 509   |  |  |  | 1,038 |  |  |  | 2,674 |   |  |  | 400 |   |  |  | 1,234 | 
|Fixed                                    |  |                   | 3,306 |          |  |            | 129 |          |  |          | 234 |            |  |          | 3,858 |          |  |            | 134   |  |  |  | 374   |  |  |  | 3,774 |   |  |  | (95 | ) |  |  | 431   | 
|Broadcast                                |  |                   | 517   |          |  |            | 47  |          |  |          | 12  |            |  |          | 679   |          |  |            | 133   |  |  |  | 32    |  |  |  | 755   |   |  |  | 197 |   |  |  | 78    | 
|EDB Business Partner                     |  |                   | 196   |          |  |            | 193 |          |  |          | 4   |            |  |          | 224   |          |  |            | 166   |  |  |  | 3     |  |  |  | 223   |   |  |  | 151 |   |  |  | 1     | 
|Other business units                     |  |                   | 394   |          |  |            | 162 |          |  |          | 198 |            |  |          | 359   |          |  |            | 60    |  |  |  | 163   |  |  |  | 305   |   |  |  | 34  |   |  |  | 152   | 
|Corporate functions and Group activities |  |                   | 304   |          |  |            |    |          |  |          |    |            |  |          | 362   |          |  |            |      |  |  |  |      |  |  |  | 355   |   |  |  |    |   |  |  | 29    | 
|Media                                    |  |                   | 15    |          |  |            | 22  |          |  |          | 14  |            |  |          |      |          |  |            |      |  |  |  |      |  |  |  |      |   |  |  |    |   |  |  |      | 
|Eliminations                             |  |                   | (56   | )        |  |            | 10  |          |  |          |    |            |  |          | (90   | )        |  |            |      |  |  |  |      |  |  |  | (100  | ) |  |  | (1  | ) |  |  |      | 
|                                         |  |                   |       |          |  |            |     |          |  |          |     |            |  |          |       |          |  |            |       |  |  |  |       |  |  |  |       |   |  |  |     |   |  |  |       | 
|Total                                    |  |                   | 5,863 |          |  |            | 668 |          |  |          | 720 |            |  |          | 7,624 |          |  |            | 1,002 |  |  |  | 1,610 |  |  |  | 7,986 |   |  |  | 686 |   |  |  | 1,925 | 
|                                         |  |                   |       |          |  |            |     |          |  |          |     |            |  |          |       |          |  |            |       |  |  |  |       |  |  |  |       |   |  |  |     |   |  |  |       | 



|    |                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------
|(2) | Specification of write-downs of tangible
    assets, goodwill and other intangible assets by business area in
    2001, 2002 and 2003:

|                                         |  |                   |       |          |  |            |       |          |  |          |     |            |  |          |     |          |  |            |       |   |  |  |     |  |  |  |     |  |  |  |    |  |  |  |    | 
|---------------------------------------- |  | ----------------- | ----- | -------- |  | ---------- | ----- | -------- |  | -------- | --- | ---------- |  | -------- | --- | -------- |  | ---------- | ----- | - |  |  | --- |  |  |  | --- |  |  |  | -- |  |  |  | -- | 
|                                         |  |                   |       |          |  |           
|                                         |  | 2001              |       | 2002     |  | 2003      
|                                         |  |                   |       |          |  |           
|                                         |  |                   |       | Other    |  |            |       | Other    |  |          |     | Other     
|                                         |  | Tangible          |       |          |  | intangible |       | Tangible |  |          |     | intangible |  | Tangible |     |          |  | intangible
|                                         |  | assets            |       | Goodwill |  | assets     |       | assets   |  | Goodwill |     | assets     |  | assets   |     | Goodwill |  | assets    
|                                         |  |                   |       |          |  |            |       |          |  |          |     |            |  |          |     |          |  |           
|                                         |  |                  
|                                         |  | (NOK in millions)
|Mobile                                   |  |                   | 22    |          |  |            |      |          |  |          |    |            |  |          | 33  |          |  |            | 2,138 |   |  |  | 118 |  |  |  | 33  |  |  |  |   |  |  |  | 2  | 
|Fixed                                    |  |                   | 649   |          |  |            | 187   |          |  |          | 6   |            |  |          | 340 |          |  |            | 160   |   |  |  |     |  |  |  | 19  |  |  |  |   |  |  |  | 5  | 
|Broadcast                                |  |                   | 494   |          |  |            |      |          |  |          |    |            |  |          | 47  |          |  |            |      |   |  |  | 83  |  |  |  | 15  |  |  |  |   |  |  |  | 3  | 
|EDB Business Partner                     |  |                   |      |          |  |            | 1,259 |          |  |          | 3   |            |  |          | 8   |          |  |            | 356   |   |  |  |    |  |  |  | 12  |  |  |  | 16 |  |  |  |   | 
|Other business units                     |  |                   | 235   |          |  |            | 820   |          |  |          | 117 |            |  |          | 5   |          |  |            | 31    |   |  |  | 296 |  |  |  | 22  |  |  |  |   |  |  |  | 15 | 
|Corporate functions and Group activities |  |                   | 12    |          |  |            |      |          |  |          |    |            |  |          |    |          |  |            |      |   |  |  |    |  |  |  | 3   |  |  |  |   |  |  |  |   | 
|Eliminations                             |  |                   | 18    |          |  |            |      |          |  |          |    |            |  |          | (9  | )        |  |            | (53   | ) |  |  |    |  |  |  |    |  |  |  |   |  |  |  |    | 
|                                         |  |                   |       |          |  |            |       |          |  |          |     |            |  |          |     |          |  |            |       |   |  |  |     |  |  |  |     |  |  |  |    |  |  |  |    | 
|Total                                    |  |                   | 1,430 |          |  |            | 2,266 |          |  |          | 126 |            |  |          | 424 |          |  |            | 2,632 |   |  |  | 497 |  |  |  | 104 |  |  |  | 16 |  |  |  | 25 | 
|                                         |  |                   |       |          |  |            |       |          |  |          |     |            |  |          |     |          |  |            |       |   |  |  |     |  |  |  |     |  |  |  |    |  |  |  |    | 

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In 2003, we made certain reclassifications from
tangible assets to intangible assets, mainly software in
administrative support systems. The comparative figures for 2002
and 2001 have been reclassified accordingly. Depreciation of
tangible assets increased in 2003 compared to 2002, mainly due
to the full-year effect of consolidation of businesses,
especially in Mobile, Broadcast and Fixed, and the shortening of
the depreciation period for some network-based equipment in
DiGi.Com as from July 1, 2002. The increase was partially
offset by reduced depreciation due to write-downs in 2002 and
reduced capital expenditure and tangible assets fully
depreciated.

Increased amortization of other intangible assets
in 2003 compared to 2002 was primarily due to the full-year
effect of the consolidation of businesses.

Reduced amortization of goodwill was primarily
due to write-downs at the end of 2002, especially related to
DiGi.Com and amortization of negative goodwill related to
Utfors, partially offset by the full-year effect of the
consolidation of businesses.

Write-downs in 2003 were not significant.
Generally, increased market values for our businesses lead to
the conclusion that none of our material investments was
impaired. If, among other things, market values decline and
market conditions deteriorate, we may have to continue to
perform impairment tests, as well as the annual impairment test
of goodwill according to US GAAP. You should read Critical
Accounting Estimates under Norwegian GAAP  for additional
information on our impairment tests.

Depreciation of tangible assets increased by
approximately NOK 1.8 billion in 2002 compared to 2001.
Mobile increased primarily due to the consolidation of formerly
associated companies. Canal Digital contributed with NOK
147 million. Shortened depreciation periods from
April 1, 2001 for some fixed assets in our Norwegian fixed
and mobile networks also increased depreciation by approximately
NOK 90 million in 2002 for assets acquired prior to
April 1, 2001.

We made significant write-downs in 2001 and 2002,
mainly due to a decline in market values and depressed market
conditions in some of our operations. In 2001 and 2002, we
evaluated the carrying values of our assets, and we made the
resulting write-downs based on the market conditions and
asset-specific circumstances in each period.

Of our total write-downs of goodwill in 2002,
NOK 2,138 million was related to DiGi.Com in the
Mobile Business area as a result of continued low publicly
quoted share prices. The write-down was based on the publicly
quoted share price at December 31, 2002, adjusted to
reflect a control premium. In Fixed, in 2002, we wrote down
goodwill related to our managed services and to our Internet
operations in the Czech Republic and Slovakia. In 2002, goodwill
in EDB Business Partner related to the Banking & Financing
area and the Consulting area was written down by
NOK 356 million based on discounted cash flows.

The write-downs of other intangible assets in our
Mobile business area in 2002 related mainly to parts of out
IT-systems portfolio that were no longer in use. The write-downs
of tangible assets in our Fixed business area in 2002 mainly
related to Fixed  Norway. In connection with the
integration of our operating service business in
Fixed  Norway with our internal IT operating
environment, we decided to reduce the number of operating
platforms and focus the activity of the operations. We also made
write-downs based on evaluations of the value of service
contracts, platforms and equipment in Fixed  Norway.

The write-downs of tangible and other intangible
assets in Broadcast in 2002 primarily related to lower demand in
the SMATV market in Denmark and Sweden, delayed
commercialization of new broadcasting standards, as well as
reduced expectations for the use of interactive TV as a payment
facility. In Other business units, the value of CA-software was
written down in 2002 based on a review of the sales potential.

Write-downs of tangible assets in 2001 related
mainly to the transatlantic fiber capacity (TAT 14)
(NOK 533 million in Fixed) and satellite and satellite
equipment (NOK 490 million in Broadcast). The
write-downs of goodwill in 2001 in Other Business Units mainly
related to Nextra International and Itworks. Write-downs of
goodwill in 2001 in Fixed were made within managed services.

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Operating Profit (Loss) and EBITDA

Our operating profit (loss) in the period 2001 to
2003 was affected by gains and losses on sales of fixed assets
and operations, expenses for workforce reductions, loss
contracts and exit from activities as well as write-downs, as
illustrated below. We believe that information about and
discussion of these items may explain in part the development of
our operating performance in this period.

|                                                                                  |  |                   |        |      |  |      |        |   |  |  |       |  
|--------------------------------------------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ | - |  |  | ----- | -
|                                                                                  |  | 2001              |        | 2002 |  | 2003
|                                                                                  |  |                   |        |      |  |     
|                                                                                  |  |                  
|                                                                                  |  | (NOK in millions)
|Operating profit                                                                  |  |                   | 3,177  |      |  |      | (320   | ) |  |  | 7,560 |  
|Of which:                                                                         |  |                   |        |      |  |      |        |   |  |  |       |  
|Gains on disposal of fixed assets and operations                                  |  |                   | 5,436  |      |  |      | 158    |   |  |  | 232   |  
|Losses on disposal of fixed assets and operations                                 |  |                   | (63    | )    |  |      | (147   | ) |  |  | (229  | )
|Expenses for workforce reductions, loss contracts
    and exit from activities(1) |  |                   | (625   | )    |  |      | (1,048 | ) |  |  | (287  | )
|Write-downs of tangible and intangible assets(2)                                  |  |                   | (3,822 | )    |  |      | (3,553 | ) |  |  | (145  | )
|                                                                                  |  |                   |        |      |  |      |        |   |  |  |       |  
|Total gains, losses, expenses for workforce
    reductions etc. and write-downs   |  |                   | 926    |      |  |      | (4,590 | ) |  |  | (429  | )
|                                                                                  |  |                   |        |      |  |      |        |   |  |  |       |  






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

Our operating profit in 2003 was to a limited
extent affected by gains and losses, expenses for workforce
reductions etc, and write-downs. We discuss these items above
under  Revenues,
 Operating expenses and
 Depreciation, amortization and
write-downs. Our operating profit increased in 2003
compared to 2002 due to the effect of these items, our focus on
increasing operational efficiency and underlying growth. The
full-year effect of the consolidation of acquired companies,
especially Kyivstar, and the decrease in depreciation and
amortization as a result of the significant write-downs made in
2002 also contributed to the increase.

We also focus on operating profit (loss) before
the effects of amortization, depreciation and write-downs. We
refer to this measure as EBITDA because under
Norwegian GAAP operating profit is reported in our consolidated
income statement before taxes and net financial items. In
addition, operating profit includes amounts attributable to
minority interests but does not include results from associated
companies or joint ventures which are accounted for using the
equity method and included in net income. We believe that
providing EBITDA enhances an understanding of our operating
activities and the performance of the individual units because
it provides investors with a measure of operating results that
is unaffected by amortization and depreciation related to
acquisitions and capital expenditures, differences in capital
structures, e.g. book value of tangible and intangible assets,
among otherwise comparable companies or investments in and
results from associated companies. We believe that EBITDA is
also an indicator to demonstrate to what extent operational
business activities generate earnings which are available to
reduce net debt or to finance investments.

EBITDA is not a measurement of financial
performance under generally accepted accounting principles. You
should not consider EBITDA as an alternative to operating
profit, net income or cash flow from operating activities. Since
other companies may not calculate EBITDA in the same way, our
EBITDA figures are not necessarily comparable with similarly
titled figures of other companies.

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The following table shows the reconciliation of
EBITDA to net income.

|                                                      |  |                   |        |      |  |      |        |   |  |  |        |  
|----------------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                      |  | 2001              |        | 2002 |  | 2003
|                                                      |  |                   |        |      |  |     
|                                                      |  |                  
|                                                      |  | (NOK in millions)
|Net income (loss)                                     |  |                   | 7,079  |      |  |      | (4,298 | ) |  |  | 4,560  |  
|Minority interests                                    |  |                   | (721   | )    |  |      | (358   | ) |  |  | 490    |  
|Taxes                                                 |  |                   | 3,897  |      |  |      | (480   | ) |  |  | 2,376  |  
|Profit (loss) before taxes and minority
    interests |  |                   | 10,255 |      |  |      | (5,136 | ) |  |  | 7,426  |  
|Net financial items                                   |  |                   | 1,159  |      |  |      | 2,366  |   |  |  | 1,365  |  
|Associated companies                                  |  |                   | (8,237 | )    |  |      | 2,450  |   |  |  | (1,231 | )
|Operating profit (loss)                               |  |                   | 3,177  |      |  |      | (320   | ) |  |  | 7,560  |  
|Depreciation and amortization                         |  |                   | 7,251  |      |  |      | 10,236 |   |  |  | 10,597 |  
|Write-downs                                           |  |                   | 3,822  |      |  |      | 3,553  |   |  |  | 145    |  
|EBITDA                                                |  |                   | 14,250 |      |  |      | 13,469 |   |  |  | 18,302 |  

Our EBITDA increased in 2003 compared to 2002 due
to the positive effect of the consolidation of acquired
companies, the underlying increase in revenues and the increased
efficiency of our operations, including the positive effect from
the cost reduction measures.

You should read  Results of
Operations by Business Area for a more detailed discussion
of operating profit and EBITDA for each business area. The
tables showing the breakdown of expenses for workforce
reductions, loss contracts and exit from activities by business
area under  Other operating expenses and
the breakdown of our write-downs under
 Depreciation, amortization and
write-downs contribute to explaining the development of
operating profit in each business area.

We recorded an operating loss in 2002 of NOK
320 million compared to an operating profit of NOK
3,177 million in 2001. Gains and losses, expenses for
workforce reductions etc, and write-downs as shown and discussed
above significantly contributed to our operating loss in 2002.
Our EBITDA decreased in 2002 compared to 2001, mainly due to
gains on sale of operations in 2001.

Associated Companies

|                                             |  |                   |         |      |  |      |        |   |  |  |       |  
|-------------------------------------------- |  | ----------------- | ------- | ---- |  | ---- | ------ | - |  |  | ----- | -
|                                             |  | 2001              |         | 2002 |  | 2003
|                                             |  |                   |         |      |  |     
|                                             |  |                  
|                                             |  | (NOK in millions)
|Telenors share of:(1)                       |  |                   |         |      |  |      |        |   |  |  |       |  
|Net income (loss) after taxes                |  |                   | (318    | )    |  |      | 341    |   |  |  | 329   |  
|Amortization of Telenors net excess values  |  |                   | (1,427  | )    |  |      | (862   | ) |  |  | (579  | )
|Write-downs of Telenors excess values       |  |                   | (11,597 | )    |  |      | (1,965 | ) |  |  | (26   | )
|Net gains on disposal of ownership interests |  |                   | 21,579  |      |  |      | 36     |   |  |  | 1,507 |  
|                                             |  |                   |         |      |  |      |        |   |  |  |       |  
|Net result from associated companies         |  |                   | 8,237   |      |  |      | (2,450 | ) |  |  | 1,231 |  
|                                             |  |                   |         |      |  |      |        |   |  |  |       |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The 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 the time of the acquisition of the
    associated companies.

The results from associated companies were
influenced by our acquisitions, disposals and consolidation of
subsidiaries in 2001, 2002 and 2003 and by our write-downs in
2001 and 2002. DiGi.Com was consolidated as a subsidiary as of
September 1, 2001, Telenordia was consolidated as a
subsidiary as of October 1, 2001, Pannon GSM was
consolidated as a subsidiary as of February 4, 2002, Canal
Digital was consolidated as a subsidiary as of June 30,
2002 and Kyivstar was consolidated as a subsidiary as of
September 1, 2002. VIAG Interkom and Esat Digifone were
sold at the beginning of 2001. Extel was sold at

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the end of 2002 and StavTeleSot at the beginning
of 2003 to VimpelCom-Region. On April 30, 2003, we
announced the sale of a 9% shareholding in Cosmote and, as a
result, Cosmote is no longer accounted for as an associated
company. In February 2004, we disposed of our remaining interest
in Cosmote. We acquired 37% of Glocalnet AB as of
December 31, 2002 and 20.4% of Golden Telecom as of
December 1, 2003.


Net income after taxes from associated companies
in 2003 was in line with 2002, but decreased by approximately
NOK 0.1 billion when adjusted for the effect of associated
companies acquired, disposed of or consolidated as subsidiaries
during 2002 and 2003. In 2003, Vimpelcom continued to experience
underlying growth in its results due to an increase in its
subscriber base. However, its positive contribution to net
income after taxes from associated companies was offset by
increased losses in Bravida, including restructuring charges and
write-downs, and write-downs related to fixed assets in Sonofon.

Amortization of Telenors net excess values
decreased in 2003 compared to 2002 mainly due to the effects of
write-downs in 2002 and reversal of previous amortization of net
excess values on Wireless Matrix, as net excess values had been
reduced to below zero in 2002. We will consolidate Sonofon as a
subsidiary as from February 12, 2004. This is expected to
reduce amortization of Telenors net excess values from
associated companies in 2004 compared to 2003.

Write-downs of Telenors excess values on
associated companies were not significant in 2003 as market
values for associated companies increased during 2003.

Net gains on disposal of ownership interests in
2003 mainly related to the sale of shares in Cosmote.

Net income after taxes in 2002 reflected a
write-down of OniWay of NOK 316 million recorded at the end
of 2002. The net effect of companies that were consolidated
during 2001 and 2002 was an increase in net income from
associated companies in 2002 compared to 2001. Apart from the
effect of associated companies acquired, sold or consolidated as
subsidiaries, there was underlying growth in the results from
most of the associated mobile companies, especially Vimpelcom,
Cosmote and Connect Austria (now renamed One GmbH).

Decreased amortization of net excess values in
2002 compared to 2001 was due to companies which were
consolidated during 2001 and 2002, as well as to the effect of
write-downs in 2001. Write-downs of our net excess values in
2002 were mainly related to Sonofon, with NOK 1 billion and
DTAC/UCOM, with NOK 881 million. During 2002, the market
values of mobile companies continued to decline and the
write-downs, both in 2002 and 2001, were made on the basis of
discounted cash flows and comparison to the value of similar
companies, in the case of Sonofon, and quoted share prices in
the case of DTAC/UCOM. You should read Other Issues 
Critical Accounting Estimates under Norwegian GAAP for
additional information about our write-downs. Gains on disposal
in 2002 related to the sale of Extel.

Write-downs in 2001 related primarily to Sonofon
and Telenordia as of June 30 (NOK 7,500 million and
NOK 665 million, respectively) and DTAC/UCOM as of
December 31 (NOK 3,400 million).

We sold our ownership interest in VIAG Interkom
and Esat Digifone in 2001, with a combined gain before taxes of
NOK 21.4 billion in 2001. The sale of Ephorma AS and
European Medical Solutions Group AS by EDB Business Partner
contributed a combined gain of NOK 141 million in 2001.

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Financial Income and Expenses

|                                                                |  |                   |        |      |  |      |        |   |  |  |        |  
|--------------------------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                                |  | 2001              |        | 2002 |  | 2003
|                                                                |  |                   |        |      |  |     
|                                                                |  |                  
|                                                                |  | (NOK in millions)
|Dividends from satellite organizations                          |  |                   | 97     |      |  |      |       |   |  |  |       |  
|Interest income                                                 |  |                   | 740    |      |  |      | 476    |   |  |  | 484    |  
|Other financial income                                          |  |                   | 60     |      |  |      | 91     |   |  |  | 102    |  
|Total financial income                                          |  |                   | 897    |      |  |      | 567    |   |  |  | 586    |  
|Interest expenses                                               |  |                   | (1,638 | )    |  |      | (1,901 | ) |  |  | (2,033 | )
|Other financial expenses                                        |  |                   | (53    | )    |  |      | (96    | ) |  |  | (45    | )
|Capitalized interest                                            |  |                   | 295    |      |  |      | 164    |   |  |  | 55     |  
|Total financial expenses                                        |  |                   | (1,396 | )    |  |      | (1,833 | ) |  |  | (2,023 | )
|Net foreign currency gain/loss                                  |  |                   | (402   | )    |  |      | (311   | ) |  |  | (1     | )
|Gain on disposal of financial assets                            |  |                   | 491    |      |  |      | 59     |   |  |  | 95     |  
|Loss on disposal of financial assets                            |  |                   | (150   | )    |  |      | (31    | ) |  |  | (91    | )
|Write-downs and reversal of write-downs of
    financial assets |  |                   | (599   | )    |  |      | (817   | ) |  |  | 69     |  
|Net gain (loss) on and write-downs of
    financial assets      |  |                   | (258   | )    |  |      | (789   | ) |  |  | 73     |  
|                                                                |  |                   |        |      |  |      |        |   |  |  |        |  
|Net financial items                                             |  |                   | (1,159 | )    |  |      | (2,366 | ) |  |  | (1,365 | )
|                                                                |  |                   |        |      |  |      |        |   |  |  |        |  

The increase in interest income in 2003 compared
to 2002 was due to a higher level of interest-bearing financial
assets, partially offset by reduced interest rates. The increase
in interest-bearing financial assets was mainly due to a higher
net cash flow from operating activities and proceeds from the
sales of Cosmote and Inmarsat. Increased other financial income
related to dividends from Expert Eilag ASA in 2003. The
satellite organizations were incorporated during 2000 and 2001
and distributed no dividends in 2002 or 2003.

Interest expenses increased in 2003 compared to
2002 due to higher interest-bearing liabilities on average
during the year, partially offset by reduced interest rates. The
increase in interest bearing liabilities was primarily due to
the acquisitions of Kyivstar and Canal Digital, which we paid in
the second half of 2002. In 2003, a reduction of
interest-bearing liabilities did not take place until the
payment of the Sonofon tax claim and the settlement of the
judicial proceedings in Greece in the third quarter, totaling
NOK 3 billion. For further information about these claims,
please see below. In October 2003, we agreed to a settlement of
the judicial proceeding in Greece, you should read notes 13 and
24 to our consolidated financial statements for additional
information, and we reversed to income NOK 41 million of
the amount we made provisions for in 2002 as interest related to
the claim because the amount we agreed to pay under the
settlement was lower than the amount we made provisions for. In
2003, we accrued and expensed interest on overdue payments on
the tax claim related to Sonofon of approximately NOK
225 million. Due to the significant reduction in short-term
interest rates and no corresponding reduction in interest rates
on overdue payments, we decided to pay the tax claim on
September 30, 2003. Subsequent to this payment, we have
incurred ordinary interest expenses on the funding of the tax
claim.

Total interest expenses reflect our composition
and structure of liabilities with floating rates, fixed rates
and higher interest rates on liabilities in some subsidiaries
with external financing. Interest rates in the Norwegian market
decreased considerably during 2003. Our average interest rates
for funding through the parent company was also reduced in 2003,
but to a lesser extent than market rates due to the duration of
our debt portfolio. This was partially offset by external
financing of subsidiaries with higher interest rates. You should
read note 20 to our consolidated financial statements for
further information about interest rates and duration of our
debt portfolio. The reduction in capitalized interest was mainly
due to lower level of assets under construction and reduced
interest rates.

The write-downs made in 2002 of New Skies
Satellites and the capital contribution in the Telenor Pension
Fund were reversed in 2003 as a result of increase in market
values, and a gain on the sale of shares in Inmarsat and Oniway
was recorded in 2003. This was partially offset by losses on the
sale of shares in Expert ASA and losses and write-downs on
Venture companies in 2003.

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As of February 26, 2004, we sold our
remaining shareholding in Cosmote for NOK 3.1 billion and
we expect to record a gain on sale of financial assets of
approximately NOK 2.6 billion before taxes in 2004 related
to this transaction.

The reduction in total financial income in 2002
compared to 2001 was mainly related to reduced interest income
on investments in interest-bearing financial assets. In 2001, we
held a portion of the proceeds from our large disposals in
liquid assets in anticipation of payment of investments and
repayments of liabilities.

The increase in total financial expenses in 2002
compared to 2001 was due to increased interest bearing
liabilities and higher average interest rates. At the beginning
of 2002, our interest bearing liabilities increased
significantly due primarily to the acquisition of Pannon GSM. At
the end of 2002, we increased our interest bearing liabilities
by NOK 2.4 billion due to a tax claim regarding the sale of
Sonofon Holding A/S, in connection with which we also issued a
NOK 2.4 billion guarantee to the Norwegian tax authorities,
and by NOK 0.5 billion due to a judicial proceeding in
Greece. We expensed interest of NOK 165 million on these
claims in 2002, of which NOK 80 million related to the tax
claim regarding Sonofon and NOK 85 million to the judicial
proceeding in Greece. You should read  Income
taxes, Capital Resources and
Item 8: Financial Information  Legal
Proceedings for additional information about these claims.

Average interest rates in 2002 increased compared
to 2001 due to financing activities by some subsidiaries, which
have their own external financing, while the average interest
rates for financing through the parent company were reduced
slightly. Capitalized interest decreased in 2002 compared to
2001 due to the lower level of investments in our fixed network
in Norway and the completion of our new headquarters at Fornebu
outside of Oslo.

Net foreign currency losses in 2002 were
primarily related to currency hedging of the purchase price for
the shares in Pannon GSM in Euro, accounts receivable in foreign
currency and interest bearing liabilities in consolidated
entities abroad. Hedge accounting is not permitted for currency
hedging of forecasted equity investments, as Pannon GSM. The
value of the Euro relative to the Norwegian Krone decreased
between the execution of the hedging transaction and its
settlement and a foreign currency loss was accordingly recorded
in connection with the hedging transaction. The reported
investment amount for Pannon GSM in Norwegian Krone was reduced
correspondingly.

The losses and write-downs of financial assets
related mainly to the write down of the shares in Inmarsat, New
Skies, Sponsor Service ASA and Venture companies in addition to
NOK 78 million in capital contribution to Telenor Pension
Fund written down to the book value of the equity in the fund.
The Inmarsat shares are valued in U.S. Dollars and the
write down of NOK 422 million was a result of the weakening
of the U.S. Dollar against the Norwegian Krone during 2002.
The shares in New Skies were written down by NOK 94 million
to the current quoted market price as of December 31, 2002,
due to a significant decline in the publicly quoted share price.
Sponsor Service ASA filed for bankruptcy in the beginning of
2003, and a loss of NOK 66 million was recognized in 2002.
In 2002, we realized small gains and losses on shares compared
to previous years.

Net foreign currency losses in 2001 related
primarily to the Esat Digifone and VIAG Interkom transactions in
the first quarter, and the DiGi.Com transaction in the third
quarter. In the first quarter, some of the proceeds from the
sale of VIAG Interkom were held in Euro in anticipation for
payment of other investments in this currency. Due to
depreciation of the Euro compared to NOK in this period, a
currency loss was recorded on these liquid assets. In
anticipation of receiving payment from the sale of Esat
Digifone, we hedged some of the proceeds, but these activities
did not qualify as hedging for accounting purposes. The currency
losses on these hedge transactions were offset by an increased
gain on the sale of Esat Digifone. In the third quarter, we
retained liquid assets in U.S. dollar until we paid for the
shares in DiGi.Com in September. The U.S. dollar exchange
rate fell compared to NOK in this period, which resulted in a
currency loss of approximately NOK 200 million. The cost
price of DiGi.Com was correspondingly reduced.

NOK 365 million of the sales gain in 2001
related to the sale of North West GSM. The net loss and
write-downs in 2001 included NOK 229 million relating to
the write-down of shares in Scandinavia Online AB and the losses
from sales and write-downs of shares, particularly in our
Venture business.

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Income Taxes

The corporate income tax rate in Norway is 28.0%.
Our effective tax rate (income taxes as a percentage of profit
before taxes) was 32.0% in 2003. In 2002, we recorded a loss
before taxes and minority interests and, therefore, we had a tax
income. Our effective tax rate was 38.0% in 2001.

In 2003, we recorded deferred taxes on retained
earnings in certain companies outside Norway due to their good
financial performance. Telenor now expects to receive dividends
from these companies. The effective tax rate was also affected
by negative results from certain associated companies and
subsidiaries outside Norway and amortization and write-downs of
goodwill, on which deferred tax assets have not been recognized.
This was partially offset by tax-related losses upon decisions
for liquidation and disposal of several companies.

In 2003, Telenor Eiendom Holding AS realized a
tax loss of NOK 2.8 billion in connection with the sale of
shares in Telenor Business Solutions AS to Telenor Business
Solutions Holding AS as part of the overall restructuring of the
Group. We are of the opinion that this is a bona fide tax loss,
and we intend to claim this loss as a regular loss on our tax
returns for 2003. As discussed below, the Norwegian tax
authorities challenged our 2001 tax return regarding the tax
loss realized on the sale of shares in Sonofon in 2001. Even if
we disagree with the position taken by the Norwegian tax
authorities, we recognized the accounting effect of their
challenge in our 2002 accounts. As a result, we did not reflect
the tax effect deriving from the sale of shares in Telenor
business Solutions AS in our results for 2003. However, we will
recognize this tax effect if either the final court decision
regarding the Sonofon tax loss is favorable to us or the
Norwegian tax authorities recognize our tax loss following the
assessment of our 2003 tax returns.

In 2002, we realized taxable losses on
liquidation and sale of companies in our Group. The liquidation
of Telenor Digifone Holding AS and sale of companies within
Nextra International in aggregate contributed to approximately
NOK 3.9 billion in tax deduction. This was partly offset by
our decision in the third quarter 2002 to record as an expense
the tax claim of NOK 2.4 billion in connection with the
challenge of our tax return for 2001 regarding the sale of
Sonofon, as well as NOK 0.4 billion in connection with a
lawsuit in Greece.

In 2002, following the ordinary assessment of our
2001 tax returns, the Norwegian tax authorities did not
recognize the loss deriving from the intragroup sale of the
shares in Sonofon Holding A/S as tax deductible. In the 2001 tax
return for Telenor Communication AS (now Telenor Eiendom Holding
AS), we recognized this loss of NOK 8.6 billion upon the
disposal of shares in Sonofon Holding A/S to Dansk Mobil Holding
AS, a sister company of Telenor Eiendom Holding AS. The disposal
was carried out as an integral part of the overall restructuring
of our Group. As a result of this challenge of our tax loss, we
made a provision and we increased our tax expenses in 2002 by
NOK 2.4 billion, as such an amount was recorded as a
reduction in taxes in 2001. In January 2003, we initiated
proceedings against the Norwegian tax authorities to oppose this
claim. You should read  Critical Accounting
Estimates under Norwegian GAAP  Income Taxes
and Item 8: Financial Information  Legal
Proceedings for additional information about this tax
claim.

The challenge of our tax return increased the
RISK adjustment (adjustment of the tax costprice, that only
affect our Norwegian investors) for Telenor ASA as of
January 1, 2002 by NOK 3.44 per share. You should read
Item 10: Additional Information 
Taxation for additional information on RISK. Any
subsequent final reassessment as a result of a court ruling in
our favor will decrease the RISK adjustment with effect from
January 1 in the year of reassessment.

In 2002, we expensed NOK 0.4 billion as
a tax expense in connection with a court ruling in Greece, as
this was our best estimate of the amount which we could be
required to pay in case of a final outcome unfavorable to us.
However, in 2003 we agreed to a settlement of this judicial
proceeding and NOK 0.2 billion was taken to income.

Losses in our associated companies and
subsidiaries outside Norway, together with the amortization and
write-downs of much of our net excess values (mainly goodwill),
were to a great extent not recognized as deferred tax assets,
which increased our tax expenses relative to net income before
taxes in 2001 and 2003

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and decreased our tax income in 2002. In 2001,
these effects were partly offset by parts of the write-downs of
excess values in 2001 that were recorded as temporary
differences which give rise to deferred tax assets. This was
mainly related to EDB Business Partner. Due to agreements to
sell some activities including parts of Nextra International, we
also recognized tax assets related to losses in these companies.
In addition, reduction in the fair value of our associated
company Sonofon was also realized in 2001 for tax purposes, and
reduced our estimated current taxes by
NOK 2.4 billion. As mentioned above, the tax
authorities in 2002 challenged the tax return for 2001.


Prior to our IPO in December 2000, a new parent
company for the Group (Telenor ASA) was incorporated and all
shares in Telenor AS were contributed to Telenor ASA as an in
kind contribution. At the same time, Telenor AS changed its name
to Telenor Communications AS and in 2002 to Telenor Eiendom
Holding AS. The tax cost base of the Telenor Eiendom Holding AS
shares equal estimated fair value at the time when the in kind
contribution was made. As a necessary part of the overall
restructuring of the Telenor Group, in 2001 and 2002 we demerged
or sold entities from Telenor Eiendom Holding AS to holding
companies for the different business areas. To the extent
Telenor ASA should dispose of shares in Telenor Eiendom Holding
AS, or dispose of shares in entities demerged from Telenor
Eiendom Holding AS, we believe that any taxes will be computed
on the difference between the consideration received and the
high tax base cost, as established through the in kind
contribution.

You should read Critical Accounting
Estimates under Norwegian GAAP  Income Taxes
for additional information about income taxes.

Minority Interests

The following table shows the largest minority
interests reported in our profit and loss statement and in the
balance sheet for and as of the end of 2001, 2002 and 2003.

|                         |  |                   |      |                         |  |                 |      |            |  |               |      |               |  |  |     |   |  |  |       |  |  |  |       | 
|------------------------ |  | ----------------- | ---- | ----------------------- |  | --------------- | ---- | ---------- |  | ------------- | ---- | ------------- |  |  | --- | - |  |  | ----- |  |  |  | ----- | 
|                         |  |                   |      |                         |  |                
|                         |  |                   |      | Year ended December 31, |  | At December 31,
|                         |  | At December 31,   |      |                         |  |                
|                         |  | 2003              |      | 2001                    |  | 2002            |      | 2003       |  | 2002          |      | 2003         
|                         |  |                   |      |                         |  |                 |      |            |  |               |      |              
|                         |  |                   |      | 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       |  |                   |     |                         |  |                 | (83  | )          |  |               | (6   | )             |  |  | (30 | ) |  |  | 65    |  |  |  | 0     | 
|Telenor Venture II ASA   |  |                   | 49.9 |                         |  |                 | (7   | )          |  |               | (67  | )             |  |  | (32 | ) |  |  | 143   |  |  |  | 136   | 
|JSC Kyvistar GSM         |  |                   | 44.7 |                         |  |                 | 0    |            |  |               | 51   |               |  |  | 256 |   |  |  | 787   |  |  |  | 998   | 
|OJSC Comincom/ Combellga |  |                   |     |                         |  |                 | 6    |            |  |               | 15   |               |  |  | 14  |   |  |  | 160   |  |  |  | 0     | 
|DiGi.Com bhd             |  |                   | 39.0 |                         |  |                 | 44   |            |  |               | 47   |               |  |  | 68  |   |  |  | 1,113 |  |  |  | 1,131 | 
|GrameenPhone Ltd         |  |                   | 49.0 |                         |  |                 | 126  |            |  |               | 162  |               |  |  | 283 |   |  |  | 328   |  |  |  | 448   | 
|EDB Business Partner ASA |  |                   | 48.2 |                         |  |                 | (764 | )          |  |               | (555 | )             |  |  | (26 | ) |  |  | 914   |  |  |  | 888   | 
|Other                    |  |                   |      |                         |  |                 | (43  | )          |  |               | (5   | )             |  |  | (43 | ) |  |  | 93    |  |  |  | 45    | 
|                         |  |                   |      |                         |  |                 |      |            |  |               |      |               |  |  |     |   |  |  |       |  |  |  |       | 
|Total                    |  |                   |      |                         |  |                 | (721 | )          |  |               | (358 | )             |  |  | 490 |   |  |  | 3,603 |  |  |  | 3,646 | 
|                         |  |                   |      |                         |  |                 |      |            |  |               |      |               |  |  |     |   |  |  |       |  |  |  |       | 

During 2003, we increased our ownership interest
in Comincom/ Combellga to 100% and at the end of the year we
exchanged our ownership for shares in Golden Telecom, in which
we owned a 20.4% ownership interest as of December 31,
2003. Golden Telecom is accounted for as an associated company.
At the end of 2003, we also sold our ownership interests in
Telenor Venture AS. During 2003, we increased our ownership
interest in GrameenPhone to 51.0%, while our voting interest
remained unchanged at 51.0%.

The minority part of net income for EDB Business
Partner for 2001 and 2002 was affected by amortization and
write-downs of net excess values of NOK 328 million and
295 million, respectively. The net excess values arose
mainly in 1999 and 2000 in connection with our purchase of
EDB ASA and the decrease in our ownership interest in EDB
Business Partner, where the minority interests were recorded at
fair value, which was in excess of book value of the
minoritys part of equity in EDB Business Partner.

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RESULTS OF OPERATIONS BY BUSINESS
AREA

The following tables sets forth selected
financial data for our business areas for the period 2001-2003.
The eliminations reported in these tables are primarily related
to intra group transactions.

|                                                                        |  |                   |        |      |  |      |        |   |  |  |        |  
|----------------------------------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                                        |  | 2001              |        | 2002 |  | 2003
|                                                                        |  |                   |        |      |  |     
|                                                                        |  |                  
|                                                                        |  | (NOK in millions)
|Revenues excluding gains on disposal of fixed
    assets and operations |  |                   |        |      |  |      |        |   |  |  |        |  
|Mobile                                                                  |  |                   | 12,299 |      |  |      | 20,346 |   |  |  | 23,810 |  
|Fixed                                                                   |  |                   | 19,685 |      |  |      | 20,008 |   |  |  | 20,500 |  
|Broadcast                                                               |  |                   | 2,614  |      |  |      | 3,607  |   |  |  | 4,800  |  
|EDB Business Partner                                                    |  |                   | 4,770  |      |  |      | 4,338  |   |  |  | 4,270  |  
|Other business units                                                    |  |                   | 5,718  |      |  |      | 5,040  |   |  |  | 4,154  |  
|Corporate functions and Group activities                                |  |                   | 2,143  |      |  |      | 2,116  |   |  |  | 2,184  |  
|Media(1)                                                                |  |                   | 1,338  |      |  |      |       |   |  |  |       |  
|Eliminations                                                            |  |                   | (7,963 | )    |  |      | (6,787 | ) |  |  | (6,829 | )
|                                                                        |  |                   |        |      |  |      |        |   |  |  |        |  
|Total revenues excluding gains                                          |  |                   | 40,604 |      |  |      | 48,668 |   |  |  | 52,889 |  
|Gains on disposal of fixed assets and operations                        |  |                   | 5,436  |      |  |      | 158    |   |  |  | 232    |  
|                                                                        |  |                   |        |      |  |      |        |   |  |  |        |  
|Total revenues                                                          |  |                   | 46,040 |      |  |      | 48,826 |   |  |  | 53,121 |  
|                                                                        |  |                   |        |      |  |      |        |   |  |  |        |  






|    |                  
|--- | -----------------
|(1) | 9 months in 2001.

|                                         |  |                   |        |      |  |      |       |   |  |  |       |  
|---------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                         |  | 2001              |        | 2002 |  | 2003
|                                         |  |                   |        |      |  |     
|                                         |  |                  
|                                         |  | (NOK in millions)
|Operating profit (loss)                  |  |                   |        |      |  |      |       |   |  |  |       |  
|Mobile                                   |  |                   | 2,495  |      |  |      | 1,414 |   |  |  | 5,224 |  
|Fixed                                    |  |                   | 1,035  |      |  |      | 731   |   |  |  | 2,531 |  
|Broadcast                                |  |                   | (726   | )    |  |      | (475  | ) |  |  | 181   |  
|EDB Business Partner                     |  |                   | (1,208 | )    |  |      | (409  | ) |  |  | (4    | )
|Other business units                     |  |                   | (2,643 | )    |  |      | (736  | ) |  |  | (120  | )
|Corporate functions and Group activities |  |                   | 4,178  |      |  |      | (931  | ) |  |  | (364  | )
|Media(1)                                 |  |                   | 262    |      |  |      |      |   |  |  |      |  
|Eliminations                             |  |                   | (216   | )    |  |      | 86    |   |  |  | 112   |  
|                                         |  |                   |        |      |  |      |       |   |  |  |       |  
|Total operating profit (loss)            |  |                   | 3,177  |      |  |      | (320  | ) |  |  | 7,560 |  
|                                         |  |                   |        |      |  |      |       |   |  |  |       |  






|    |                  
|--- | -----------------
|(1) | 9 months in 2001.

|                                         |  |                   |        |      |  |      |        |   |  |  |        | 
|---------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | 
|                                         |  | 2001              |        | 2002 |  | 2003
|                                         |  |                   |        |      |  |     
|                                         |  |                  
|                                         |  | (NOK in millions)
|EBITDA                                   |  |                   |        |      |  |      |        |   |  |  |        | 
|Mobile                                   |  |                   | 4,067  |      |  |      | 7,482  |   |  |  | 9,567  | 
|Fixed                                    |  |                   | 5,546  |      |  |      | 5,597  |   |  |  | 6,665  | 
|Broadcast                                |  |                   | 344    |      |  |      | 499    |   |  |  | 1,229  | 
|EDB Business Partner                     |  |                   | 447    |      |  |      | 348    |   |  |  | 399    | 
|Other business units                     |  |                   | (718   | )    |  |      | 178    |   |  |  | 408    | 
|Corporate functions and Group activities |  |                   | 4,494  |      |  |      | (569   | ) |  |  | 23     | 
|Media(1)                                 |  |                   | 313    |      |  |      |        |   |  |  |        | 
|Eliminations                             |  |                   | (243   | )    |  |      | (66    | ) |  |  | 11     | 
|                                         |  |                   |        |      |  |      |        |   |  |  |        | 
|Total EBITDA(2)                          |  |                   | 14,250 |      |  |      | 13,469 |   |  |  | 18,302 | 
|                                         |  |                   |        |      |  |      |        |   |  |  |        | 






|    |                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | 9 months in 2001.                                                                                                                                           
|   
|(2) | You should read Results of
    Operations  Group-Operating Profit (Loss) and
    EBITDA for the reconciliation of EBITDA to net income for
    the group.

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TELENOR MOBILE

|                                                   |                           |                   |        |       |  |      |        |       |  |  |        |       | 
|-------------------------------------------------- | ------------------------- | ----------------- | ------ | ----- |  | ---- | ------ | ----- |  |  | ------ | ----- | 
|                                                   |                           | 2001              |        | 2002  |  | 2003
|                                                   |                           |                   |        |       |  |     
|                                                   |                           |                  
|                                                   |                           | (NOK in millions)
|External revenues                                  |                           |                   | 11,001 |       |  |      | 19,079 |       |  |  | 22,483 |      
|Internal revenues                                  |                           |                   | 1,298  |       |  |      | 1,267  |       |  |  | 1,327  |      
|Gains on disposal of fixed assets and operations   |                           |                   | 259    |       |  |      |       |       |  |  |       |      
|                                                   |                           |                   |        |       |  |      |        |       |  |  |        |      
|Total revenues                                     |                           |                   | 12,558 |       |  |      | 20,346 |       |  |  | 23,810 |      
|                                                   |                           |                   |        |       |  |      |        |       |  |  |        |      
|External costs of materials and traffic charges    |                           |                   | 2,695  |       |  |      | 5,020  |       |  |  | 5,481  |      
|Internal costs of materials and traffic charges    |                           |                   | 815    |       |  |      | 725    |       |  |  | 770    |      
|Total costs of materials and traffic charges       |                           |                   | 3,510  |       |  |      | 5,745  |       |  |  | 6,251  |      
|                                                   |                           |                   |        |       |  |      |        |       |  |  |        |      
|Own work capitalized                               |                           |                   | (71    | )     |  |      | (69    | )     |  |  | (97    | )    
|Salaries and personnel costs                       |                           |                   | 1,368  |       |  |      | 1,898  |       |  |  | 1,917  |      
|Other external operating expenses                  |                           |                   | 2,774  |       |  |      | 4,330  |       |  |  | 5,170  |      
|Other internal operating expenses                  |                           |                   | 910    |       |  |      | 960    |       |  |  | 997    |      
|Losses on disposal of fixed assets and write-downs |                           |                   |       |       |  |      |       |       |  |  | 5      |      
|Depreciation and amortization                      |                           |                   | 1,550  |       |  |      | 3,779  |       |  |  | 4,308  |      
|Write-downs                                        |                           |                   | 22     |       |  |      | 2,289  |       |  |  | 35     |      
|                                                   |                           |                   |        |       |  |      |        |       |  |  |        |      
|Total operating expenses                           |                           |                   | 10,063 |       |  |      | 18,932 |       |  |  | 18,586 |      
|                                                   |                           |                   |        |       |  |      |        |       |  |  |        |      
|Operating profit                                   |                           |                   | 2,495  |       |  |      | 1,414  |       |  |  | 5,224  |      
|                                                   |                           |                   |        |       |  |      |        |       |  |  |        |      
|Associated companies                               |                           |                   | 9,677  |       |  |      | (2,030 | )     |  |  | 1,639  |      
|Net financial items                                |                           |                   | (496   | )     |  |      | (2,050 | )     |  |  | (2,182 | )    
|                                                   |                           |                   |        |       |  |      |        |       |  |  |        |      
|Profit before taxes and minority
    interests     |                           |                   | 11,676 |       |  |      | (2,666 | )     |  |  | 4,681  |      
|                                                   |                           |                   |        |       |  |      |        |       |  |  |        |      
|EBITDA                                             |                           |                   | 4,067  |       |  |      | 7,482  |       |  |  | 9,567  |      
|Depreciation and amortization                      |                           |                   | 1,550  |       |  |      | 3,779  |       |  |  | 4,308  |      
|Write-downs                                        |                           |                   | 22     |       |  |      | 2,289  |       |  |  | 35     |      
|                                                   |                           |                   |        |       |  |      |        |       |  |  |        |      
|Operating profit                                   |                           |                   | 2,495  |       |  |      | 1,414  |       |  |  | 5,224  |      
|                                                   |                           |                   |        |       |  |      |        |       |  |  |        |      
|Operating profit/ Total revenues (%)               |                           |                   | 19.9   |       |  |      | 6.9    |       |  |  | 21,9   |      
|EBITDA/ Total revenues (%)                         |                           |                   | 32.4   |       |  |      | 36.8   |       |  |  | 40.2   |      
|Investments:                                       |                           |                   |        |       |  |      |        |       |  |  |        |      
|                                                   | Capex                     |                   |        | 2,716 |  |      |        | 3,731 |  |  |        | 3,667 | 
|                                                   | Investments in businesses |                   |        | 4,495 |  |      |        | 8,894 |  |  |        | 95    | 
|No. of man-years (end of period)                   |                           |                   | 4,217  |       |  |      | 6,551  |       |  |  | 6,924  |      
|                                                   | Of which abroad           |                   |        | 2,084 |  |      |        | 4,673 |  |  |        | 5,201 | 
|Revenues                                           |                           |                   |        |       |  |      |        |       |  |  |        |      
|Telenor Mobil  Norway                             |                           |                   | 10,056 |       |  |      | 10,695 |       |  |  | 10,909 |      
|Pannon GSM  Hungary                               |                           |                   |       |       |  |      | 4,505  |       |  |  | 5,370  |      
|DiGi.Com  Malaysia                                |                           |                   | 906    |       |  |      | 2,715  |       |  |  | 3,176  |      
|GrameenPhone  Bangladesh                          |                           |                   | 1,185  |       |  |      | 1,589  |       |  |  | 1,536  |      
|Kyivstar  Ukraine                                 |                           |                   |       |       |  |      | 708    |       |  |  | 2,634  |      
|Other including eliminations                       |                           |                   | 411    |       |  |      | 134    |       |  |  | 185    |      
|                                                   |                           |                   |        |       |  |      |        |       |  |  |        |      
|Total revenues                                     |                           |                   | 12,558 |       |  |      | 20,346 |       |  |  | 23,810 |      
|                                                   |                           |                   |        |       |  |      |        |       |  |  |        |      

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|                             |  |                   |       |      |  |      |       |   |  |  |       |  
|---------------------------- |  | ----------------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                             |  | 2001              |       | 2002 |  | 2003
|                             |  |                   |       |      |  |     
|                             |  |                  
|                             |  | (NOK in millions)
|EBITDA                       |  |                   |       |      |  |      |       |   |  |  |       |  
|Telenor Mobil  Norway       |  |                   | 3,731 |      |  |      | 4,330 |   |  |  | 4,262 |  
|Pannon GSM  Hungary         |  |                   |      |      |  |      | 1,586 |   |  |  | 1,924 |  
|DiGi.Com  Malaysia          |  |                   | 306   |      |  |      | 1,022 |   |  |  | 1,295 |  
|GrameenPhone  Bangladesh    |  |                   | 457   |      |  |      | 757   |   |  |  | 1,001 |  
|Kyivstar  Ukraine           |  |                   |      |      |  |      | 403   |   |  |  | 1,573 |  
|Other including eliminations |  |                   | (427  | )    |  |      | (616  | ) |  |  | (488  | )
|                             |  |                   |       |      |  |      |       |   |  |  |       |  
|Total EBITDA                 |  |                   | 4,067 |      |  |      | 7,482 |   |  |  | 9,567 |  
|                             |  |                   |       |      |  |      |       |   |  |  |       |  

Overview

The Mobile business areas results in 2001,
2002 and 2003 were affected by the consolidation of:



| |   |                                                                                                                                                                                                                                                                                                
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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%. The ownership
    share in Kyivstar was increased further to 55.35% as a result of
    a capital increase with effect from May 2003.
|
| |  | 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%.                                                                                                                                     
|
| |  | DiGi.Com as a subsidiary effective from
    September 1, 2001, when we increased our ownership interest
    in the Malaysian operator from 32.9% to 61.0%.                                                                                                                                     

Effective from January 1, 2004, Telenor
Mobiles activities in the Scandinavian region were grouped
into our new unit Telenor Nordic Mobile. We believe that through
Telenor Nordic Mobile we can realize synergies and further
improve operational efficiency across our operations in
Scandinavia. As part of this strategy, we increased our
ownership interest in the Danish operator Sonofon from 53.5% to
100%, effective from February 12, 2004. You should read
Item 4  Information About the
Company  Telenor Mobile  Mobile Operations
Outside Norway  Associated Companies and Joint
Ventures for additional information about such acquisition.

An increasing proportion of our revenues and
profits (losses) are derived from our international mobile
operations. In addition to the effects from the consolidation of
Kyivstar and Pannon GSM in 2002 and DiGi.Com in 2001, there was
an underlying growth in revenues without a corresponding growth
in expenses in our foreign subsidiaries. This contributed to an
increase in EBITDA in the period 2001 to 2003. Amortization and
depreciation increased in the same period, mainly due to the
consolidation of these companies. Operating profit was reduced
in 2002 compared to 2001 due to write-downs of NOK
2.3 billion, of which NOK 2.1 billion was goodwill
related to DiGi.Com. In 2001, we recorded a gain on sale of the
subsidiary Norcom by NOK 259 million.

In 2003, in our more mature markets, particularly
Norway and Hungary we experienced increased competition and a
decrease in our market share despite the increase in penetration
rates for mobile telephony services. Operators in mature markets
face increased competition and tend to shift their focus from
the acquisition of new customers to customer retention and the
stabilization of their market shares. This may result in
increased costs related to sales, marketing and commissions and,
more generally, in increased pressure on margins. In addition,
operators in mature markets tend to focus on increased average
usage and revenues per subscriber as the main source of
potential growth by introducing new and attractive services. We
further believe that our constant focus on improving the
operational efficiency of our mobile operations will contribute
to improving or at least stabilizing overall profitability in
mature markets.

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In our emerging markets, particularly Bangladesh
and the Ukraine, which still offer a significant growth
potential and are characterized by low penetration rates, we
continue to focus primarily on acquiring new subscribers. In
addition, we seek to improve the cost efficiency of our
operations in these markets by realizing the economies of scale
and sharing the best practices created across our international
mobile operations.

During the period 2001 to 2003, we also optimized
our capital expenditure without reducing the quality of our
mobile networks across our international mobile operations. This
was due in part to the realization of important synergies across
these operations, such as centralized procurement, global
supplier agreements and best practice solutions for network
development and optimization.

Fluctuations in currency exchange rates between
the Norwegian Krone and the functional currencies of our mobile
operations could affect our reported earnings and the value in
Norwegian Krone of the investments. For example, in 2003 the
significant strengthening of the Norwegian Krone against the
US Dollar and other currencies linked to the US Dollar had
an adverse effect on the results of operations of, and the value
of our investment in, our mobile subsidiaries DiGi.Com
(Malaysia), Kyivstar (Ukraine), whose functional currency is the
US Dollar, and GrameenPhone (Bangladesh) when reported in
Norwegian Krone.

Telenor Mobil  Norway

|                                     |                           |                   |        |       |  |      |        |     |  |  |        |     | 
|------------------------------------ | ------------------------- | ----------------- | ------ | ----- |  | ---- | ------ | --- |  |  | ------ | --- | 
|                                     |                           | 2001              |        | 2002  |  | 2003
|                                     |                           |                   |        |       |  |     
|                                     |                           |                  
|                                     |                           | (NOK in millions)
|External revenues                    |                           |                   |        |       |  |      |        |     |  |  |        |    
|Mobile outgoing traffic              |                           |                   | 3,500  |       |  |      | 3,880  |     |  |  | 3,712  |    
|Mobile incoming traffic              |                           |                   | 392    |       |  |      | 389    |     |  |  | 455    |    
|Roaming                              |                           |                   | 1,209  |       |  |      | 1,220  |     |  |  | 1,224  |    
|                                     |                           |                   |        |       |  |      |        |     |  |  |        |    
|Total traffic                        |                           |                   | 5,101  |       |  |      | 5,489  |     |  |  | 5,391  |    
|SMS and content services             |                           |                   | 1,187  |       |  |      | 1,530  |     |  |  | 1,537  |    
|Subscriptions and connections        |                           |                   | 1,328  |       |  |      | 1,350  |     |  |  | 1,216  |    
|Customer equipment                   |                           |                   | 620    |       |  |      | 616    |     |  |  | 722    |    
|Service providers and other          |                           |                   | 510    |       |  |      | 456    |     |  |  | 773    |    
|                                     |                           |                   |        |       |  |      |        |     |  |  |        |    
|Total external revenues              |                           |                   | 8,746  |       |  |      | 9,441  |     |  |  | 9,639  |    
|Internal revenues                    |                           |                   | 1,310  |       |  |      | 1,254  |     |  |  | 1,270  |    
|Gains on disposal                    |                           |                   |       |       |  |      |       |     |  |  |       |    
|                                     |                           |                   |        |       |  |      |        |     |  |  |        |    
|Total revenues                       |                           |                   | 10,056 |       |  |      | 10,695 |     |  |  | 10,909 |    
|                                     |                           |                   |        |       |  |      |        |     |  |  |        |    
|Total operating expenses             |                           |                   | 7,430  |       |  |      | 7,687  |     |  |  | 7,794  |    
|                                     |                           |                   |        |       |  |      |        |     |  |  |        |    
|Operating profit                     |                           |                   | 2,626  |       |  |      | 3,008  |     |  |  | 3,115  |    
|                                     |                           |                   |        |       |  |      |        |     |  |  |        |    
|EBITDA                               |                           |                   | 3,731  |       |  |      | 4,330  |     |  |  | 4,262  |    
|Depreciation and amortization        |                           |                   | 1,083  |       |  |      | 1,207  |     |  |  | 1,147  |    
|Write-downs                          |                           |                   | 22     |       |  |      | 115    |     |  |  |       |    
|                                     |                           |                   |        |       |  |      |        |     |  |  |        |    
|Operating profit                     |                           |                   | 2,626  |       |  |      | 3,008  |     |  |  | 3,115  |    
|                                     |                           |                   |        |       |  |      |        |     |  |  |        |    
|Operating profit/ Total revenues (%) |                           |                   | 26.1   |       |  |      | 28.1   |     |  |  | 28.6   |    
|EBITDA/ Total revenues (%)           |                           |                   | 37.1   |       |  |      | 40.5   |     |  |  | 39.1   |    
|Investments                          |                           |                   |        |       |  |      |        |     |  |  |        |    
|                                     | Capex                     |                   |        | 1,674 |  |      |        | 750 |  |  |        | 500 | 
|                                     | Acquisition of businesses |                   |        |      |  |      |        |    |  |  |        |    | 
|No. of man-years (end of period)     |                           |                   | 1,825  |       |  |      | 1,713  |     |  |  | 1,602  |    
|No. of subscriptions (in thousand)   |                           |                   | 2,307  |       |  |      | 2,382  |     |  |  | 2,364  |    

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Operating profit and EBITDA  Telenor
Mobil  Norway

Operating profit in 2003 increased by 3.4%
compared to 2002. Depreciation, amortization and write-downs of
tangible and intangible assets decreased due to a decrease in
capital expenditure during 2002 and 2003 and the effect of
write-downs in 2002. Both EBITDA and the EBITDA margin (EBITDA
as a percentage of total revenues) decreased in 2003 compared to
2002. This decrease was due primarily to increased operating
expenses in connection with increased marketing activities as a
result of increased competition, higher traffic charges as a
result of increased traffic to other mobile networks, a
different mix of subscriptions and price reductions. This
decrease was partially offset by a decrease in certain other
operating expenses, primarily fees to consultants and salaries
and personnel costs, as well as an increase in revenues from
sales to other service providers. The decrease in salaries and
personnel costs in 2003 was due to our workforce reduction in
2002.

Operating profit in 2002 increased by 14.6%
compared to 2001. Depreciation, amortization and write-downs of
tangible and intangible assets increased as an effect of high
capital expenditure during 2001, the shortening of depreciation
periods for part of our equipment as of April 1, 2001 and a
write-down related to our IT-systems portfolio in 2002. EBITDA
increased in 2002 compared to 2001 due to changes in the
composition of revenues, with a larger share of our revenues
being generated from higher margin products. We incurred
expenses of NOK 104 million for workforce reductions in
2002. Adjusted for these expenses, other operating expenses
decreased as a result of our cost reduction measures adopted in
2002.

Revenues  Telenor
Mobil  Norway

Our market share for GSM subscriptions as of
December 31, 2003 was 57% compared to 61% as of
December 31, 2002. During the same period, the mobile
penetration in Norway increased from 84% to approximately 90%.

In 2003, external revenues from outgoing mobile
traffic in Norway decreased primarily due to the decrease in the
number of and changes in the mix of contract subscriptions and
price reductions. This decrease was partially offset by an
increase in average traffic minutes generated by each
subscription.

External revenues from incoming mobile traffic
increased in 2003 compared to 2002 due primarily to an increase
in traffic volume from subscribers of other mobile operators.

In 2003, external revenues from roaming were in
line with 2002. The decrease in traffic volume from subscribers
of foreign operators in Norway was offset by an increase in
volume of SMS and higher average prices per minute from
Norwegian subscribers abroad. Higher average prices per minute
were due to a combination of increased prices charged by
operators outside Norway and changes in travelling patterns
resulting in more Norwegians travelling to countries with higher
prices per minute.

In 2003, external revenues from SMS and Content
services were in line with 2002. The number of messages
increased by 234 million to 1,926 million in 2003
compared to 2002. This was offset by lower average prices in
2003 compared to 2002, mainly due to an increase in the number
of free messages and reduced prices as from May 16, 2003.
The number of SMS messages terminating from other operators
increased by approximately 100 million to approximately
550 million in 2003 compared to 2002.

In 2003, external revenues from subscriptions and
connections decreased compared to 2002 due to migration of
customers to lower priced subscription plans and a decrease in
the number of subscriptions. In addition, we increased our
marketing activities to retain subscribers by offering discounts
on subscription contracts with a minimum contract period.

Our external revenues from sales of customer
equipment are derived primarily from sales of handsets and
computer equipment through our own distributors. These external
revenues increased in 2003 compared to 2002 due primarily to new
contracts for the supply of home computers to the employees of
certain other companies.

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External revenues from service providers
increased in 2003 compared to 2002 due to the increase in the
number of subscriptions of service providers and in average
traffic minutes and SMS generated by each subscription.

Other external revenues increased in 2003
compared to 2002 as a result of higher sales of SIM cards to
service providers and foreign operators.

Internal revenues consist of incoming traffic
from the Fixed business area and from outgoing mobile traffic
generated by employees of other group companies.

Our market share for GSM subscriptions as of
December 31, 2002 was estimated to be 61%, the same level
as at December 31, 2001. During the same period, the
estimated mobile penetration in Norway increased from 80% to 84%.

In 2002, increased external revenues from
outgoing mobile traffic in Norway were primarily due to the
increase in the number of subscriptions and to the increase in
average traffic generated by each subscription.

External revenues from incoming mobile traffic in
2002 were in line with 2001. Increased traffic volume was offset
by the price reduction effective from May 5, 2001.

External revenues from roaming remained stable
despite an increase in volume generated by our Norwegian
subscribers abroad due to the strengthening of the Norwegian
Krone.

The increase in external revenues from SMS and
content services in 2002 compared to 2001 was due to a higher
number of SMS and subscriptions. The number of SMS increased by
322 millions to 1,692 millions in 2002, and on average
each subscription generated a higher number of SMS in 2002.
Revenues increased more than volume as a result of a higher
average price in 2002 compared to 2001.

External revenues from subscriptions and
connections were relatively stable in 2002 compared to 2001 due
to migration of customers to lower priced subscriptions, which
was offset by the effect of a higher number of subscriptions.

External revenues from service providers were
stable in 2002 compared to 2001. Price reduction was offset by a
higher number of subscriptions of service providers and a slight
increase in traffic.

Other external revenues decreased in 2002
compared to 2001 as a result of lower sales of SIM cards to
service providers and foreign operators.

Decrease in internal revenues was due to lower
prices in 2002 compared to 2001.

Operating expenses  Telenor
Mobil  Norway

|                                                   |  |                   |       |      |  |      |       |   |  |  |       |  
|-------------------------------------------------- |  | ----------------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                                   |  | 2001              |       | 2002 |  | 2003
|                                                   |  |                   |       |      |  |     
|                                                   |  |                  
|                                                   |  | (NOK in millions)
|External costs of materials and traffic charges    |  |                   | 1,793 |      |  |      | 1,872 |   |  |  | 2,127 |  
|Internal costs of materials and traffic charges    |  |                   | 814   |      |  |      | 722   |   |  |  | 775   |  
|                                                   |  |                   |       |      |  |      |       |   |  |  |       |  
|Total costs of materials and traffic charges       |  |                   | 2,607 |      |  |      | 2,594 |   |  |  | 2,902 |  
|                                                   |  |                   |       |      |  |      |       |   |  |  |       |  
|Own work capitalized                               |  |                   | (55   | )    |  |      | (52   | ) |  |  | (33   | )
|Salaries and personnel costs                       |  |                   | 976   |      |  |      | 1,064 |   |  |  | 936   |  
|Other external operating expenses                  |  |                   | 2,021 |      |  |      | 1,970 |   |  |  | 2,019 |  
|Other internal operating expenses                  |  |                   | 776   |      |  |      | 789   |   |  |  | 823   |  
|Losses on disposal of fixed assets and write-downs |  |                   |      |      |  |      |      |   |  |  |      |  
|Depreciation and amortization                      |  |                   | 1,083 |      |  |      | 1,207 |   |  |  | 1,147 |  
|Write-downs                                        |  |                   | 22    |      |  |      | 115   |   |  |  |      |  
|                                                   |  |                   |       |      |  |      |       |   |  |  |       |  
|Total operating expenses                           |  |                   | 7,430 |      |  |      | 7,687 |   |  |  | 7,794 |  
|                                                   |  |                   |       |      |  |      |       |   |  |  |       |  

Increased operating expenses in 2003 compared to
2002 were due primarily to the increase in costs of materials
and traffic charges and costs related to sales, marketing and
commissions.

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Costs of materials and traffic charges in 2003
increased compared to 2002 due primarily to increased outgoing
traffic (voice and SMS) terminating in other telecom
operators networks. Roaming charges also increased, due
primarily to increased traffic from subscribers of service
providers.

Salaries and personnel costs decreased in 2003
compared to 2002 as in 2003 we realized the full-year effect of
the decrease in the number of employees that occurred in 2002 as
part of our cost reduction measures.

Other operating expenses increased in 2003
compared to 2002 due primarily to increased costs related to
sales, marketing and commissions. This increase was due
primarily to our increased focus on customer retention as a
result of increased competition. In addition, in 2003 there was
an increase in IT and network-related expenses due to the
increase in traffic volumes and the number of services offered
to subscribers. This increase was partially offset by cost
reduction measures, especially with respect to the use of
consultants. We expensed NOK 104 million for workforce
reductions in 2002.

Depreciation and amortization decreased in 2003
compared to 2002 due to reduced capital expenditure in both 2002
and 2003 and the effect of write-downs in 2002. In addition, the
expected useful life of parts of our IT-system portfolio was
increased, resulting in lower depreciation expenses in 2003.

Increased operating expenses in 2002 compared to
2001 were due primarily to higher depreciation, amortization and
write-downs and expenses for workforce reductions.

Costs of materials and traffic charges in 2002
were slightly lower than in 2001 due primarily to reduced
roaming charges as a result of the strengthening of the
Norwegian Krone and lower sales of SIM cards. This was partially
offset by higher traffic charges from the increase in outgoing
traffic (voice and SMS) to subscribers in other telecom
operators networks.

Salaries and personnel costs increased in 2002
compared to 2001 due to general wage inflation and the net
increase in the number of employees notwithstanding the
workforce reduction that occurred in the fourth quarter of 2002.

Other operating expenses decreased in 2002
compared to 2001 despite expenses for workforce reductions of
NOK 104 million in 2002. The decrease was due to cost
reduction measures, especially reduced use of consultants and
reduced costs related to sales, marketing and commissions.

Depreciation and amortization increased in 2002
compared to 2001 due to the relatively high level of capital
expenditure during 2001 and the shortening of depreciation
periods as of April 1, 2001. Increased write-downs in 2002
related primarily to assets no longer in use in our IT-system
portfolio.

Capital expenditure  Telenor
mobil  Norway

Capital expenditure was lower in 2003 compared to
2002 due primarily to reduced investments in administrative
IT-systems. In 2002 and 2003, we made limited capital
expenditure in our UMTS network and equipment. However, at the
end of 2003 we increased our investments in our GSM network to
expand its coverage and capacity and to prepare it for an
upgrade to a new mobile telephony technology. We expect capital
expenditure to increase in 2004 due to investments in such new
technology. Capital expenditure was substantially lower in 2002
compared to 2001 due to lower capacity and coverage investments
as growth in traffic decreased.

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Pannon GSM  Hungary

|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|------------------------------------ |  | ----------------- | - | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                     |  | 2001              |   | 2002 |  | 2003
|                                     |  |                   |   |      |  |     
|                                     |  |                  
|                                     |  | (NOK in millions)
|Mobile related revenues              |  |                   |  |      |  |      | 4,187 |  |  |  | 5,005 | 
|Other revenues                       |  |                   |  |      |  |      | 318   |  |  |  | 365   | 
|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|Total revenues                       |  |                   |  |      |  |      | 4,505 |  |  |  | 5,370 | 
|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|Total operating expenses             |  |                   |  |      |  |      | 3,634 |  |  |  | 4,345 | 
|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|Operating profit                     |  |                   |  |      |  |      | 871   |  |  |  | 1,025 | 
|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|EBITDA                               |  |                   |  |      |  |      | 1,586 |  |  |  | 1,924 | 
|Depreciation and amortization        |  |                   |  |      |  |      | 700   |  |  |  | 889   | 
|Write-downs                          |  |                   |  |      |  |      | 15    |  |  |  | 10    | 
|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|Operating profit                     |  |                   |  |      |  |      | 871   |  |  |  | 1,025 | 
|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|Operating profit/ Total revenues (%) |  |                   |  |      |  |      | 19.3  |  |  |  | 19.1  | 
|EBITDA/ Total revenues (%)           |  |                   |  |      |  |      | 35.2  |  |  |  | 35.8  | 
|Capex                                |  |                   |  |      |  |      | 825   |  |  |  | 644   | 
|No. of man-years (end of period)     |  |                   |   |      |  |      | 1,523 |  |  |  | 1,499 | 
|No. of subscriptions (in thousand)   |  |                   |  |      |  |      | 2,450 |  |  |  | 2,618 | 

The preceding table shows figures included in the
accounts for Telenor from the date of acquisition. We
consolidated Pannon GSM as a subsidiary effective
February 4, 2002, when we increased our ownership interest
in the company from 25.8% to 100%. The following discussion and
analysis of Pannon GSMs results of operations is based on
Pannon GSMs financial statements for the years ended
December 31, 2001 and 2002, as prepared by Pannon GSM,
which we have adjusted to conform materially with Norwegian
GAAP. We believe that such information provides a more useful
measure of comparative financial performance for a period when
we had not yet consolidated Pannon GSM. However, such
information does not purport to represent what the actual
results of operations would have been had Pannon GSM been
consolidated from January 1, 2001 and is not necessarily
indicative of future operating results.

The Norwegian Krone depreciated against the
Hungarian Forint by 2% in 2003 compared to 2002, while it
appreciated by 1% in 2002 compared to 2001.

Operating profit and EBITDA 
Pannon GSM

Operating profit and EBITDA increased in 2003
compared to 2002 due to higher traffic as a result of the
increase in subscriptions. The operating profit margin
(operating profit as a percentage of total revenues) decreased
slightly in 2003 compared to 2002 due to increased amortization
and depreciation. The EBITDA margin increased slightly in 2003
due to increased revenues, which more than offset increased
operating expenses.

Operating profit increased in 2002 compared to
2001 and EBITDA increased by NOK 0.3 billion in 2002
compared to 2001 due to higher traffic as a result of more
subscriptions and increased use of text messages (SMS), which
more than offset increased operating expenses. Provisions of NOK
56 millions were made in 2002 for the estimated effect of
charges related to the establishment of a Universal Service Fund
with effect from February 1, 2002. The operating profit
margin increased in 2002 compared to 2001 and the EBITDA margin
increased from 35% in 2001 to 36% in 2002.

Revenues  Pannon
GSM

In 2003, Pannon GSM had a 9.1% increase in
revenues compared to 2002. This growth was primarily due to
increased traffic resulting from an increase of 168,000
subscriptions in 2003. The growth in revenues from 2001 to 2002
was 18% with an increase in subscriptions during 2002 of
575,000. In both years, on average each subscription generated
less revenue compared to the previous year, as new customers and

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customers with prepaid subscriptions reduced the
average number of call minutes and revenues per subscription.
Other revenues mainly consisted of sales of handsets.


Pannon GSMs market share of GSM
subscriptions in Hungary at December 31, 2003 was estimated
to be 36% compared to 38% at December 31, 2002 and 40% as
at December 31, 2001. The reduction was due to increased
competition. At December 31, 2003, the estimated mobile
penetration in Hungary had increased to 79% compared to 68% at
December 31, 2002 and 49% at December 31, 2001.

Operating expenses  Pannon
GSM

|                                                   |  |                   |   |      |  |      |       |  |  |  |       | 
|-------------------------------------------------- |  | ----------------- | - | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                                   |  | 2001              |   | 2002 |  | 2003
|                                                   |  |                   |   |      |  |     
|                                                   |  |                  
|                                                   |  | (NOK in millions)
|External costs of materials and traffic charges    |  |                   |  |      |  |      | 1,754 |  |  |  | 2,048 | 
|Internal costs of materials and traffic charges    |  |                   |  |      |  |      | 2     |  |  |  | 2     | 
|Total costs of materials and traffic charges       |  |                   |  |      |  |      | 1,756 |  |  |  | 2,050 | 
|                                                   |  |                   |   |      |  |      |       |  |  |  |       | 
|Own work capitalized                               |  |                   |  |      |  |      |      |  |  |  |      | 
|Salaries and personnel costs                       |  |                   |  |      |  |      | 298   |  |  |  | 385   | 
|Other external operating expenses                  |  |                   |  |      |  |      | 865   |  |  |  | 1,001 | 
|Other internal operating expenses                  |  |                   |  |      |  |      |      |  |  |  | 10    | 
|Losses on disposal of fixed assets and write-downs |  |                   |  |      |  |      |      |  |  |  |      | 
|Depreciation and amortization                      |  |                   |  |      |  |      | 700   |  |  |  | 889   | 
|Write-downs                                        |  |                   |  |      |  |      | 15    |  |  |  | 10    | 
|                                                   |  |                   |   |      |  |      |       |  |  |  |       | 
|Total operating expenses                           |  |                   |  |      |  |      | 3,634 |  |  |  | 4,345 | 
|                                                   |  |                   |   |      |  |      |       |  |  |  |       | 

Operating expenses increased by NOK
0.4 billion in 2003 compared to the full year of 2002
primarily due to increased costs of materials and traffic
charges as a result of increased traffic terminating in other
operators networks. Other operating expenses increased in
2003 compared to 2002 due to higher marketing costs and higher
commissions related to the increased sales of contract
subscriptions. Depreciation and amortization increased in 2003
compared to 2002 as a result of a higher level of capital
expenditures in recent years. As our accumulated capital
expenditures that are the basis for depreciation and
amortization increase, our depreciation and amortization will
increase accordingly as long as our fixed assets are not
entirely depreciated.

Operating expenses increased by NOK
0.6 billion in 2002 compared to 2001, due primarily to
increased costs of materials and traffic charges. In addition,
higher capital expenditure in previous periods resulted in
increased depreciation and amortization. Other operating
expenses also increased due to provisions of
NOK 56 million to cover the estimated effect of
charges related to the introduction of a Universal Service Fund
(USF) with effect from February 1, 2002. You should read
Item 4  Information About the
Company  Telenor Mobile  Mobile Operations
Outside Norway  Consolidated Subsidiaries 
Pannon GSM for additional information regarding the
USF.

Capital expenditure  Pannon
GSM

Capital expenditure decreased by NOK
0.2 billion in 2003 compared to 2002, and by NOK
0.3 billion in 2002 compared to 2001, in each case due to
reduced capital expenditure in the GSM network and equipment and
IT systems.

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DiGi.Com  Malaysia (ownership interest
61.0% as of December 31, 2003)

|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|------------------------------------ |  | ----------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                     |  | 2001              |       | 2002 |  | 2003
|                                     |  |                   |       |      |  |     
|                                     |  |                  
|                                     |  | (NOK in millions)
|Mobile related revenues              |  |                   | 691   |      |  |      | 2,273 |  |  |  | 2,713 | 
|Other revenues                       |  |                   | 215   |      |  |      | 442   |  |  |  | 463   | 
|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|Total revenues                       |  |                   | 906   |      |  |      | 2,715 |  |  |  | 3,176 | 
|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|Total operating expenses             |  |                   | 725   |      |  |      | 2,284 |  |  |  | 2,679 | 
|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|Operating profit                     |  |                   | 181   |      |  |      | 431   |  |  |  | 497   | 
|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|EBITDA                               |  |                   | 306   |      |  |      | 1,022 |  |  |  | 1,295 | 
|Depreciation and amortization        |  |                   | 125   |      |  |      | 579   |  |  |  | 780   | 
|Write-downs                          |  |                   |      |      |  |      | 12    |  |  |  | 18    | 
|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|Operating profit                     |  |                   | 181   |      |  |      | 431   |  |  |  | 497   | 
|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|Operating profit/ Total revenues (%) |  |                   | 20.0  |      |  |      | 15.9  |  |  |  | 15.6  | 
|EBITDA/ Total revenues (%)           |  |                   | 33.8  |      |  |      | 37.6  |  |  |  | 40.8  | 
|Capex                                |  |                   | 459   |      |  |      | 1,457 |  |  |  | 1,043 | 
|No. of man-years (end of period)     |  |                   | 1,477 |      |  |      | 1,443 |  |  |  | 1,450 | 
|No. of subscriptions (in thousand)   |  |                   | 1,039 |      |  |      | 1,616 |  |  |  | 2,207 | 

The preceding table shows figures included in the
accounts for Telenor from the date of acquisition. We
consolidated DiGi.Com as a subsidiary effective
September 1, 2001, when we increased our ownership interest
in the company from 32.9% to 61.0%. The following discussion and
analysis of DiGi.Coms results of operations is based on
DiGi.Coms financial statements for the year ended
December 31, 2001 as prepared by DiGi.Com, which we have
adjusted to conform materially with Norwegian GAAP. We believe
that such information provides a more useful measure of
comparative financial performance for a period when we had not
yet consolidated DiGi.Com for a full year. However, such
information does not purport to represent what the actual
results of operations would have been had DiGi.Com been
consolidated from January 1, 2001 and is not necessarily
indicative of future operating results. The discussion and
analysis of DiGi.Coms results in 2003 compared to 2002 is
based on the figures consolidated in the Telenor Group accounts,
as shown above.

The Norwegian Krone appreciated against the
Malaysian Ringgit by 12% in 2003 compared to 2002 and by 11% in
2002 compared to 2001.

Operating profit and EBITDA 
DiGi.Com

Operating profit and EBITDA measured in NOK and
in local currency increased in 2003 compared to 2002 due to the
increase in revenues, which more than offset the increase in
operating expenses. Depreciation and amortization increased due
to the full year effect of the shortening of the depreciation
period for some network-based equipment from July 1, 2002
and due to a high level of capital expenditure in the recent
years. This contributed to a slight decrease in the operating
profit margin.

Operating profit decreased in 2002 compared to
2001 if measured in NOK. However, measured in local currency
operating profit increased. Depreciation, amortization and
write-downs increased due to a shorter depreciation period for
some network-based equipment with effect from July 1, 2002.
EBITDA measured in NOK increased in 2002 compared to 2001 by
NOK 0.15 billion due to higher traffic as a result of
the increase in the number of subscriptions and the use of short
text messages (SMS), which more than offset increased operating
expenses. The EBITDA margin increased from 34% to 38% in 2002,
while the operating profit margin decreased.

Revenues  DiGi.Com

In 2003, DiGi.Com had a 17% increase in revenues
measured in NOK compared to 2002. Measured in local currency,
the increase was 33%. The increase in revenues was due primarily
to higher traffic and

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increased use of value added services (VAS)
resulting from an increase of 591,000 in the number of
subscriptions in 2003. However, on average each subscription
generated less revenue as new customers and customers with
prepaid subscriptions reduced the average number of call minutes
and revenues per subscription. DiGi.Com also introduced price
reductions in the form of free call time and loyalty programs in
2003 and this contributed to the decrease in revenues per
subscription. Other revenues, mainly coming from DiGi.Coms
international carrier business, increased in 2003 compared to
2002 due to higher traffic volumes.


In 2002, revenues increased by 5% compared to
2001 if measured in NOK. Measured in local currency, the
increase was 18%. The increase was due primarily to increased
traffic resulting from an increase of 577,000 in the number of
subscriptions in addition to higher use of text messages (SMS).
However, on average each subscription generated less revenue as
new customers and customers with prepaid subscriptions reduced
the average number of call minutes and revenues per subscription.

DiGi.Coms market share of GSM subscriptions
in Malaysia at December 31, 2003 was estimated to be 20%
compared to 19% at December 31, 2002 and 17% at
December 31, 2001. During 2003, the estimated mobile
penetration in Malaysia increased from 37% to 44%, compared to
31% at December 31, 2001.

Operating expenses 
DiGi.Com

|                                                   |  |                   |     |      |  |      |       |   |  |  |       |  
|-------------------------------------------------- |  | ----------------- | --- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                                   |  | 2001              |     | 2002 |  | 2003
|                                                   |  |                   |     |      |  |     
|                                                   |  |                  
|                                                   |  | (NOK in millions)
|External costs of materials and traffic charges    |  |                   | 340 |      |  |      | 730   |   |  |  | 801   |  
|Internal costs of materials and traffic charges    |  |                   | 1   |      |  |      | 3     |   |  |  | 3     |  
|Total costs of materials and traffic charges       |  |                   | 341 |      |  |      | 733   |   |  |  | 804   |  
|                                                   |  |                   |     |      |  |      |       |   |  |  |       |  
|Own work capitalized                               |  |                   | (1  | )    |  |      | (3    | ) |  |  | (7    | )
|Salaries and personnel costs                       |  |                   | 56  |      |  |      | 194   |   |  |  | 197   |  
|Other external operating expenses                  |  |                   | 199 |      |  |      | 760   |   |  |  | 886   |  
|Other internal operating expenses                  |  |                   | 5   |      |  |      | 9     |   |  |  | 1     |  
|Losses on disposal of fixed assets and write-downs |  |                   |    |      |  |      |      |   |  |  |      |  
|Depreciation and amortization                      |  |                   | 125 |      |  |      | 579   |   |  |  | 780   |  
|Write-downs                                        |  |                   |    |      |  |      | 12    |   |  |  | 18    |  
|                                                   |  |                   |     |      |  |      |       |   |  |  |       |  
|Total operating expenses                           |  |                   | 725 |      |  |      | 2,284 |   |  |  | 2,679 |  
|                                                   |  |                   |     |      |  |      |       |   |  |  |       |  

Operating expenses increased in 2003 compared to
2002 due primarily to increased costs of materials and traffic
charges resulting from the higher traffic volumes generated by
the higher number of subscriptions, as well as increased
depreciation due to the full year effect of the reduced
depreciation period for network-based equipment. Effective
July 1, 2002, DiGi.Com reduced the depreciation period for
network-based equipment, which increased depreciation by nearly
NOK 0.2 billion in the second half of 2002. Compared to
2001, measured in Norwegian Krone operating expenses increased
by NOK 0.1 billion in 2002, mainly due to increased
depreciation and amortization, partially offset by the
strengthening of Norwegian Krone compared to local currency.

Capital expenditure 
DiGi.Com

Capital expenditure decreased by NOK
0.4 billion (0.2 billion if measured in local
currency) in 2003 compared to 2002 due to reduced prices for
network-related equipment. In 2002, capital expenditure
decreased by NOK 0.2 billion compared to 2001; however, it
was in line with capital expenditure in 2001 if measured in
local currency.

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Kyivstar  Ukraine (ownership
interest 55.4% as of December 31, 2003)

|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|------------------------------------ |  | ----------------- | - | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                     |  | 2001              |   | 2002 |  | 2003
|                                     |  |                   |   |      |  |     
|                                     |  |                  
|                                     |  | (NOK in millions)
|Mobile related revenues              |  |                   |  |      |  |      | 681   |  |  |  | 2,569 | 
|Other revenues                       |  |                   |  |      |  |      | 27    |  |  |  | 65    | 
|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|Total revenues                       |  |                   |  |      |  |      | 708   |  |  |  | 2,634 | 
|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|Total operating expenses             |  |                   |  |      |  |      | 403   |  |  |  | 1,404 | 
|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|Operating profit                     |  |                   |  |      |  |      | 305   |  |  |  | 1,230 | 
|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|EBITDA                               |  |                   |  |      |  |      | 403   |  |  |  | 1,573 | 
|Depreciation and amortization        |  |                   |  |      |  |      | 98    |  |  |  | 343   | 
|Write-downs                          |  |                   |  |      |  |      |      |  |  |  |      | 
|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|Operating profit                     |  |                   |  |      |  |      | 305   |  |  |  | 1,230 | 
|                                     |  |                   |   |      |  |      |       |  |  |  |       | 
|Operating profit/ Total revenues (%) |  |                   |  |      |  |      | 43.1  |  |  |  | 46.7  | 
|EBITDA/ Total revenues (%)           |  |                   |  |      |  |      | 56.9  |  |  |  | 59.7  | 
|Capex                                |  |                   |  |      |  |      | 329   |  |  |  | 979   | 
|No. of man-years (end of period)     |  |                   |   |      |  |      | 994   |  |  |  | 1,269 | 
|No. of subscriptions (in thousand)   |  |                   |  |      |  |      | 1,856 |  |  |  | 3,037 | 

The preceding table shows figures included in the
accounts for Telenor from the date of acquisition. In 2002, we
increased our ownership interest in Kyivstar from 45.4% to 54.2%
and consolidated Kyivstar as a subsidiary effective
September 1, 2002. As of May 2003, our ownership interest
increased to 55.4%. The following discussion and analysis of
Kyivstars results of operations is based on
Kyivstars financial statements for the years ended
December 31, 2002 and 2003, as prepared by Kyivstar, which
we have adjusted to conform materially with Norwegian GAAP. We
believe that such information provides a more useful measure of
comparative financial performance for a period when we had not
yet consolidated Kyivstar. However, such information does not
purport to represent what the actual results of operations would
have been had Kyivstar been consolidated from January 1,
2002 and is not necessarily indicative of our future operating
results.

The functional currency for Kyivstar is the US
Dollar. The Norwegian Krone appreciated against the US Dollar by
12% in 2003 compared to 2002 and by 11% in 2002 compared to 2001.

Operating profit and EBITDA 
Kyivstar

Operating profit increased by 37% measured in
Norwegian Krone and by 57% measured in US Dollars in 2003
compared to 2002. EBITDA increased by 36% measured in Norwegian
Krone and by 55% measured in US Dollars in 2003 compared to
2002. The increase was due to increased revenues, which more
than offset the increase in operating expenses. The increase in
operating expenses was less than proportional to the increase in
revenues as Kyivstar was able to benefit from economies of
scale. Operating profit and EBITDA increased in 2002 compared to
2001 due to higher traffic as a result of an increase in the
number of subscriptions, which more than offset the increase in
operating expenses. Depreciation and amortization increased due
to increased capital expenditure.

Revenues  Kyivstar

In 2003, the company had a 44% increase in
revenues measured in Norwegian Krone (a 50% increase if measured
in US Dollars) compared to 2002. The increase in revenues was
due primarily to increased traffic resulting from an increase of
1,181,000 in the number of subscriptions in 2003. In addition,
on average each subscription generated marginally more revenue
as usage increased due to increased mobile penetration and the
introduction of the new Ukrainian interconnection regime.
Increased usage was partially offset by a decrease in prices due
to the introduction of the new interconnection regime. You
should read Item 4 

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Information About the Company  Telenor
Mobile  Mobile Operations Outside Norway 
Consolidated Subsidiaries  Kyivstar for
additional information about the new Ukrainian interconnection
regime.


The increase in revenues in 2002 compared to 2001
was 57%, if measured in Norwegian Krone, and 84%, if measured in
US Dollars. The increase in revenues was due primarily to the
increase of 761,000 in the number of subscriptions during the
year. However, on average each subscription generated less
revenue, as new customers and customers with prepaid
subscriptions reduced the average number of call minutes and
revenues per subscription.

Kyivstars market share of GSM subscriptions
in the Ukraine at December 31, 2003 was estimated to be 47%
compared to 50% at December 31, 2002 and 48% at
December 31, 2001. During 2003, the estimated mobile
penetration in the Ukraine increased from 7.8% to 13.7% compared
to 4.6% at December 31, 2001.

Operating expenses 
Kyivstar

|                                                   |  |                   |   |      |  |      |     |  |  |  |       | 
|-------------------------------------------------- |  | ----------------- | - | ---- |  | ---- | --- |  |  |  | ----- | 
|                                                   |  | 2001              |   | 2002 |  | 2003
|                                                   |  |                   |   |      |  |     
|                                                   |  |                  
|                                                   |  | (NOK in millions)
|External costs of materials and traffic charges    |  |                   |  |      |  |      | 92  |  |  |  | 276   | 
|Internal costs of materials and traffic charges    |  |                   |  |      |  |      |    |  |  |  |      | 
|Total costs of materials and traffic charges       |  |                   |  |      |  |      | 92  |  |  |  | 276   | 
|                                                   |  |                   |   |      |  |      |     |  |  |  |       | 
|Own work capitalized                               |  |                   |  |      |  |      |    |  |  |  |      | 
|Salaries and personnel costs                       |  |                   |  |      |  |      | 25  |  |  |  | 89    | 
|Other external operating expenses                  |  |                   |  |      |  |      | 179 |  |  |  | 684   | 
|Other internal operating expenses                  |  |                   |  |      |  |      | 9   |  |  |  | 12    | 
|Losses on disposal of fixed assets and write-downs |  |                   |  |      |  |      |    |  |  |  |      | 
|Depreciation and amortization                      |  |                   |  |      |  |      | 98  |  |  |  | 343   | 
|Write-downs                                        |  |                   |  |      |  |      |    |  |  |  |      | 
|                                                   |  |                   |   |      |  |      |     |  |  |  |       | 
|Total operating expenses                           |  |                   |  |      |  |      | 403 |  |  |  | 1,404 | 
|                                                   |  |                   |   |      |  |      |     |  |  |  |       | 

Operating expenses increased in 2003 compared to
2002 due primarily to the increased number of subscriptions.
Costs of materials and traffic charges increased as a result of
higher traffic volume. In addition, advertising costs increased
in 2003 compared to 2002 as the market became more competitive.
Commission expenses also increased, but the commission cost per
new subscription was in line with 2002.

Operating expenses increased by NOK
0.1 billion in 2002 compared to 2001, mainly due to an
increase in costs of materials and traffic charges as a result
of higher traffic volume. In general, operating expenses were
low in 2002 due to low marketing expenses and the companys
focus on cost efficiency.

Capital expenditure 
Kyivstar

Capital expenditure in 2003 was in line with 2002
when measured in US Dollars. In 2002, capital expenditure
increased compared to 2001 due primarily to more capacity and
coverage investments in the GSM network in 2002.

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GrameenPhone  Bangladesh (ownership
interest 51.0% as of December 31, 2003)

|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|------------------------------------ |  | ----------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                     |  | 2001              |       | 2002 |  | 2003
|                                     |  |                   |       |      |  |     
|                                     |  |                  
|                                     |  | (NOK in millions)
|Mobile related revenues              |  |                   | 759   |      |  |      | 1,203 |  |  |  | 1,529 | 
|Other revenues*                      |  |                   | 426   |      |  |      | 386   |  |  |  | 7     | 
|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|Total revenues                       |  |                   | 1,185 |      |  |      | 1,589 |  |  |  | 1,536 | 
|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|Total operating expenses             |  |                   | 857   |      |  |      | 958   |  |  |  | 693   | 
|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|Operating profit                     |  |                   | 328   |      |  |      | 631   |  |  |  | 843   | 
|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|EBITDA                               |  |                   | 457   |      |  |      | 757   |  |  |  | 1,001 | 
|Depreciation and amortization        |  |                   | 129   |      |  |      | 126   |  |  |  | 158   | 
|Write-downs                          |  |                   |      |      |  |      |      |  |  |  |      | 
|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|Operating profit                     |  |                   | 328   |      |  |      | 631   |  |  |  | 843   | 
|                                     |  |                   |       |      |  |      |       |  |  |  |       | 
|Operating profit/ Total revenues (%) |  |                   | 27.7  |      |  |      | 39.7  |  |  |  | 54.9  | 
|EBITDA/ Total revenues (%)           |  |                   | 38.6  |      |  |      | 47.6  |  |  |  | 65.2  | 
|Capex                                |  |                   | 425   |      |  |      | 342   |  |  |  | 429   | 
|No. of man-years (end of period)     |  |                   | 589   |      |  |      | 692   |  |  |  | 829   | 
|No. of subscriptions (in thousand)   |  |                   | 464   |      |  |      | 769   |  |  |  | 1,141 | 






|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | With effect from the third quarter of 2002, fees
    collected by GrameenPhone on behalf of the authorities have been
    deducted from revenues. With effect from January 1, 2003,
    sales of handsets by GrameenPhone are treated 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.

In December 2003, Telenor increased its ownership
interest in GrameenPhone from 46.4% to 51.0%. The voting
interest remained unchanged at 51.0%. The Norwegian Krone
appreciated against the Bangladeshi Takka by 13% in 2003
compared to 2002 and by 13% in 2002 compared to 2001.

Operating profit and EBITDA 
GrameenPhone

Operating profit and EBITDA increased in the
period 2001 to 2003 due to higher traffic as a result of the
increase in the number of subscriptions, which more than offset
the increase in operating expenses. Depreciation and
amortization increased in 2003 compared to 2002 due to a higher
level of capital expenditure during 2003.

Revenues 
GrameenPhone

Measured in Norwegian Krone, mobile-related
revenues increased by 27% in 2003 compared to 2002 due to
increased traffic resulting from an increase of 372,000 in the
number of subscriptions. However, on average each subscription
generated less revenues as new customers and customers with
prepaid subscriptions reduced the average number of call minutes
and revenues per subscription. In local currency, mobile-related
revenues increased by 47% in 2003 compared to 2002.

In 2002, mobile-related revenues increased by 58%
measured in Norwegian Krone compared to 2001. In local currency,
the increase was 83%. The increase in revenues was due primarily
to increased traffic resulting from an increase of 305,000 in
the number of subscriptions in 2002. Fees that GrameenPhone
collects on behalf of the authorities have been deducted from
revenues effective July 1, 2002 and totalled NOK
52 million for the second half of 2002. This resulted in a
significant decrease in other revenues, which was partly offset
by increased sales of customer equipment.

GrameenPhones estimated share of GSM
subscriptions in Bangladesh at December 31, 2003 decreased
to 62% from 69% at December 31, 2002 and 70% at
December 31, 2001 due to increased competition.

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During 2003, the estimated mobile penetration in
Bangladesh increased from 0.9% to 1.3%, compared to 0.5% at
December 31, 2001.


Operating expenses 
GrameenPhone

|                                                   |  |                   |     |      |  |      |     |  |  |  |     | 
|-------------------------------------------------- |  | ----------------- | --- | ---- |  | ---- | --- |  |  |  | --- | 
|                                                   |  | 2001              |     | 2002 |  | 2003
|                                                   |  |                   |     |      |  |     
|                                                   |  |                  
|                                                   |  | (NOK in millions)
|External costs of materials and traffic charges    |  |                   | 539 |      |  |      | 524 |  |  |  | 164 | 
|Internal costs of materials and traffic charges    |  |                   |    |      |  |      |    |  |  |  |    | 
|Total costs of materials and traffic charges       |  |                   | 539 |      |  |      | 524 |  |  |  | 164 | 
|                                                   |  |                   |     |      |  |      |     |  |  |  |     | 
|Own work capitalized                               |  |                   |    |      |  |      |    |  |  |  |    | 
|Salaries and personnel costs                       |  |                   | 38  |      |  |      | 42  |  |  |  | 51  | 
|Other external operating expenses                  |  |                   | 151 |      |  |      | 266 |  |  |  | 309 | 
|Other internal operating expenses                  |  |                   |    |      |  |      |    |  |  |  | 6   | 
|Losses on disposal of fixed assets and write-downs |  |                   |    |      |  |      |    |  |  |  | 5   | 
|Depreciation and amortization                      |  |                   | 129 |      |  |      | 126 |  |  |  | 158 | 
|Write-downs                                        |  |                   |    |      |  |      |    |  |  |  |    | 
|                                                   |  |                   |     |      |  |      |     |  |  |  |     | 
|Total operating expenses                           |  |                   | 857 |      |  |      | 958 |  |  |  | 693 | 
|                                                   |  |                   |     |      |  |      |     |  |  |  |     | 

Operating expenses decreased in 2003 compared to
2002 primarily as a result of the treatment of sales of handsets
as commission sales from January 1, 2003, which reduced
costs of materials and traffic charges. Excluding the effect of
this change, operating expenses increased in 2003 compared to
2002 due to higher traffic and operation and maintenance
expenses. Depreciation and amortization increased in 2003
compared to 2002 due to increased capital expenditure during
2003.

Operating expenses increased in 2002 compared to
2001 due primarily to increased operation and maintenance
expenses, commissions and increased license fees.

Capital expenditure 
GrameenPhone

Capital expenditure increased in 2003 compared to
2002 due primarily to network expansion. In local currency,
capital expenditures in 2002 and in 2001 were approximately at
the same level.

Other Units in Mobile (including amortization
of net excess values and eliminations of purchases and sales
between the units in Mobile)

|                                                                   |  |                   |      |      |  |      |        |   |  |  |        |  
|------------------------------------------------------------------ |  | ----------------- | ---- | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                                   |  | 2001              |      | 2002 |  | 2003
|                                                                   |  |                   |      |      |  |     
|                                                                   |  |                  
|                                                                   |  | (NOK in millions)
|EBITDA                                                             |  |                   | (427 | )    |  |      | (616   | ) |  |  | (488   | )
|Depreciation and amortization(1)                                   |  |                   | 213  |      |  |      | 1,069  |   |  |  | 991    |  
|Write-downs(2)                                                     |  |                   |     |      |  |      | 2,147  |   |  |  | 7      |  
|                                                                   |  |                   |      |      |  |      |        |   |  |  |        |  
|Operating (loss)                                                   |  |                   | (640 | )    |  |      | (3,832 | ) |  |  | (1,486 | )
|                                                                   |  |                   |      |      |  |      |        |   |  |  |        |  
|(1) includes amortization of Telenors net
    excess values(*) by |  |                   | 115  |      |  |      | 935    |   |  |  | 911    |  
|(2) includes write-downs of Telenors net
    excess values(*) by  |  |                   |     |      |  |      | 2,138  |   |  |  |       |  
|                                                                   |  |                   |      |      |  |      |        |   |  |  |        |  
|Investments
    Capex                                              |  |                   | 158  |      |  |      | 28     |   |  |  | 72     |  
|No. of man-years (end of period)                                   |  |                   | 326  |      |  |      | 186    |   |  |  | 275    |  






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

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Other units in Mobile comprise our mobile
operations in Sweden (Telenor Mobile Sweden), costs related to
the management and administration of our international mobile
portfolio, djuice.com, and amortizations and write-downs of our
net excess values.

Operating loss was lower in 2003 compared to
2002, primarily because we made write-downs of NOK
2,147 million in 2002, mainly related to goodwill on
DiGi.Com. The EBITDA loss was lower in 2003 compared to 2002 due
to the discontinuance of our djuice.com activities in 2003,
reduced management and administrative expenses.

Telenor Mobile Sweden had total revenues of NOK
127 million in 2003 (NOK 81 million in 2002 and NOK
4 million in 2001), with an EBITDA loss of NOK
114 million (a EBITDA loss of NOK 77 million in 2002
and NOK 64 million in 2001).

The increase in operating loss in 2002 compared
to 2001 was due primarily to write-downs and increased
amortization of excess values, including goodwill, in connection
with the acquisition and consolidation of DiGi.Com, Pannon GSM
and Kyivstar. An assessment of book values was carried out in
accordance with generally accepted accounting principles, which
led to a write-down of goodwill on DiGi.Com of
NOK 2.1 billion in 2002. This write-down was based on
the publicly quoted share price at December 31, 2002,
adjusted to reflect a control premium. The EBITDA loss increased
in 2002 compared to 2001 due to a gain of NOK 259 million
related to sale of our subsidiary Norcom Network Communications
Inc. in 2001. Excluding the effect of this gain in 2001, the
EBITDA loss was lower in 2002 due to reduced expenses as a
result of a lower activity level in djuice.com and reduced
management and administrative expenses.

The decrease in capital expenditure in 2003
compared to 2002 was due to the discontinuance of our djuice.com
activities. The increase in capital expenditure in 2002 compared
to 2001 was due to a high activity level in djuice.com in 2002.

Associated Companies and Joint Ventures in
Mobile

|                                            |  |                   |         |      |  |      |        |   |  |  |       |  
|------------------------------------------- |  | ----------------- | ------- | ---- |  | ---- | ------ | - |  |  | ----- | -
|                                            |  | 2001              |         | 2002 |  | 2003
|                                            |  |                   |         |      |  |     
|                                            |  |                  
|                                            |  | (NOK in millions)
|Telenors share of:(1)                      |  |                   |         |      |  |      |        |   |  |  |       |  
|Net income after taxes                      |  |                   | 421     |      |  |      | 612    |   |  |  | 608   |  
|Amortization of Telenors net excess values |  |                   | (1,276  | )    |  |      | (798   | ) |  |  | (534  | )
|Write-downs of Telenors excess values      |  |                   | (10,900 | )    |  |      | (1,884 | ) |  |  | (15   | )
|Gain on disposal of ownership interests     |  |                   | 21,432  |      |  |      | 40     |   |  |  | 1,580 |  
|                                            |  |                   |         |      |  |      |        |   |  |  |       |  
|Net result from associated companies        |  |                   | 9,677   |      |  |      | (2,030 | ) |  |  | 1,639 |  
|                                            |  |                   |         |      |  |      |        |   |  |  |       |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 results from associated companies were
affected by:



| |   |                                                                                                                                                                 
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The sale of VIAG Interkom and Esat Digifone in
    2001, Extel in 2002 and the sale of Stavtelesot, OniWay and 9%
    of the shares in Cosmote in 2003.         
|
| |  | DiGi.Com, Pannon GSM and Kyivstar being accounted
    for as subsidiaries effective September 1, 2001,
    February 4, 2002 and September 1, 2002, respectively.

In addition, we have increased our ownership
interest in the Danish operator Sonofon from 53.5% to 100%,
effective from February 12, 2004. You should read
Item 4  Information About the
Company 

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Telenor Mobile  Mobile Operations
Outside Norway  Associated Companies and Joint
Ventures for additional information about such acquisition.


Our mobile associated companies outside Norway,
particularly VimpelCom in Russia and DTAC in Thailand,
experienced a significant increase in their customer base in
2003 and in 2002.

Adjusted for associated companies sold or
becoming subsidiaries, net income after taxes increased by
approximately NOK 100 million in 2003 compared to 2002,
mainly due to VimpelCom. This was partially offset by a
write-down of assets in Sonofon of approximately NOK 100
million related to fixed wireless access. Net income after taxes
in 2002 included a write-down of our investment in OniWay of
NOK 316 million. We wrote down this investment, as we did
not consider it commercially sensible to continue operations as
planned. We disposed of our shares in OniWay in June 2003 with a
gain of NOK 35 million reported as a part of financial
items.

Due to the write-downs in 2002 and the
consolidation of Pannon GSM and Kyivstar, amortization of net
excess values on associated companies decreased in 2003 compared
to 2002. In addition, in 2003 amortization of net excess values
decreased due to the reversal of previous amortization of net
excess values on Wireless Matrix, as net excess values had been
reduced to below zero in 2002. Due to the consolidation of
Sonofon as from February 12, 2004, we expect amortization
of net excess values on associated companies to decrease further
in 2004.

As a result of the decrease in market values, in
the second quarter of 2001 we wrote down our investment in
Sonofon by NOK 7.5 billion to reflect the estimated fair
value. At December 31, 2002, we wrote down an additional
NOK 1.0 billion to the estimated fair value of Sonofon
based on discounted cash flows and comparison to other
companies. We wrote down DTAC/UCOM by NOK 3.4 billion to
the publicly quoted share price at December 31, 2001 and by
an additional NOK 0.9 billion to the publicly quoted share
price at December 31, 2002.

Gains on disposals in 2003 were related to the
sale of Stavtelesot in January 2003 and the sale of 9% of the
shares in Cosmote in April 2003. Gains in 2002 were related to
the sale of Extel in December 2002. Gains in 2001 were related
to the sale of VIAG Interkom and Esat Digifone in January
and April 2001, respectively.

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TELENOR FIXED

|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |       | 
|------------------------------------------------------------------- | ------------------------- | ----------------- | ------ | ----- |  | ---- | ------ | ----- |  |  | ------ | ----- | 
|                                                                    |                           | 2001              |        | 2002  |  | 2003
|                                                                    |                           |                   |        |       |  |     
|                                                                    |                           |                  
|                                                                    |                           | (NOK in millions)
|External revenues                                                   |                           |                   | 17,818 |       |  |      | 18,338 |       |  |  | 18,787 |      
|Internal revenues                                                   |                           |                   | 1,867  |       |  |      | 1,670  |       |  |  | 1,713  |      
|Gains on disposal of fixed assets and operations                    |                           |                   | 6      |       |  |      | 14     |       |  |  | 9      |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Total revenues                                                      |                           |                   | 19,691 |       |  |      | 20,022 |       |  |  | 20,509 |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|External costs of materials and traffic charges                     |                           |                   | 3,481  |       |  |      | 3,649  |       |  |  | 3,903  |      
|Internal costs of materials and traffic charges                     |                           |                   | 1,827  |       |  |      | 1,626  |       |  |  | 1,529  |      
|Total costs of materials and traffic charges                        |                           |                   | 5,308  |       |  |      | 5,275  |       |  |  | 5,432  |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Own work capitalized                                                |                           |                   | (194   | )     |  |      | (110   | )     |  |  | (117   | )    
|Salaries and personnel costs                                        |                           |                   | 3,313  |       |  |      | 3,577  |       |  |  | 3,650  |      
|Other external operating expenses                                   |                           |                   | 4,041  |       |  |      | 3,966  |       |  |  | 3,140  |      
|Other internal operating expenses                                   |                           |                   | 1,671  |       |  |      | 1,685  |       |  |  | 1,714  |      
|Losses on disposal of fixed assets                                  |                           |                   | 6      |       |  |      | 32     |       |  |  | 25     |      
|Depreciation and amortization(1)                                    |                           |                   | 3,669  |       |  |      | 4,366  |       |  |  | 4,110  |      
|Write-downs(2)                                                      |                           |                   | 842    |       |  |      | 500    |       |  |  | 24     |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Total operating expenses                                            |                           |                   | 18,656 |       |  |      | 19,291 |       |  |  | 17,978 |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Operating profit                                                    |                           |                   | 1,035  |       |  |      | 731    |       |  |  | 2,531  |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Associated companies                                                |                           |                   | (874   | )     |  |      | (5     | )     |  |  | 8      |      
|Net financial items                                                 |                           |                   | (319   | )     |  |      | (297   | )     |  |  | (736   | )    
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Profit before taxes and minority
    interests                      |                           |                   | (158   | )     |  |      | 429    |       |  |  | 1,803  |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|(1)  Includes amortization of
    Telenors net excess values(*) by |                           |                   | 363    |       |  |      | 157    |       |  |  | (76    | )    
|(2)  Includes write-downs of
    Telenors net excess values(*) by  |                           |                   |       |       |  |      | 160    |       |  |  |       |      
|EBITDA                                                              |                           |                   | 5,546  |       |  |      | 5,597  |       |  |  | 6,665  |      
|Depreciation and amortization                                       |                           |                   | 3,669  |       |  |      | 4,366  |       |  |  | 4,110  |      
|Write-downs                                                         |                           |                   | 842    |       |  |      | 500    |       |  |  | 24     |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Operating profit                                                    |                           |                   | 1,035  |       |  |      | 731    |       |  |  | 2,531  |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Operating profit/ Total revenues (%)                                |                           |                   | 5.3    |       |  |      | 3.7    |       |  |  | 12.3   |      
|EBITDA/ Total revenues (%)                                          |                           |                   | 28.2   |       |  |      | 28.0   |       |  |  | 32.5   |      
|Investments:                                                        |                           |                   |        |       |  |      |        |       |  |  |        |      
|                                                                    | Capex                     |                   |        | 5,203 |  |      |        | 3,260 |  |  |        | 1,867 | 
|                                                                    | Investments in businesses |                   |        | 325   |  |      |        | 270   |  |  |        | 294   | 
|No. of man-years (end of period)                                    |                           |                   | 7,766  |       |  |      | 7,215  |       |  |  | 6,087  |      
|                                                                    | Of which abroad           |                   |        | 1,701 |  |      |        | 1,583 |  |  |        | 652   | 






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

|               |  |                   |        |      |  |      |        |   |  |  |        |  
|-------------- |  | ----------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|               |  | 2001              |        | 2002 |  | 2003
|               |  |                   |        |      |  |     
|               |  |                  
|               |  | (NOK in millions)
|Revenues       |  |                   |        |      |  |      |        |   |  |  |        |  
|Norway         |  |                   | 18,616 |      |  |      | 18,281 |   |  |  | 18,189 |  
|Sweden         |  |                   | 398    |      |  |      | 1,073  |   |  |  | 1,603  |  
|Russia(1)      |  |                   | 582    |      |  |      | 682    |   |  |  | 703    |  
|Other          |  |                   | 121    |      |  |      | 149    |   |  |  | 162    |  
|Eliminations   |  |                   | (26    | )    |  |      | (163   | ) |  |  | (148   | )
|               |  |                   |        |      |  |      |        |   |  |  |        |  
|Total revenues |  |                   | 19,691 |      |  |      | 20,022 |   |  |  | 20,509 |  
|               |  |                   |        |      |  |      |        |   |  |  |        |  

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|                        |  |                   |       |      |  |      |       |   |  |  |       |  
|----------------------- |  | ----------------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                        |  | 2001              |       | 2002 |  | 2003
|                        |  |                   |       |      |  |     
|                        |  |                  
|                        |  | (NOK in millions)
|EBITDA                  |  |                   |       |      |  |      |       |   |  |  |       |  
|Norway                  |  |                   | 5,502 |      |  |      | 5,489 |   |  |  | 6,512 |  
|Sweden                  |  |                   | (128  | )    |  |      | (100  | ) |  |  | (56   | )
|Russia(1)               |  |                   | 186   |      |  |      | 228   |   |  |  | 215   |  
|Other                   |  |                   | (43   | )    |  |      | (23   | ) |  |  | (8    | )
|Eliminations            |  |                   | 29    |      |  |      | 3     |   |  |  | 2     |  
|                        |  |                   |       |      |  |      |       |   |  |  |       |  
|Total EBITDA            |  |                   | 5,546 |      |  |      | 5,597 |   |  |  | 6,665 |  
|                        |  |                   |       |      |  |      |       |   |  |  |       |  
|Operating profit (loss) |  |                   |       |      |  |      |       |   |  |  |       |  
|Norway                  |  |                   | 1,371 |      |  |      | 1,157 |   |  |  | 2,720 |  
|Sweden                  |  |                   | (290  | )    |  |      | (333  | ) |  |  | (198  | )
|Russia(1)               |  |                   | 27    |      |  |      | 70    |   |  |  | 71    |  
|Other                   |  |                   | (102  | )    |  |      | (166  | ) |  |  | (71   | )
|Eliminations            |  |                   | 29    |      |  |      | 3     |   |  |  | 9     |  
|                        |  |                   |       |      |  |      |       |   |  |  |       |  
|Total operating profit  |  |                   | 1,035 |      |  |      | 731   |   |  |  | 2,531 |  
|                        |  |                   |       |      |  |      |       |   |  |  |       |  






|    |                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | 11 months in 2003. 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 reported as an
    associated company

Overview

In 2003, we experienced increased competition in
Norway, both from other providers of fixed telephony services
and mobile operators. In 2003 our markets shares were reduced.
However, our revenues in Norway were relatively stable in 2003
compared to 2002. Our revenues from ADSL, which carried an
increasing portion of our data traffic, and the wholesale market
represented an increasing portion of our total revenues, which
to a large extent offset the decrease in other revenues. We
expect these trends to continue in 2004. In the third quarter of
2003, we started to offer and sell unbundled telephony access
(PSTN and ISDN) lines on a wholesale basis to other operators.

Overall, Fixeds operating profit and
operating profit margin increased in 2003 compared to 2002,
primarily due to our emphasis on cost reductions and operational
efficiency through process improvements, our efficient use of
the capital expenditure which we made in earlier periods and our
reliable existing network infrastructure. This, in addition to
reduced demand for fixed network services and lower equipment
prices contributed to reduced capital expenditure in 2003
compared to 2002.

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 reported as an associated company as of the date of the
transaction.

Operating profit and EBITDA

Operating profit increased in 2003 compared to
2002 due to decreased depreciation, amortization and write-downs
and increased EBITDA. Write-downs in 2002 related to data
equipment and IT solutions both for internal use and to provide
services to our customers. Depreciation and amortization
decreased in 2003 compared to 2002 due to the write-downs made
in 2002 and due to decreased capital expenditure and
amortization of negative goodwill related to Fixed-Sweden.
Decreased operating expenses also contributed to the increase in
EBITDA in 2003 compared to 2002. In 2003, we recorded expenses
for workforce reductions and loss contracts totalling NOK
6 million, compared to NOK 311 million in 2002. In
addition, we reduced our operating expenses in 2003 as a result
of other cost reduction measures.

Operating profit in 2002 decreased compared to
2001, primarily due to increase depreciation, and amortization,
partly offset by reduced write-downs and increased EBITDA.
Depreciation and amortization

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increased due to shortening of the depreciation
period for some fixed network-related assets in Norway and due
to the consolidation of Telenordia in Sweden as from the fourth
quarter of 2001. In 2001, we wrote down our transatlantic fiber
submarine cable, TAT 14. EBITDA increased by 0.9% in 2002
compared to 2001. The increase in revenues was offset by an
increase in operating expenses, as well as depreciation,
amortization and write-downs. Expenses for workforce reductions
and loss contracts increased by NOK 222 million in 2002
compared to 2001.


Fixed  Norway

|                                                                                           |  |                   |        |      |  |      |        |  |  |  |        | 
|------------------------------------------------------------------------------------------ |  | ----------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                                                                           |  | 2001              |        | 2002 |  | 2003
|                                                                                           |  |                   |        |      |  |     
|                                                                                           |  |                  
|                                                                                           |  | (NOK in millions)
|Business market  fixed
    network                                                        |  |                   |        |      |  |      |        |  |  |  |        | 
|Subscriptions and connections  analog
    (PSTN)/digital (ISDN)                           |  |                   | 1,313  |      |  |      | 1,335  |  |  |  | 1,240  | 
|Subscriptions and connections 
    ADSL/Internett                                         |  |                   | 112    |      |  |      | 194    |  |  |  | 226    | 
|Fixed to fixed traffic domestic, excluding
    traffic to Internet service providers (ISP) |  |                   | 838    |      |  |      | 776    |  |  |  | 625    | 
|Traffic to Internet service providers (ISP)                                                |  |                   | 251    |      |  |      | 170    |  |  |  | 116    | 
|Traffic to mobile                                                                          |  |                   | 694    |      |  |      | 666    |  |  |  | 647    | 
|Traffic abroad                                                                             |  |                   | 196    |      |  |      | 180    |  |  |  | 159    | 
|Other traffic                                                                              |  |                   | 639    |      |  |      | 669    |  |  |  | 621    | 
|                                                                                           |  |                   |        |      |  |      |        |  |  |  |        | 
|Total fixed network business market                                                        |  |                   | 4,043  |      |  |      | 3,990  |  |  |  | 3,634  | 
|                                                                                           |  |                   |        |      |  |      |        |  |  |  |        | 
|Residential market  fixed
    network                                                     |  |                   |        |      |  |      |        |  |  |  |        | 
|Subscriptions and connections  Analog
    (PSTN)/digital (ISDN)                           |  |                   | 2,916  |      |  |      | 3,026  |  |  |  | 3,060  | 
|Subscriptions and connections 
    ADSL/Internett                                         |  |                   | 339    |      |  |      | 543    |  |  |  | 815    | 
|Fixed to fixed traffic domestic, excluding
    traffic to Internet service providers (ISP) |  |                   | 1,288  |      |  |      | 1,190  |  |  |  | 1,061  | 
|Traffic to Internet service providers                                                      |  |                   | 578    |      |  |      | 520    |  |  |  | 445    | 
|Traffic to mobile                                                                          |  |                   | 1,111  |      |  |      | 1,144  |  |  |  | 1,069  | 
|Traffic abroad                                                                             |  |                   | 287    |      |  |      | 279    |  |  |  | 250    | 
|Other traffic                                                                              |  |                   | 725    |      |  |      | 660    |  |  |  | 630    | 
|                                                                                           |  |                   |        |      |  |      |        |  |  |  |        | 
|Total fixed network residential
    market                                                 |  |                   | 7,244  |      |  |      | 7,362  |  |  |  | 7,330  | 
|                                                                                           |  |                   |        |      |  |      |        |  |  |  |        | 
|Other retail revenues                                                                      |  |                   |        |      |  |      |        |  |  |  |        | 
|Leased lines                                                                               |  |                   | 337    |      |  |      | 341    |  |  |  | 329    | 
|Data services (frame relay, ATM, lan-lan, datapak)                                         |  |                   | 847    |      |  |      | 828    |  |  |  | 836    | 
|Managed Services                                                                           |  |                   | 781    |      |  |      | 679    |  |  |  | 726    | 
|Other                                                                                      |  |                   | 550    |      |  |      | 388    |  |  |  | 377    | 
|                                                                                           |  |                   |        |      |  |      |        |  |  |  |        | 
|Total other retail revenues                                                                |  |                   | 2,515  |      |  |      | 2,236  |  |  |  | 2,268  | 
|                                                                                           |  |                   |        |      |  |      |        |  |  |  |        | 
|Total retail revenues                                                                      |  |                   | 13,802 |      |  |      | 13,588 |  |  |  | 13,232 | 
|                                                                                           |  |                   |        |      |  |      |        |  |  |  |        | 

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|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |       | 
|------------------------------------------------------------------- | ------------------------- | ----------------- | ------ | ----- |  | ---- | ------ | ----- |  |  | ------ | ----- | 
|                                                                    |                           | 2001              |        | 2002  |  | 2003
|                                                                    |                           |                   |        |       |  |     
|                                                                    |                           |                  
|                                                                    |                           | (NOK in millions)
|Wholesale market  fixed
    network                                |                           |                   |        |       |  |      |        |       |  |  |        |      
|Sale to service providers and operators                             |                           |                   | 29     |       |  |      | 107    |       |  |  | 249    |      
|Domestic interconnect                                               |                           |                   | 693    |       |  |      | 629    |       |  |  | 643    |      
|International interconnect                                          |                           |                   | 418    |       |  |      | 340    |       |  |  | 339    |      
|Transit traffic                                                     |                           |                   | 953    |       |  |      | 1,027  |       |  |  | 1,038  |      
|Leased lines                                                        |                           |                   | 704    |       |  |      | 647    |       |  |  | 631    |      
|Other wholesale                                                     |                           |                   | 143    |       |  |      | 194    |       |  |  | 277    |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Total wholesale market  fixed
    network                          |                           |                   | 2,940  |       |  |      | 2,944  |       |  |  | 3,177  |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Total external revenues                                             |                           |                   | 16,742 |       |  |      | 16,532 |       |  |  | 16,409 |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Internal revenues                                                   |                           |                   | 1,868  |       |  |      | 1,749  |       |  |  | 1,776  |      
|Gains on disposal of fixed assets and operations                    |                           |                   | 6      |       |  |      |       |       |  |  | 4      |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Total revenues                                                      |                           |                   | 18,616 |       |  |      | 18,281 |       |  |  | 18,189 |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Total operating expenses                                            |                           |                   | 17,245 |       |  |      | 17,124 |       |  |  | 15,469 |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Operating profit                                                    |                           |                   | 1,371  |       |  |      | 1,157  |       |  |  | 2,720  |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|EBITDA                                                              |                           |                   | 5,502  |       |  |      | 5,489  |       |  |  | 6,512  |      
|Depreciation and amortization(1)                                    |                           |                   | 3,360  |       |  |      | 3,919  |       |  |  | 3,773  |      
|Write-downs(2)                                                      |                           |                   | 771    |       |  |      | 413    |       |  |  | 19     |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|Operating profit                                                    |                           |                   | 1,371  |       |  |      | 1,157  |       |  |  | 2,720  |      
|                                                                    |                           |                   |        |       |  |      |        |       |  |  |        |      
|(1)  Includes amortization of
    Telenors net excess values(*) by |                           |                   | 7      |       |  |      | 23     |       |  |  | 9      |      
|(2)  Includes write-downs of
    Telenors net excess values(*) by  |                           |                   | 177    |       |  |      | 89     |       |  |  |       |      
|Operating profit/ Total revenues (%)                                |                           |                   | 7.4    |       |  |      | 6.3    |       |  |  | 15.0   |      
|EBITDA/ Total revenues (%)                                          |                           |                   | 29.6   |       |  |      | 30.0   |       |  |  | 35.8   |      
|Investments:                                                        |                           |                   |        |       |  |      |        |       |  |  |        |      
|                                                                    | Capex                     |                   |        | 4,780 |  |      |        | 2,919 |  |  |        | 1,568 | 
|                                                                    | Investments in businesses |                   |        | 316   |  |      |        | 11    |  |  |        | 1     | 
|No. of man-years (end of period)                                    |                           |                   | 6,255  |       |  |      | 5,653  |       |  |  | 5,440  |      






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

Operating profit and EBITDA 
Fixed  Norway

Operating profit increased in 2003 compared to
2002 due to decreased depreciation, amortization and write-downs
and increased EBITDA. Write-downs in 2002 related to data
equipment and IT solutions both for internal use and to provide
services to our customers. Depreciation and amortization
decreased due to the write-downs in 2002 and a decrease in
capital expenditure. Increased EBITDA in 2003 compared to 2002
was due to increased gross margin (revenues less costs of
materials and traffic charges as a percentage of revenues) due
to changes in the mix of products and services, with a larger
share of revenues being generated from higher margin products
and services, and reduced operating expenses, besides
depreciation, amortization and write-downs. We did not record
expenses for workforce reductions and loss contracts in 2003;
such expenses totaled NOK 304 million in 2002. In addition,
in 2003 we reduced our operating expenses as a result of cost
cutting measures implemented during 2002 and 2003.

Operating profit decreased in 2002 compared to
2001 due to increased depreciation and amortization related to
shortened depreciation periods and high capital expenditure.
Write-downs decreased in 2002 compared to 2001. EBITDA in 2002
was in line with 2001. The decrease in revenues in 2002 was more
than offset by the decrease in costs of materials and traffic
charges. In 2002, expenses for workforce reductions and loss
contracts increased, but were partially offset by other cost
reductions.

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External revenues 
Fixed  Norway

Business and residential market

External subscription and connection revenues
from PSTN/ISDN decreased in 2003 compared to 2002 due to
transition to sale of access lines on a wholesale basis and a
decrease in the number of subscriptions in the market as a
whole. In the residential market, the decrease in the number of
subscriptions was offset by the full-year effect of increased
prices from May 1, 2002.

Increased external revenues from ADSL and
Internet subscriptions were due to the increase in the number of
ADSL subscriptions. The number of ADSL subscriptions (business
and residential) was approximately 177,000 at December 31,
2003, an increase of 83,000 compared to the end of 2002.

Reduced external traffic revenues in 2003
compared to 2002 were due to an approximately 8% (11% in the
business market and 6% in the residential market) decrease in
total traffic in Telenors fixed network (total market)
measured in minutes and reduced market share due to increased
competition. The decrease in traffic resulted from the migration
of fixed voice traffic to mobile traffic and of data traffic
from dial-up Internet to ADSL.

Telenors market share measured in traffic
minutes was 69% in December 2003 (72% in the business market and
68% in the residential market), compared to 72% in December 2002
(76% in the business market and 70% in the residential market)
and 73% in December 2001 (77% in the business market and 71% in
the residential market).

External subscription and connection revenues
from PSTN/ISDN increased in 2002 compared to 2001 due to
increased prices as of May 1, 2002, which more than offset
the decrease in the number of subscriptions in the market as a
whole.

Increased external revenues from ADSL and
Internet subscriptions were due to growth in the number of ADSL
subscriptions. The number of ADSL subscriptions (business and
residential) at December 31, 2002 was 94,000, an increase
of 70,000 compared to December 31, 2001.

Reduced external traffic revenues in 2002
compared to 2001 were due to a 8% (8% in the business market and
9% in the residential market) decrease in total traffic in
Telenors network measured in minutes and reduced market
share. In particular, traffic in our network decreased by
approximately 8% in our business market and approximately 9% in
our residential market. The decrease in total traffic resulted
from the migration of fixed voice traffic to mobile traffic and
of data traffic from dial-up Internet to ADSL.

Other external retail revenues

Other external retail revenues in 2003 were in
line with 2002. Other external retail revenues decreased in 2002
compared to 2001 due to decreased revenues from managed services
as a result of a weak market for sales of managed services in
2002. In 2002, there was also a decrease in demand for other
retail products, such as consulting, hosting and other
non-network revenues.

Wholesale market

Increased revenues from sales to service
providers and other operators in 2003 compared to 2002 were due
to sales of unbundled telephony access (PSTN/ISDN) lines, ADSL
and traffic on a wholesale basis. We started to offer and sell
unbundled telephony access (PSTN/ISDN) lines on a wholesale
basis in the third quarter of 2003. Such sales started to have
an impact on our revenues in the fourth quarter of 2003.
External revenues from domestic interconnection increased in
2003 compared to 2002 due to an increased number of
subscriptions with other Norwegian fixed telephony service
providers and mobile operators.

Other wholesale revenues increased in the period
2001 to 2003 due to sales of local loop unbundled subscriptions,
which we introduced in April 2001, and co-location products.

Increased revenues from sale to other services
providers and operators in 2002 compared to 2001 were mainly due
to sale of ADSL on a wholesale basis.

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Decreased external revenues from domestic
interconnection in 2002 compared to 2001 were due to a decrease
in prices for interconnection.

External revenues for international
interconnection decreased from 2001 to 2002 were due to
increased competition resulting in a lower market share.

Transit traffic is traffic from other domestic
and international operators that is sent via our fixed network
to third party operators. The increase in external revenues from
transit traffic in 2002 compared to 2001 was due to increased
domestic transit traffic, mainly from mobile operators. This was
partly offset by the decrease in revenues from international
transit traffic due to price reductions. Transit traffic is low
margin traffic.

The decrease in revenues from leased lines in
2002 compared to 2001 was due to reduced demand for network
capacity.

Internal revenues 
Fixed-Norway

Internal revenues consist of intra group sales of
network capacity, leased lines and interconnections, mainly to
Telenor Mobil - Norway, sales of other wholesale products,
such as co-location and contractor work, and sales of managed
services and data services, mainly to Fixed-Sweden. Internal
revenues increased in 2003 compared to 2002 mainly due to
increased sales of co-location and contractor work to Telenor
Mobil and Broadcast. The decrease in Internal revenues in 2002
compared to 2001 was mainly due to reduced sales of managed
services and leased lines.

Operating expenses 
Fixed-Norway

|                                                |  |                   |        |      |  |      |        |   |  |  |        |  
|----------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                |  | 2001              |        | 2002 |  | 2003
|                                                |  |                   |        |      |  |     
|                                                |  |                  
|                                                |  | (NOK in millions)
|External costs of materials and traffic charges |  |                   | 3,039  |      |  |      | 2,759  |   |  |  | 2,545  |  
|Internal costs of materials and traffic charges |  |                   | 1,839  |      |  |      | 1,704  |   |  |  | 1,583  |  
|Total costs of materials and traffic charges    |  |                   | 4,878  |      |  |      | 4,463  |   |  |  | 4,128  |  
|                                                |  |                   |        |      |  |      |        |   |  |  |        |  
|Own work capitalized                            |  |                   | (186   | )    |  |      | (96    | ) |  |  | (103   | )
|Salaries and personnel costs                    |  |                   | 3,039  |      |  |      | 3,175  |   |  |  | 3,189  |  
|Other external operating expenses               |  |                   | 3,727  |      |  |      | 3,563  |   |  |  | 2,792  |  
|Other internal operating expenses               |  |                   | 1,652  |      |  |      | 1,658  |   |  |  | 1,682  |  
|Losses on disposal of fixed assets              |  |                   | 4      |      |  |      | 29     |   |  |  | (11    | )
|Depreciation and amortization                   |  |                   | 3,360  |      |  |      | 3,919  |   |  |  | 3,773  |  
|Write-downs                                     |  |                   | 771    |      |  |      | 413    |   |  |  | 19     |  
|                                                |  |                   |        |      |  |      |        |   |  |  |        |  
|Total operating expenses                        |  |                   | 17,245 |      |  |      | 17,124 |   |  |  | 15,469 |  
|                                                |  |                   |        |      |  |      |        |   |  |  |        |  

Total costs of materials and traffic charges
decreased in 2003 compared to 2002 due to: the decrease in
traffic to Internet service providers (ISP) as a result of the
transition to ADSL, which does not generate traffic charges; the
decrease in fixed to mobile and international traffic; and the
decrease in prices for termination in mobile networks from
July 1, 2003. We also decreased our costs of materials and
traffic charges of managed services. This was due to both
reduced volume of external and internal sale and a shift towards
products with higher gross margin. The shift towards products
with higher gross margin was partly achieved by renegotiating
contracts so that contract elements with relatively high level
of materials and traffic charges were removed from scope of work.

Salaries and personnel costs in 2003 were in line
with 2002. The decrease in the number of man-years during 2003
was offset by general wage inflation and transfer of
approximately 180 man-years, primarily from the Broadcast
business area, between the last quarter of 2002 and the first
quarter of 2003.

Overall, other operating expenses decreased in
2003 compared to 2002, except costs related to sales and
marketing which had a slight increase. Our operating expenses
decreased as a result of our focus on

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efficiency improvements. In particular, our
maintenance costs decreased, due partly to reduced prices.
Expenses for workforce reductions decreased by
NOK 304 million in 2003 compared to 2002.


Depreciation and amortization decreased in 2003
compared to 2002 mainly due to the reduction in capital
expenditure and the write-downs made in 2002.

Total costs of materials and traffic charges
decreased in 2002 compared to 2001 due to the decrease in
traffic to ISP as a result of the transition to ADSL, as well as
a decrease in prices for international traffic. In addition, the
full-year effect of the decrease in mobile termination prices
from May 1, 2001 and the decrease in sales of managed
services resulted in a decrease in costs of materials and
traffic charges.

Salaries and personnel costs increased in 2002
compared to 2001 mainly due to increased pension costs

In 2002, the reduction in workforce and the
decrease in other external and internal operating expenses,
primarily consultancy fees, travel expenses and IT costs, were
due to improved operational efficiency in 2002 compared to 2001.
Furthermore, a lower fault rate of our network due to our
capital expenditure in previous years contributed to reduced
maintenance costs. In 2002, expenses for workforce reductions
were NOK 304 million, compared to
NOK 53 million in 2001.

Significant network-related capital expenditure
in recent years, the construction of our new internal IT system,
increased completion of assets under construction in 2002 and
reduced depreciation periods for certain types of cables and
switches from April 1, 2001, resulted in an increase in
depreciation and amortization in 2002 compared to 2001. In 2002,
we also reclassified some lease agreements related to
operational and customer equipment from operating to finance
lease agreements, which increased depreciation and decreased
other operating expenses.

Write-downs in 2002 were mainly due to our
decision to reduce the number of our IT operating platforms by
integrating the IT operating platforms supporting our services
to customers with our internal IT operating environment. The
value of IT platforms and equipment under customer service
contracts was also written down based on the evaluation of the
earnings potential of these contracts.

In 2001, we wrote down our transatlantic fiber
cable, TAT 14, by NOK 533 million based on market
assessments. In 2001, we also made write-downs of
NOK 132 million on goodwill and fixed assets in
connection with the reorganization mainly of the managed
services activity and write-downs of NOK 106 millions
on goodwill in Eurocom.

Capital Expenditure 
Fixed-Norway

The reduction in capital expenditure in the
period 2001 to 2003 was due to the more efficient use of
capacity resulting from our capital expenditure in earlier
years, lower demand for fixed network services and lower
equipment prices.

In 2002, we reported high capital expenditure due
to the completion of our new internal IT-system in Norway and
the reclassification of certain lease agreements related to
operational and customer equipment from operating to finance
leases.

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Fixed  Sweden

|                                                 |                           |                   |      |      |  |      |       |     |  |  |       |    | 
|------------------------------------------------ | ------------------------- | ----------------- | ---- | ---- |  | ---- | ----- | --- |  |  | ----- | -- | 
|                                                 |                           | 2001              |      | 2002 |  | 2003
|                                                 |                           |                   |      |      |  |     
|                                                 |                           |                  
|                                                 |                           | (NOK in millions)
|External revenues                                |                           |                   | 380  |      |  |      | 983   |     |  |  | 1,517 |   
|Internal revenues                                |                           |                   | 18   |      |  |      | 76    |     |  |  | 81    |   
|Gains on disposal of fixed assets and operations |                           |                   |     |      |  |      | 14    |     |  |  | 5     |   
|                                                 |                           |                   |      |      |  |      |       |     |  |  |       |   
|Total revenues                                   |                           |                   | 398  |      |  |      | 1,073 |     |  |  | 1,603 |   
|                                                 |                           |                   |      |      |  |      |       |     |  |  |       |   
|Total operating expenses                         |                           |                   | 688  |      |  |      | 1,406 |     |  |  | 1,801 |   
|                                                 |                           |                   |      |      |  |      |       |     |  |  |       |   
|Operating (loss)                                 |                           |                   | (290 | )    |  |      | (333  | )   |  |  | (198  | ) 
|                                                 |                           |                   |      |      |  |      |       |     |  |  |       |   
|EBITDA                                           |                           |                   | (128 | )    |  |      | (100  | )   |  |  | (56   | ) 
|Depreciation and amortization                    |                           |                   | 91   |      |  |      | 218   |     |  |  | 141   |   
|Write-downs                                      |                           |                   | 71   |      |  |      | 15    |     |  |  | 1     |   
|                                                 |                           |                   |      |      |  |      |       |     |  |  |       |   
|Operating (loss)                                 |                           |                   | (290 | )    |  |      | (333  | )   |  |  | (198  | ) 
|                                                 |                           |                   |      |      |  |      |       |     |  |  |       |   
|Investments:                                     |                           |                   |      |      |  |      |       |     |  |  |       |   
|                                                 | Capex                     |                   |      | 47   |  |      |       | 84  |  |  |       | 85 | 
|                                                 | Investments in businesses |                   |      | 9    |  |      |       | 257 |  |  |       | 13 | 
|No. of man-years (end of period)                 |                           |                   | 523  |      |  |      | 551   |     |  |  | 443   |   

In 2003, the operations of Fixed-Sweden changed
significantly compared to 2002. As of December 31, 2002,
the customer base in Telenordia Privat AB was sold in exchange
for a 37.2% ownership interest in the listed Swedish service
provider Glocalnet AB. In December 2002, Telenor also
purchased 90% of the shares in the listed Swedish fixed line
operator Utfors AB, which was consolidated as a subsidiary from
December 31, 2002. In the fourth quarter of 2001, we
acquired the remaining 50% ownership interest of Telenordia
which we did not already own and we consolidated Telenordia as a
subsidiary as from October 1, 2001.

Operating (loss) 
Fixed-Sweden

The decrease in operating loss in 2003 compared
to 2002 was mainly due to the consolidation of Utfors AB
and increased revenues from the other operations of
Fixed-Sweden. The decrease in depreciation and amortization in
2003 compared to 2002 was due to the amortization of negative
goodwill in connection with the acquisition of Utfors AB.

The increase in operating loss in 2002 compared
to 2001 was mainly due to the full-year effect of the
consolidation of Telenordia.

Revenues 
Fixed-Sweden

Increased revenues in 2003 compared to 2002 were
due to the effect of the consolidation of Utfors AB, a new
wholesale agreement with the associated company
Glocalnet AB and increased sales of traffic and data
services in the business market.

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The increase in revenues in 2002 compared to 2001
was mainly due to the full-year effect of the consolidation of
Telenordia.

|                                                                                   |  |      |     |      |  |      |       |  |  |  |       |  
|---------------------------------------------------------------------------------- |  | ---- | --- | ---- |  | ---- | ----- |  |  |  | ----- | -
|                                                                                   |  | 2001 |     | 2002 |  | 2003
|                                                                                   |  |      |     |      |  |     
|Operating expenses                                                                 |  |      |     |      |  |      |       |  |  |  |       |  
|External costs of materials and traffic charges                                    |  |      | 247 |      |  |      | 626   |  |  |  | 1,047 |  
|Internal costs of materials and traffic charges                                    |  |      | 20  |      |  |      | 69    |  |  |  | 93    |  
|Total costs of materials and traffic charges                                       |  |      | 267 |      |  |      | 695   |  |  |  | 1,140 |  
|                                                                                   |  |      |     |      |  |      |       |  |  |  |       |  
|Own work capitalized                                                               |  |      |    |      |  |      |      |  |  |  |      |  
|Salaries and personnel costs                                                       |  |      | 126 |      |  |      | 236   |  |  |  | 294   |  
|Other external operating expenses                                                  |  |      | 127 |      |  |      | 222   |  |  |  | 198   |  
|Other internal operating expenses                                                  |  |      | 6   |      |  |      | 20    |  |  |  | 18    |  
|Losses on disposal of fixed assets                                                 |  |      |    |      |  |      |      |  |  |  | 9     |  
|Depreciation and amortization(1)                                                   |  |      | 91  |      |  |      | 218   |  |  |  | 141   |  
|Write-downs(1)                                                                     |  |      | 71  |      |  |      | 15    |  |  |  | 1     |  
|                                                                                   |  |      |     |      |  |      |       |  |  |  |       |  
|Total operating expenses                                                           |  |      | 688 |      |  |      | 1,406 |  |  |  | 1,801 |  
|                                                                                   |  |      |     |      |  |      |       |  |  |  |       |  
|(1) Includes amortization and write-downs of
    Telenors net excess values(*) by |  |      | 47  |      |  |      | 31    |  |  |  | (143  | )






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

Increased operating expenses in 2003 compared to
2002 were due to the effect of the consolidation of
Utfors AB. Depreciation and amortization decreased in 2003
compared to 2002 due to amortization of negative goodwill in
connection with the acquisition of Utfors AB.

Depreciation and amortization increased in 2002
compared to 2001 due to the full-year effect of the
consolidation of Telenordia. In 2001, write-downs of
NOK 21 million were made on goodwill and
NOK 50 million on fixed assets.

Fixed  Russia

As of December 1, 2003, we exchanged our
ownership interest in our Russian subsidiary Comincom/Combellga
for shares in the listed Russian fixed line operator Golden
Telecom. Concurrent with this exchange, we also purchased
additional shares in Golden Telecom in the market. As a result
of these transactions, Telenor had an ownership interest in
Golden Telecom of 20.4% at December 31, 2003 and Golden
Telecom is accounted for as an associated company from
December 1, 2003. Consequently, Comincom was consolidated
only for 11 months of 2003. Growth in the Russian market
combined with the companys organic growth contributed to
an increase in Comincoms revenues in the period 2001 to
2003.

Fixed  Other Countries

Fixed  Other Countries comprises our
fixed networks and Internet activities in the Czech Republic and
Slovakia. Increased revenues contributed to reduced EBITDA
losses in the period 2001 to 2003. However, operating loss
increased in 2002 compared to 2001 due to write-downs of
goodwill related to the Internet operations by
NOK 72 million in 2002.

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TELENOR BROADCAST

|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |     | 
|---------------------------------------------------------------------------------- | ------------------------- | ----------------- | ------ | ---- |  | ---- | ------ | ----- |  |  | ----- | --- | 
|                                                                                   |                           | 2001              |        | 2002 |  | 2003
|                                                                                   |                           |                   |        |      |  |     
|                                                                                   |                           |                  
|                                                                                   |                           | (NOK in millions)
|External revenues                                                                  |                           |                   | 2,408  |      |  |      | 3,366  |       |  |  | 4,641 |    
|Internal revenues                                                                  |                           |                   | 206    |      |  |      | 241    |       |  |  | 159   |    
|Gains on disposal of fixed assets and operations                                   |                           |                   | 12     |      |  |      | (2     | )     |  |  | 20    |    
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|Total revenues                                                                     |                           |                   | 2,626  |      |  |      | 3,605  |       |  |  | 4,820 |    
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|External costs of materials and traffic charges                                    |                           |                   | 1,021  |      |  |      | 1,477  |       |  |  | 1,934 |    
|Internal costs of materials and traffic charges                                    |                           |                   | 71     |      |  |      | 94     |       |  |  | 92    |    
|Total costs of materials and traffic charges                                       |                           |                   | 1,092  |      |  |      | 1,571  |       |  |  | 2,026 |    
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|Own work capitalized                                                               |                           |                   | (19    | )    |  |      | (32    | )     |  |  | (18   | )  
|Salaries and personnel costs                                                       |                           |                   | 489    |      |  |      | 609    |       |  |  | 570   |    
|Other external operating expenses                                                  |                           |                   | 521    |      |  |      | 700    |       |  |  | 734   |    
|Other internal operating expenses                                                  |                           |                   | 181    |      |  |      | 252    |       |  |  | 271   |    
|Losses on disposal of fixed assets and write-downs                                 |                           |                   | 18     |      |  |      | 6      |       |  |  | 8     |    
|Depreciation and amortization                                                      |                           |                   | 576    |      |  |      | 844    |       |  |  | 1,030 |    
|Write-downs                                                                        |                           |                   | 494    |      |  |      | 130    |       |  |  | 18    |    
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|Total operating expenses                                                           |                           |                   | 3,352  |      |  |      | 4,080  |       |  |  | 4,639 |    
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|Operating profit (loss)                                                            |                           |                   | (726   | )    |  |      | (475   | )     |  |  | 181   |    
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|Associated companies                                                               |                           |                   | (546   | )    |  |      | (264   | )     |  |  | (84   | )  
|Net financial items                                                                |                           |                   | (397   | )    |  |      | (812   | )     |  |  | (909  | )  
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|Profit before taxes and minority
    interests                                     |                           |                   | (1,669 | )    |  |      | (1,551 | )     |  |  | (812  | )  
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|Investments                                                                        |                           |                   |        |      |  |      |        |       |  |  |       |    
|                                                                                   | Capex                     |                   |        | 805  |  |      |        | 384   |  |  |       | 252 | 
|                                                                                   | Investments in businesses |                   |        | 906  |  |      |        | 2.385 |  |  |       | 14  | 
|No. of man-years (end of period)                                                   |                           |                   | 943    |      |  |      | 972    |       |  |  | 809   |    
|                                                                                   | Of which abroad           |                   |        | 164  |  |      |        | 226   |  |  |       | 210 | 
|Revenues                                                                           |                           |                   |        |      |  |      |        |       |  |  |       |    
|Distribution                                                                       |                           |                   | 799    |      |  |      | 2,162  |       |  |  | 3,794 |    
|Transmission                                                                       |                           |                   | 1,587  |      |  |      | 1,457  |       |  |  | 1,277 |    
|Other                                                                              |                           |                   | 345    |      |  |      | 326    |       |  |  | 354   |    
|Eliminations                                                                       |                           |                   | (105   | )    |  |      | (340   | )     |  |  | (605  | )  
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|Total revenues                                                                     |                           |                   | 2,626  |      |  |      | 3,605  |       |  |  | 4,820 |    
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|EBITDA                                                                             |                           |                   |        |      |  |      |        |       |  |  |       |    
|Distribution                                                                       |                           |                   | (68    | )    |  |      | 19     |       |  |  | 686   |    
|Transmission                                                                       |                           |                   | 525    |      |  |      | 581    |       |  |  | 554   |    
|Other                                                                              |                           |                   | (112   | )    |  |      | (102   | )     |  |  | (10   | )  
|Eliminations                                                                       |                           |                   | (1     | )    |  |      | 1      |       |  |  | (1    | )  
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|Total EBITDA                                                                       |                           |                   | 344    |      |  |      | 499    |       |  |  | 1,229 |    
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|Depreciation and amortization(1)                                                   |                           |                   | 576    |      |  |      | 844    |       |  |  | 1,030 |    
|Write-downs(1)                                                                     |                           |                   | 494    |      |  |      | 130    |       |  |  | 18    |    
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|Operating profit (loss)                                                            |                           |                   | (726   | )    |  |      | (475   | )     |  |  | 181   |    
|                                                                                   |                           |                   |        |      |  |      |        |       |  |  |       |    
|(1) Includes amortization and write-downs of
    Telenors net excess values(*) by |                           |                   | 71     |      |  |      | 161    |       |  |  | 256   |    
|Operating profit (loss)/Total revenues (%)                                         |                           |                   | nm     |      |  |      | nm     |       |  |  | 3.8   |    
|EBITDA/ Total revenues (%)                                                         |                           |                   | 13.1   |      |  |      | 13.8   |       |  |  | 25.5  |    






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

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Overview

In 2003, the results of our Broadcast business
area were positively affected by the consolidation and
integration of Canal Digital, which resulted in:



| |   |                                                                                          
| | - | -----------------------------------------------------------------------------------------
| |  | a streamlined and more cost-efficient
    organization;                                  
|
| |  | continued growth in the number of subscribers,
    market share, revenues and EBITDA; and
|
| |  | increased economies of scale in purchase and
    distribution.                           

We expect revenue and subscriber growth to
continue in 2004. However, we are currently experiencing
increased competition from Viasat (satellite dish) and from
digital terrestrial television in Sweden.

Operating profit (loss) and EBITDA

We reported an operating profit in 2003 compared
to an operating loss in 2002 and EBITDA increased primarily due
to increased revenues resulting from the consolidation of Canal
Digital, subscriber growth and cost reduction initiatives,
including workforce reductions. Depreciation and amortization
also increased in 2003 compared to 2002 due to the consolidation
of Canal Digital. However, the impact of such increase was
partially offset by reduced write-downs.

Operating loss decreased in 2002 compared to 2001
due to increased EBITDA and reduced write-downs. The improvement
in EBITDA was primarily due to the positive effect of the
consolidation of Canal Digital and the closure of certain loss
generating activities within Transmission in 2001. Expenses for
workforce reductions and expenses related to termination of
contracts amounted to NOK 65 million in 2002, a decrease of
NOK 16 million compared to 2001. Depreciation and
amortization increased in 2002 compared to 2001 due to the
consolidation of Canal Digital. The consolidation of Canal
Digital from June 30, 2002 had a negative impact on
operating profit of approximately NOK 185 million,
including amortization of goodwill and other excess values, in
2002.

Distribution

|                                                 |  |                   |       |      |  |      |       |   |  |  |       |  
|------------------------------------------------ |  | ----------------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                                 |  | 2001              |       | 2002 |  | 2003
|                                                 |  |                   |       |      |  |     
|                                                 |  |                  
|                                                 |  | (NOK in millions)
|External revenues                                |  |                   |       |      |  |      |       |   |  |  |       |  
|Satellite dish                                   |  |                   |      |      |  |      | 1,099 |   |  |  | 2,528 |  
|Cable-TV                                         |  |                   | 568   |      |  |      | 742   |   |  |  | 888   |  
|Small antenna TV-networks                        |  |                   | 197   |      |  |      | 252   |   |  |  | 335   |  
|Other                                            |  |                   | 12    |      |  |      | 55    |   |  |  | 10    |  
|                                                 |  |                   |       |      |  |      |       |   |  |  |       |  
|Total external revenues                          |  |                   | 777   |      |  |      | 2,148 |   |  |  | 3,761 |  
|Internal revenues                                |  |                   | 10    |      |  |      | 16    |   |  |  | 13    |  
|Gains on disposal of fixed assets and operations |  |                   | 12    |      |  |      | (2    | ) |  |  | 20    |  
|                                                 |  |                   |       |      |  |      |       |   |  |  |       |  
|Total revenues                                   |  |                   | 799   |      |  |      | 2,162 |   |  |  | 3,794 |  
|                                                 |  |                   |       |      |  |      |       |   |  |  |       |  
|Total operating expenses                         |  |                   | 1,075 |      |  |      | 2,740 |   |  |  | 3,870 |  
|                                                 |  |                   |       |      |  |      |       |   |  |  |       |  
|Operating (loss)                                 |  |                   | (276  | )    |  |      | (578  | ) |  |  | (76   | )
|                                                 |  |                   |       |      |  |      |       |   |  |  |       |  
|EBITDA                                           |  |                   | (68   | )    |  |      | 19    |   |  |  | 686   |  
|Depreciation and amortization(1)                 |  |                   | 207   |      |  |      | 541   |   |  |  | 754   |  
|Write-downs                                      |  |                   | 1     |      |  |      | 56    |   |  |  | 8     |  
|                                                 |  |                   |       |      |  |      |       |   |  |  |       |  
|Operating (loss)                                 |  |                   | (276  | )    |  |      | (578  | ) |  |  | (76   | )
|                                                 |  |                   |       |      |  |      |       |   |  |  |       |  

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|                                 |                           |                   |     |      |  |      |     |       |  |  |      |     | 
|-------------------------------- | ------------------------- | ----------------- | --- | ---- |  | ---- | --- | ----- |  |  | ---- | --- | 
|                                 |                           | 2001              |     | 2002 |  | 2003
|                                 |                           |                   |     |      |  |     
|                                 |                           |                  
|                                 |                           | (NOK in millions)
|EBITDA/ Total revenues (%)       |                           |                   | nm  |      |  |      | 0.9 |       |  |  | 18.1 |    
|Investments                      |                           |                   |     |      |  |      |     |       |  |  |      |    
|                                 | Capex                     |                   |     | 566  |  |      |     | 235   |  |  |      | 112 | 
|                                 | Investments in businesses |                   |     | 304  |  |      |     | 2,369 |  |  |      |    | 
|No. of man-years (end of period) |                           |                   | 441 |      |  |      | 563 |       |  |  | 416  |    

Operating profit (loss) and
EBITDA  Distribution

In Distribution, EBITDA increased and operating
loss decreased in 2003 compared to 2002 due to the consolidation
of Canal Digital, a higher number of subscribers, reduced costs
for transmission and content and workforce reductions.

In 2002, we had a positive EBITDA compared to a
negative EBITDA in 2001. This positive development was due to
the consolidation of Canal Digital. However, the operating loss
increased in 2002 compared to 2001 due to increased
depreciation, amortization and write-downs resulting primarily
from the consolidation of Canal Digital and a high level of our
capital expenditure in Distribution in 2001.

Revenues 
Distribution

External revenues in Distribution increased in
2003 compared to 2002 due to the full-year effect of the
consolidation of Canal Digital, a higher number of satellite
dish and cable-TV subscribers, price increases for cable-TV and
the effect of the weakening of the Norwegian Krone against the
Swedish Krona. Increased revenues from Small Antenna TV-networks
in 2003 compared to 2002 were due primarily to new pay-TV
channels.

External revenues in Distribution increased by
NOK 1,371 million in 2002 compared to 2001, of which NOK
1,139 million resulted from the consolidation of Canal
Digital from July 1, 2002. External revenues in cable-TV in
Norway increased in 2002 compared to 2001 due to increased
prices and subscribers purchase of new services. The
effect of the full-year consolidation of Sweden On Line
(cable-TV) amounted to NOK 126 million in revenues in
2002 compared to 2001.

At December 31, 2003, our total number of
television subscribers in the Nordic region was 2,465,000, a net
increase of 2.5% compared to December 31, 2002. The number
of our satellite dish subscribers was 763,000, a net increase of
8.8% compared to December 31, 2002. The number of our Cable
TV subscribers increased by 33,000 to 604,000 in 2003. The
numbers of households in our small antenna TV-networks was
1,098,000 at December 31, 2003, a decrease of 3.1% compared
to December 31, 2002.

At December 31, 2002, our total number of
television subscribers in the Nordic region was 2,405,000, a net
increase of 3.5% compared to December 31, 2001. The number
of our subscribers with satellite dish was 701,000, a net
increase of 23.2% compared to 2001. The number of our
subscribers with cable-TV increased by 10,000 to 571,000 in 2002
and the numbers of households in our small antenna TV-networks
was 1,133,000, a decrease of 5.0% from 2001.

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Operating expenses 
Distribution

|                                                                                   |  |      |       |      |  |      |       |   |  |  |       |  
|---------------------------------------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                                                                   |  | 2001 |       | 2002 |  | 2003
|                                                                                   |  |      |       |      |  |     
|External costs of materials and traffic charges                                    |  |      | 450   |      |  |      | 1,075 |   |  |  | 1,591 |  
|Internal costs of materials and traffic charges                                    |  |      | 34    |      |  |      | 233   |   |  |  | 480   |  
|Total costs of materials and traffic charges                                       |  |      | 484   |      |  |      | 1,308 |   |  |  | 2,071 |  
|                                                                                   |  |      |       |      |  |      |       |   |  |  |       |  
|Own work capitalized                                                               |  |      | (6    | )    |  |      | (16   | ) |  |  | (8    | )
|Salaries and personnel costs                                                       |  |      | 175   |      |  |      | 274   |   |  |  | 263   |  
|Other external operating expenses                                                  |  |      | 159   |      |  |      | 452   |   |  |  | 570   |  
|Other internal operating expenses                                                  |  |      | 55    |      |  |      | 125   |   |  |  | 204   |  
|Losses on disposal of fixed assets and write-downs                                 |  |      |      |      |  |      |      |   |  |  | 8     |  
|Depreciation and amortization(1)                                                   |  |      | 207   |      |  |      | 541   |   |  |  | 754   |  
|Write-downs(1)                                                                     |  |      | 1     |      |  |      | 56    |   |  |  | 8     |  
|                                                                                   |  |      |       |      |  |      |       |   |  |  |       |  
|Total operating expenses                                                           |  |      | 1,075 |      |  |      | 2,740 |   |  |  | 3,870 |  
|                                                                                   |  |      |       |      |  |      |       |   |  |  |       |  
|(1) Includes amortization and write-downs of
    Telenors net excess values(*) by |  |      | 68    |      |  |      | 160   |   |  |  | 255   |  






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

Total operating expenses in Distribution
increased in 2003 compared to 2002 due primarily to the
full-year effect of the consolidation of Canal Digital.

Our gross margin (revenues less costs of
materials and traffic charges as a percentage of revenues) in
Distribution increased by 5 percentage points to 45% due
primarily to reduced transmission costs as a result of the
renegotiation of prices with the Transmission division and
reduced program costs per subscriber resulting from economies of
scale in our content purchasing activities.

Salaries and personnel costs in 2003 decreased
despite the full-year effect of the consolidation of Canal
Digital due to workforce reductions and the effect of the
outsourcing of personnel from Distribution to other business
areas of Telenor at the end of 2002, which contributed to the
increase in other internal operating expenses.

In 2003, we expensed NOK 10 million for
workforce reductions and termination of contracts compared to
NOK 48 million in 2002. In the fourth quarter of 2002
and in the first quarter of 2003, we reduced the number of
employees in Distribution as part of our restructuring plan.

Total operating expenses increased in 2002
compared to 2001 due primarily to the consolidation of Canal
Digital, the full-year effect of the consolidation of Sweden
Online and increased activities in content and interactive
services.

In 2002, we made write-downs of NOK
56 million, mainly on set-top boxes for our Small Antenna
TV-networks market and on platforms related to new broadcasting
technologies.

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Transmission

|                                                 |                           |                   |       |      |  |      |       |     |  |  |       |     | 
|------------------------------------------------ | ------------------------- | ----------------- | ----- | ---- |  | ---- | ----- | --- |  |  | ----- | --- | 
|                                                 |                           | 2001              |       | 2002 |  | 2003
|                                                 |                           |                   |       |      |  |     
|                                                 |                           |                  
|                                                 |                           | (NOK in millions)
|External revenues                                |                           |                   |       |      |  |      |       |     |  |  |       |    
|Satellite Broadcasting                           |                           |                   | 999   |      |  |      | 655   |     |  |  | 352   |    
|Norkring                                         |                           |                   | 434   |      |  |      | 455   |     |  |  | 464   |    
|                                                 |                           |                   |       |      |  |      |       |     |  |  |       |    
|Total external revenues                          |                           |                   | 1,433 |      |  |      | 1,110 |     |  |  | 816   |    
|Internal revenues                                |                           |                   | 154   |      |  |      | 347   |     |  |  | 461   |    
|Gains on disposal of fixed assets and operations |                           |                   |      |      |  |      |      |     |  |  |      |    
|                                                 |                           |                   |       |      |  |      |       |     |  |  |       |    
|Total revenues                                   |                           |                   | 1,587 |      |  |      | 1,457 |     |  |  | 1,277 |    
|                                                 |                           |                   |       |      |  |      |       |     |  |  |       |    
|Total operating expenses                         |                           |                   | 1,911 |      |  |      | 1,207 |     |  |  | 996   |    
|                                                 |                           |                   |       |      |  |      |       |     |  |  |       |    
|Operating profit (loss)                          |                           |                   | (324  | )    |  |      | 250   |     |  |  | 281   |    
|                                                 |                           |                   |       |      |  |      |       |     |  |  |       |    
|EBITDA                                           |                           |                   | 525   |      |  |      | 581   |     |  |  | 554   |    
|Depreciation and amortization                    |                           |                   | 356   |      |  |      | 290   |     |  |  | 266   |    
|Write-downs                                      |                           |                   | 493   |      |  |      | 41    |     |  |  | 7     |    
|                                                 |                           |                   |       |      |  |      |       |     |  |  |       |    
|Operating profit (loss)                          |                           |                   | (324  | )    |  |      | 250   |     |  |  | 281   |    
|                                                 |                           |                   |       |      |  |      |       |     |  |  |       |    
|Operating profit (loss)/Total revenues (%)       |                           |                   | nm    |      |  |      | 17.2  |     |  |  | 22.0  |    
|EBITDA/ Total revenues (%)                       |                           |                   | 33.1  |      |  |      | 39.9  |     |  |  | 43.4  |    
|Investments                                      |                           |                   |       |      |  |      |       |     |  |  |       |    
|                                                 | Capex                     |                   |       | 207  |  |      |       | 115 |  |  |       | 116 | 
|                                                 | Investments in businesses |                   |       |     |  |      |       |    |  |  |       |    | 
|No. of man-years (end of period)                 |                           |                   | 359   |      |  |      | 252   |     |  |  | 222   |    

Operating profit (loss) and
EBITDA  Transmission

Operating profit in Transmission increased in
2003 compared to 2002 and in 2002 we reported an operating
profit compared to an operating loss in 2001. This improvement
was primarily due to decreased depreciation, amortization and
write-downs. Depreciation and amortization decreased due to the
write-downs we made in 2001 and 2002 and due to fully
depreciated assets. In 2001, we wrote down the value of our
satellites and satellite equipment. EBITDA was relatively stable
in 2003 compared to 2002 and in 2002 compared to 2001 as the
decrease in revenues was offset by decreased operating expenses,
excluding depreciation, amortization and write-downs.

Revenues 
Transmission

External revenues in Transmission decreased in
2003 compared to 2002 and in 2002 compared to 2001 due to the
consolidation of Canal Digital in 2002 and the phasing out of
analog transmission via satellite. Revenues from sales to Canal
Digital were reported as external revenues until June 30,
2002. Such revenues amounted to NOK 206 million for
the first six months of 2002. Following the consolidation of
Canal Digital, sales from Transmission to Canal Digital
(Distribution) have been reported as internal revenues in
Transmission and eliminated for the Broadcast business area as a
whole. Other internal revenues in Transmission consist mainly of
sales of satellite capacity to Satellite Services and Satellite
Networks, included in Other business units.

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Operating expenses 
Transmission

|                                                   |  |      |       |      |  |      |       |   |  |  |     |  
|-------------------------------------------------- |  | ---- | ----- | ---- |  | ---- | ----- | - |  |  | --- | -
|                                                   |  | 2001 |       | 2002 |  | 2003
|                                                   |  |      |       |      |  |     
|External costs of materials and traffic charges    |  |      | 453   |      |  |      | 354   |   |  |  | 287 |  
|Internal costs of materials and traffic charges    |  |      | 68    |      |  |      | 70    |   |  |  | 45  |  
|Total costs of materials and traffic charges       |  |      | 521   |      |  |      | 424   |   |  |  | 332 |  
|                                                   |  |      |       |      |  |      |       |   |  |  |     |  
|Own work capitalized                               |  |      | (10   | )    |  |      | (10   | ) |  |  | (7  | )
|Salaries and personnel costs                       |  |      | 193   |      |  |      | 194   |   |  |  | 159 |  
|Other external operating expenses                  |  |      | 224   |      |  |      | 152   |   |  |  | 90  |  
|Other internal operating expenses                  |  |      | 116   |      |  |      | 116   |   |  |  | 149 |  
|Losses on disposal of fixed assets and write-downs |  |      | 18    |      |  |      |      |   |  |  |    |  
|Depreciation and amortization                      |  |      | 356   |      |  |      | 290   |   |  |  | 266 |  
|Write-downs                                        |  |      | 493   |      |  |      | 41    |   |  |  | 7   |  
|                                                   |  |      |       |      |  |      |       |   |  |  |     |  
|Total operating expenses                           |  |      | 1,911 |      |  |      | 1,207 |   |  |  | 996 |  
|                                                   |  |      |       |      |  |      |       |   |  |  |     |  

In 2003, costs of materials and traffic charges
in Transmission decreased compared to 2002, due primarily to
reduced prices for satellite capacity. In 2004, we expect to
replace our currently leased satellite capacity with our own
satellite transponders as a result of our contractually
committed capital expenditure for transponders in 2004. We
expect to reduce our costs of materials and traffic charges and
to increase depreciation and amortization as a result of this
capital expenditure.

Salaries and personnel costs decreased in 2003
compared to 2002 due primarily to workforce reductions and
outsourcing of personnel from Transmission to other business
areas of Telenor from the end of 2002, which increased other
internal operating expenses for Transmission. The decrease in
other external operating expenses was due to cost saving
initiatives. Depreciation and amortization decreased in 2003
compared to 2002 primarily as a result of fully depreciated
assets in Norkring and the effect of write-downs in Satellite
Broadcasting in 2002.

Total operating expenses decreased in 2002
compared to 2001 due primarily to the closure of certain loss
generating activities. In 2001, we recorded
NOK 38 million relating to the termination of certain
contracts compared to NOK 6 million for workforce
reductions in 2002.

Depreciation and amortization decreased in 2002
compared to 2001, primarily as a result of write-downs in 2001.
In 2002, we made write-downs of NOK 41 million that
related primarily to our platforms for new broadcasting
technologies. In 2001, we made write-downs of
NOK 493 million that related primarily to our
satellites and satellite equipment.

Other

Other mainly consists of Conax, which offers
conditional access systems (such as smart cards), and the
corporate functions of Broadcast.

Reduced EBITDA loss in 2003 compared to 2002 was
due to a management fee from Canal Digital, increased revenues
in Conax and cost saving initiatives.

Reduced EBITDA loss in 2002 compared to 2001 was
due to a management fee from Canal Digital.

Capital Expenditure

Capital expenditure decreased in 2003 compared to
2002 due primarily to lower capital expenditure in our cable-TV
networks. In 2004, we are contractually committed to a capital
expenditure for a total of USD 88 million in satellite
transponders for the Intelsat 10-02 satellite, which will
replace our currently leased satellite capacity.

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Capital expenditure decreased in 2002 compared to
2001 due primarily to the extensive upgrade of the cable-TV
networks performed in 2001. In addition, there was lower capital
expenditure in the terrestrial transmission network in 2002.

Associated Companies

|                                            |  |                   |      |      |  |      |      |   |  |  |     |  
|------------------------------------------- |  | ----------------- | ---- | ---- |  | ---- | ---- | - |  |  | --- | -
|                                            |  | 2001              |      | 2002 |  | 2003
|                                            |  |                   |      |      |  |     
|                                            |  |                  
|                                            |  | (NOK in millions)
|Telenors share of:(1)                      |  |                   |      |      |  |      |      |   |  |  |     |  
|Net income (loss) after taxes               |  |                   | (463 | )    |  |      | (138 | ) |  |  | 10  |  
|Amortization of Telenors net excess values |  |                   | (58  | )    |  |      | (55  | ) |  |  | (22 | )
|Write-downs of Telenors excess values      |  |                   | (22  | )    |  |      | (71  | ) |  |  |     |  
|Loss on disposal of ownership interests     |  |                   | (3   | )    |  |      |     |   |  |  | (72 | )
|                                            |  |                   |      |      |  |      |      |   |  |  |     |  
|Net result from associated companies        |  |                   | (546 | )    |  |      | (264 | ) |  |  | (84 | )
|                                            |  |                   |      |      |  |      |      |   |  |  |     |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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.

We consolidated Canal Digital as a subsidiary as
of June 30, 2002 and, therefore, the results for our
associated companies in Broadcast are not comparable for the
period 2001 to 2003.

In 2003, the associated companies in Broadcast
consisted primarily of Otrum and APR Media Holding AS. During
2003, we transferred our 29.1% ownership interest in A-Pressen
to APR Media Holding in return for a 44.8% ownership interest in
APR Media Holding. We recorded a loss of
NOK 72 million in connection with this transaction.

Net loss in 2002 decreased compared to 2001 as
Canal Digital was accounted for as an associated company for
only six months in 2002. At the end of 2001, Otrum disposed of
certain loss-making businesses; these disposals contributed to a
reduction in net loss in 2002 compared to 2001. We estimated the
fair value of Otrum to be lower than its book value and,
therefore, we wrote down our excess values related to Otrum
during 2002.

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

|                                                  |                           |                   |        |      |  |      |       |     |  |  |       |     | 
|------------------------------------------------- | ------------------------- | ----------------- | ------ | ---- |  | ---- | ----- | --- |  |  | ----- | --- | 
|                                                  |                           | 2001              |        | 2002 |  | 2003
|                                                  |                           |                   |        |      |  |     
|                                                  |                           |                  
|                                                  |                           | (NOK in millions)
|External revenues                                 |                           |                   | 3,312  |      |  |      | 3,383 |     |  |  | 3,210 |    
|Internal revenues                                 |                           |                   | 1,458  |      |  |      | 955   |     |  |  | 1,060 |    
|Gains on disposal of fixed assets and operations  |                           |                   | 41     |      |  |      | 3     |     |  |  | 19    |    
|                                                  |                           |                   |        |      |  |      |       |     |  |  |       |    
|Total revenues                                    |                           |                   | 4,811  |      |  |      | 4,341 |     |  |  | 4,289 |    
|Total operating expenses                          |                           |                   | 6,019  |      |  |      | 4,750 |     |  |  | 4,293 |    
|                                                  |                           |                   |        |      |  |      |       |     |  |  |       |    
|Operating (loss)                                  |                           |                   | (1,208 | )    |  |      | (409  | )   |  |  | (4    | )  
|Associated companies                              |                           |                   | 130    |      |  |      | (5    | )   |  |  | (13   | )  
|Net financial items                               |                           |                   | (94    | )    |  |      | (86   | )   |  |  | (71   | )  
|                                                  |                           |                   |        |      |  |      |       |     |  |  |       |    
|(Loss) before taxes and minority
    interests    |                           |                   | (1,172 | )    |  |      | (500  | )   |  |  | (88   | )  
|EBITDA                                            |                           |                   | 447    |      |  |      | 348   |     |  |  | 399   |    
|Depreciation and amortization                     |                           |                   | 393    |      |  |      | 393   |     |  |  | 375   |    
|Write-downs                                       |                           |                   | 1,262  |      |  |      | 364   |     |  |  | 28    |    
|                                                  |                           |                   |        |      |  |      |       |     |  |  |       |    
|Operating (loss)                                  |                           |                   | (1,208 | )    |  |      | (409  | )   |  |  | (4    | )  
|                                                  |                           |                   |        |      |  |      |       |     |  |  |       |    
|Investments:                                      |                           |                   |        |      |  |      |       |     |  |  |       |    
|                                                  | Capex                     |                   |        | 174  |  |      |       | 167 |  |  |       | 210 | 
|                                                  | Investments in businesses |                   |        | 749  |  |      |       | 88  |  |  |       | 95  | 
|Total full-time equivalent employees (period end) |                           |                   | 3,172  |      |  |      | 2,760 |     |  |  | 2,477 |    
|                                                  | Of which outside Norway   |                   |        | 344  |  |      |       | 308 |  |  |       | 266 | 

Overview

EDB Business Partner ASA is listed on the Oslo
Stock Exchange. EDB Business Partner encompasses the former
Telenor Programvare and EDB ASA, which were consolidated
effective as of May 1, 1999. The figures are affected by
the acquisitions of PDS AS (April 1, 2001), Accept Data AS
(August 1, 2001) and Infovention AB (September 1,
2001) within Banking and Finance, DnB IT Drift (July 1,
2001 and October 1, 2002) and Unigrid AB (August 1,
2001) within IT Operations and Incatel AS (May 1,
2003) within Telecom. The Consulting area was discontinued as
from July 1, 2003.

EDB Business Partners main area of business
is the Nordic strategic outsourcing industry. We expect the
outsourcing market to grow over the coming years and we regard
EDB Business Partner to be well positioned to take an active
part of this growth particularly in the Norwegian market. The
company focuses on retaining current and receiving new larger
long-term outsourcing contracts.

The effects of cost reducing measures implemented
in 2002 and 2003 and reduced write-downs had a positive impact
on the results of EDB Business Partner in 2003.

On March 26, 2004, Telenor Fixed and EDB Business
Partner entered into an agreement, effective May 1, 2004,
to transfer to EDB Business Partner Telenor Fixeds
existing IT operations for a net consideration of
NOK 132 million. On that same date, EDB Business
Partner entered into an agreement to sell a substantial part of
the operations currently grouped in its Telecom business area to
Accenture. You should read Item 4: Information About
the Company  EDB Business Partner ASA for
additional information about these agreements.

Operating (loss) and EBITDA

Operating loss decreased in 2003 compared to
2002, mainly due to reduced write-downs of goodwill and cost
reductions, partially offset by increased expenses for workforce
reductions and loss contracts. EBITDA increased in 2003 compared
to 2002 due to improved profitability in the IT Operations and
Telecom areas, while the other areas showed reduced earnings.
The restructuring process continued in the IT Operations,
Banking & Finance and Consulting areas, and we recorded
total expenses of NOK 223 million for workforce

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reductions and loss contracts in 2003 compared to
NOK 111 million in 2002. The IT Operations area continued
to show improved profitability as a result of increased revenues
and cost efficiency. In the Telecom area, EBITDA increased due
to cost reductions and acquisition of Incatel AS. EBITDA in the
Banking & Finance area decreased due to reduced revenues,
partially offset by cost reductions. Cost reducing measures
implemented in the second half of 2003, including significant
reductions in the number of employees resulted in an improved
EBITDA-margin at the end of 2003 compared to 2002. The
Consulting area was discontinued as from July 1, 2003 and
parts of its business activities were transferred to other areas
in EDB Business Partner.


Operating loss decreased in 2002 compared to
2001, mainly due to reduced write-downs. EBITDA decreased in
2002 compared to 2001 due to reduced earnings in all areas
except the IT Operations area. Gains on disposals were reduced
due to sale of properties in 2001. In the first half of 2002, we
initiated a restructuring process in the Banking & Finance,
Telecom and Consulting areas, and we recorded total expenses of
NOK 111 million for restructuring in 2002 compared to NOK
179 million in 2001. The IT Operations area showed improved
profitability in 2002 compared to 2001 due to the restructuring
of the business in 2001 and the effect of acquired businesses.
Revenues from the Telecom area decreased significantly in the
domestic market. However, underlying margins improved towards
the end of 2002 due to cost reductions. In Banking &
Finance, revenues decreased in 2002 due to reduced sales to
financial institutions both in Norway and Sweden and cost
reductions did not fully offset the decrease in revenues.

Revenues

Total revenues in 2003 decreased by 1% compared
to 2002. Revenues decreased in all areas, except the IT
Operations area, where volume growth more than offset price
reductions. In the Telecom area, revenues decreased due to lower
prices and reduced demand within the mediation business, offset
in part by revenues from Incatel, which was acquired in 2003.
The Banking & Finance area experienced reduced sales of
software. However, at the end of 2003 sales increased. The
discontinuance of the Consulting area in 2003 contributed to
reduced revenues.

Total revenues in 2002 decreased by 10% compared
to 2001. Revenues from the IT Operations area increased mainly
due to the full-year effect of the outsourcing contract with Den
Norske Bank and the acquisition of the Swedish subsidiary
Unigrid in 2001. Revenues from the Banking & Finance,
Telecom and Consulting areas decreased due to depressed market
conditions. The decline in revenues from the Telecom area was
particularly significant in the domestic market.

Operating Expenses

|                                                  |  |                   |       |      |  |      |       |  |  |  |       | 
|------------------------------------------------- |  | ----------------- | ----- | ---- |  | ---- | ----- |  |  |  | ----- | 
|                                                  |  | 2001              |       | 2002 |  | 2003
|                                                  |  |                   |       |      |  |     
|                                                  |  |                  
|                                                  |  | (NOK in millions)
|Costs of materials and traffic charges            |  |                   | 283   |      |  |      | 393   |  |  |  | 370   | 
|Own work capitalized                              |  |                   |      |      |  |      |      |  |  |  |      | 
|Salaries and personnel costs                      |  |                   | 1,904 |      |  |      | 1,862 |  |  |  | 1,753 | 
|Other operating expenses                          |  |                   | 2,177 |      |  |      | 1,738 |  |  |  | 1,761 | 
|Losses on disposal of fixed assets and operations |  |                   |      |      |  |      |      |  |  |  | 6     | 
|                                                  |  |                   |       |      |  |      |       |  |  |  |       | 
|Depreciation and amortization                     |  |                   | 393   |      |  |      | 393   |  |  |  | 375   | 
|Write-downs                                       |  |                   | 1,262 |      |  |      | 364   |  |  |  | 28    | 
|Total operating expenses                          |  |                   | 6,019 |      |  |      | 4,750 |  |  |  | 4,293 | 
|                                                  |  |                   |       |      |  |      |       |  |  |  |       | 

Operating expenses in 2003 decreased compared to
2002 due to lower write-downs and amortization of goodwill, the
effects of cost reduction programs and the discontinuance of the
Consulting area. We recorded total expenses of NOK
223 million for workforce reductions and loss contracts in
2003 compared to NOK 111 million in 2002. Consulting
services, operations, maintenance and rent of hardware and
software and other IT-services that are billed to our customers
are included in other operating expenses and not as costs of
materials and traffic charges.

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Costs of materials decreased in 2003 compared to
2002 due to reduced revenues.

The reduction in salaries and personnel costs in
2003 compared to 2002 was due to the decrease in the number of
employees following the implementation of certain restructuring
measures and the discontinuance of the Consulting area.

Write-downs of goodwill totaled NOK
16 million in 2003, a decrease of NOK 340 million
compared to 2002.

The reduction in operating expenses in 2002
compared to 2001 was primarily due to restructuring measures and
lower write-downs of goodwill.

Cost of materials increased in 2002 compared to
2001 as a consequence of the acquisition of new businesses in
the IT Operations area.

The number of employees decreased in 2002
compared to 2001. This and other cost saving measures reduced
salaries and personnel costs and other operating expenses in
2002 compared to 2001.

Write-downs of goodwill totaled NOK
356 million in 2002, a decrease of NOK 906 million
compared to 2001. Write-downs of goodwill in 2002 related to the
Banking & Finance area (NOK 263 million) and to the
Consulting area (NOK 93 million). Write-downs were based on
a review of all individual goodwill items based on discounted
future cash flows. Due to the significant decline in the market
value of EDB Business Partners shares and the entire
sector in which EDB Business Partner operates, NOK
1,259 million in goodwill related to the Consulting, IT
operations and Banking & Finance areas was written down
in 2001.

Capital Expenditure

Capital expenditure in the period 2001 to 2003
related mainly to investments in computer hardware and software
for the mainframe platform within the IT Operations area. In
2003, part of the capital expenditure related to the replacement
of equipment used in IT operations outsourced from our customers.

Associated Companies

In 2001, we sold the associated companies
Ephorma AS and European Medical Solution Group AS with
a total gain of NOK 141 million.

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OTHER BUSINESS UNITS

|                                                                                    |                           |                   |        |       |  |      |        |       |  |  |       |       | 
|----------------------------------------------------------------------------------- | ------------------------- | ----------------- | ------ | ----- |  | ---- | ------ | ----- |  |  | ----- | ----- | 
|                                                                                    |                           | 2001              |        | 2002  |  | 2003
|                                                                                    |                           |                   |        |       |  |     
|                                                                                    |                           |                  
|                                                                                    |                           | (NOK in millions)
|External revenues                                                                   |                           |                   | 4,527  |       |  |      | 4,255  |       |  |  | 3,539 |      
|Internal revenues                                                                   |                           |                   | 1,191  |       |  |      | 785    |       |  |  | 615   |      
|Gains on disposal of fixed assets and operations                                    |                           |                   | 1      |       |  |      |       |       |  |  | 51    |      
|                                                                                    |                           |                   |        |       |  |      |        |       |  |  |       |      
|Total revenues                                                                      |                           |                   | 5,719  |       |  |      | 5,040  |       |  |  | 4,205 |      
|                                                                                    |                           |                   |        |       |  |      |        |       |  |  |       |      
|External costs of materials and traffic charges                                     |                           |                   | 2,484  |       |  |      | 2,017  |       |  |  | 1,527 |      
|Internal costs of materials and traffic charges                                     |                           |                   | 320    |       |  |      | 265    |       |  |  | 214   |      
|Total costs of materials and traffic charges                                        |                           |                   | 2,804  |       |  |      | 2,282  |       |  |  | 1,741 |      
|                                                                                    |                           |                   |        |       |  |      |        |       |  |  |       |      
|Own work capitalized                                                                |                           |                   |       |       |  |      | (2     | )     |  |  | 1     |      
|Salaries and personnel costs                                                        |                           |                   | 1,928  |       |  |      | 1,465  |       |  |  | 1,088 |      
|Other external operating expenses                                                   |                           |                   | 1,411  |       |  |      | 854    |       |  |  | 580   |      
|Other internal operating expenses                                                   |                           |                   | 264    |       |  |      | 237    |       |  |  | 210   |      
|Losses on disposal of fixed assets and write-downs                                  |                           |                   | 29     |       |  |      | 26     |       |  |  | 177   |      
|Depreciation and amortization(1)                                                    |                           |                   | 754    |       |  |      | 582    |       |  |  | 491   |      
|Write-downs(1)                                                                      |                           |                   | 1,172  |       |  |      | 332    |       |  |  | 37    |      
|                                                                                    |                           |                   |        |       |  |      |        |       |  |  |       |      
|Total operating expenses                                                            |                           |                   | 8,362  |       |  |      | 5,776  |       |  |  | 4,325 |      
|                                                                                    |                           |                   |        |       |  |      |        |       |  |  |       |      
|Operating (loss)                                                                    |                           |                   | (2,643 | )     |  |      | (736   | )     |  |  | (120  | )    
|                                                                                    |                           |                   |        |       |  |      |        |       |  |  |       |      
|Associated companies                                                                |                           |                   | (107   | )     |  |      | (132   | )     |  |  | (318  | )    
|Net financial items                                                                 |                           |                   | (551   | )     |  |      | (943   | )     |  |  | (314  | )    
|                                                                                    |                           |                   |        |       |  |      |        |       |  |  |       |      
|Loss before taxes and minority
    interests                                        |                           |                   | (3,301 | )     |  |      | (1,811 | )     |  |  | (752  | )    
|                                                                                    |                           |                   |        |       |  |      |        |       |  |  |       |      
|(1)  Includes amortization and
    write-downs of Telenors net excess values(*) by |                           |                   | 983    |       |  |      | 99     |       |  |  | 40    |      
|Investments                                                                         |                           |                   |        |       |  |      |        |       |  |  |       |      
|                                                                                    | Capex                     |                   |        | 635   |  |      |        | 301   |  |  |       | 233   | 
|                                                                                    | Investments in businesses |                   |        | 281   |  |      |        | 771   |  |  |       | 30    | 
|No. of man-years (end of period)                                                    |                           |                   | 3,740  |       |  |      | 3,541  |       |  |  | 2,244 |      
|                                                                                    | Of which abroad           |                   |        | 1,985 |  |      |        | 2,075 |  |  |       | 1,076 | 






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

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|                        |  |                   |        |      |  |      |       |   |  |  |       |  
|----------------------- |  | ----------------- | ------ | ---- |  | ---- | ----- | - |  |  | ----- | -
|                        |  | 2001              |        | 2002 |  | 2003
|                        |  |                   |        |      |  |     
|                        |  |                  
|                        |  | (NOK in millions)
|Revenues                |  |                   |        |      |  |      |       |   |  |  |       |  
|Satellite Services      |  |                   | 1,271  |      |  |      | 2,153 |   |  |  | 1,996 |  
|Satellite Networks      |  |                   | 443    |      |  |      | 611   |   |  |  | 570   |  
|Teleservice             |  |                   | 878    |      |  |      | 756   |   |  |  | 725   |  
|Nextra International    |  |                   | 1,164  |      |  |      | 725   |   |  |  | 272   |  
|Software Services       |  |                   | 365    |      |  |      | 185   |   |  |  | 121   |  
|Itworks                 |  |                   | 1,124  |      |  |      | 188   |   |  |  |      |  
|Other                   |  |                   | 488    |      |  |      | 438   |   |  |  | 516   |  
|Eliminations            |  |                   | (14    | )    |  |      | (16   | ) |  |  | 5     |  
|                        |  |                   |        |      |  |      |       |   |  |  |       |  
|Total revenues          |  |                   | 5,719  |      |  |      | 5,040 |   |  |  | 4,205 |  
|                        |  |                   |        |      |  |      |       |   |  |  |       |  
|EBITDA                  |  |                   |        |      |  |      |       |   |  |  |       |  
|Satellite Services      |  |                   | 152    |      |  |      | 303   |   |  |  | 427   |  
|Satellite Networks      |  |                   | 36     |      |  |      | 109   |   |  |  | 127   |  
|Teleservice             |  |                   | 111    |      |  |      | (62   | ) |  |  | (7    | )
|Nextra International    |  |                   | (930   | )    |  |      | (155  | ) |  |  | (195  | )
|Software Services       |  |                   | 239    |      |  |      | 62    |   |  |  | 33    |  
|Itworks                 |  |                   | (102   | )    |  |      | (16   | ) |  |  |      |  
|Other                   |  |                   | (224   | )    |  |      | (63   | ) |  |  | 23    |  
|                        |  |                   |        |      |  |      |       |   |  |  |       |  
|Total EBITDA            |  |                   | (718   | )    |  |      | 178   |   |  |  | 408   |  
|                        |  |                   |        |      |  |      |       |   |  |  |       |  
|Operating profit (loss) |  |                   |        |      |  |      |       |   |  |  |       |  
|Satellite Services      |  |                   | 27     |      |  |      | 100   |   |  |  | 200   |  
|Satellite Networks      |  |                   | (118   | )    |  |      | 39    |   |  |  | 34    |  
|Teleservice             |  |                   | 71     |      |  |      | (93   | ) |  |  | (43   | )
|Nextra International    |  |                   | (2,042 | )    |  |      | (260  | ) |  |  | (220  | )
|Software Services       |  |                   | 83     |      |  |      | (372  | ) |  |  | (86   | )
|Itworks                 |  |                   | (265   | )    |  |      | (23   | ) |  |  |      |  
|Other                   |  |                   | (399   | )    |  |      | (127  | ) |  |  | (5    | )
|                        |  |                   |        |      |  |      |       |   |  |  |       |  
|Total operating (loss)  |  |                   | (2,643 | )    |  |      | (736  | ) |  |  | (120  | )
|                        |  |                   |        |      |  |      |       |   |  |  |       |  

Overview

In 2002 and 2003, the scope of the activities
which we consolidate in Other Business units changed
as we disposed of some businesses and we restructured certain
others. In 2003, we successfully completed the integration of
the operations of SAIT and COMSAT Mobile Communication in
Satellite Services.

Satellite Services

Revenues  Satellite
Services

The decrease in revenues in Satellite Services in
2003 compared to 2002 was primarily due to the strengthening of
the Norwegian Krone against the US Dollar. Reduced sales of
low margin products were offset by increased sales of high-speed
data (GAN) traffic, primarily due to the conflict in Iraq. This
product has a higher margin.

The increase in revenues in Satellite Services in
2002 compared to 2001 was due to the consolidation of former
COMSAT Mobile Communications, renamed Telenor Satellite Services
Inc. (TSSI), from January 11, 2002. The strengthening of
the Norwegian Krone (NOK) against the US Dollar adversely
affected revenues measured in NOK from the operations in all of
the countries in which Satellite Services operates. In addition,
revenues in the subsidiary Marlink were adversely affected by
general price reductions on Inmarsat services. In the Norwegian
operations, revenues increased due to increased sales of
Inmarsat traffic volume and amendments to agreements relating to
the former Eik cooperation that increased revenues and expenses.

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Operating profit  Satellite
Services

The increase in operating profit in 2003 was due
to the exploitation of synergies derived from the integration of
the operations of SAIT and COMSAT Mobile Communication,
increased sales of high margin products and discontinuance of
payments to our former partners in the former Eik-cooperation.
Write-downs of fixed assets and expenses for workforce
reductions increased in total by NOK 20 million in
2003 compared to 2002.

Operating profit in 2002 increased significantly
compared to 2001 due to the consolidation of TSSI and increased
sales volumes, partly offset by lower margins and the
strengthening of the Norwegian Krone against the US Dollar.

Capital expenditure and investments in
businesses  Satellite Services

Capital expenditure in 2003
(NOK 135 million) related primarily to Sealink
equipment and to the technical up-grade of our Eik land earth
station and our U.S. earth stations, primarily in
connection with IT and software development.

In 2002, capital expenditure for Satellite
Services (NOK 126 million) was in line with 2001 and
it related primarily to Sealink equipment.

In 2002 we acquired COMSAT Mobile Communication
for NOK 743 million (USD 81 million),
reported as investments in businesses.

Satellite Networks

Revenues  Satellite
Networks

The decrease in revenues in 2003 compared to 2002
was due to reduced revenues from the Internet operation Taide
and Poland and the strengthening of the Norwegian Krone against
the US Dollar. Revenues in Taide decreased due to lower
prices as a result of increased competition. The operations in
Poland were sold at the end of 2003 with a gain on disposal of
NOK 20 million.

Revenues increased in 2002 compared to 2001 due
to new contracts with international organizations entered into
in 2002, which also resulted in increased sales and
supplementary services. The increased sales more than offset the
negative impact of the strengthening of the Norwegian Krone
against the US Dollar in 2002.

Operating profit (loss) 
Satellite Networks

The decrease in operating profit in 2003 compared
to 2002 was due to a net operating loss of NOK 6 million in
Poland in 2003. The loss in Poland included a gain on sale of
NOK 20 million and write-downs of NOK 14 million. In
addition, the decrease in revenues was offset by reduced
expenses due to more cost-efficient operations, including the
use of satellite capacity, and lower expenses due to the
strengthening of the Norwegian Krone against the US Dollar in
2003.

We had an operating profit in 2002 compared to an
operating loss in 2001. This was due to reduced write-downs and
reduced losses on disposal of fixed assets and operations in
2002, as well as a larger share of revenues being generated from
higher margin products.

Capital expenditure  Satellite
Networks

Capital expenditure amounted to NOK
56 million in 2003, NOK 82 million in 2002 and NOK
178 million in 2001. Capital expenditure in Satellite
Networks was primarily related to satellite communication
equipment leased and used by our customers.

The decrease in capital expenditure in the period
2001 to 2003 was due to higher capital expenditure when we
entered into new customer contracts in 2001 and to the lower
capital expenditure required to operate these same contracts in
2002 and 2003. In 2001, we also had capital expenditure in our
operations in Poland.

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Teleservice

Revenues 
Teleservice

Reduced revenues in 2003 compared to 2002 were
due to lower demand for directory enquiry services and lower
market share resulting from increased competition in the market
for these services in 2002. This reduction in revenues was
partially offset by revenues from an acquired call-center unit
in Sweden.

Teleservice reduced revenues in 2002 compared to
2001 due to lower demand for directory enquiry services and call
center functions. Due to this development, Teleservice closed
down six divisions during 2002.

Operating profit (loss) 
Teleservice

The operating loss was reduced in 2003 compared
to 2002 due to reduced expenses for workforce reduction and
pension benefits, partially offset by reduced revenues. In 2003,
the workforce was further reduced, resulting in expenses for
workforce reductions of NOK 45 million.

Operating loss in 2002 included expenses for
workforce reductions of NOK 75 million in connection with
the closure of divisions, as well as NOK 66 million related
to the accounting of previously granted pension benefits in
Teleservice.

Nextra International

Revenues  Nextra
International

The decrease in revenues in the period 2001 to
2003 was due to our gradual exit from the international
operations of Nextra, which we completed with the sale of
Nextras operations in the United Kingdom in 2003.

Operating (loss)  Nextra
International

In the period 2001 to 2003, Nextras
operations generated losses that gradually decreased as Nextra
disposed of these operations. In 2003, we recorded net losses on
disposals of operations of NOK 160 million, which were
partially offset by the reversal of provisions. In 2001 and
2002, Telenor had made provisions to cover possible negative
outcomes regarding the final settlement of the sale or
liquidation of Nextras operations. In 2003, a total of NOK
38 million of these provisions were reversed due to final
settlement of the sale of our operations in Germany. In 2001, we
made write-downs of NOK 849 million as a result of our
reassessment of the business prospects and strategy of
Nextras activities.

Software Service

Revenues  Software
Services

Reduced scope of the business of Software
Services consultancy operations in 2003 resulted in lower
revenues in 2003 compared to 2002. In addition, revenues from
internal sales of CA software were lower as a result of deferred
delivery.

Reduced revenues in 2002 compared to 2001 were
mainly due to reduced external sales of Computer Associates
software. The consultancy operations were reduced in 2002
compared to 2001.

Operating profit (loss) 
Software Services

In 2002, we wrote down the value of our software
licenses from Computer Associates by NOK 295 million.
Excluding these write-downs, the operating loss increased in
2003 compared to 2002 due to lower revenues, partially offset by
reduced operating expenses resulting from the reduced scope of
the operations compared to 2002.

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The operating loss in 2002 compared to an
operating profit in 2001 was due to reduced revenues and
write-downs in 2002.

Itworks

Itworks filed for bankruptcy on April 24,
2002. As a result of large losses incurred in 2001 and at the
beginning of 2002, and with further losses expected due to
failing market conditions, we decided that there was no sound
financial basis to continue to finance the company.

Other

Other includes principally Telenor Venture (which
includes former Telenor Innovation) and Telenor International
Business. Revenues increased in 2003 compared to 2002 in both
business units.

The operating loss was reduced in 2003 compared
to 2002 due to increased revenues and cost reducing measures in
Telenor Venture.

The unit TTYL was closed down at the end of 2001
and contributed to the reduction in revenues in
other in 2002 compared to 2001. Reduced operating
loss was mainly due to losses and write-downs in 2001 in TTYL.
In 2002, we made write-downs of NOK 32 million, primarily
related to goodwill.

CORPORATE FUNCTIONS AND GROUP
ACTIVITIES

|                                                |  |                   |       |      |  |      |       |   |  |  |       |  
|----------------------------------------------- |  | ----------------- | ----- | ---- |  | ---- | ----- | - |  |  | ----- | -
|                                                |  | 2001              |       | 2002 |  | 2003
|                                                |  |                   |       |      |  |     
|                                                |  |                  
|                                                |  | (NOK in millions)
|External revenues                               |  |                   | 280   |      |  |      | 247   |   |  |  | 229   |  
|Internal revenues                               |  |                   | 1,863 |      |  |      | 1,869 |   |  |  | 1,955 |  
|Gains on disposal                               |  |                   | 5,116 |      |  |      | 143   |   |  |  | 133   |  
|                                                |  |                   |       |      |  |      |       |   |  |  |       |  
|Total revenues                                  |  |                   | 7,259 |      |  |      | 2,259 |   |  |  | 2,317 |  
|                                                |  |                   |       |      |  |      |       |   |  |  |       |  
|External costs of materials and traffic charges |  |                   | 91    |      |  |      | 43    |   |  |  | 38    |  
|Internal costs of materials and traffic charges |  |                   | 3     |      |  |      |      |   |  |  | 13    |  
|Total costs of materials and traffic charges    |  |                   | 94    |      |  |      | 43    |   |  |  | 51    |  
|                                                |  |                   |       |      |  |      |       |   |  |  |       |  
|Own work capitalized                            |  |                   | (44   | )    |  |      | (7    | ) |  |  | (2    | )
|Salaries and personnel costs                    |  |                   | 856   |      |  |      | 875   |   |  |  | 781   |  
|Other external operating expenses               |  |                   | 1,495 |      |  |      | 1,608 |   |  |  | 1,193 |  
|Other internal operating expenses               |  |                   | 354   |      |  |      | 226   |   |  |  | 263   |  
|Losses on disposal of fixed assets              |  |                   | 10    |      |  |      | 83    |   |  |  | 8     |  
|Depreciation and amortization                   |  |                   | 304   |      |  |      | 362   |   |  |  | 384   |  
|Write-downs                                     |  |                   | 12    |      |  |      |      |   |  |  | 3     |  
|                                                |  |                   |       |      |  |      |       |   |  |  |       |  
|Total operating expenses                        |  |                   | 3,081 |      |  |      | 3,190 |   |  |  | 2,681 |  
|                                                |  |                   |       |      |  |      |       |   |  |  |       |  
|Operating profit (loss)                         |  |                   | 4,178 |      |  |      | (931  | ) |  |  | (364  | )
|                                                |  |                   |       |      |  |      |       |   |  |  |       |  
|Associated companies                            |  |                   | (6    | )    |  |      | (1    | ) |  |  | (2    | )
|Net financial items                             |  |                   | 691   |      |  |      | 1,929 |   |  |  | 2,846 |  
|                                                |  |                   |       |      |  |      |       |   |  |  |       |  
|Profit before taxes and minority
    interests  |  |                   | 4,863 |      |  |      | 997   |   |  |  | 2,480 |  
|                                                |  |                   |       |      |  |      |       |   |  |  |       |  

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|                                 |                           |                   |       |       |  |      |       |       |  |  |      |     | 
|-------------------------------- | ------------------------- | ----------------- | ----- | ----- |  | ---- | ----- | ----- |  |  | ---- | --- | 
|                                 |                           | 2001              |       | 2002  |  | 2003
|                                 |                           |                   |       |       |  |     
|                                 |                           |                  
|                                 |                           | (NOK in millions)
|Investments                      |                           |                   |       |       |  |      |       |       |  |  |      |    
|                                 | Capex                     |                   |       | 2,044 |  |      |       | 1,064 |  |  |      | 253 | 
|                                 | Investments in businesses |                   |       | 334   |  |      |       | 56    |  |  |      | 93  | 
|No. of man-years (end of period) |                           |                   | 770   |       |  |      | 1,077 |       |  |  | 888  |    
|                                 | Of which abroad           |                   |       | 22    |  |      |       | 21    |  |  |      | 20  | 
|EBITDA                           |                           |                   | 4,494 |       |  |      | (569  | )     |  |  | 23   |    
|Depreciation and amortization    |                           |                   | 304   |       |  |      | 362   |       |  |  | 384  |    
|Write-downs                      |                           |                   | 12    |       |  |      |      |       |  |  | 3    |    
|                                 |                           |                   |       |       |  |      |       |       |  |  |      |    
|Operating profit (loss)          |                           |                   | 4,178 |       |  |      | (931  | )     |  |  | (364 | )  
|                                 |                           |                   |       |       |  |      |       |       |  |  |      |    

This area comprises Real Estate, Research and
Development, Strategic Group Projects, Internal Insurance
Company, Group Treasury, International Services and central
staff and support functions.

In 2003, we reduced expenses through cost
reduction initiatives and we significantly decreased our capital
expenditure due to the completion of our head office at Fornebu
outside Oslo during 2002.

Revenues

Revenues excluding gains on disposals were
substantially stable in 2001, 2002 and 2003.

Gains on disposals in 2001 were due primarily to
the sale of Telenor Media. Gains in 2002 and 2003 were due
primarily to sales of properties.

Operating Profit (loss) and EBITDA

EBITDA increased by NOK 592 million in 2003
compared to 2002 due primarily to reduced expenses. Expenses for
workforce reductions and loss contracts decreased by NOK
238 million and net gains on disposals of properties
increased by NOK 65 million. Capital expenditure on owned
properties reduced expenses for lease of properties as well as
maintenance cost in 2003 compared to 2002. In 2003, we had fewer
Group projects compared to 2002. This contributed to reduced
expenses. Salaries and personnel costs were reduced due to the
decrease in the number of employees in 2003.

In 2002, we recorded an EBITDA loss compared to
an EBITDA profit in 2001. The profit in 2001 was due to the gain
from the sale of Telenor Media. NOK 272 million was
expensed in 2002 for workforce reductions and loss contracts,
compared to NOK 74 million in 2001 that related to the
establishment of the Telemuseum foundation. Expenses for lease
of properties and consultancy fees decreased in 2002 compared to
2001. The decrease in leased properties was due to investments
in own properties that replaced rented premises and to the
accrual for loss on property leases as of June 30, 2002.
Consultancy fees decreased due to lower activity in Strategic
Group Projects and acquisition activities. NOK 83 million
was recorded as losses on disposal in 2002, mainly relating to
the bankruptcy of our former subsidiary Itworks AS.

Depreciation and amortization increased in the
period 2001 to 2003 because the depreciation period for our
properties, on which we made significant capital expenditure,
commenced as these properties were ready for their intended use,
mainly at the end of 2001 and during 2002. Capital expenditure
on our administrative support systems also increased
depreciation and amortization due to relatively short
depreciation and amortization periods.

Capital Expenditure

Capital expenditure decreased considerably in the
period 2001 to 2003, due primarily to the completion of our head
office at Fornebu outside Oslo during 2002.

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BUSINESS AREAS SOLD

TELENOR MEDIA

We sold our former subsidiary Telenor Media,
effective as of October 1, 2001, and consequently Media was
consolidated for the first nine months of 2001 only. The tables
below are included to show the effect of Telenor Media on our
results in the periods where Telenor Media was consolidated as a
subsidiary.

|                                                  |                           |                   |       |     | 
|------------------------------------------------- | ------------------------- | ----------------- | ----- | --- | 
|                                                  |                           | 9 months         
|                                                  |                           | 2001             
|                                                  |                           |                  
|                                                  |                           | (NOK in millions)
|External revenues                                 |                           |                   | 1,258 |    
|Internal revenues                                 |                           |                   | 80    |    
|Gains on disposal of fixed assets and operations  |                           |                   | 5     |    
|                                                  |                           |                   |       |    
|Total revenues                                    |                           |                   | 1,343 |    
|Total operating expenses                          |                           |                   | 1,081 |    
|                                                  |                           |                   |       |    
|Operating profit                                  |                           |                   | 262   |    
|Associated companies                              |                           |                   | (12   | )  
|Net financial items                               |                           |                   | 21    |    
|                                                  |                           |                   |       |    
|Profit before taxes and minority
    interests    |                           |                   | 271   |    
|                                                  |                           |                   |       |    
|Investments:                                      |                           |                   |       |    
|                                                  | Capex                     |                   |       | 56  | 
|                                                  | Acquisition of businesses |                   |       | 127 | 
|Total full-time equivalent employees (period end) |                           |                   |      |    
|                                                  | Of which abroad           |                   |       |    | 
|Operating expenses                                |                           |                   |       |    
|External costs of materials and traffic charges   |                           |                   | 159   |    
|Internal costs of materials and traffic charges   |                           |                   | 4     |    
|                                                  |                           |                   |       |    
|Total costs of materials and traffic charges      |                           |                   | 163   |    
|Own work capitalized                              |                           |                   |      |    
|Salaries and personnel costs                      |                           |                   | 406   |    
|Other external operating expenses                 |                           |                   | 344   |    
|Other internal operating expenses                 |                           |                   | 117   |    
|Depreciation and amortization                     |                           |                   | 51    |    
|Write-downs                                       |                           |                   |      |    
|Losses on disposal of fixed assets and operations |                           |                   |      |    
|                                                  |                           |                   |       |    
|Total operating expenses                          |                           |                   | 1,081 |    
|                                                  |                           |                   |       |    

WORKING CAPITAL

Working capital (current assets less current
liabilities) was positive by NOK 0.3 billion as of
December 31, 2003, negative by NOK 6.4 billion as of
December 31, 2002 and negative by NOK 0.8 billion
as of December 31, 2001. We believe that taking into
consideration our established credit facilities and having due
regard for our sources of liquidity reserves (including
committed credit facilities), credit rating and access to
capital markets, we have sufficient liquidity and working
capital to meet our present and future requirements. Our sources
of liquidity are described below.

LIQUIDITY

You should read the cash flow statement in our
consolidated financial statements that form part of this report
on Form 20-F for detailed figures related to the
Groups cash flow. We present our cash flow statement

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using both the direct and indirect method. The
statement provides detailed information of our cash flows. The
table below shows an aggregated cash flow statement:


|                                                                             |  |                   |         |      |  |      |         |   |  |  |        |  
|---------------------------------------------------------------------------- |  | ----------------- | ------- | ---- |  | ---- | ------- | - |  |  | ------ | -
|                                                                             |  | 2001              |         | 2002 |  | 2003
|                                                                             |  |                   |         |      |  |     
|                                                                             |  |                  
|                                                                             |  | (NOK in millions)
|Aggregated cash flow statement                                               |  |                   |         |      |  |      |         |   |  |  |        |  
|Net cash flow from operating activities                                      |  |                   | 6,993   |      |  |      | 12,858  |   |  |  | 13,676 |  
|Net cash flow from investment activities                                     |  |                   | 20,891  |      |  |      | (21,727 | ) |  |  | (3,454 | )
|Net cash flow from financing activities                                      |  |                   | (24,366 | )    |  |      | 8,641   |   |  |  | (7,887 | )
|Effect on cash and cash equivalents of changes in
    foreign exchange rates |  |                   | 15      |      |  |      | (347    | ) |  |  | 45     |  
|Net change in cash and cash equivalents                                      |  |                   | 3,533   |      |  |      | (575    | ) |  |  | 2,380  |  
|Cash and cash equivalents January 1                                          |  |                   | 2,306   |      |  |      | 5,839   |   |  |  | 5,264  |  
|Cash and cash equivalents December 31                                        |  |                   | 5,839   |      |  |      | 5,264   |   |  |  | 7,644  |  

Net cash flow from operating activities increased
in 2003 compared to 2002 by NOK 0.8 billion to
NOK 13.7 billion. The increase was primarily related
to increased revenues and operating margins. The full-year
effect of the consolidation of Kyivstar and Canal Digital also
contributed to this increase. The increase in cash flow was
however partially offset by increased payments of financial
items, including interest, and payment of income taxes. In 2002,
we also had a positive cash flow effect from changes in
accruals, especially reduced accounts receivables and
prepayments. In 2003, the positive effect from changes in
accruals was more limited compared to 2002 and we made payments
on provisions made in 2002 for workforce reductions etc. In
2003, payment of income taxes were mainly related to companies
outside Norway, of which NOK 2.5 billion was payment
of taxes on the gain on sale of VIAG Interkom in 2001. In
Norway, neither did we have to pay income taxes in 2003 nor do
we expect to pay income taxes in 2004 due to tax losses carried
forward.

Net cash flow from investment activities was a
net payment of approximately NOK 3.5 billion in 2003,
compared to a net payment of approximately
NOK 21.7 billion in 2002. Our capital expenditure and
investment in businesses were reduced in 2003 compared to 2002
by approximately NOK 2.6 billion and
NOK 11.8 billion, respectively. You should read
 Investments for further information
about our investments. In 2003, we received cash payments of
NOK 2.3 billion upon sale of shares in associated
companies, mainly Cosmote. We also received cash payments of
NOK 1.1 billion upon sale of other shareholdings, of
which the largest was the sale of shares in Inmarsat in exchange
for NOK 0.8 billion in cash and an ownership interest
in Inmarsats new holding company. We also received
0.5 NOK billion for the sale of fixed assets, including a
net cash inflow of NOK 0.2 billion in a new cross
border QTE lease of fixed-line network. We also made payments of
NOK 0.3 billion in 2003 for other investments.

In 2003, we made net cash payments on our
interest-bearing liabilities of NOK 7.0 billion due to
our cash inflows from operating activities exceeding net cash
outflow from investment activities. In addition, our cash and
cash equivalents increased by NOK 2.4 billion during
2003 to NOK 7.6 billion. In 2003, we paid dividends of
NOK 0.8 billion to the shareholders of Telenor ASA and
our subsidiaries made a further NOK 0.1 billion
payment to the minority interests, mainly in GrameenPhone.

As of February 12, 2004, we paid
NOK 3.6 billion for the remaining 46.5% of the shares
in Sonofon which we did not already own. You should read
Item 4  Information About the
Company  Telenor Mobile  Mobile Operations
Outside Norway  Associated Companies and Joint
Ventures for additional information about such
acquisition. As of February 26, 2004, we agreed to sell our
remaining shareholdings in Cosmote for cash consideration of
approximately NOK 3.1 billion.

Net cash flow from operating activities increased
in 2002 compared to 2001 by NOK 5.9 billion to
NOK 12.9 billion. This increase was primarily due to
increased revenues and operating margins and changes in
accruals, including accounts receivables and prepayments, and
was partly offset by increased payments of taxes and interest.
For additional information on changes in accruals, you should
read our consolidated cash flow statement. The consolidation of
DiGi.Com in 2001 and of Pannon GSM and Kyivstar in 2002
contributed NOK 3.1 billion of the increase.

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Net cash flow from investment activities was a
net payment of approximately NOK 21.7 billion, as opposed
to a net cash receipt in 2001 of approximately NOK 20.9
billion, mainly due to the sale of businesses, including
associated companies, and tangible assets in 2001. Our level of
cash payments of capital expenditure decreased by approximately
NOK 2.5 billion in 2002 compared to 2001, but payments for
acquisitions of businesses (net of cash acquired) increased by
approximately NOK 6.1 billion in 2002 compared to 2001
mainly due to the acquisition of the shares of Pannon GSM and
Canal Digital which we did not already own.

In 2002, in order to finance part of our
investments in businesses we increased our interest-bearing
liabilities and, as a result, our net cash flow from financing
activities was an inflow of approximately NOK 8.6 billion.
In 2002, we paid dividends of NOK 0.6 billion and our cash
and cash equivalents in foreign currency measured in NOK were
negatively affected by approximately NOK 0.3 billion.

In 2001, we completed significant disposals of
companies and assets and the proceeds from the sale of VIAG
Interkom, Esat Digifone and Telenor Media totaled approximately
NOK 38 billion. These transactions gave us a significant
positive cash flow from investment activities in 2001.

Proceeds from our disposals were used to repay
interest-bearing liabilities in the amount of approximately NOK
24 billion during 2001. We paid dividends of NOK 0.5
billion in 2001.

INVESTMENTS

|                                                                         |  |                   |        |      |  |      |        |   |  |  |       |  
|------------------------------------------------------------------------ |  | ----------------- | ------ | ---- |  | ---- | ------ | - |  |  | ----- | -
|                                                                         |  | 2001              |        | 2002 |  | 2003
|                                                                         |  |                   |        |      |  |     
|                                                                         |  |                  
|                                                                         |  | (NOK in millions)
|Fixed networks                                                           |  |                   | 4,456  |      |  |      | 3,001  |   |  |  | 2,099 |  
|Mobile networks                                                          |  |                   | 1,610  |      |  |      | 2,205  |   |  |  | 2,487 |  
|Properties                                                               |  |                   | 1,102  |      |  |      | 2,840  |   |  |  | 546   |  
|Support systems (office and computer equipment,
    software, cars etc.) |  |                   | 2,891  |      |  |      | 3,042  |   |  |  | 1,991 |  
|Other intangible assets                                                  |  |                   | 316    |      |  |      | 455    |   |  |  | 81    |  
|Work in progress (net additions) and other                               |  |                   | 1,259  |      |  |      | (2,654 | ) |  |  | (750  | )
|                                                                         |  |                   |        |      |  |      |        |   |  |  |       |  
|Total Capital expenditure (Capex)(1)                                     |  |                   | 11,634 |      |  |      | 8,889  |   |  |  | 6,454 |  
|Investments in businesses(2)                                             |  |                   | 7,212  |      |  |      | 12,411 |   |  |  | 563   |  
|                                                                         |  |                   |        |      |  |      |        |   |  |  |       |  
|Total                                                                    |  |                   | 18,846 |      |  |      | 21,300 |   |  |  | 7,017 |  
|                                                                         |  |                   |        |      |  |      |        |   |  |  |       |  






|    |                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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.

Capital expenditure in 2004 is expected to
increase compared to 2003 due to the purchase of satellite
capacity, the consolidation of Sonofon and investments in new
mobile technology in Norway. The actual amounts and the timing
of our capital expenditure may vary substantially from our
estimates.

Our capital expenditure in 2003 was reduced by
NOK 2.4 billion compared to 2002, mainly due to reduced
investments in the fixed network, properties and IT-support
systems in Norway. The reduction in the fixed network was due to
the more effective use of capacity resulting from earlier
capital expenditure, lower demand for fixed network services and
lower equipment prices. In 2002, we completed our new
headquarters and our new internal IT-system in Norway and in
2003 we had lower capital expenditure in strategic group
projects, which contributed to the reduced level of capital
expenditure in 2003 compared to 2002. Of our total capital
expenditure in 2003, NOK 2.8 billion was invested in Norway
and NOK 3.6 billion outside Norway, mainly in our mobile
subsidiaries. Of our investments in businesses in 2003,
NOK 0.4 billion was outside Norway.

Investments in Norway totalled NOK 7.9
billion in 2002, of which NOK 2.5 billion were acquisitions
of businesses, including the acquisition of Canal Digital Group.
We invested NOK 1.1 billion in real estate

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(including work in progress) mainly in our new
headquarters located in Fornebu outside of Oslo. We made other
investments for a total of NOK 4.3 billion in Norway,
including investments in our fixed and mobile networks,
equipment used in customer contracts and in operational systems
and administrative support systems, of which NOK 0.5
billion was invested in connection with strategic Group
projects, including the support systems and IT infrastructure at
our new headquarters. The decrease in work in progress was due
mainly to the completion of certain real estate investments and
fixed networks in 2002. Investments outside Norway totaled
NOK 13.4 billion in 2002, of which NOK 9.9 billion
were acquisitions of businesses. Our total capital expenditure
outside Norway was NOK 3.5 billion in 2002 of which
NOK 2.6 billion was capital expenditure in DiGi.Com, Pannon
GSM and Kyivstar.


Investments in Norway amounted to NOK 10.9
billion in 2001, of which NOK 1.6 billion was acquisition
of businesses. NOK 2.0 billion was invested in real estate
(including work in progress), of which the new headquarters
located on Fornebu represented the largest portion. Other
investments were made in the fixed and mobile networks,
including the networks for our TV-distribution businesses.
Investments were also made in operational systems and
administrative support systems of which NOK 0.6 billion was
invested in connection with strategic Group projects, including
the support systems and IT infrastructure at the new
headquarters. Investments outside Norway amounted to
NOK 7.9 billion in 2001, of which NOK 5.6 billion was
for acquisition of businesses. Capital expenditure outside
Norway consisted mainly of investments in the Mobile business
area (DiGi.Com and GrameenPhone), the Business Solutions
business area and in the transatlantic fibre capacity in the
Networks business area.

The table below lists our most significant
investments in businesses and the acquisition cost, including
capital contributions to our associated companies, for each of
the last three years.

|                                  |  |                   |       |      |  |      |        |  |  |  |     | 
|--------------------------------- |  | ----------------- | ----- | ---- |  | ---- | ------ |  |  |  | --- | 
|                                  |  | 2001              |       | 2002 |  | 2003
|                                  |  |                   |       |      |  |     
|                                  |  |                  
|                                  |  | (NOK in millions)
|Pannon GSM RT                     |  |                   |      |      |  |      | 7,906  |  |  |  |    | 
|COMSAT Mobile Communications      |  |                   |      |      |  |      | 743    |  |  |  |    | 
|Utfors AB                         |  |                   |      |      |  |      | 153    |  |  |  | 13  | 
|Glocalnet AB                      |  |                   |      |      |  |      | 102    |  |  |  |    | 
|DiGi.Com bhd                      |  |                   | 3,223 |      |  |      |       |  |  |  |    | 
|VimpelCom (incl VimpelCom-Region) |  |                   | 255   |      |  |      | 432    |  |  |  |    | 
|Telenordia AB                     |  |                   | 191   |      |  |      |       |  |  |  |    | 
|ONE GmbH (Connect Austria)        |  |                   | 264   |      |  |      | 44     |  |  |  |    | 
|Canal Digital                     |  |                   | 378   |      |  |      | 2,166  |  |  |  |    | 
|Kyivstar G.S.M. JSC               |  |                   | 254   |      |  |      | 294    |  |  |  | 8   | 
|Wireless Matrix Corporation       |  |                   | 317   |      |  |      |       |  |  |  |    | 
|Otrum Electronics ASA             |  |                   | 273   |      |  |      |       |  |  |  |    | 
|Sweden On-Line AB                 |  |                   | 165   |      |  |      |       |  |  |  |    | 
|Marlink (SAIT Communications S.A) |  |                   | 189   |      |  |      |       |  |  |  |    | 
|OniWay                            |  |                   | 324   |      |  |      | 217    |  |  |  |    | 
|Unigrid AB                        |  |                   | 122   |      |  |      |       |  |  |  |    | 
|IT operations DnB & Nordea        |  |                   | 597   |      |  |      | 20     |  |  |  |    | 
|Bravida ASA                       |  |                   |      |      |  |      | 91     |  |  |  | 82  | 
|OJSC Comincom/ Combellga          |  |                   | 273   |      |  |      |       |  |  |  | 217 | 
|OJSC Golden Telecom               |  |                   |      |      |  |      |       |  |  |  | 63  | 
|GrameenPhone Ltd.                 |  |                   |      |      |  |      |       |  |  |  | 86  | 
|Other                             |  |                   | 387   |      |  |      | 243    |  |  |  | 94  | 
|                                  |  |                   |       |      |  |      |        |  |  |  |     | 
|Total investments in businesses   |  |                   | 7,212 |      |  |      | 12,411 |  |  |  | 563 | 
|                                  |  |                   |       |      |  |      |        |  |  |  |     | 

The following transactions relating to changes in
ownership interests were not reported as investments in
businesses in 2003 in the table above: the sale of shares in our
Russian subsidiary Comincom in exchange for shares in the
Russian listed company Golden Telecom Inc.
(NOK 1.3 billion recorded as an associated

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company), the sale of shares in Inmarsat in
exchange for cash of NOK 0.8 billion and an ownership
interest in Inmarsats new holding company
(NOK 0.7 billion recorded as shares), and the sale of
shares in A-pressen ASA in exchange for shares in APR Media
Holding (NOK 0.4 billion recorded as an associated
company).


INFORMATION ABOUT CONTRACTUAL CASH PAYMENTS
AND CAPITAL RESOURCES

Contractual Cash Payments

The following table shows our contractual
obligations and commercial commitments as of December 31,
2003.

|                                        |  |                   |        |           |  |           |       |           |  |         |        |  |  |  |       |  |  |  |       | 
|--------------------------------------- |  | ----------------- | ------ | --------- |  | --------- | ----- | --------- |  | ------- | ------ |  |  |  | ----- |  |  |  | ----- | 
|                                        |  |                  
|                                        |  | Payments due     
|                                        |  |                  
|                                        |  |                   |        | Less than |  |          
|                                        |  |                   |        | 1 year    |  |           |       | Over     
|                                        |  | Total             |        | (2004)    |  | 2-3 years |       | 4-5 years |  | 5 years
|                                        |  |                   |        |           |  |           |       |           |  |        
|                                        |  |                  
|                                        |  | (NOK in millions)
|Short-term interest-bearing liabilities |  |                   | 386    |           |  |           | 386   |           |  |         |       |  |  |  |      |  |  |  |      | 
|Long-term interest-bearing liabilities  |  |                   | 23,812 |           |  |           | 2,251 |           |  |         | 8,542  |  |  |  | 6,479 |  |  |  | 6,540 | 
|Finance lease obligations               |  |                   | 1,564  |           |  |           | 422   |           |  |         | 501    |  |  |  | 334   |  |  |  | 307   | 
|Committed purchase obligations(1)       |  |                   |        |           |  |           |       |           |  |         |        |  |  |  |       |  |  |  |       | 
|Rent of premises                        |  |                   | 3,255  |           |  |           | 603   |           |  |         | 942    |  |  |  | 647   |  |  |  | 1,063 | 
|Rent of cars, office equipment etc.     |  |                   | 158    |           |  |           | 71    |           |  |         | 68     |  |  |  | 11    |  |  |  | 8     | 
|Rent of satellite and network capacity  |  |                   | 1,720  |           |  |           | 448   |           |  |         | 848    |  |  |  | 137   |  |  |  | 287   | 
|IT-related agreements                   |  |                   | 678    |           |  |           | 346   |           |  |         | 315    |  |  |  | 17    |  |  |  |      | 
|Other contractual obligations           |  |                   | 807    |           |  |           | 552   |           |  |         | 209    |  |  |  | 46    |  |  |  |      | 
|Committed investments(1)                |  |                   |        |           |  |           |       |           |  |         |        |  |  |  |       |  |  |  |       | 
|Properties and equipment                |  |                   | 500    |           |  |           | 381   |           |  |         | 65     |  |  |  | 54    |  |  |  |      | 
|Other contractual investments           |  |                   | 4,366  |           |  |           | 4,358 |           |  |         | 8      |  |  |  |       |  |  |  |       | 
|Total contractual cash obligations      |  |                   | 37,246 |           |  |           | 9,818 |           |  |         | 11,498 |  |  |  | 7,725 |  |  |  | 8,205 | 
|Guarantees (expire)                     |  |                   | 2,557  |           |  |           | 790   |           |  |         | 917    |  |  |  | 1     |  |  |  | 849   | 






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

Of the finance lease obligations in the table,
NOK 1,004 million relate to leases for the Thor II and III
satellites. Under these agreements, we may be required to
provide security arrangements if our credit rating is downgraded
to A - with negative outlook. We have treated the lease
financing arrangements as mortgages as though these were already
secured.

You should read  Capital
resources and note 20 to our consolidated financial
statements for additional information on our interest-bearing
liabilities.

Rent of satellite and network capacity includes
payments related to a Mobile Virtual Network Operator (MVNO)
agreement with NOK 558 million for 2006. You should read
Item 4: Information on the Company 
Telenor Mobile  Telenor Mobil 
Norway for additional information on the MVNO agreement.

Other contractual investments for 2004 include
USD 88 million (NOK 626 million calculated by
using the hedged USD/NOK currency rate) for the purchase of
capacity in a satellite to be launched by Intelsat (Intelsat
10-02) and NOK 3,661 million for the payment of the
consideration for the acquisition of the remaining 46.5%
ownership interest in Sonofon as of February 12, 2004.

In addition, we entered into cross border QTE
leases for telephony switches, GSM Mobile network and fixed-line
network in 1998, 1999 and 2003. These agreements provide for
defeasance of all amounts due by us to the other parties under
the leases. As of December 31, 2003, defeasance of USD
986 million were deposited with highly rated financial
institutions and in US government related securities. Our leasing

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obligations are offset against our defeasance
arrangements in the balance sheet and are not included in the
table above. We also provided guarantees in connection with
these cross border QTE leases. You should read
 Off Balance Sheet Arrangements for
additional information on our QTE leases.


Capital Resources

We will use cash flow from operations, debt,
equity financing and proceeds from potential disposals of assets
to finance our future investments.

Telenor ASA issues debt in the domestic and
international capital markets mainly in the form of commercial
paper and bonds. We use our Euro commercial paper program,
U.S. commercial paper program, Euro medium term note
program and three domestic open bond programs with
different maturities. In order to have satisfactory access to
these external sources of financing in terms of both volume and
price, we should maintain a satisfactory credit rating. Our long
term and short-term credit rating is A2/P-1 from Moodys
and A-/A-2 from Standard & Poors, both with
stable outlook.

In order to secure satisfactory financial
flexibility, in 2003 Telenor ASA established a committed
syndicated revolving credit facility of Euro 1.5 billion
with maturity in 2008. In accordance with our financing policy,
this committed credit facility should be available to serve at
any time as refinancing source for all of our outstanding
commercial paper.

As of December 31, 2003, our total
outstanding interest-bearing liabilities were
NOK 25.8 billion, of which NOK 19.5 billion
were unsecured bonds issued by Telenor ASA. All bonds
issued by Telenor ASA are subject to a negative pledge
clause restricting our ability to pledge our assets to secure
future borrowings without giving a similar secured status to our
existing lenders, and also contain covenants limiting disposals
of significant subsidiaries and assets.

At December 31, 2003, our subsidiaries had
long-term interest-bearing liabilities of approximately
NOK 5.8 billion, mainly consisting of bonds
(NOK 2.2 billion), loans from financial institutions
(NOK 1.9 billion) and financial leases and vendor
financing (NOK 1.7 billion). These interest-bearing
liabilities are generally not guaranteed by Telenor ASA and are
subject to standard financial covenants. Subsidiaries in which
we own an interest of less than 90% normally have stand-alone
financing. In addition, at December 31, 2003, our
subsidiaries had short-term interest-bearing liabilities of
approximately NOK 0.4 billion.

As of December 31, 2003,
NOK 2.7 billion of our total interest-bearing
liabilities were secured by pledge of assets and the book value
of these pledged assets was NOK 8.1 billion. The
pledges and the corresponding liabilities related to DiGi.Com,
GrameenPhone and our leases for the Thor II and
Thor III satellites. In addition, Telenor ASA guaranteed
finance leases for a total of NOK 1.5 billion,
including the leases for the Thor II and Thor III
satellites.

You should read note 20 to our consolidated
financial statements for additional information on our interest
bearing liabilities.

At December 31, 2003, Telenor ASAs
domestic bonds totaled NOK 3.1 billion and our
outstanding Euro medium term notes totaled
NOK 17.5 billion. Our committed revolving credit
facilities of Euro 1.5 billion was undrawn and no
commercial paper was issued under Telenor ASAs Euro
commercial paper program, U.S. commercial paper program or
in the domestic market as of December 31, 2003.

At the general meeting held on May 8, 2003,
our shareholders resolved to grant a new authority to the board
of directors to increase the share capital up to
NOK 1,065,193,800 through issuance of up to
177,532,300 ordinary shares of NOK 6 nominal value
each. Our board of directors may waive the pre-emptive rights of
shareholders to such shares. The boards authority, which
expires on July 1, 2004, also includes the authority to
issue shares against consideration other than cash and in
connection with a merger. Such an increase in share capital may
also be used in share option plans and stock ownership programs
for employees.

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In January 2004, we entered into an agreement
with the Norwegian state, our largest shareholder, in connection
with our program to buy back our own shares in accordance with
the authority granted by the general meeting of our shareholders
on May 8, 2003. The state agreed to cancel an amount of its
own shares proportional to the amount of Telenor shares which we
repurchase in the market against payment by us. As a result, the
states ownership interest will remain unchanged.

595,109 shares at a nominal value of NOK 6 each
were issued in December 2003 in employee share issues under our
employee stock ownership program. Similarly, in December 2002, a
total of 659,520 shares were issued and in November and
December 2001, a total of 578,753 shares at a nominal value
of NOK 6 each were issued.

On February 21, 2002, we established an
option plan under which we granted options to our managers and
key personnel in February 2002 and February 2003 to subscribe
for up to a total of 5.5 million of our shares. In February
2004, new options granted were limited to a group of 12 managers
and key personnel. Upon exercise of the options, we may redeem
options by paying an amount in cash corresponding to the
difference between the exercise quotation price and the closing
price on the day the notification reached the company. In
addition, our listed Norwegian subsidiary EDB Business Partner
has an option plan. You should read notes 29 and 31 to our
consolidated financial statements for additional information
about our stock option plans.

As of December 31, 2003, we held 28,103,172
treasury shares of the total of 30,000,000, which were issued to
be used to grant additional bonus shares to retail investors in
Norway pursuant to the global offering in December 2000. On
December 4, 2001, 1,896,828 treasury shares were
transferred as additional bonus shares to retail investors. The
general meeting held in 2001 granted authority to our board of
directors to use the remaining shares for other purposes. The
tax base cost of our treasury shares is somewhat uncertain, and
in our opinion this cost equals zero. Thus, if the shares are
disposed of for cash, a capital gain may be recognized for tax
purposes depending on the consideration received. If the shares
are swapped against other shares a capital gain may be deferred
by application to the Norwegian Ministry of Finance. No capital
gain should arise if the shares are cancelled.

OFF BALANCE SHEET ARRANGEMENTS

Our off balance sheet arrangements mainly consist
of guarantees issued in connection with our operations. The
reasons to issue the guarantees are stated below in the
discussion of each material guarantee arrangement.

In addition to the amounts included in the table
below, we have provided guarantees for the payment of all lease
obligations undertaken by two Telenor subsidiaries under three
cross border QTE leases. You should read notes 15, 20, 21
and 31 to our consolidated financial statements for additional
information on these leases. As of December 31, 2002 and
2003, the total gross amount of the guarantees were
NOK 4,293 million (USD 616 million) and
NOK 7,165 million (USD 1,073 million),
respectively. We have provided defeasance of all amounts due by
us under the QTE lease agreements with highly rated financial
institutions and US government related securities. The
defeasance arrangements are offset against our leasing
obligations in the balance sheet. The payment undertakers pay
all the lease rentals on our behalf over the life of the leases
in accordance with their contractual terms and the financial
schedules. During the term of the leases, we maintain the legal
ownership rights on and the economic benefits in Norway of the
equipment. For the three QTE leases entered into in 1998, 1999
and 2003 respectively, we have received benefits of
NOK 530 million since the lessors can depreciate the
equipment subject to the QTE leases also in the US for tax
purposes.

The following table and discussion relates to our
other guarantees as of December 31, 2003. Guarantees where
the resulting liability is included in the balance sheet are not
included in the following table.

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|                      |  |                   |       |               |  |           |     |           |  |         |     |  |  |  |   |  |  |  |     | 
|--------------------- |  | ----------------- | ----- | ------------- |  | --------- | --- | --------- |  | ------- | --- |  |  |  | - |  |  |  | --- | 
|                      |  |                   |       | expire        |  |           |     |           |  | expire 
|                      |  |                   |       | Less than     |  | expire    |     | expire    |  | Over   
|                      |  | Total             |       | 1 year (2004) |  | 2-3 years |     | 4-5 years |  | 5 years
|                      |  |                   |       |               |  |           |     |           |  |        
|                      |  |                  
|                      |  | (NOK in millions)
|Guarantee liabilities |  |                   | 2,557 |               |  |           | 790 |           |  |         | 917 |  |  |  | 1 |  |  |  | 849 | 

The table above includes a guarantee liability of
approximately NOK 854 million related to Bravida,
mainly in connection with Bravidas deliveries to a project
in Sweden. In 2000, when Bravida was still our subsidiary, we
provided a performance (fulfilment) guarantee in connection with
Bravidas obligations in connection with the Södra
Länken project in Sweden. The total estimated value
(revenues) of the contract for Bravida as of December 31,
2003 was NOK 848 million (SEK 914 million), of
which approximately SEK 700 million in value of work was
performed. The contract value was estimated to
NOK 515 million as of December 31, 2002. We
expect this project to be completed in 2004 or 2005.

In 2001, we provided a guarantee to Intelsat of
USD 117 million (NOK 781 million as of
31 December 2003) for the performance of the committed
capital expenditure of USD 88 million (NOK 626 million
calculated by using the hedged USD/NOK currency rate) in
satellite capacity in 2004. You should read
 Information About Contractual Cash Payments
and Capital Resources  Contractual Cash
Payments for additional information on this capital
expenditure, which is included in our contractual cash payments.

In 2002, we provided a guarantee for up to
approximately EUR 68 million (NOK 570 million as of
December 31, 2003) in favor of the lenders of
interest-bearing financing to our associated company
ONE GmbH (formerly known as Connect Austria). Payments
under the guarantee may be required if the financial covenants
in these loan agreements are breached by ONE GmbH.

We provided a guarantee for a termination fee in
connection with the leases for the Thor II and
Thor III satellites of NOK 271 million. The
leasing periods end in 2009 and 2010, respectively.

In addition, we provided performance and payment
guarantees for subsidiaries for an aggregate amount of
approximately NOK 81 million.

CRITICAL ACCOUNTING ESTIMATES UNDER NORWEGIAN
GAAP

Certain amounts included in or affecting our
financial statements and related disclosure must be estimated,
requiring us to make assumptions with respect to values or
conditions which cannot be known with certainty at the time the
financial statements are prepared. A critical accounting
estimate is one which is both important to the portrayal
of the companys financial condition and results and
requires managements most difficult, subjective or complex
judgments, often as a result of the need to make estimates about
the effect of matters that are inherently uncertain. We evaluate
such estimates on an ongoing basis, based upon historical
results and experience, consultation with experts, trends and
other methods we consider reasonable in the particular
circumstances, as well as our forecasts as to how these might
change in the future.

Impairment.We have
made significant investments in tangible assets, goodwill and
other intangible assets, associated companies and joint ventures
and other investments. These assets and investments are tested
for impairment when circumstances trigger an impairment test.
Factors we consider important which could trigger an impairment
review include the following:



| |   |                                                                                               
| | - | ----------------------------------------------------------------------------------------------
| |  | 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.                                             

The principles for impairment testing are
described in the accounting policies. For tangible and
intangible assets, the assessment is made based on the estimated
recoverable amount, which is the higher of estimated discounted
future cash flow and sales price less cost to sell. When such
amounts are less than the carrying amount of the asset, a
write-down to the estimated recoverable amount is recorded.

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If quoted market prices for an asset or a company
are not available, or the quoted market prices cannot be
regarded as fair market value due to low trading liquidity, fair
market value is determined primarily using the anticipated cash
flows discounted at a rate commensurate with the risk involved.
Estimating fair values of assets and companies must in part be
based on management evaluations, including estimates of future
performance, revenue generating capacity of the assets,
assumptions of the future market conditions and the success in
marketing of new products and services. Changes in circumstances
and in managements assumptions may give rise to impairment
losses in the relevant periods.

Goodwill is reviewed based on an estimated fair
value of the reporting unit it refers to. Fair value of the
reporting unit is based on quoted market share price (adjusted
to reflect a control premium for those subsidiaries in which we
have effective control) or discounted cash flows of the
reporting unit where quoted market share price is not available.
U.S. GAAP prescribes a two-phase process for impairment
testing of goodwill. The first phase screens for impairment by
comparing fair value to the book value of the reporting
entities. If the fair value is less than the book value the
second phase measures the impairment. When impairment is
identified, the carrying amount of goodwill is reduced to its
estimated fair value of the reporting unit.

For the impairment test in accordance with
U.S. GAAP, we use undiscounted cash flows, except for
goodwill. This did not result in any material difference from
the results of our impairment test in accordance with Norwegian
GAAP as of December 31, 2003 and 2002.

Write-downs in 2003 were not significant.
Generally, when the market value of our businesses increases, we
conclude that none of our material investments were impaired. In
2003, we experienced an increase in the market value of our
assets and investments. On the other hand, during 2001 and 2002
the market value of telecom companies and assets decreased
significantly. Consequently, in 2001 and 2002, we made
substantial write-downs of tangible assets, goodwill and other
intangible assets, associated companies and joint ventures and
other investments.

Depreciation and
amortization.Depreciation and
amortization is based on management estimates of the future
useful life of tangible and intangible assets. Estimates may
change due to technological developments, competition, changes
in market conditions and other factors and may result in changes
in the estimated useful life and in the amortization or
depreciation charges. We shortened the depreciation time for
some tangible assets in our mobile networks in Malaysia in 2002
and in our Norwegian fixed and mobile networks in 2001.
Technological developments are difficult to predict and ours and
our competitors views on the trends and pace of
development may change over time. Some of our assets and
technologies, in which we invested several years ago, are still
in use and provide the basis for our new technologies. For
example, our copper cables and infrastructure in our fixed
networks are used as the basis for the rollout of our
ADSL technology and lines. In our mobile business, the
development and launch of UMTS technology and services have
been slower than the telecommunications industry anticipated a
few years ago. In addition, in our Norwegian operations we have
reduced our capital expenditure in the period 2001 to 2003, as
we have been able to utilize our previous capital expenditure
more efficiently. We review the future useful life of tangible
and intangible assets periodically taking into consideration the
factors mentioned above and all other important factors. In case
of significant changes in our estimates, depreciation and
amortization charges are adjusted.

Business
combinations.We are required to
allocate the purchase price of acquired companies to the
tangible and intangible assets acquired and liabilities assumed
based on their estimated fair values. For our larger
acquisitions, we have engaged independent third-party appraisal
firms to assist us in determining the fair values of the assets
acquired and liabilities assumed. Such valuations require
management to make significant estimates and assumptions. The
significant purchased intangible assets recorded by Telenor
include customer contracts, brands and licenses. The significant
tangible assets include mainly networks.

Critical estimates in valuing certain tangible
and intangible assets include but are not limited to: future
expected cash flows from customer contracts and licenses,
replacement cost for brand and for tangible assets.
Managements estimates of fair value are based upon
assumptions believed to be reasonable, but which are inherently
uncertain and unpredictable and, as a result, actual results may
differ from estimates.

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Income taxes.We
record valuation allowances to reduce our deferred tax assets to
an amount that is more likely than not to be realized. Our
valuation allowances relate mainly to our foreign operations.
Furthermore, we have not recorded deferred tax assets that may
be realized upon possible future disposal of shares in
subsidiaries and associated companies, until a liquidation or
sale has been decided. Historically, deferred tax assets
relating to losses in our foreign entities, from which we deduct
our valuation allowances in accordance with our accounting
policies, have subsequently been realized through the disposal
of such entities. While we have considered future taxable income
and feasible tax planning strategies in determining the amount
of our valuation allowances, any difference in the amount that
we ultimately may realize would be included as income in the
period in which such a determination is made.

To the extent Telenor ASA should dispose of
shares in Telenor Eiendom Holding AS, or dispose of shares in
entities demerged from Telenor Eiendom Holding AS, we believe
that any taxes will be computed on the difference between the
consideration received and the high tax base cost of the shares
determined in connection with the in kind contribution prior to
our IPO in December 2000. You should read
 Results of Operations 
Group  Income Taxes for additional information
on the in kind contribution.

We have realized significant tax losses on
shareholdings, both through liquidation and sale of shares to
third parties and between companies in our group. Even though we
believe that these tax losses are tax deductible, in 2002 the
Norwegian tax authorities challenged our evaluations in
connection with one of our transactions. Our accounting policy
is that we make provisions to cover for changes in our in tax
assessments, pending the outcome of our appeal against these
decisions. You should read  Results of
Operations  Group  Income Taxes and
Item 8: Financial Information  Legal
Proceedings for additional information on the challenge by
the Norwegian tax authorities.

On March 26, 2004, the Norwegian government
issued and submitted to the Norwegian parliament (Storting) a
consultation paper outlining certain proposals for a future tax
reform. The main proposals relating to the taxation of companies
provide for a tax exemption on dividend income and a tax
exemption on capital gains deriving from disposal of shares. As
a result of such exemptions, capital losses deriving from
disposals of shares would not be tax deductible. If the
governments proposals receive sufficient support in the
Storting, the government might submit draft legislation relating
to the proposed tax reform to the Storting in the fall of 2004,
in which case the tax exemptions described above could become
effective from the fiscal year commenced on January 1, 2004.

Pension costs, pension obligations and pension
plan assets.Calculation of pension
costs and net pension obligations (the difference between
pension obligations and pension plan assets) are made based on a
number of estimates and assumptions. Changes in, and deviations
from, estimates and assumptions (actuarial gains and losses)
affect fair value of net pension liabilities, but are not
recorded in our financial statements unless the accumulated
effect of such changes and deviations exceed 10% of the higher
of our pension benefit obligations and our pension plan assets
at the beginning of the year. From 10% up to 15%, the excess
amount is recognized in the profit and loss statement over an
estimated average remaining service period of 12 years and
any amount in excess of 15% is recognized over a shorter period
of 5 years. Actuarial losses have increased starting as of
December 31, 1999, and were estimated to be approximately
NOK 1.0 billion as of December 31, 2003. These
actuarial losses relate mainly to our Norwegian defined benefit
plans and were approximately 21% of our pension benefit
obligations as of December 31, 2003.

The increase in actuarial losses was mainly due
to the reduction in our discount rate as of December 31,
1999 and again as of December 31, 2003, a lower than
estimated actual return on plan assets due to the reduction in
share prices in the period 1999 to 2002, that was partially
offset by a higher than estimated return in 2003 and higher
salary increases and pensions adjustments than we had originally
estimated in the period 1999 to 2002. Our key assumptions for
our Norwegian defined benefit plans, which constitute the major
part of our pension plans, are evaluated each year. In 2003,
long-term interest rates were reduced and, consequently, we
reduced our discount rate from 6.5% to 5.7% as of
December 31, 2003. We also made some other adjustments to
our estimates, but the lower discount rate had the most
significant effect on the fair value of our pension obligations,
which increased. As of December 31, 2003, our assumptions
were: 5.7% discount rate, 6.1% expected return on plan assets,
3.4% rate of compensation increase, 3.4% expected

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increase in the social security base amount, 3.4%
annual adjustments to pensions and a 12-year estimated average
remaining service period. Changes in these assumptions, as well
as deviations from these assumptions and other actuarial
assumptions, may affect the estimated net present value of our
net pension obligations, actuarial gains and losses and future
years pension expenses.


The table below shows an estimate of the
potential effects of a one percentage point change in our key
assumptions for our defined benefit plans. As of
December 31, 2003, we estimate our pension expense for 2004
for our defined benefit plans to be approximately
NOK 820 million. Such expenses were
NOK 698 million of our total pension expenses of
NOK 760 million in 2003.

The following estimates and our estimated pension
expense for 2004 are based on facts and circumstances as of
December 31, 2003. Actual results may deviate from these
estimates.

|                    |                                                                                                         |                   |  |              |   |               |  |             |  |        |  |     |  |     |  |      |   |  |  |      |   |  |  |     |  |  |  |     |  |  |  |      |  
|------------------- | ------------------------------------------------------------------------------------------------------- | ----------------- |  | ------------ | - | ------------- |  | ----------- |  | ------ |  | --- |  | --- |  | ---- | - |  |  | ---- | - |  |  | --- |  |  |  | --- |  |  |  | ---- | -
|                    |                                                                                                         |                   |  |              |   |               |  |             |  |        |  |    
|                    |                                                                                                         |                   |  |              |   |               |  | Social      |  | Annual
|                    |                                                                                                         |                   |  | Compensation |   | Security base |  | adjustments
|                    |                                                                                                         | Discount rate     |  | rate         |   | amount        |  | to pensions
|                    |                                                                                                         |                   |  |              |   |               |  |            
|                    |                                                                                                         | +1%               |  | -1%          |   | +1%           |  | -1%         |  | +1%    |  | -1% |  | +1% |  | -1% 
|                    |                                                                                                         |                   |  |              |   |               |  |             |  |        |  |     |  |     |  |     
|                    |                                                                                                         |                  
|                    |                                                                                                         | (NOK in millions)
|Changes in pension: |                                                                                                         |                   |  |              |   |               |  |             |  |        |  |     |  |     |  |      |   |  |  |      |   |  |  |     |  |  |  |     |  |  |  |     
|                    | Liabilities                                                                                             |                   |  | (830         | ) |               |  | 890         |  |        |  | 660 |  |     |  | (540 | ) |  |  | (220 | ) |  |  | 220 |  |  |  | 500 |  |  |  | (410 | )
|                    | Unrecognized actuarial losses                                                                           |                   |  | (830         | ) |               |  | 890         |  |        |  | 660 |  |     |  | (540 | ) |  |  | (220 | ) |  |  | 220 |  |  |  | 500 |  |  |  | (410 | )
|                    | Expenses due to amortization of actuarial losses                                                        |                   |  | (110         | ) |               |  | 150         |  |        |  | 110 |  |     |  | (90  | ) |  |  | (40  | ) |  |  | 40  |  |  |  | 90  |  |  |  | (70  | )
|                    | Net periodic benefit cost including effect due to
    amortization of actuarial losses (as shown above) |                   |  | (280         | ) |               |  | 340         |  |        |  | 250 |  |     |  | (210 | ) |  |  | (90  | ) |  |  | 90  |  |  |  | 190 |  |  |  | (160 | )

Legal proceedings.We are subject to various legal
proceedings and claims, the outcomes of which are subject to
significant uncertainty. We evaluate, among other factors, the
degree of probability of an unfavorable outcome and the ability
to make a reasonable estimate of the amount of loss.
Unanticipated events or changes in these factors may require us
to increase or decrease the amount we have accrued for any
matter or accrue for a matter that has not been previously
accrued because it was not considered probable. You should read
Item 8: Financial Information  Legal
Proceedings for additional information on legal
proceedings.

OTHER INFORMATION

Inflation

Our results in recent years have not been
substantially affected by inflation. Inflation in Norway as
measured by the consumer price index during the years ended
December 31, 2001, 2002 and 2003 was 3.0%, 1.3% and 2.5%
respectively.

Norwegian GAAP compared with
U.S. GAAP

Our consolidated financial statements have been
prepared under Norwegian GAAP, which differs from U.S. GAAP
in several respects. We have prepared a reconciliation of our
net income for the years ended December 31, 2001, 2002 and
2003, and of our shareholders equity as of
December 31, 2002 and 2003.

The significant differences between Norwegian
GAAP and U.S. GAAP affecting our net income and
shareholders equity are described in note 31 to our audited
consolidated financial statements.

Under U.S. GAAP, net income (loss) for the
years ended December 31, 2001, 2002 and 2003 would have
been NOK 7,004 million, NOK (3,658) million and
NOK 5,036 million, respectively, as compared to,
NOK 7,079 million, NOK (4,298) million and
NOK 4,560 million, respectively, under Norwegian GAAP.

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ITEM 6:     DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES

DIRECTORS AND SENIOR MANAGEMENT

The management of Telenor is vested in our board
of directors and our president and chief executive officer. The
president is responsible for the day-to-day management of our
company in accordance with the instructions, policies and
operating guidelines set out by our board of directors. Our
articles of association specify that our board of directors
shall consist of between five and eleven members. Our board of
directors currently consists of ten directors, of whom three are
employee representatives.

The current board of directors (excluding
employee representatives) has been elected by the corporate
assembly.

The directors and executive officers of the
Company are identified below. The address of the directors and
executive officers is c/o Telenor ASA, at the corporate
headquarters, Fornebu, Norway.

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 | 
|Einar Førde              |  | Oslo                   |  |      | 1943 |           |  | 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 | 
|Harald Stavn(1)          |  | Kongsberg              |  |      | 1954 |           |  | Director        |  |  | Spring 2005 | 
|Per Gunnar Salomonsen(1) |  | Skien                  |  |      | 1954 |           |  | Director        |  |  | Spring 2005 | 
|Irma Tystad(1)           |  | Trysil                 |  |      | 1943 |           |  | Director        |  |  | Spring 2005 | 






|    |                          
|--- | -------------------------
|(1) | Elected by the employees.

Thorleif
Engerwas elected to the board on
October 1, 2001 and was made chairman on March 6,
2003. He is chief executive officer of Yara International ASA.
He began working for Norsk Hydro in 1973 and has held a number
of positions in the company. Mr. Enger is a member of
ABBs corporate assembly. He has a doctorate in structural
engineering from the University of Colorado.

Bjørg
Venwas elected to the board on
October 1, 2001. She is a solicitor with attendance rights
at the Supreme Court in Norway, and since 1980 has been a
partner in the law firm, Haavind Vislie, in Oslo. She is
chairman of the appeal board of the Oslo Stock Exchange and the
appeal board for Public Acquisitions. Ms. Ven is substitute
judge at the EFTA court in Luxembourg and chairman of the board
of NOS ASA.

Hanne de Morawas elected to the board on June 18, 2002. Her work
experience includes Den norske Creditbank in Luxembourg and
Procter & Gamble in Geneva and Stockholm. She has been a
partner with McKinsey & Company since 1996. Since June
2002, she has run her own management resource firm in
Switzerland. She has a Master of Business Administration degree
from IESE, Barcelona.

Einar
Førdewas elected to the
board on October 1, 2001. He is an independent consultant
and chairman of the board of Norsk Telegrambyra and a board
member of Digital Vision AS. From 1989 to autumn 2001,
Mr. Førde was the chief executive officer of the
Norwegian Broadcasting Corporation (NRK). He was a member of the
Norwegian parliament from 1969 to 1989 for the Labor Party and
the Minister for Religion and Education from 1979 to 1981.
Mr. Førde was the parliamentary leader of the Labor
Party in Norway from 1986-89 and deputy leader of the party from
1981-89.

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John
Giverholtwas elected to the board
on May 8, 2003. He is presently chief financial officer of
Ferd AS and has previously held leading positions in Arthur
Andersen, Actinor, Norsk Hydro, DnB and Orkla. He has a B.Sc.
from the University of Manchester, England and is a state
authorized public accountant in Norway.

Liselott
Kilaaswas elected to the board on
May 8, 2003. She heads the Business area Communication and
Security Systems of Zenitel in Norway. She has previously held
leading positions in the oil industry, PA Consulting Group and
Stento AS. She has a M.Sc. from the University of Oslo and an
MBA from the International Institute for Management Development
(IMD) in Lausanne.

Jørgen
Lindegaardwas elected to the
board on October 1, 2001. He is the chief executive officer
of the airline company, SAS. Lindegaards background is in
the telecommunications industry, and since 1975 he has held
managerial positions at Fyns Telefon A/S, København Telefon
A/S and TeleDanmark A/S. He is chairman of the board of Sonofon
Holding A/S until 2004. Mr. Lindegaard is a
telecommunications engineer and a member of The Academy for
Technical Sciences in Denmark and Norway.

Harald Stavnwas elected to the board on June 20, 2000 as an employee
representative. Mr. Stavn joined Telenor in 1974 and has
held various engineering positions. He is a board member of
Telenor Pensjonskasse (Pension Fund), member of the executive
board of NITO (the Norwegian Society of Engineers) and employee
representative for NITO in Telenor. Mr. Stavn has a
technical education from the Technical College of Norwegian
Telecom and was also educated as a business economist at
Handelshøyskolen BI (the Norwegian School of Management) in
Oslo.

Per Gunnar
Salomonsenwas elected onto the
board on November 1, 2000, as an employee representative.
Mr. Salomonsen began working for Telenor in 1973. He has
held various positions in Telenor, most recently as operations
engineer. From 1995 to 2000, he was a board member of Telenor
Nett. Mr. Salomonsen is a group employee representative for
the Norwegian trade union EL & IT Forbundet. He is an
engineer.

Irma Tystadwas elected to our board of directors on June 20, 2000 as
an employee representative. Ms. Tystad began working for
Telenor in 1962 and has served as a board member of Telenor Plus
since 1995 and of Telenor Pensjonskasse (Pension Fund) since
1997. She is the group employee representative for
Kommunikasjonsforbundet (Union of Communications).
Ms. Tystad is a graduate of the Technical College of
Norwegian Telecom and has subsequently studied business and
management.

Board Practices

Remuneration Committee

In December 2000, our board of directors
established a remuneration committee consisting of the chairman
and deputy chairman of our board of directors and one member to
be elected among our other shareholder-elected board members,
currently Liselott Kilaas. Our president and chief executive
director Jon Fredrik Baksaas is also invited to attend the
meetings of the committee. The primary responsibility of the
committee is to discuss and make proposals to the board of
directors in respect of our compensation policy for our chief
executive officer and group management, as well as the general
remuneration policy for our other managers. The committee meets
on average four to six times per year.

Audit Committee

In September 2003, we established an audit
committee which at any time shall be composed of at least two
members of the board, which are elected by the board of
directors. The current members of the audit committee are John
Giverholt, who was appointed chairman of the audit committee,
and Hanne de Mora. It is the audit committees task to
support the board of directors in fulfilling its
responsibilities with respect to financial reporting, internal
accounting controls and auditing matters and to report to the
board of directors in connection with the related procedures on
an annual basis. With respect to auditing matters, the audit
committee is in particular responsible for making
recommendations to the board and the general assembly with
respect to the appointment, rentention and termination as well
as the fees of the external auditors. It is

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also responsible for fulfilling the
responsibilities set forth in the Audit and Permitted Non-Audit
Services Pre-Approval Policies and Procedures. For more
information on these procedures, you should read
Item 16C: Principal Accountant Fees and
Services. Moreover, the audit committee shall assist the
board with regard to the management of operational and financial
risks and is responsible for dealing with complaints regarding
accounting, internal accounting controls or auditing matters.
The audit committee shall meet as and when it deems appropriate,
at a minimum, however, three times a year and it may ask the
chief executive officer, or also summon other members of
management, to attend the meetings as necessary.
Mr. Giverholt has been designated as the audit
committees financial expert, for more information on this
designation, you should read Item 16A: Audit
Committee Financial Expert.


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 and Chief
    Executive Officer of Telenor Mobile
|Berit Svendsen       |  | Oslo     |  |      | 1963 |          |  | Executive Vice President and Chief Technology
    Officer                        
|Jan Edvard Thygesen  |  | Nesbru   |  |      | 1951 |          |  | Executive Vice President and Chief Executive
    Officer of Telenor Nordic Mobile
|Asmund Løset(1)      |  | Drammen  |  |      | 1957 |          |  | Executive Vice President and Chief Executive
    Officer of Telenor Networks     
|Morten Karlsen Sørby |  | Oslo     |  |      | 1959 |          |  | Executive Vice President and Chief Executive
    Officer of Telenor Norge        
|Stig Eide Sivertsen  |  | Oslo     |  |      | 1959 |          |  | Executive Vice President and Chief Executive
    Officer of Telenor Broadcast    






|    |                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------
|(1) | Asmund Løset was appointed executive vice
    president and chief executive officer of Telenor Networks on
    January 6, 2004.

Jon Fredrik
Baksaashas served as our
president and chief executive officer since June 21, 2002.
Mr. Baksaas joined us in 1989 and previously served as
deputy chief executive officer since 1997. Mr. Baksaas has
also held positions as director of corporate finance, executive
vice president, and chief executive officer of TBK AS. Before
joining us, he held finance related positions at Aker AS, Stolt-
Nielsen Seaway and Det Norske Veritas. Mr. Baksaas is also
a board member of Svenska Handelsbanken AB. Mr. Baksaas
received a Master of Science from the Norwegian School of
Economics and Business Administration and has attended the
Program for Executive Development at IMD in Lausanne,
Switzerland.

Arve Johansenhas served as a senior executive vice president since 1999 and
as CEO of Telenor Mobile Communications AS since 2000.
Mr. Johansen joined us in 1989 and has held a number of
positions, including chief executive officer of Telenor
International AS. Prior to joining Telenor, Mr. Johansen
was employed by EB Telecom as an executive vice president, by
the Norwegian Institute of Technology as a research engineer and
by ELAB. Mr. Johansen received a Master of Science in
electrical engineering (telecommunications) from The Norwegian
Institute of Technology and participated in the Program for
Management Development at the Harvard Business School.

Torstein
Molandhas served as a senior
executive vice president since 2000 and chief financial officer
of Telenor since 1997. Prior to joining us in 1997,
Mr. Moland served as the Governor of the Central Bank of
Norway and as executive vice president and chief financial
officer of Norske Skog. He had previously served at the
Norwegian Ministry of Finance working on economic policy and
later as the secretary of state to the Prime Minister.
Mr. Moland received an honors degree in economics from the
University of Oslo and engaged in additional studies at the
Massachusetts Institute of Technology.

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Berit
Svendsenhas served as an
executive vice president and chief technology officer of Telenor
since 2000. Since joining us in 1988 Ms. Svendsen has held
various position, most recently Project-Director for FMC
(Fixed-Mobile Convergence) and as managing director for data
services. Ms. Svendsen holds a Master of Science in
Electrical Engineering from the Norwegian University of Science
and Technology and a Master of Technology Management from the
Norwegian School of Economics and Business Administration in
Bergen and the Massachusetts Institute of Technology.

Jan Edvard
Thygesenhas served as an
executive vice president and chief executive officer of Telenor
Network Services AS since 1998. Since January 6, 2004, he
holds the position of executive vice president and chief
executive officer of Telenor Nordic Mobile. Since joining us in
1979, Mr. Thygesen has held various positions, including
executive vice president of Telenor Mobil, president of Telenor
Invest AS, executive vice president of Telenor Bedrift AS and
president of Telenor Nett AS. He has also served as the
president of Esat Digifone and Televerket. Mr. Thygesen
received a Bachelor of Science in electronics and
telecommunications from The Norwegian Institute of Technology.

Asmund
Løsethas held the position
of executive vice president and chief executive officer of
Telenor Networks since January 6, 2004. Since joining us in
1996, Mr. Løset has held various positions including
deputy managing director of Telenor Nett. Mr. Løset
has also been responsible for our initial public offering and
for our efficiency program Delta 4. He has previously worked at
Uni Storebrand, where he was director of joint services with
responsibility for IT services, economy and legal services.
Mr. Løset holds a Masters Degree in Business
Administration from the Norwegian School of Economics and
Business Administration in Bergen.

Morten Karlsen
Sørbyhas held the position
as executive vice president of Telenor Norway since
January 1, 2003. Mr. Sørby joined us in 1993 and
has since held several positions in the group, including
executive vice president of Telenor Mobile, director of finance
and vice president of Telenor International AS. He has
previously worked at Arthur Andersen & Co in Oslo, primarily
within IT, telecom and media. Mr. Sørby holds a Master
of Science in Business Administration and is a state licensed
public accountant (Norway).

Stig Eide
Sivertsenis executive vice
president and chief executive officer of Telenor Broadcast.
Mr. Sivertsen joined the Company in 1997 as the director of
finance and chief accountant for Telenor Link AS.
Mr. Sivertsen previously held positions as chief executive
officer of Nettavisen AS and chief financial officer of
Petroleum Geo-Services ASA and Schibsted ASA. Mr. Sivertsen
holds elementary and supplementary degrees in law from the
University of Bergen and a Master of Business Administration
from Durham University.

Corporate Assembly

Our corporate assembly consists of
15 members. The general meeting elects ten members with
three alternates. Our employees elect an additional five members
and two observers, all with alternates. We have an election
committee that makes recommendations to the general meeting
regarding the election of shareholder-elected members of the
corporate assembly and their alternates. The committee consists
of four members who are shareholders or representatives of
shareholders. The chairman of the corporate assembly is a
permanent member of the committee and acts as its chairman. Two
members are elected by the general meeting and one member is
elected by and from among the corporate assemblys
shareholder-elected members. Each member is elected for a
two-year term. A member of the corporate assembly (other than a
member elected by employees) may be removed by the shareholders
at any time without cause.

The corporate assembly has a duty to supervise
the board of directors and our president and chief executive
officer in their management of the company, and under Norwegian
law has a fiduciary duty to the shareholders.

One of the principal functions of the corporate
assembly is to elect and remove the board of directors. Up to
one-third of the members of the board of directors, but in no
event less than two persons, including alternates, shall be
elected among our employees if one-third of the corporate
assembly members demands it.

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Half of the members elected by the employees may
request that the board members shall be elected by the
shareholder elected members and employee elected members of the
assembly voting as separate groups. The members are elected for
a term of two years. The current term of the members elected by
our employees and general meeting will expire during the spring
of 2005. The approval of our corporate assembly is required for
significant investments as well as for substantial changes to
our operations that affect the number or allocation of employees
on the recommendation of our board of directors.


Set forth below is a list of the current members
of our corporate assembly.

|                            |  |              |  |                
|--------------------------- |  | ------------ |  | ---------------
|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            |  | Bergen       |  | 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

Aggregate remuneration for the board of directors
and the corporate assembly for 2003 was NOK 1,630,834 and NOK
551,996, respectively. The members of the board of directors do
not have any agreements which entitle them to extraordinary
remuneration in the event of termination or change of office, or
agreements for bonus or profit sharing options.

Aggregate remuneration for the group management
for 2003 was NOK 21,347,980.

The annual salary for the president and chief
executive officer Jon Fredrik Baksaas was NOK 3,200,000 in 2003.
He also received pension premiums of NOK 1,677,463 and other
compensation of NOK 118,478 from us. Jon Fredrik Baksaas had no
annual bonus agreement in 2003, however, he was granted 250,000
share options on February 21, 2003 with a maturity of
7 years. In addition, he was granted 150,000 share options
when he was appointed President and CEO on June 1, 2002 and
100,000 share options under the share option program in 2002.
Our pension plan gives Mr. Baksaas the right to retire at
the age of 60 with a supplementary pension, resulting in a total
pension equal to 66% of NOK 3,000,000, adjusted annually with
the Consumer Price Index. The first adjustment occurred on
January 1, 2003. Mr. Baksaas has the right to receive
salary for a period of 24 months if we terminate the
employment, provided that he does not undertake any other
employment during such period, in which case the payment would
be reduced by 75% of the salary for the new employment. There
will be no holiday payment of this amount. The agreed period of
termination notice is six months.

The following table summarizes the principal
terms and conditions of termination, pension benefits and
incentive package of each member of our group management in
2003, with the exception of Mr. Baksaas for whom
information is provided above.

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|                                                             |  |        |           |           |  |            |          |         |  |                                                                                                                                                                                                                                       |  |  |         |  |  |  |         | 
|------------------------------------------------------------ |  | ------ | --------- | --------- |  | ---------- | -------- | ------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ------- |  |  |  | ------- | 
|                                                             |  |        |           |           |  |            |          | Share   |  | Share                                                                                                                                                                                                                                
|                                                             |  | Agreed |           | Severance |  |            |          | Options |  | Options                                                                                                                                                                                                                              
|Name/title                                                   |  | Notice |           | Pay       |  | Pension(1) |          | 2002(2) |  | 2003                                                                                                                                                                                                                                 
|                                                             |  |        |           |           |  |            |          |         |  |                                                                                                                                                                                                                                      
|Senior Executive
    Vice President
    Arve Johansen        |  |        | 6  months |           |  |            | 6 months |         |  | 66% of pension-qualifying income at the date of
    retirement with the right to retire at the age of 60.                                                                                                                             |  |  | 100,000 |  |  |  | 100,000 | 
|Senior Executive
    Vice President and CFO, Torstein Moland |  |        | 6  months |           |  |            | 6 months |         |  | 66% of pension-qualifying income at the date of
    retirement with the right to retire at the age of 60.                                                                                                                             |  |  | 100,000 |  |  |  | 100,000 | 
|Executive Vice President and CTO,
    Berit Svendsen         |  |        | 6  months |           |  |            | 6 months |         |  | 66% of pension-qualifying income with the right
    to retire at the age of 62.                                                                                                                                                       |  |  | 100,000 |  |  |  | 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.                                                                                                                             |  |  | 75,000  |  |  |  | 75,000  | 
|Executive Vice President
    Asmund Løset                    |  |        | 6  months |           |  |            | 6 months |         |  | 66% of pension-qualifying income at the date of
    retirement with the right to retire at the age of 62.                                                                                                                             |  |  |        |  |  |  | 30,000  | 
|Executive Vice President
    Morten Karlsen Sørby            |  |        | 6  months |           |  |            | 6 months |         |  | 66% of pension-qualifying income 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 annual
    regulation according to the consumer price index. |  |  | 70,000  |  |  |  | 75,000  | 
|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.                                                                                                                             |  |  | 75,000  |  |  |  | 75,000  | 






|    |                                                                                                                                                                                                                                                                                                                                                                                             
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Pension qualifying salary may be lower than
    actual fixed salary at the date of retirement. Any increase in
    fixed salary for the group management is conditional upon the
    implementation of a cap on pension qualifying salary
    similar to that provided in Morten Karlsen Sørbys
    pension agreement.                                                                   
|   
|(2) | The share option programs for 2002 and 2003 are
    described in incentive programs.                                                                                                                                                                                                                                                                                                        
|   
|(3) | 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.

Members of group management are also eligible for
annual bonus payments. The bonus base is 4 months of fixed
salary in 2003. In addition, there may be an adjustment of +
/ - 20% conditional upon performance according to certain
non-financial criteria. If the budget is reached (under any
given bonus criterion), 50% of the bonus is paid. 100% of the
bonus may only be paid as a result of exceptional financial
performance beyond budget.

Incentive Programs

Our group management is offered a combination of
annual bonus and share options, providing both short- and
long-term incentives. Annual bonus is also used as an incentive
for other managers and key personnel. A limited group is also
offered share options.

We granted share options on February 21,
2002, February 21, 2003 and February 23, 2004. In
addition, 150,000 options were granted to the president and
chief executive officer on June 21, 2002. In 2002, 85
managers and key personnel were granted options and in 2003, 110
managers and key personnel were granted options. In 2004, only a
limited group of 12 new executives and managers were granted
options.

Options granted in 2002:One third of the options vest in each
of the three years subsequent to the date of grant. The latest
possible exercise date is seven years subsequent to the date of
grant. The exercise

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price corresponds to the average closing price on
the Oslo Stock Exchange for the five trading days prior to the
date of grant, increasing by an amount each month corresponding
to 1/12 of 12 months NIBOR (Norwegian Interbank Interest
Rate). The options may only be exercised four times a year,
during a ten-day period after the publication of our quarterly
results. For options granted on February 21, 2002, the
price at end of exercise life will be NOK 50.96. For
options granted to Fredrik Baksaas on June 21, 2002, the
price at end of exercise life will be NOK 42.12.


Options granted in 2003 and 2004:One third of the options vest in each
of the three years subsequent to the date of grant and are
exercisable if the stock price at the time of exercise is higher
than the average closing price on the Oslo Stock Exchange for
the five trading days prior to the date of grant, adjusted with
5.38% per year. The latest possible exercise date is seven years
subsequent to the date of grant. The exercise price corresponds
to the average closing price at Oslo Stock Exchange five trading
days prior to the date of grant (NOK 26.44 for 2003 and NOK
48.36 for 2004). The options may only be exercised four times a
year, during a ten-day period after the publication of our
quarterly results.

|                                      |  |               |           |                |  |  |       | 
|------------------------------------- |  | ------------- | --------- | -------------- |  |  | ----- | 
|                                      |  |               |           | 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 | 

The table below details our options outstanding
by related option exercise price as of December 31, 2003
and is based on the final exercise price. Some options may be
exercised prior to the termination of the plan.

|                 |             |             |  |                  |           |                      |  |  |         |  |  |  |         | 
|---------------- | ----------- | ----------- |  | ---------------- | --------- | -------------------- |  |  | ------- |  |  |  | ------- | 
|Weighted Average |             |             |  | Weighted Average |           | Options Exercisable 
|Exercise Price   |             | Options     |  | Remaining Life   |           | as of               
|(in NOK)         |             | Outstanding |  | in years         |           | December 31, 2003(1)
|                 |             |             |  |                  |           |                     
|                 | 50.96(1)(2) |             |  |                  | 2,323,333 |                      |  |  | 5 years |  |  |  | 726,666 | 
|                 | 42.12(2)(3) |             |  |                  | 150,000   |                      |  |  | 5 years |  |  |  | 50,000  | 
|                 | 26.44(3)(4) |             |  |                  | 2,630,000 |                      |  |  | 6 years |  |  |  | 0       | 






|    |                                                                                                                                                                                                                                                                                                                                                                                           
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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, the
    exercise price is fixed throughout the options term, and
    is NOK 26.44.

The options may only be exercised in a period
right after the publication of Telenors quarterly financial
results.



|    |                                                                       
|--- | ----------------------------------------------------------------------
|(2) | First possible exercise was February 2003
    for  1/3 of the options.
|   
|(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.

Upon the exercise of options we maintain the
right to redeem options by paying an amount in cash
corresponding to the difference between exercise quotation price
and closing price on the day the notification reached the
company. The options may be exercised earlier than the end of
the option term, as long as they are exercisable.

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The following members of the group management
were granted options under the above mentioned option-programs.

|                     |  |               |         |               |  |  |         | 
|-------------------- |  | ------------- | ------- | ------------- |  |  | ------- | 
|                     |  | Granted       |         | Granted      
|                     |  | Options as of |         | options as of
|                     |  | February 21,  |         | February 21, 
|Name                 |  | 2002          |         | 2003         
|                     |  |               |         |              
|Jon Fredrik Baksaas  |  |               | 100,000 | (1)           |  |  | 250,000 | 
|Torstein Moland      |  |               | 100,000 |               |  |  | 100,000 | 
|Berit Svendsen       |  |               | 100,000 |               |  |  | 75,000  | 
|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  | 
|Asmund Løset         |  |               |         |               |  |  | 30,000  | 






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

Pension Benefits

We provide pension benefits to substantially all
of our employees in Norway through the foundation Telenor
Pension Fund (Telenor Pensjonskasse). We established the fund on
January 1, 1988 and we established it as our pension fund
since September 1, 1995. On that date, all of our employees
who had previously been part of a governmental pension scheme
were placed into a corporate pension scheme. Under an
arrangement with the government, the governments pension
scheme will fund all pension entitlements that were accrued up
to September 1, 1995, without any recourse to us.

The amount of benefits provided through the fund
are based on the employees length of service and
compensation. Full pension benefits through the fund are 66%
(inclusive of Norwegian national insurance) of the
employees annual salary after 30 years of service.
However, the annual remuneration that determines the pension
benefits cannot exceed 12 times the base amount set by the
Government. For May 2003, the base amount is NOK 56,861. The
parliament determines the maximum amount of pension benefits
annually based on an index linked to an employees salary.
We estimate that Parliament will increase pension benefits
provided through the fund by approximately 3% per year. Under
Norwegian law, the Telenor pension fund is treated as a service
pension arrangement and, therefore, the premium for the plan is
tax deductible.

The rules set out by our pension fund are used to
calculate the value of the commitments made. In addition to the
standard benefits described above, we established a
supplementary foundation, the Telenor Pension Fund II, on
January 1, 1997 to provide additional benefits to eligible
employees pursuant to their employment contracts. Full pension
under this scheme is 66% of the employees annual salary.
Employees are eligible for full pension benefits under this
scheme after 20 years of service. In this case, the annual
remuneration can exceed 12 times the base amount. However, for a
limited number of employees the annual pension is maximized to a
certain amount. The additional premium payable under the Telenor
Pension Fund II is not tax deductible according to Norwegian tax
law. The Telenor Pension Fund II is now closed for new
members, and a system of supplementary pension based on defined
contribution per year (not defined benefit) will be implemented.

Our Top Management Pension Plan is based on the
general pension plan with supplementary pensions through the
Telenor Pension Fund II. The Top Management Pension Plan
provides higher pensions than those available under the general
plan. There is no minimum required period of employment for an
employee to qualify for membership in the Top Management Pension
Plan. The Top Management Pension Plan is also closed for new
members.

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Exemptions from corporate governance listing
requirements under the NASDAQ Marketplace Rules

In connection with our initial public offering
and the listing of our shares in the United States in December
2000, we received an exemption from the audit committee charter
and the audit committee composition requirements under
Rule 4350(d) of the NASDAQ Marketplace Rules, which
requires an issuer to certify that (i) it has and will
continue to have an audit committee consisting of at least three
members, who are independent directors and (ii) it has
adopted a formal written audit committee charter and that the
audit committee has reviewed and reassessed the adequacy of the
formal written charter on an annual basis. We also received an
exemption from the related independent director requirement
under Rule 4350(c), which requires an issuer to maintain a
sufficient number of independent directors on its board of
directors to satisfy the audit committee requirement. Until
September 2003, in accordance with generally accepted business
practice in Norway we did not have an audit committee fulfilling
the above-mentioned requirements. However, in September 2003, in
the light of certain revisions to the corporate governance
requirements mentioned above following the adoption of the
Sarbanes-Oxley Act of 2002, we adopted an audit committee
charter and established an audit committee. For a description of
our audit committee, you should read   Board
practices  Audit Committee. Furthermore,
although our directors do not necessarily fulfill the NASDAQ
requirements for independence, our board was and is composed
entirely of non-executive members that are independent of our
management. Compliance by foreign private issuers with the new
requirements for the charter, composition and responsibilities
of audit committees as well as for director independence is not
required until July 31, 2005.

We were also granted an exemption with respect to
the quorum requirement under Rule 4350(f), which requires
each issuer to provide for a quorum as specified in its by-laws
for any meeting of the holders of common stock, which shall in
no case be less than 33 1/3% of the outstanding shares of a
companys common voting stock. Our articles of association
do not provide any quorum requirement that is generally
applicable to general meetings of our shareholders. This absence
of a quorum requirement is in accordance with Norwegian law and
generally accepted business practices in Norway.

We also filed an application for exemption from
the recently adopted NASDAQ requirements relating to audit
committee approval of related party transactions under
Rule 4350(h) and shareholder approval of equity
compensation plans under Rule 4350(i) with NASDAQ in
accordance with Rule 4350(a). Our application is pending.

With respect to audit committee approval of
related party transactions, Norwegian law and practice as well
as our codes of conduct provide for certain alternative
safeguards. For example: there are restrictions on
directors actions in situations where conflicts of
interest arise; there is a requirement under Norwegian corporate
law for the board of directors, which is composed of
non-executive directors, to approve material transactions,
including material related party transactions; certain material
transactions with shareholders require approval by our
shareholders; intra-group transactions are required to be on an
arms length basis and, if they are material, to be
approved by the shareholders; and business relationships with
Norwegian governmental authorities must comply with certain
public procurement rules aiming at equal treatment of suppliers,
transparency and competition.

With respect to the requirement of shareholder
approval of equity compensation plans, although equity
compensation plans as such are not required to be submitted to
the vote of our shareholders, under Norwegian law our board of
directors is required to seek shareholders authorization
to issue new shares, including shares to be issued pursuant to
our equity compensation plans. Consequently, our shareholders
exercise control over the number of shares which could be issued
under such plans and their potentially dilutive effect.

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EMPLOYEES

As of December 31, 2003, we had 19,450
full-time equivalent employees, of whom we employed 12,000 in
Norway and 7,450 outside Norway. During 2003, the number of
full-time equivalent employees decreased by 494 from our
operations in Norway and by 1,416 full-time equivalent employees
from our operations outside Norway. Set forth below are the
numbers of our full-time equivalent in each of our business
areas and other companies as the dates indicated:

|                                         |  |                        |        |                        |  |                        |       |        |  |         |        |       |  |        |        |         |  |       |       |  |  |  |        |  |  |  |        |  |  |  |       |  |  |  |        | 
|---------------------------------------- |  | ---------------------- | ------ | ---------------------- |  | ---------------------- | ----- | ------ |  | ------- | ------ | ----- |  | ------ | ------ | ------- |  | ----- | ----- |  |  |  | ------ |  |  |  | ------ |  |  |  | ----- |  |  |  | ------ | 
|                                         |  |                        |        |                        |  |                       
|                                         |  | Number of employees(1) |        | Number of employees(1) |  | Number of employees(1)
|                                         |  |                        |        |                        |  |                       
|                                         |  |                        |        |                        |  |                       
|                                         |  | December 31, 2001      |        | December 31, 2002      |  | December 31, 2003     
|                                         |  |                        |        |                        |  |                       
|                                         |  |                        |        | Outside                |  |                        |       |        |  | Outside |        |       |  |        |        | Outside |  |      
|Business Area                            |  | Norway                 |        | Norway                 |  | Total                  |       | Norway |  | Norway  |        | Total |  | Norway |        | Norway  |  | Total
|                                         |  |                        |        |                        |  |                        |       |        |  |         |        |       |  |        |        |         |  |      
|Mobile                                   |  |                        | 2,133  |                        |  |                        | 2,084 |        |  |         | 4,217  |       |  |        | 1,878  |         |  |       | 4,673 |  |  |  | 6,551  |  |  |  | 1,723  |  |  |  | 5,201 |  |  |  | 6,924  | 
|Fixed                                    |  |                        | 6,065  |                        |  |                        | 1,701 |        |  |         | 7,766  |       |  |        | 5,632  |         |  |       | 1,583 |  |  |  | 7,215  |  |  |  | 5,435  |  |  |  | 652   |  |  |  | 6,087  | 
|Broadcast                                |  |                        | 779    |                        |  |                        | 164   |        |  |         | 943    |       |  |        | 746    |         |  |       | 226   |  |  |  | 972    |  |  |  | 599    |  |  |  | 210   |  |  |  | 809    | 
|EDB Business Partner FO                  |  |                        | 2,828  |                        |  |                        | 344   |        |  |         | 3,172  |       |  |        | 2,452  |         |  |       | 308   |  |  |  | 2,760  |  |  |  | 2,211  |  |  |  | 266   |  |  |  | 2,477  | 
|Other business units                     |  |                        | 1,755  |                        |  |                        | 1,985 |        |  |         | 3,740  |       |  |        | 1,466  |         |  |       | 2,075 |  |  |  | 3,541  |  |  |  | 1,168  |  |  |  | 1,076 |  |  |  | 2,244  | 
|Corporate functions and group activities |  |                        | 1,140  |                        |  |                        | 22    |        |  |         | 1,162  |       |  |        | 1,026  |         |  |       | 35    |  |  |  | 1,061  |  |  |  | 864    |  |  |  | 45    |  |  |  | 909    | 
|                                         |  |                        |        |                        |  |                        |       |        |  |         |        |       |  |        |        |         |  |       |       |  |  |  |        |  |  |  |        |  |  |  |       |  |  |  |        | 
|Total                                    |  |                        | 14,700 |                        |  |                        | 6,300 |        |  |         | 21,000 |       |  |        | 13,200 |         |  |       | 8,900 |  |  |  | 22,100 |  |  |  | 12,000 |  |  |  | 7,450 |  |  |  | 19,450 | 
|                                         |  |                        |        |                        |  |                        |       |        |  |         |        |       |  |        |        |         |  |       |       |  |  |  |        |  |  |  |        |  |  |  |       |  |  |  |        | 






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

We were a member of the employers
association NAVO (the Norwegian association of employers for
business activities with public connections) through 2003.
During 2003, we reconsidered our membership in the
employers association NAVO. Group Management decided to
leave NAVO and join the employers association NHO
(Confederation of Norwegian Business and Industry) from
February 1, 2004. Joint consultation and cooperation with
the trade unions are governed through the Principal Agreement of
our employer association, central agreements of cooperation and
agreements in the individual business units or companies. The
cooperation is also formalized through forums such as the group
committee, the joint consultative committee and regular
management forums

Our employees are represented by four trade
unions: EL & IT Forbundet, Kommunikasjonsforbundet,
NITO-TELE and Tekna Tele. Approximately 55% of our employees are
union members. The unions are entitled to appoint three members
to our board of directors. However, our employees elect these
members.

We seek to continually improve the skills and
development of our employees in each of our business areas.
Employees participate in various training programs. Our training
organization provides different development programs and we
cooperate with selected colleges and universities as well as
other educational and research institutions in Norway and
abroad. We place great emphasis on promoting an atmosphere
geared towards learning and sharing of knowledge, with a strong
focus on our efforts to retain our employees, which are
strategically important to our business. An important principle
of our personnel policy is to appear as an attractive and
competitive employer as well as to establish value-added
remuneration plans.

Total loans to employees were NOK 41 million
as of December 31, 2003. The loans were mainly given to
finance cars purchased by the employees as an alternative to
company cars and loans were provided in connection with the
purchase of shares in the employee stock ownership program in
December 2003 (NOK 16 million). The loans for the
purchase of shares was limited to NOK 5,970 per employee after
discount. The board of directors will decide whether a similar
employee stock ownership program will be established in 2004.
Loans extended to employees for share purchases are
non-interest-bearing and have a term of 11 months. For more
information on our share purchase programs you should read
Share Ownership. None of our directors have
been extended loans by the company.

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SHARE OWNERSHIP

The number of shares owned by the members of the
board of directors, the corporate assembly and the group
management as of March 26, 2004 is shown below. Shares
owned by the board of directors and the group management include
closely related parties.

|                       |  |                  |        | 
|---------------------- |  | ---------------- | ------ | 
|                       |  | Number of shares
|                       |  | as of           
|The Board of Directors |  | March 26, 2004  
|                       |  |                 
|Thorleif Enger         |  |                  | 2,000  | 
|Bjørg Ven              |  |                  | 10,000 | 
|Harald Stavn           |  |                  | 3,503  | 
|Per Gunnar Salomonsen  |  |                  | 1,671  | 
|Irma Tystad            |  |                  | 813    | 

|                       |  |                  |     | 
|---------------------- |  | ---------------- | --- | 
|                       |  | Number of shares
|                       |  | as of           
|The Corporate Assembly |  | March 26, 2004  
|                       |  |                 
|Mona Røkke             |  |                  | 200 | 
|Berit Kopren           |  |                  | 275 | 
|Stein Erik Olsen       |  |                  | 989 | 
|Arne Jenssen           |  |                  | 407 | 

|                     |  |                  |        | 
|-------------------- |  | ---------------- | ------ | 
|                     |  | Number of shares
|                     |  | as of           
|The Group Management |  | March 26, 2004  
|                     |  |                 
|Jon Fredrik Baksaas  |  |                  | 20,511 | 
|Torstein Moland      |  |                  | 16,699 | 
|Arve Johansen        |  |                  | 24,791 | 
|Morten Karlsen Sørby |  |                  | 3,453  | 
|Berit Svendsen       |  |                  | 4,767  | 
|Jan Edvard Thygesen  |  |                  | 55,937 | 
|Stig Eide Sivertsen  |  |                  | 28,424 | 
|Asmund Løset         |  |                  | 3,118  | 

In order to encourage long-term shareholding
among our employees, all our permanent employees and the
employees of our Norwegian subsidiaries where our ownership
share directly or indirectly is greater than 90%, were in 2001,
2002 and 2003 extended a loan of approximately NOK 6,000 each to
buy shares for an aggregate value of up to NOK 7,500, with a
cash discount of approximately 20%. If the average share price
in the last 30 days of trading, up to and including
December 15, 2004, is at least 12% higher than the
corresponding average share price up to and including
December 15, 2003, those who subscribed for shares in this
offer will be allocated profit bonus shares for NOK
2,500, provided that they continue to hold the allocated shares
and are still employees of Telenor.

Approximately 25% of those who were offered
shares accepted the offer and were allocated 176 shares each at
a value of NOK 42.40, which was the average quoting price during
the last five days of trading up to and including
December 15, 2003. After taking account of the discount,
this gives a value of NOK 34.10 per share.




ITEM 7:  MAJOR SHAREHOLDERS AND
RELATED PARTY TRANSACTIONS

Other than as described below, we do not believe
that we have undertaken any material transactions or loans with
a related party.

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RELATIONSHIP BETWEEN TELENOR AND THE KINGDOM
OF NORWAY

Background

Our predecessors and we have been responsible for
telecommunications in Norway since 1855 when Telenor was founded
as the Norwegian Telegraph Administration. Throughout much of
our operating history we have been a state-owned monopoly
telecommunications provider in Norway. Since the early 1980s,
the Norwegian Telecommunications markets have been gradually
opened up to competition, and by January 1, 1998 the
Norwegian market was fully opened. As part of the deregulation
process, we (the present Telenor Communications AS) were
converted from a public enterprise to a limited company owned
100% by the Kingdom of Norway in 1994. In 1995 we were renamed
Telenor. The Kingdom of Norways ownership of Telenor was
previously administered by the Ministry of Transport and
Communications. On September 8, 2000, the administration of
the Kingdom of Norways ownership interest in Telenor was
transferred to the Ministry of Trade and Industry.

The Kingdom of Norway as a
Shareholder

At April 2, 2004, the Kingdom of Norway
owned 959,842,400 shares of Telenor, representing approximately
53.1% of our share capital (as diluted for 40,913,172 own
shares).

Prior to our initial public offering in December
2000, the Kingdom of Norway owned 100% of our issued share
capital, save as described as follows.

At our incorporation on July 21, 2000, our
share capital, which was entirely owned by the Kingdom of
Norway, was NOK 8,400,000,000 divided into 840,000 ordinary
shares of NOK 10,000 nominal value each. At an extraordinary
general meeting held on November 10, 2000, it was decided
to split the shares into shares having a nominal value of NOK 6
each, whereupon our share capital was NOK 8,400,000,000 divided
into 1,400,000,000 ordinary shares of NOK 6 nominal value each.

At the same time, it was resolved to increase the
share capital by NOK 180,000,000 through the issuance of
30,000,000 ordinary shares through a transfer of capital from
other paid in capital to share capital (a bonus
issue).

The Kingdom of Norway waived its right to receive
the new shares, which were issued to us as treasury shares. The
treasury shares were intended to be used to grant additional
bonus shares to retail investors in Norway pursuant to the
initial public offering. In December 2001 1,896,828 of bonus
shares were granted to retail investors in Norway leaving
28,103,172 of treasury shares owned by Telenor. At the general
meeting held on May 10, 2001, our board of directors was
given the authority to use the treasury shares upon our
boards decision.

In January 2004, we entered into an agreement
with the Kingdom of Norway, in connection with our program to
buy back our own shares in accordance with the authority granted
by the general meeting of our shareholders on May 8, 2003.
The Kingdom of Norway agreed to cancel an amount of its own
shares proportional to the amount of Telenor shares which we
repurchase in the market against payment by us. As a result, its
ownership interest will remain unchanged.

On June 14, 2000, the Storting (the
Norwegian parliament) authorized the Norwegian government to
sell the Kingdom of Norways shares in Telenor, provided
that it ensures that the Kingdom of Norways ownership
level in Telenor amounts to at least 51%. In 2001, the Storting
authorized the Kingdom of Norway to reduce its ownership level
to 34%. In July 2003, the government sold 270,157,600 shares of
Telenor (comprising 250,000,000 shares sold to institutional
investors in and outside Norway and 20,157,600 shares sold to
retail investors in Norway) and reduced its ownership interest
to approximately 62.5% of our share capital.

On March 29, 2004, the government completed
the sale of approximately 170,000,000 shares of Telenor,
corresponding to approximately 9.4% of our share capital, to
institutional investors in and outside Norway at a price of
NOK 48.50 per share, thus further reducing its ownership
interest to approximately 53.1% (as diluted for 40,913,172 own
shares). In addition, the government has announced its intention
to offer and sell

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up to 30,000,000 shares of Telenor, corresponding
to approximately 2% of our share capital, to retail investors in
Norway at a price of NOK 48.50 per share. Upon completion,
and assuming that all of the offered shares will be sold, this
transaction is expected to result in the reduction of the
governments ownership interest in Telenor to approximately
51%. The government has agreed not to sell additional Telenor
shares for a period of 180 days following completion of
this sale.


As a majority shareholder, the Kingdom of Norway
will have the power to control any decision at a meeting of our
shareholders requiring a majority vote, including electing a
majority of the corporate assembly which in turn has the power
to elect our board of directors, as well as approval of the
payment of dividends. In addition, as long as the Kingdom of
Norway owns more than one-third of the shares in Telenor, it
will be able to prevent any amendments to our articles of
association.

The Norwegian government has noted that as one of
several shareholders in Telenor, the Kingdom of Norway will
concentrate primarily on issues relating to return on capital,
capital structure and dividend policy, emphasizing long-term
profitable business development and the creation of value for
all shareholders. The Norwegian government plans to ensure that
the Kingdom of Norways ownership position will be
exercised professionally and in accordance with usual
businesslike practices. Telenor will be expected to generate
capital returns consistent with those of other European
companies in the same industry and with an equivalent
positioning to that of Telenor. The capital structure and the
dividend policy should be conducive to the creation of
shareholder value.

The Kingdom of Norway as a Regulator

Our telecommunications activities are regulated
primarily by the Electronic Communications Act and the secondary
regulations promulgated thereunder. Under the Electronic
Communications Act, the PT is the agency of the Norwegian
government with day-to-day responsibility for overseeing the
telecommunications sector. The PT reports to the Ministry
of Transport and Communications.

The question of the organization of ownership and
regulatory roles in the telecommunications sector has been
considered in numerous proposals before the Storting. In order
to increase market confidence that the ownership and regulatory
roles in the telecommunications sector are organized in an
acceptable manner, among other reasons, the Norwegian government
transferred the administration of the Kingdom of Norways
ownership interest in Telenor to the Ministry of Trade and
Industry on September 8, 2000.

The Kingdom of Norway as a Customer

The departments and agencies of the Kingdom of
Norway in the aggregate comprise our largest customer.
Generally, we deal with the various departments and agencies of
the Kingdom of Norway as separate customers, except that the
terms upon which we offer services to government entities are
periodically established through a tender process in order to
comply with the procurement rules to which the government
entities are subject. The provision of services to any one
department or agency does not constitute a material part of our
revenues. You should read note 26 to our consolidated
financial statements for additional information on our
relationship with the Kingdom of Norway.

OTHER RELATED PARTY TRANSACTIONS

We have entered into arrangements with a number
of subsidiaries and affiliated companies in the course of our
business. Transactions between us and these subsidiaries and
affiliated companies are conducted at arms length, meaning
on commercially reasonable terms that would also have been
agreed by unrelated third parties. We provide a variety of
services to these companies, including network services,
invoicing and collection services, treasury services,
administrative and managerial services. For a description of
certain of these related party transactions, you should read
note 26 to our consolidated financial statements. Short and
long term receivables from associated companies and joint
ventures are set out in notes 16 and 17 to our consolidated
financial statements.

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OTHER INFORMATION

As of March 26, 2004, 562,499 ADSs
equivalent to 1,687,497 ordinary shares, or approximately 0.09%
of the total ordinary shares in issue, were outstanding and were
held by three holders.

As of March 26, 2004, there was a total of
51,420 record holders of ordinary shares, of whom 173 had
registered addresses in the United States and held a total of
121,341,534 ordinary shares (6.72% of the total issued). Since
certain ordinary shares are registered in the names of nominees,
the number of shareholders of record may not be representative
of the number of beneficial owners.

For the number of shares owned by the members of
the board of directors, the corporate assembly and the group
management as of March 26, 2004, you should read
Item 6: Directors, Senior Management and
Employees  Share Ownership. Shares owned by the
board of directors and the group management include closely
related parties.




ITEM 8:  FINANCIAL
INFORMATION

FINANCIAL STATEMENTS

See Item 18: Financial
Statements.

LEGAL PROCEEDINGS

We are involved in a number of legal proceedings,
including among others those described below, concerning matters
arising in connection with the conduct of our business.
Provisions have been made to cover unfavorable rulings or
deviations in tax assessments, pending the outcome of appeals by
us against these decisions, as described below. Furthermore,
provisions have been made to cover the expected outcome of other
proceedings to the extent that negative outcomes are likely, and
reliable estimates can be made. However, most of the proceedings
against us are of such a nature that provisions cannot be
estimated. While acknowledging the uncertainties of litigation
we believe that, based on the information available to date,
these matters will be resolved without any material negative
effect on our financial position. You should read
Item 4: Information about the Company 
Regulation for a description of regulatory proceedings.

In January 2003, we initiated proceedings against
the Norwegian tax authorities before the Oslo District Court
relating to the non-recognition of a tax loss deriving from an
intra-group sale of shares in Sonofon Holding A/S. The disputed
amount is approximately NOK 8.6 billion, which results in a
tax charge of NOK 2.4 billion. Hearings were held before
the Oslo District Court in January 2004 and the court has not
yet issued its decision.

In April 2001, the company S&A Telecom
(Cyprus) Limited, on behalf of WR Com Enterprises Limited,
initiated legal proceedings against us before the civil court of
Athens, Greece, claiming approximately NOK 444 million plus
interest related to disputes under several agreements entered
into in connection with ownership interests in Cosmote. In
January 2003, the court ruled that we were obliged to pay WR Com
Enterprises Limited approximately NOK 444 million plus
interest. In April 2003, we appealed the ruling. WR Com
Enterprises Limited had also commenced arbitration proceedings
in Oslo based on similar grounds in the same complex of cases,
but withdrew the arbitration case in October 2002. In October
2003, we entered into a settlement agreement with S&A
Telecom (Cyprus) Limited and WR Com Enterprises Limited. Under
the terms of the settlement we paid EUR 33.6 million to WR
Com Enterprises Limited.

In July 2002, TDC Tele Danmark AS, Telia Mobile
AB, Sonera AB and Iceland Telecom Ltd. initiated legal
proceedings against us before a court of arbitration. The
claimants were making claims for compensation based on the
assumption of joint ownership of the INMARSAT earth
stations at Eik and associated activities. The arbitration panel
issued its decision, which was favorable to us, in December 2003.

In December 1997, Teletopia AS initiated legal
proceedings against us before the Oslo District Court claiming,
among other things, that the termination of agreements entered
into with Teletopia in 1995 was invalid and that we should be
ordered to pay compensation as determined by the court. In April
2001, the

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Oslo District Court ruled that we are to pay
compensation of NOK 23.5 million to Teletopia. We appealed
the decision and Teletopia cross-appealed requesting additional
compensation. The Court of Appeal issued its judgment in
February 2004, dismissing the claim against us upon payment of
NOK 600,000. In addition, we were awarded approximately NOK
8.1 million to cover our legal costs. Teletopia has filed
an appeal against this decision with the Norwegian Supreme Court.


Tele2 brought legal action against us in June
2002 claiming damages of NOK 98.2 million based on an
alleged breach of an administrative decision by the Norwegian
Post and Telecommunication Authority, regarding the
implementation of carrier preselection. In November 2001, Oslo
District Court ruled in our favor in a case where Tele2 claimed
compensation for the delayed implementation of carrier
preselection based on an alleged breach of the interconnection
agreement. Tele2 appealed. In January 2004, all pending legal
actions between us and Tele2 were withdrawn after an
out-of-court settlement was reached. However, in March 2004, we
were summoned to appear before the conciliation board, the first
step in Norwegian civil court proceedings before a case is
transferred to the competent court if no settlement is reached
between the parties, in connection with a complaint filed by
Tele2. Tele2 is claiming repayment of approximately NOK 113
million plus interests and legal costs based on the allegation
that the prices charged by us for resale of mobile telephone
services under the service provider agreement with Tele2 have
not been in accordance with the requirements for cost-oriented
pricing.

In November 2003, Sense Communication ASA
initiated legal proceedings against us before the Oslo District
Court claiming up to NOK 170 million based on allegations
that our prices set forth in a service provision agreement for
the period 2000-2003 had been excessive and not in accordance
with the requirements for cost-oriented pricing. Sense has given
notice to the effect that the claim might be recalculated in
order to include the year 2003 and other relevant years
according to financial information to be filed by us. The Oslo
District Court has not yet decided a date for commencement of
court hearings.

The liquidators of Enitel AS have initiated legal
proceedings against us before the Asker and Bærum District
Court. The claim for damages and reimbursement of NOK
121.2 million (excluding interest) is based on alleged
overcharging for leased lines and traffic terminated in our
fixed and mobile networks for the period of 1997 to 2001 The
district court has not yet decided on a date for the
commencement of court hearings.




ITEM 9:  THE OFFER AND
LISTING

The principal trading market for our ordinary
shares is the Oslo Stock Exchange on which they have been listed
since the initial public offering of our shares in December
2000. Our ordinary shares are also listed on the NASDAQ National
Market trading in the form of ADSs evidenced by ADRs. Each ADS
represents three ordinary shares. We have a sponsored ADR
facility with JP Morgan Chase Bank (formerly known as
Morgan Guaranty Trust Company of New York) as Depositary.

The following table gives, for the periods
indicated, the reported high and low market quotations for the
ordinary shares on the Oslo Stock Exchange, as derived from its
Daily Official List, and the highest and lowest sales prices of
the ADSs as reported on the NASDAQ National Market composite
tape.

|               |  |                |       |           |  |      |       |     |  |  |        |  |  |  |        | 
|-------------- |  | -------------- | ----- | --------- |  | ---- | ----- | --- |  |  | ------ |  |  |  | ------ | 
|               |  |                |       |           |  |     
|               |  | 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  | 
|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  | 

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|               |  |                |       |           |  |      |       |     |  |  |        |  |  |  |        | 
|-------------- |  | -------------- | ----- | --------- |  | ---- | ----- | --- |  |  | ------ |  |  |  | ------ | 
|               |  |                |       |           |  |     
|               |  | NOK per        |       |          
|               |  | ordinary share |       | $ per ADS
|               |  |                |       |          
|               |  | High           |       | Low       |  | High |       | Low
|               |  |                |       |           |  |      |       |    
|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 | 
|2004           |  |                |       |           |  |      |       |     |  |  |        |  |  |  |        | 
|First Quarter  |  |                | 51.00 |           |  |      | 43.40 |     |  |  | 22.550 |  |  |  | 19.760 | 
|October 2003   |  |                | 39.20 |           |  |      | 32.20 |     |  |  | 16.938 |  |  |  | 13.701 | 
|November       |  |                | 41.40 |           |  |      | 38.30 |     |  |  | 18.249 |  |  |  | 16.000 | 
|December       |  |                | 44.50 |           |  |      | 41.80 |     |  |  | 20.200 |  |  |  | 18.040 | 
|January 2004   |  |                | 50.50 |           |  |      | 43.40 |     |  |  | 22.150 |  |  |  | 20.090 | 
|February       |  |                | 51.00 |           |  |      | 47.20 |     |  |  | 22.550 |  |  |  | 20.100 | 
|March          |  |                | 50.25 |           |  |      | 46.30 |     |  |  | 22.000 |  |  |  | 19.760 | 




ITEM 10:  ADDITIONAL
INFORMATION

MEMORANDUM AND ARTICLES OF
ASSOCIATION

Summary of our Articles of
Association

Name of the company

Our registered name is Telenor ASA. We are a
public limited company.

Registered office

Our registered office is in Bærum, Norway.

Object of the company

The objects of our company are telecommunications
activities and other related activities. The activities may be
conducted by the company itself, by subsidiaries or through
participation in or in cooperation with other companies.

Share capital

Our share capital is NOK 10,827,875,664 divided
into 1,804,645,944 ordinary shares.

For additional information relating to our share
capital, you should read note 30 to our consolidated
financial statements.

Nominal value of shares

The nominal value of each ordinary share is NOK 6.

Board of Directors

Our articles of association provide that our
board of directors shall consist of between five and eleven
members.

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Corporate Assembly

We have a corporate assembly of 15 members who
are elected for two-year terms. Ten members with three
alternates are elected by the general meeting and five members
and two observers, all with alternates, are elected by and among
the employees.

Annual General Meeting

Our annual general meeting is held before the end
of June, upon two weeks written notice and will be chaired
by the chairman of the corporate assembly. Shareholders wishing
to attend the meeting must give us three days written
notice. The meeting deals with the annual report and accounts,
including distribution of dividends, and any other matters as
required by law or our articles of association.

Election Committee

We have an election committee. The election
committee makes recommendations to the general meeting regarding
the election of shareholder-elected members and alternates to
the corporate assembly and makes recommendations to the
corporate assembly regarding the election of shareholder-elected
members and alternates to the board of directors.

Shareholders Meetings

In accordance with Norwegian law, our annual
general meeting of shareholders is required to be held each year
on or prior to June 30. Norwegian law requires that written
notice of general meetings be sent to all shareholders whose
addresses are known at least two weeks prior to the date of the
meeting. A shareholder may vote at the general meeting either in
person or by proxy. Although Norwegian law does not require us
to send proxy forms to our shareholders for general meetings, we
include a proxy form with notices of general meetings.

In addition to the annual general meeting,
extraordinary general meetings of shareholders may be held if
deemed necessary by the board of directors, the corporate
assembly or the chairman of the corporate assembly. An
extraordinary general meeting must also be convened for the
consideration of specific matters at the written request of our
auditors or of shareholders representing a total of at least 5%
of the outstanding share capital.

Our general meetings are chaired by the chairman
of the corporate assembly.

Voting Rights

All the ordinary shares carry equal right to vote
at general meetings.

Except as otherwise provided, decisions which
shareholders are entitled to make pursuant to Norwegian law or
our articles of association may be made by a simple majority of
the votes cast. In case of elections, the persons who obtain the
most votes cast are deemed elected. However, certain decisions,
including resolutions to waive preferential rights in connection
with any share issue, to approve a merger or demerger, to amend
our articles of association or to authorize an increase or
reduction in our share capital must receive the approval of at
least two-thirds of the aggregate number of votes cast as well
as two-thirds of the share capital represented at a
shareholders meeting. Norwegian law further requires that
certain decisions, which have the effect of substantially
altering the rights and preferences of any shares or class of
shares receive the approval of at least two-thirds of the
holders of such shares or class of shares.

In order to attend and vote at our annual or
extraordinary general meetings, shareholders must notify us of
their attendance at least three days prior to the meeting. In
general, in order to be entitled to vote, a shareholder must be
registered as the owner of shares in the share register kept by
the Norwegian Central Securities Depositary, referred to as the
VPS System (described below), or, alternatively, report and show
evidence of its share acquisition to us prior to the general
meeting. Beneficial owners of shares which are registered in the
name of a nominee are generally not entitled to vote under
Norwegian law, nor are any

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persons who are designated in the register as
holding such shares as nominees. The beneficial owners of ADSs
are therefore only able to vote at meetings by surrendering
their ADSs, withdrawing their ordinary shares from the ADS
depositary and registering their ownership of such ordinary
shares directly in our share register in the VPS System.


The VPS System and Transfer of
Shares

The VPS System is Norways paperless
centralized securities registry. It is a computerized
bookkeeping system operated by an independent body in which the
ownership of, and all transactions relating to, Norwegian listed
shares must be recorded. Our share register is operated through
the VPS System.

All transactions relating to securities
registered with the VPS are made through computerized book
entries. The VPS System confirms each entry by sending a
transcript to the registered shareholder regardless of
beneficial ownership. To effect these entries, the individual
shareholder must establish a share account with a Norwegian
account agent. Norwegian banks, the central bank of Norway,
authorized securities brokers in Norway, bond issuing mortgage
companies, unit trust managing companies and Norwegian branches
of credit institutions established within the European Economic
Area are allowed to act as account agents.

The entry of a transaction in the VPS System is
prima facie evidence in determining the legal rights of parties
as against the issuing company or a third party claiming an
interest in the subject security.

The VPS System is strictly liable for any loss
resulting from an error in connection with registering, altering
or canceling a right, except in the event of contributory
negligence, in which event compensation owed by the VPS System
may be reduced or withdrawn.

A transferee or assignee of shares may not
exercise the rights of a shareholder with respect to such shares
unless such transferee or assignee has registered such
shareholding or has reported and shown evidence of such share
acquisition and the acquisition of such shares is not prevented
by law, our articles of association or otherwise.

Amendments to our Articles of Association,
including Variation of Rights

The affirmative vote of two-thirds of the votes
cast as well as two-thirds of the aggregate share capital
represented at the general meeting is required to amend our
articles of association. Any amendment, which would reduce any
shareholders right in respect of dividend payments or
rights upon liquidation, or restrict the transferability of
shares requires a majority vote of at least 90%. Any amendment
which will alter the legal relationship between shares that were
previously equal or make any issued shares redeemable need the
consent of all shareholders affected thereby.

Additional Issuances and Preferential
Rights

Any issuances of shares by us, including bonus
issues, require an amendment to our articles of association,
which requires the same vote as other amendments to our articles
of association. In addition, under Norwegian law, our
shareholders have a preferential right to subscribe to issues of
new shares by us. The preferential rights to subscribe for an
issue may be waived by a resolution in a general meeting by the
same majority required to approve amendments to our articles of
association. A waiver of the shareholders preferential
rights in respect of bonus issues requires the approval of all
outstanding shares, regardless of class.

The general meeting may, with a majority vote as
described above, authorize the board of directors to issue new
shares, and to waive the preferential rights of shareholders in
connection with such issuances. Such authorization may be
effective for a maximum of two years, and the par value of the
shares to be issued may not exceed 50% of the share capital when
the authorization was granted.

The issuance of shares to holders who are
citizens or residents of the United States upon the exercise of
preferential rights may require us to file a registration
statement in the United States under United States securities
laws. If we decide not to file a registration statement, these
holders may not be able to exercise

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their preferential rights and therefore would be
required to sell these rights to eligible Norwegian persons or
other eligible non-U.S. holders to realize the value of
these rights.


Under Norwegian law, bonus issues may be
distributed, subject to shareholder approval, by transfer from
Telenors free equity or from our share premium reserve.
Any bonus issues may be effected either by issuing shares or by
increasing the par value of the shares outstanding.

Minority Rights

Norwegian law contains a number of protections
for minority shareholders against oppression by the majority.
Any shareholder may petition the courts to have a decision of
the board of directors or general meeting declared invalid on
the grounds that it unreasonably favors certain shareholders or
third parties to the detriment of other shareholders or the
company itself. In certain grave circumstances shareholders may
require the courts to dissolve the company as a result of such
decisions. Minority shareholders holding 5% or more of our share
capital have a right to demand that we hold an extraordinary
general meeting to discuss specific matters. In addition, any
shareholder may demand that we place an item on the agenda for
any shareholders meeting if we are notified in time for
such item to be included in the notice of the meeting.

Mandatory Bid Requirement

Norwegian law requires any person, entity or
group acting in concert that acquires more than 40% of the
voting rights of a Norwegian company listed on the Oslo Stock
Exchange, or OSE, to make an unconditional general offer to
acquire the whole of the outstanding share capital of that
company. The offer is subject to approval by the OSE before
submission of the offer to the shareholders. The offer must be
in cash or contain a cash alternative at least equivalent to any
other consideration offered. The offering price per share must
be at least as high as the highest price paid by the offeror in
the six-month period prior to the date the 40% threshold was
exceeded, but equal to the market price if the market price was
higher when the 40% threshold was exceeded. A shareholder who
fails to make the required offer must within four weeks dispose
of sufficient shares so that the obligation ceases to apply.
Otherwise, the OSE may cause the shares exceeding the 40% limit
to be sold by public auction. A shareholder who fails to make
such bid cannot, as long as the mandatory bid requirement
remains in force, vote his shares or exercise any rights of
share ownership unless a majority of the remaining shareholders
approve, other than the right to receive dividends and
preferential rights in the event of a share capital increase. In
addition, the OSE may impose a daily fine upon a shareholder who
fails to make the required offer.

Compulsory Acquisition

If a shareholder, directly or via subsidiaries,
acquires shares representing more than 90% of the total number
of issued shares as well as more than 90% of the total voting
rights attached to those shares, then the majority shareholder
would have the right (and each remaining minority shareholder of
that company would have the right to require the majority
shareholder) to effect a compulsory acquisition for cash of any
shares not already owned by the majority shareholder
(Section 4-25 of the Norwegian Public Limited Companies Act
1997 No. 45). The compulsory acquisition would result in
the majority shareholder becoming the owner of the shares of the
minority shareholders with immediate effect.

Upon effecting the compulsory acquisition, the
majority shareholder would have to offer the minority
shareholders a specific price per share. The determination of
the price per share would be at the discretion of the majority
shareholder. Should any minority shareholder not accept the
offered price, such minority shareholder may, within a specified
period of not less than two months, request that the price be
set by the Norwegian courts. The cost of such court procedure
would normally be charged to the account of the majority
shareholder, and the courts would have full discretion in
determining the consideration due to the minority shareholder as
a result of the compulsory acquisition.

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Election and Removal of Directors and
Corporate Assembly

The general meeting of shareholders elects
two-thirds of the members of the corporate assembly, together
with alternate members, while the remaining one-third, together
with alternate members, is elected by and among our employees.
There is no quorum requirement, and nominees who receive the
most votes are elected. The election committee makes
recommendations to the general meeting regarding the election of
shareholder-elected members and alternates to the corporate
assembly. A member of the corporate assembly (other than a
member elected by employees) may be removed by the general
meeting at any time without cause.

Our directors are elected and may be removed from
office by our corporate assembly. The corporate assembly makes
decisions by majority vote, and more than half of the members
must be present for a quorum. If votes are tied, the chairman
casts the deciding vote. However, half of the members elected by
the employees may demand that the board members shall be elected
by members of the assembly elected by shareholders and members
elected by employees of the assembly, each voting as a separate
group. The election committee makes recommendations to the
corporate assembly regarding the election of shareholder-elected
members and alternates to the board of directors. A director
(other than a director elected directly by the employees) may be
removed at any time by the corporate assembly without cause.

The members of the corporate assembly and the
board of directors have fiduciary duties to the shareholders,
see Item 6: Directors, Senior Management and
Employees  Directors and Senior
Management  Corporate Assembly and
 Liability of Directors below.

Payment of Dividends

For a discussion of the declaration and payment
of dividends on our ordinary shares, see Item 3: Key
Information  Dividends and Dividend Policy.

Rights of Redemption and Repurchase of
Shares

Our articles of association do not authorize the
redemption of shares. In the absence of authorization, the
redemption of shares may still be decided by a general meeting
of shareholders by a two-thirds majority under certain
conditions, but the redemption would, for all practical
purposes, depend on the consent of all shareholders whose shares
are redeemed.

A Norwegian company may repurchase its own shares
if their purchase has been authorized in advance by a general
meeting with the approval of at least two-thirds of the
aggregate number of votes cast as well as two-thirds of the
share capital represented at the meeting. The aggregate par
value of the repurchased shares held must not exceed 10% of the
share capital and such repurchase may only take place if,
according to the latest adopted balance sheet, we have
distributable equity exceeding the amount to be paid for the
shares. The authorization by the general meeting must be for a
period not exceeding 18 months.

We are currently executing a share buy-back
program, which was authorized by our general meeting of
shareholders on May 8, 2003.

Shareholders Votes on Certain
Reorganizations

If we were to merge with another company or to
demerge, such decision would require a resolution of our
shareholders at a general meeting passed by a two-thirds
majority of the aggregate votes cast as well as two-thirds of
the aggregate share capital represented at the general meeting.
A merger plan or demerger plan signed by the board of directors
as well as certain other required documentation must be sent to
all shareholders at least one month prior to the
shareholders meeting.

Any agreement by which we acquire assets or
services from a shareholder or a related party against a
consideration exceeding the equivalent of 5% of our share
capital at such time is only binding if approved by the general
meeting. This does not apply to acquisition of listed securities
at market price and to agreements in the ordinary course of
business entered into on normal commercial terms.

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Liability of Directors

Our directors, the president and chief executive
officer and the members of the corporate assembly owe a
fiduciary duty to the company and its shareholders. Their
principal task is to safeguard the interest of shareholders. In
addition, they may also have duties to other third parties, such
as employees and creditors.

Our directors, the president and chief executive
officer and the members of the corporate assembly can each be
held liable for any damage they negligently or willfully cause
us. Norwegian law permits the general meeting to exempt any such
person from liability, but the exemption is not binding if
substantially correct and complete information was not provided
to the general meeting when the decision was taken. In addition,
if our general meeting has exempted such a person from liability
or decided not to hold such a person liable for a certain
matter, shareholders representing more than 10% of the share
capital or (if there are more than 100 shareholders) more than
10% of the number of shareholders can raise the claim on our
behalf and in our name. The cost of any such action is not our
responsibility, but can be recovered by any proceeds we receive
as a result of the action. If the decision not to hold such
person liable was adopted by the same majority as required for
amending the articles of association, such decision is binding
on the minority shareholders.

Indemnification of Directors and
Officers

Neither Norwegian law nor our articles of
association contain any provision concerning indemnification by
us of our board of directors.

Disclosures of Interests

A person, entity or group acting in concert that
acquires or disposes of shares, options for shares or other
rights to shares resulting in its beneficial ownership, directly
or indirectly, in the aggregate, exceeding or falling below the
respective thresholds of 1/20, 1/10, 1/5, 1/3, 1/2, 2/3 or 9/10
of our share capital has an obligation under Norwegian law to
notify the Oslo Stock Exchange immediately. A corresponding
disclosure obligation applies with respect to any holder of ADSs
who is entitled upon surrender of the ADRs to acquire directly
or indirectly the beneficial ownership of a number of shares
that, together with any other shares, additional ADSs
representing shares or options to acquire shares held by such
holder, in the aggregate, meets, exceeds or falls below these
thresholds.

Distribution of Assets on
Liquidation

Under Norwegian law, a company may be wound-up by
a resolution of the companys shareholders in a general
meeting passed by both a two-thirds majority of the aggregate
votes cast and two-thirds of the aggregate share capital
represented at the meeting. The shares rank equal in the event
of a return on capital by the company upon a winding-up or
otherwise.

MATERIAL CONTRACTS

None.

EXCHANGE CONTROLS

Under Norwegian foreign exchange controls
currently in effect, transfers of capital to and from Norway are
not subject to prior government approval except for the physical
transfer of payments in currency, which is restricted to
licensed banks. This means that non-Norwegian resident
shareholders may receive dividend payments without a Norwegian
exchange control consent as long as the payment is made through
a licensed bank.

There are presently no restrictions affecting the
rights of non-residents or foreign owners to hold or vote our
shares.

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TAXATION

Norwegian Tax Matters

This section describes the material Norwegian tax
consequences that apply to shareholders resident in Norway as
well as non-resident shareholders in connection with the
acquisition, ownership, and realization of our ordinary shares.
This section does not provide a complete description of all tax
regulations, which might be relevant (i.e. for investors to whom
special regulations may be applicable). This section is based on
current law and practice. Shareholders should contact their
professional tax advisors for advice concerning individual tax
consequences.

Taxation of dividends

Dividends distributed are subject to taxation in
Norway as general income at a flat rate, currently 28%.
According to an imputation method, shareholders who are
residents of Norway for tax purposes will effectively not be
subject to tax on dividend distributions from Norwegian
companies, as there will be available as a credit
(godtgjørelse) against the Norwegian tax in an
amount equal to the tax to be levied on the dividends received.

Non-Norwegian shareholders are subject to a
withholding tax at a rate of 25% on dividends distributed from
Norwegian companies, unless the shareholder is carrying on
business activities in Norway and such shares are effectively
connected to such activities. In that case the rules described
in the foregoing paragraph are applicable. In other cases the
withholding rate of 25% is normally lower according to tax
treaties between Norway and the country in which the shareholder
is resident. Generally, the treaty rate does not exceed 15%, and
in cases where a corporate shareholder holds a qualifying
percentage of the shares of the distributing company, the
withholding tax rate on dividends is in most cases reduced to 5%
or even to zero. The treaty rate in the U.S.-Norwegian treaty is
15% in all cases.

The 15% withholding rate under the tax treaty
between Norway and the United States will apply to dividends
paid on shares held directly by U.S. Holders properly
demonstrating to the company that they are entitled to the
benefits of the treaty.

Dividends paid to the depositary for
redistribution to shareholders holding ADSs will at the outset
be subject to a withholding tax of 25%. The beneficial owners
will in this case have to apply for refund of the excess amount
of tax with the Norwegian Directorate of Taxes. However,
provided it is acting as a licensed custodian operating
(a) nominee account(s) in the Norwegian Registry of
Securities (the VPS System) with approval from the Norwegian
Banking, Insurance and Securities Commission and the Norwegian
Directorate of Taxes, the bank(s) acting as depositary is
entitled to receive dividends from us for redistribution to ADS
holders who are beneficial owners at the treaty withholding rate
of 15%.

Wealth tax

The value of the shares is included when
computing the wealth tax imposed on individuals deemed resident
in Norway for tax purposes. Norwegian joint stock companies and
certain other companies in a similar position are not subject to
wealth tax. Currently, the marginal wealth tax rate is 1.1% of
the value assessed. The value for assessment purposes for shares
listed on the Oslo Stock Exchange is 100% of the listed value of
such shares as of January 1 in the year of assessment.
Shareholders resident outside of Norway are ordinarily not
subject to wealth tax in Norway for shares in Norwegian joint
stock companies.

Inheritance tax and gift tax

Upon transfer of shares due to inheritance or
certain gifts, such transfer may be subject to inheritance or
gift tax. The basis for the computation is the market value at
the time the transfer takes place. Still, such transfer is not
subject to Norwegian tax if the donor/ deceased was neither a
national nor resident of Norway for tax purposes.

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Taxation upon realization of shares and
subscription rights

A holder of shares who exercises his subscription
rights is not considered to realize any gain in connection with
such subscription of new shares. The taxable basis for the
shares received is the amount paid in connection with the
subscription.

Shareholders who sell or otherwise dispose of
subscription rights are subject to tax on capital gain obtained
from the disposal.

A shareholder who is resident for tax purposes in
Norway will realize a taxable gain or deductible loss upon a
sale, redemption or other disposition of shares. Such capital
gain or loss is included in or deducted from the computation of
general income in the year of disposal at a flat tax rate of
28%. The gain is subject to tax and the loss is deductible
irrespective of the length of the ownership and the number of
shares disposed of.

The taxable gain or loss is computed as the sales
price adjusted for transactional expenses less the taxable
basis. A shareholders taxable basis normally equals the
cost of shares adjusted according to the so-called RISK-rules
(RISK is the Norwegian abbreviation for the variation in the
companys retained earnings after tax during the ownership
of the shareholder). The RISK amount is computed for each fiscal
year, and regulate the taxable basis as of January 1 in the
assessment year. If the shareholder owns shares acquired at
different points in time, the shares that were acquired first
will be regarded as the first to be sold, on a first-in
first-out basis.

Shareholders not resident in Norway are normally
not subject to tax in Norway on capital gains, and losses are
not deductible upon sale, redemption or other disposition of
subscription rights, shares or ADSs in Norwegian companies,
unless the shareholder has been resident for tax purposes in
Norway and the disposal takes place within five years after the
end of the calendar year in which the shareholder ceased to be a
resident of Norway for tax purposes, or, alternatively, the
shareholder is carrying on business activities in Norway and
such subscription rights, shares or ADSs are or have been
effectively connected to such activities.

Transfer tax

There is no transfer tax imposed in Norway in
connection with the sale or purchase of shares.

United States Tax Matters

General

This section describes the material United States
federal income tax consequences of owning shares or ADSs. It
applies to you only if you hold your shares or ADSs as capital
assets for tax purposes. This section does not apply to you if
you are a member of a special class of holders subject to
special rules, including:



| |   |                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------
| |  | 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.                               

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This section is based on the Internal Revenue
Code of 1986, as amended, its legislative history, existing and
proposed regulations, published rulings and court decisions, and
the Convention between the United States of America and the
Kingdom of Norway for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with Respect to Taxes on Income and
Property (the Treaty). These laws are subject to
change, possibly on a retroactive basis. In addition, this
section is based in part upon the representations of the
depositary and the assumption that each obligation in the
deposit agreement and any related agreement will be performed in
accordance with its terms. Taking into account this assumption,
for United States federal income purposes, if you hold ADRs
evidencing ADSs, you generally will be treated as the owner of
the shares represented by those ADRs. Exchanges of shares for
ADRs, and ADRs for shares, generally will not be subject to
United States federal income tax.

You are a U.S. holder if you are
a beneficial owner of shares or ADSs that is for United States
federal income tax purposes:



| |   |                                                                                                                                                                                                                      
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.

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

Subject to the passive foreign investment company
rules discussed below, if you are a U.S. holder, the gross
amount of any dividend paid by Telenor out of its current or
accumulated earnings and profits (as determined for United
States federal income tax purposes) is subject to United States
federal income taxation. If you are a non-corporate
U.S. holder, dividends paid to you in taxable years
beginning after December 31, 2002 and before
January 1, 2009 that constitute qualified dividend income
will be taxable to you at a maximum tax rate of 15%, provided
that you hold the shares or ADSs for more than 60 days
during the 120-day period beginning 60 days before the
ex-dividend date. On February 19, 2004, the United States
Internal Revenue Service announced that it will permit taxpayers
to apply a proposed legislative change to this holding period
requirement as if such change were already effective. This
legislative technical correction would change the
minimum required holding period, retroactive to January 1,
2003, to more than 60 days during the 121-day period
beginning 60 days before the ex-dividend date. Dividends
paid by Telenor generally will be qualified dividend income.

You must include any Norwegian tax withheld from
the dividend payment in this gross amount even though you do not
in fact receive the amount withheld as tax. The dividend is
taxable to you when you, in the case of shares, or the
depository, in the case of ADSs, receive the dividend, actually
or constructively. The dividend will not be eligible for the
dividends-received deduction generally allowed to United States
corporations in respect of dividends received from other United
States corporations. The amount of the dividend distribution
that you must include in your income as a U.S. holder will
be the U.S. dollar value of the Norwegian Krone payments
made, determined at the spot Norwegian Krone/U.S. dollar
rate on the date the dividend distribution is included in your
income, regardless of whether the payment is in fact converted
into U.S. dollars. Any gain or loss resulting from currency
exchange fluctuations during the period from the date you
include the dividend payment in income to the date you convert
the payment into U.S. dollars generally will be treated as
ordinary income or loss. Such gain or loss generally will be
income or loss from sources within the United States for foreign
tax credit limitation purposes. Distributions in excess of
current and accumulated earnings and profits (as determined for
United States federal income tax purposes) will be treated as a
non-taxable return of capital to the extent of your tax basis in
the shares or ADSs and, to the extent in excess of your tax
basis, will be treated as capital gain.

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Subject to certain limitations, the 15% Norwegian
tax withheld in accordance with the Treaty and paid over to
Norway will be creditable against your United States federal
income tax liability. Special rules apply in determining the
foreign tax credit limitation with respect to dividends that are
subject to the maximum 15% tax rate. To the extent that a refund
of a portion of the tax withheld is available to you under
Norwegian law or the Treaty, the amount of tax withheld that is
refundable will not be eligible for credit against your United
States federal income tax liability. See Norwegian Tax
Matters  Taxation of dividends above. Dividends
will be income from sources outside the United States, and
generally will be passive income or financial
services income, which is treated separately from other
types of income for purposes of computing the foreign tax credit
allowable to you.

Taxation of capital gains

Subject to the passive foreign investment company
rules discussed below, if you are a U.S. holder and you
sell or otherwise dispose of your shares or ADSs, you will
recognize capital gain or loss for United States federal income
tax purposes equal to the difference between the
U.S. dollar value of the amount that you realize and your
tax basis, determined in U.S. dollars, in your shares or
ADSs. Capital gain of a non-corporate U.S. holder that is
recognized on or after May 6, 2003 and before
January 1, 2009 is generally taxed at a maximum rate of 15%
where the holder has a holding period greater than one year. The
gain or loss will generally be income or loss from sources
within the United States for foreign tax credit limitation
purposes.

If you receive any foreign currency on the sale
of shares or ADSs, you may recognize ordinary income or loss
from sources within the United States as a result of currency
fluctuations between the date of the sale of the shares or ADSs
and the date the sales proceeds are converted into
U.S. dollars.

Passive Foreign Investment Company (PFIC)
Rules

We believe that our shares and ADSs should not be
treated as stock of a passive foreign investment company, or
PFIC, for United States federal income tax purposes. However,
this conclusion is a factual determination that is made
annually, and may therefore be subject to change.

In general, if you are a U.S. holder, we
will be a PFIC with respect to you if for any taxable year in
which you held our ADSs or shares:



| |   |                                                                                                                                                                                              
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.

Passive income generally includes dividends,
interest, royalties, rents (other than certain rents and
royalties derived in the active conduct of a trade or business),
annuities and gains from assets that produce passive income. If
a foreign corporation owns at least 25% by value of the stock of
another corporation, the foreign corporation is treated for
purposes of the PFIC tests as owning its proportionate share of
the assets of the other corporation, and as receiving directly
its proportionate share of the other corporations income.

If we are treated as a PFIC, and you are a
U.S. holder that did not make a qualified election fund, or
QEF, election or a mark-to-market election, as described below,
you will be subject to special rules with respect to:



| |   |                                                                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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).

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Under these rules:



| |   |                                                                                                                                               
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.

Special rules apply for calculating the amount of
the foreign tax credit with respect to excess distributions by a
PFIC.

If our shares or ADSs are considered marketable
stock, you may also make a mark-to-market election. If you make
this election, you will not be subject to the PFIC rules
described above. Instead, in general, you will include as
ordinary income each year the excess, if any, of the fair market
value of your shares or ADSs at the end of the taxable year over
your adjusted basis in your shares or ADSs. These amounts of
ordinary income will not be eligible for the favorable tax rates
applicable to qualified dividend income or long-term capital
gains. You will also be allowed to take an ordinary loss in
respect of the excess, if any, of the adjusted basis of your
shares or ADSs over their fair market value at the end of the
taxable year (but only to the extent of the net amount of
previously included income as a result of the mark-to-market
election). Your basis in the shares or ADSs will be adjusted to
reflect any such income or loss amounts.

In addition, notwithstanding any election you
make with regard to the shares or ADSs, dividends that you
receive from us will not constitute qualified dividend income to
you if we are a PFIC either in the taxable year of the
distribution or the preceding taxable year. Dividends that you
receive that do not constitute qualified dividend income are not
eligible for taxation at the 15% maximum rate applicable to
qualified dividend income. Instead, you must include the gross
amount of any such dividend paid by us out of our accumulated
earnings and profits (as determined for United States federal
income tax purposes) in your gross income, and it will be
subject to tax at rates applicable to ordinary income.

If you own shares or ADSs during any year that we
are a PFIC, you must file Internal Revenue Service
Form 8621.

DOCUMENTS ON DISPLAY

It is possible to read and copy documents
referred to in this annual report on Form 20-F that have
been filed with the SEC at the SECs public reference room
located at 450 Fifth Street, NW, Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms and their copy charges.




ITEM 11:  QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

FUNDING AND FINANCIAL RISK MANAGEMENT
ACTIVITIES IN TELENOR

Telenor ASAs treasury function is
responsible for funding, foreign exchange risk, interest rate
risk and credit risk management for the parent company and for
companies in which we have an ownership interest of more than
90%. Subsidiaries in which we own an interest of less than 90%
normally have standalone financing.

We have limited activity related to interest rate
and currency trading. As of December 31, 2003 we did not
have any outstanding open trading positions.

Our management emphasizes financial flexibility.
An important part of this emphasis is to minimize liquidity risk
through ensuring access to a diversified set of funding sources.
Telenor ASA issues debt in the

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domestic and international capital markets mainly
in the form of commercial paper and bonds. We use our Euro
commercial paper program, U.S. commercial paper program,
Euro medium term note program and three Norwegian open
bond programs with different maturities. To secure
satisfactory financial flexibility, Telenor ASA established a
committed syndicated revolving credit facility of
EUR 1.5 billion with maturity in 2008. You should read
Item 5: Operating and Financial Review and
Prospects  Information About Contractual Cash
Payments and Capital Resources  Capital
Resources and note 20 to our consolidated financial
statements for additional information about our sources of
financing.


Changes in market interest rates affect fair
value of assets and liabilities, as well as interest payments
and receipts. We are exposed to interest rate risk through
funding and cash management activities. The objective for
interest rate risk management is to minimize interest cost while
at the same time holding the volatility of future interest
payments within acceptable limits. To achieve this we use a
simulation model that takes into account market variables and
the portfolio composition. Generally, the average duration of
the debt liability portfolio should be between 0.5 and
2.5 years. We apply interest rate derivatives to manage the
interest rate risk of the debt portfolio. This typically
involves interest rate swaps, whereas forward rate agreements
and interest rate options are used in certain situations.

We are exposed to changes in the value of the
Norwegian Krone (NOK) relative to other currencies. We have
invested in companies that have other functional currencies than
NOK. In addition, in certain instances companies that mainly
operate in NOK will also enter into transactions denominated in
currencies other than NOK. The book value of our net investments
in foreign entities varies with changes in the value of NOK
compared to other currencies. Moreover, these companies will
typically pay dividends, if any, in their local currency.
Managements strategy to handle exchange rate exposures
related to net investments is to issue debt in the currencies
involved. Combinations of money market instruments (commercial
paper and bonds) and derivatives (foreign currency forward
contracts and currency swaps) are typically used for this
purpose. Exchange rate risk related to debt instruments in
foreign entities is also a part of our risk exposure. Norwegian
entities may also be exposed to exchange rate risk. Such
exposures typically arise from revenues or operating expenses in
foreign currencies. This exchange rate risk is normally not
hedged by us. Exchange rate risk also arises when Norwegian
entities enter into other transactions denominated in foreign
currency, or when agreements are made to acquire or dispose of
investments outside Norway. Committed cash flows equivalent to
NOK 50 million or higher are hedged economically, typically
using options or forward contracts.

Hedging as described above is only carried out in
currencies that have well-functioning capital markets.

SENSITIVITY ANALYSIS

We have adopted sensitivity analysis as the
approach to quantify market risk.

Fair value of debt instruments issued by Telenor
ASA is calculated using an interest rate curve, which
incorporates estimates of the Telenor ASA credit spreads as of
December 31, 2003. The credit curve has been extrapolated
from trades observed in the secondary market of Telenor ASA debt
instruments with different maturities.

Fair value of debt instruments issued by our
subsidiaries is determined by reference to market quotes where
such are available. Fair value of other floating rate
instruments issued by our subsidiaries is assumed to be equal to
the book value.

For all other interest bearing liabilities fair
value is estimated using the Telenor ASA credit curve described
above.

Fair value of currency swaps, foreign currency
forward contracts and interest rate swaps is estimated by
reference to the present value of future cash flows, calculated
by using quoted swap curves and exchange rates as of
December 31, 2003. Options are revalued using appropriate
option pricing models.

Interest rate risk is quantified by change in
fair value given a 10% parallel shift in interest rate curves.
Exchange rate risk is quantified by change in fair value from a
10% change in spot rates against the

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Norwegian Krone. Changes in market volatilities
will change the fair value of option instruments. Volatility
risk is quantified by change in fair value due to a 10% change
in implied volatilities.


The model underlying the sensitivity analysis
includes derivatives as well as bank deposits and borrowings,
short-term interest bearing investments, commercial paper and
bonds. The fair values of our equity investments or cash flows
from these assets are not taken into account. As such the
analysis does not show our total net exposure to financial
market risk.

The assumptions used in the model for partial
movements in risk factors are not based upon empirical
observations. Correlations between different exchange rates,
short and long-term interest rates as well as the interest rates
of the different currencies in the portfolio are not taken into
account. As a result, the total effects of deficiencies in the
assumptions implicit in the model might be substantial and the
hypothetical gains and losses calculated do not express
managements expectations of future changes in fair value.

|                                 |  |                   |         |                |  |                |      |            |  |     |     |      |  |     |       |   |  |  |        |   |  |  |     |   |  |  |    | 
|-------------------------------- |  | ----------------- | ------- | -------------- |  | -------------- | ---- | ---------- |  | --- | --- | ---- |  | --- | ----- | - |  |  | ------ | - |  |  | --- | - |  |  | -- | 
|                                 |  |                   |         |                |  |                |      |            |  |     |     |     
|                                 |  | Fair value        |         |                |  |                |      | Volatility
|                                 |  | as of             |         | Interest rates |  | Exchange rates |      | of options
|                                 |  | December 31,      |         |                |  |                |      |           
|2003                             |  | 2003              |         | -10%           |  | 10%            |      | -10%       |  | 10% |     | -10% |  | 10%
|                                 |  |                   |         |                |  |                |      |            |  |     |     |      |  |    
|                                 |  |                  
|                                 |  | (NOK in millions)
|Foreign exchange derivatives     |  |                   | 1,515   |                |  |                | 62   |            |  |     | (61 | )    |  |     | (576  | ) |  |  | 576    |   |  |  |    |   |  |  |   | 
|Interest rate derivatives        |  |                   | (26     | )              |  |                | (8   | )          |  |     | 11  |      |  |     | (32   | ) |  |  | 32     |   |  |  | (10 | ) |  |  | 10 | 
|Net interest-bearing liabilities |  |                   | (20,147 | )              |  |                | (287 | )          |  |     | 280 |      |  |     | 2,034 |   |  |  | (2,034 | ) |  |  |    |   |  |  |   | 
|                                 |  |                   |         |                |  |                |      |            |  |     |     |      |  |     |       |   |  |  |        |   |  |  |     |   |  |  |    | 
|Total                            |  |                   | (18,658 | )              |  |                | (233 | )          |  |     | 230 |      |  |     | 1,426 |   |  |  | (1,426 | ) |  |  | (10 | ) |  |  | 10 | 
|                                 |  |                   |         |                |  |                |      |            |  |     |     |      |  |     |       |   |  |  |        |   |  |  |     |   |  |  |    | 

|                                 |  |                   |         |                |  |                |      |            |  |     |     |      |  |     |       |   |  |  |        |   |  |  |    |   |  |  |   | 
|-------------------------------- |  | ----------------- | ------- | -------------- |  | -------------- | ---- | ---------- |  | --- | --- | ---- |  | --- | ----- | - |  |  | ------ | - |  |  | -- | - |  |  | - | 
|                                 |  |                   |         |                |  |                |      |            |  |     |     |     
|                                 |  | Fair value        |         |                |  |                |      | Volatility
|                                 |  | as of             |         | Interest rates |  | Exchange rates |      | of options
|                                 |  | December 31,      |         |                |  |                |      |           
|2002                             |  | 2002              |         | -10%           |  | 10%            |      | -10%       |  | 10% |     | -10% |  | 10%
|                                 |  |                   |         |                |  |                |      |            |  |     |     |      |  |    
|                                 |  |                  
|                                 |  | (NOK in millions)
|Foreign exchange derivatives     |  |                   | 699     |                |  |                | 54   |            |  |     | (53 | )    |  |     | (553  | ) |  |  | 553    |   |  |  |   |   |  |  |  | 
|Interest rate derivatives        |  |                   | (12     | )              |  |                | 90   |            |  |     | (89 | )    |  |     | 15    |   |  |  | (15    | ) |  |  | (1 | ) |  |  | 1 | 
|Net interest-bearing liabilities |  |                   | (27,880 | )              |  |                | (360 | )          |  |     | 352 |      |  |     | 2,205 |   |  |  | (2,205 | ) |  |  |   |   |  |  |  | 
|                                 |  |                   |         |                |  |                |      |            |  |     |     |      |  |     |       |   |  |  |        |   |  |  |    |   |  |  |   | 
|Total                            |  |                   | (27,193 | )              |  |                | (216 | )          |  |     | 213 |      |  |     | 1,637 |   |  |  | (1,637 | ) |  |  | (1 | ) |  |  | 1 | 
|                                 |  |                   |         |                |  |                |      |            |  |     |     |      |  |     |       |   |  |  |        |   |  |  |    |   |  |  |   | 

The decrease in market value of net
interest-bearing liabilities as of December 31, 2003
compared to December 31, 2002 was primarily due to our
repayment of interest-bearing liabilities during 2003 and the
increase in our liquid assets as discussed under
Item 5: Operating and Financial Review and
Prospects  Results of Operations 
liquidity above.

The risk arising from changes in option
volatilities was insignificant due to the small volume of
options in the portfolio.

As of December 31, 2003, the interest rate
sensitivity was substantially in line with December 31,
2002. The absolute size of net interest bearing liabilities
decreased resulting in a decrease in the quantified interest
rate sensitivity, holding duration constant, offset by the
increase in the average duration of the net interest-bearing
liabilities portfolio.

As of December 31, 2003, the exchange rate
risk quantified in this analysis decreased compared to
December 31, 2002, because the hedging portfolio was
slightly reduced in this period.




ITEM
12:     DESCRIPTION OF SECURITIES OTHER
THAN EQUITY SECURITIES

Not applicable.

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PART II




ITEM
13:     DEFAULTS, DIVIDEND ARREARAGES
AND DELINQUENCIES

Not applicable.






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

None.




ITEM 15:     CONTROLS
AND PROCEDURES

We maintain disclosure controls and
procedures as such term is defined in Exchange Act
Rule 13a-15(e). This includes the establishment of a
disclosure committee. The disclosure committee currently
consists of Torstein Moland, chief financial officer, Bjørn
Brenna, group controller, Pal Wien Espen, general counsel, Kai
Rosenberg, head of communication, and Erling Thune, head of
investor relations. The committee is generally responsible for
considering the materiality of information and determining our
disclosure obligations on a timely basis. The committee also
allocates reviewing responsibilities to the appropriate officers
within Telenor. The committee, together with our chief executive
officer and chief financial officer, has the responsibility for
the evaluation of the effectiveness of our disclosure and
control procedures and may generally take all actions deemed
necessary or desirable to ensure compliance with such procedures.

In designing and evaluating our disclosure
controls and procedures, our management, including the chief
executive officer and the chief financial officer, recognized
that any controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving
the desired control objectives, and our management necessarily
was required to apply its judgment in evaluating the
cost-benefit relationship of possible controls and procedures.
Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all
control issues and instances of fraud, if any, within the
company have been detected. Our disclosure controls and
procedures have been designed to meet, and management believes
that they meet, reasonable assurance standards.

Our management, with participation of the chief
executive officer and the chief financial officer, has evaluated
the effectiveness of the design and operation of our disclosure
controls and procedures (pursuant to Exchange Act
Rule 13a-15(b)) as of the end of the period covered by this
annual report. Based on that evaluation our management,
including the chief executive officer and the chief financial
officer, concluded that subject to the limitations noted above
our disclosure controls and procedures were effective as of
December 31, 2003.

There have been no significant changes in our
internal controls over financial reporting identified in
connection with the above-mentioned evaluation that occurred in
the period covered by this annual report that have materially
affected or are reasonably likely to materially affect our
internal control over financial reportings.




ITEM 16A:     AUDIT
COMMITTEE FINANCIAL EXPERT

On December 19, 2003, our board of directors
determined that John Giverholt qualifies as an audit committee
financial expert within the meaning of Item 16A of
Form 20-F. For more information on our audit committee you
should read Item 6: Directors, Senior Management and
Employees  Directors and Senior
Management  Board Practices.




ITEM 16B:     CODE OF
ETHICS

On March 25, 2004, our board of directors
adopted amendments to our existing Codes of Conduct, which are
applicable to all directors, officers and employees. These
amendments revise the Codes of Conduct to include the standards
required for a Code of Ethics within the meaning of
Item 16B of Form 20-F and

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NASDAQ Marketplace Rule 4350(n). The Codes
of Conduct are available on our website at
http://www.telenor.com/csr/coc/.





ITEM
16C:     PRINCIPAL ACCOUNTANT FEES AND
SERVICES

The following table provides an overview of the
fees billed by Ernst & Young AS, our independent auditors in
respect of 2002 and 2003, for professional services performed in
respect of 2002 and 2003, respectively.

|                   |  |                 |      |      |  |  |      | 
|------------------ |  | --------------- | ---- | ---- |  |  | ---- | 
|                   |  |                
|                   |  | Year ended     
|                   |  | December 31,   
|                   |  |                
|                   |  | 2002            |      | 2003
|                   |  |                 |      |     
|                   |  |                
|                   |  | NOK in millions
|Audit Fees         |  |                 | 18.6 |      |  |  | 24.5 | 
|Audit-Related Fees |  |                 | 12.1 |      |  |  | 17.1 | 
|Tax Fees           |  |                 | 4.5  |      |  |  | 6.3  | 
|All Other Fees     |  |                 | 1.6  |      |  |  | 1.0  | 
|                   |  |                 |      |      |  |  |      | 
|Total              |  |                 | 36.8 |      |  |  | 48.9 | 
|                   |  |                 |      |      |  |  |      | 

Audit services.The
following services were billed under the category audit
services: audit of financial statements, reviews of
quarterly reports, including the formulation of audit opinions
and reports, domestic and international statutory audits, tax
services necessary for compliance with generally accepted
auditing principles, and support in the preparation and auditing
of the documents to be filed. Audit services also included the
auditing of information systems and processes and tests which
serve to promote understanding and reliability of systems and
internal corporate controls, as well as advice on issues of
accounting and reporting.

Audit-related
services.Audit-related services
mainly consisted of services which are normally performed by the
independent accountant in connection with the auditing of the
annual financial statements. Audit-related services also
included due diligence in connection with acquisitions and
disposals, advice on issues of accounting and reporting which
were not classified as audit services, support with the
interpretation and implementation of new accounting and
reporting standards, information systems audits, regulatory
reporting audits and auditing of employee benefit plans.

Tax services.Tax
services primarily consisted of services relating to the review
of tax compliance and tax advice, mainly outside Norway.

Other services.Other services consisted of services unrelated to the audits of
our financial statements, such as consultation regarding
regulatory reporting and training sessions.

The audit committee of our board of directors is
responsible, among other matters, for the oversight of our
independent auditors. On May 6, 2003, our board of
directors adopted the Audit and Non-Audit Services Pre-Approval
Policies and Procedures (the Procedures) governing
the approval by our audit committee of audit and non-audit
services to be performed by our independent auditors in order to
ensure that the provision of such services does not impair the
auditors independence. Prior to the establishment of the
audit committee in September 2003, our board of directors was
responsible for the approval of the provision of such services
under the Procedures.

Under the Procedures, proposed services
(i) are either reviewed and generally pre-approved by the
audit committee on an annual basis (general
pre-approval); or (ii) require specific pre-approval
by the audit committee (full pre-approval). An
appendix to the Procedures sets forth audit, audit-related and
tax services that have received general pre-approval, which is
generally valid for the fiscal year, unless provided otherwise.
The audit committee can amend this list based on subsequent
determinations. Proposed services by the independent auditors
that are not set forth in the appendix require full pre-approval
by the audit committee. There is also an appendix setting forth
prohibited non-audit services.

176



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All services to be performed by the independent
accountants were subject to the Procedures and approved in
advance either specifically or generally. No services which are
classified as prohibited services by the U.S. Securities
and Exchange Commission were commissioned after May 6, 2003.

The designated financial expert of the audit
committee shall report to the audit committee on a regular basis
for informational purposes. Our internal auditor, who has been
designated by our board of directors to generally monitor
compliance with the Procedures, will assist the designated
financial expert in determining whether a proposed service falls
with in the category of services enjoying general pre-approval.
Requests for full pre-approval must be accompanied by a joint
statement from our internal auditor and the independent auditors
setting forth whether in their view the request for approval is
consistent with the SECs rules on auditor independence.
The internal auditors and management will immediately report
violations of the Procedures to the audit committee.

The independent auditors will submit to our audit
committee on an annual basis a formal written statement
delineating the relationships between us and them and there will
be a discussion of the independent auditors methods and
procedures for ensuring independence. In connection with each
engagement, the independent auditors will be required to
represent and confirm that the proposed services will not affect
their independence.




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

Not applicable.






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

Not yet applicable.




PART III



ITEM 17:     FINANCIAL
STATEMENTS

Not applicable.




ITEM 18:     FINANCIAL
STATEMENTS

Our consolidated financial statements of
Telenor ASA beginning on page F-1 and the related
notes, the report thereon of Ernst & Young AS and the report
of PricewaterhouseCoopers DA on the financial statements of
Telenor Mobil AS as of and for the year ended
December 31, 2003 are filed as part of this annual report
on Form 20-F.

The financial statements of Telenor ASA as
of December 31, 2001 and for the years ended
December 31, 2001 and 2000 were audited by Arthur
Andersen & Co., who have ceased operations. Arthur
Andersen & Co. expressed an unqualified opinion on
those financial statements in their previously issued report
dated March 12, 2002. A copy of such report is included in
this annual report on Form 20-F and has not been reissued
by Arthur Andersen & Co.

177



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ITEM 19:     EXHIBITS

The following exhibits are filed as part of this
annual report:

|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit 1       |  | Articles of Association for Telenor ASA, as
    amended on February 12, 2004 (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.

178



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SIGNATURE

The registrant hereby certifies that it meets all
of the requirements for filing on Form 20-F and that it has
duly caused and authorized the undersigned to sign this annual
report on its behalf.



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



| |     |                    
| | --- | -------------------
| | By: | /s/ TORSTEIN MOLAND

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

Date: April 2, 2004

179



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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, 2002 and 2003, dated
    March 25, 2004                                                 |  |      | F-2 | 
|                                                   | Report of PricewaterhouseCoopers DA on the
    financial statements of Telenor Mobil AS, as of and for the
    year ended December 31, 2003, dated March 23, 2004 |  |      | F-3 | 
|                                                   | Report of Arthur Andersen & Co. for the
    fiscal year ended December 31, 2001, dated March 12,
    2002*                                                        |  |      | 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 |    



---



|  |                                                                                                                                                                                                                                                                                                                                                                                            
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | This report (i) is a copy of the
    accountants report, dated March 12, 2002, previously
    issued by Arthur Andersen & Co. for the financial
    statements of Telenor ASA as of December 31, 2000 and
    2001, and for the years then ended, (ii) has not been
    reissued by Arthur Andersen & Co. and
    (iii) is included herein pursuant to Rule 2.02(e) of
    Regulation S-X.

F-1



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REPORT OF INDEPENDENT AUDITORS

To the Board of Directors and Shareholders of the
Telenor Group

We have audited the accompanying consolidated
balance sheets of the Telenor Group as of December 31, 2003
and 2002, and the related consolidated statements of profit and
loss, consolidated statements of shareholders equity, and
consolidated cash flow statements for the years then ended.
These financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits. We
did not audit the financial statements of Telenor Mobil AS, a
wholly-owned subsidiary, as of and for the year ended
December 31, 2003, which statements reflect total assets
constituting 9 percent as of December 31, 2003 and total
revenues constituting 17 percent in 2003 of the related
consolidated totals. Those statements were audited by other
auditors whose report has been furnished to us, and our opinion,
insofar as it relates to the amounts included for Telenor Mobil
AS, is based solely on the report of the other auditors. The
financial statements of the Telenor Group for the year ended
December 31, 2001, were audited by other auditors who have
ceased operations as a foreign associated firm of the Securities
and Exchange Commission Practice Section of the American
Institute of Certified Public Accountants and whose report dated
March 12, 2002, expressed an unqualified opinion on those
statements.

We conducted our audits in accordance with
auditing standards generally accepted in Norway and the United
States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits and the report of other auditors provide a reasonable
basis for our opinion.

In our opinion, based on our audits and the
report of other auditors, the financial statements referred to
above present fairly, in all material respects, the consolidated
financial position of the Telenor Group at December 31, 2003 and
2002, and the consolidated results of its operations and its
cash flows for the years then ended in conformity with
accounting principles generally accepted in Norway.

Accounting principles generally accepted in
Norway vary in certain significant respects from accounting
principles generally accepted in the United States of America.
Information relating to the nature and effect of such
differences is presented in Note 31 to the consolidated
financial statements. As discussed above, the financial
statements of the Telenor Group for the year ended
December 31, 2001 were audited by other auditors who have
ceased operations. Note 31 in these financial statements has
been revised to include the transitional disclosures required by
Statement of Financial Accounting Standards (Statement)
No. 142, Goodwill and Other Intangible Assets, which was
adopted by the Company as of January 1, 2002. Our audit
procedures with respect to the disclosures in Note 31 with
respect to 2001 included (a) agreeing the previously
reported net income to the previously issued financial
statements and the adjustments to reported net income
representing amortization expense (including any related tax
effects) recognized in those periods related to goodwill and
equity method goodwill as a result of initially applying
Statement No. 142 (including any related tax effects) to
the Companys underlying records obtained from management,
and (b) testing the mathematical accuracy of the
reconciliation of adjusted net income to reported net income,
and the related earnings-per-share amounts. In our opinion, the
disclosures for 2001 in Note 31 are appropriate. However, we
were not engaged to audit, review, or apply any procedures to
the 2001 financial statements of the Company other than with
respect to such disclosures in Note 31 and, accordingly, we do
not express an opinion or any other form of assurance on the
2001 financial statements taken as a whole.

Ernst & Young AS

Oslo, Norway


March 25, 2004

F-2



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REPORT OF INDEPENDENT AUDITORS

To the shareholder of Telenor Mobil AS

We have audited the accompanying balance sheet of
Telenor Mobil AS as of December 31, 2003, and the related
statements of income and cash flows for the year then ended.
These financial statements are the responsibility of the
Companys management and Board of Directors. Our
responsibility is to express an opinion on the financial
statements based on our audit.

We conducted our audit in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial
position of Telenor Mobil AS at December 31, 2003, and the
results of its operations and its cash flows for the year then
ended in conformity with accounting principles generally
accepted in Norway.

PricewaterhouseCoopers DA

Oslo, Norway 
 March 23, 2004

F-3



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##### Table of Contents



This report (i) is a copy of the
accountants report, dated March 12, 2002, previously
issued by Arthur Andersen & Co. for the financial
statements of Telenor ASA as of December 31, 2000 and
2001, and for the years then ended, (ii) has not been
reissued by Arthur Andersen & Co. and
(iii) is included herein pursuant to Rule 2.02(e) of
Regulation S-X.



REPORT OF INDEPENDENT AUDITORS

To the shareholders of Telenor ASA:

We have audited the accompanying consolidated
balance sheets of Telenor ASA and its subsidiaries (the
Company) as of December 31, 2000 and 2001, and
the related consolidated statements of profit and loss,
shareholders equity and cash flows for each of the three
years in the period ended December 31, 2001. These
financial statements are the responsibility of the
Companys management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with
generally accepted auditing standards in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2000 and 2001,
and the related consolidated statements of profit and loss,
shareholders equity and cash flows for each of the three
years in the period ended December 31, 2001 in conformity
with accounting principles generally accepted in Norway.

Accounting practices used by the Company in
preparing the accompanying financial statements conform with
generally accepted accounting principles in Norway, but do not
conform with accounting principles generally accepted in the
United States. A description of these differences and a complete
reconciliation of consolidated net income and shareholders
equity to U.S. generally accepted accounting principles is set
forth in Note 30.

ARTHUR ANDERSEN & CO

Oslo, Norway, March 12, 2002


F-4



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CONSOLIDATED STATEMENT OF PROFIT AND
LOSS

Telenor Group January 1 
December 31


|                                                                            |  |      |       |                         |  |      |        |      |  |  |        |   |  |  |        |  
|--------------------------------------------------------------------------- |  | ---- | ----- | ----------------------- |  | ---- | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                                                            |  | Note |       | 2001                    |  | 2002 |        | 2003
|                                                                            |  |      |       |                         |  |      |        |     
|                                                                            |  |      |       |                        
|                                                                            |  |      |       | (NOK in millions except
|                                                                            |  |      |       | per share amounts)     
|Revenues                                                                    |  |      | 2     |                         |  |      | 40,604 |      |  |  | 48,668 |   |  |  | 52,889 |  
|Gains on disposal of fixed assets and operations                            |  |      | 2     |                         |  |      | 5,436  |      |  |  | 158    |   |  |  | 232    |  
|Total revenues                                                              |  |      |       |                         |  |      | 46,040 |      |  |  | 48,826 |   |  |  | 53,121 |  
|Operating expenses                                                          |  |      |       |                         |  |      |        |      |  |  |        |   |  |  |        |  
|Costs of materials and traffic charges                                      |  |      | 4     |                         |  |      | 10,204 |      |  |  | 12,485 |   |  |  | 13,094 |  
|Own work capitalized                                                        |  |      | 5     |                         |  |      | (1,002 | )    |  |  | (567   | ) |  |  | (571   | )
|Salaries and personnel costs                                                |  |      | 6,7   |                         |  |      | 10,128 |      |  |  | 10,104 |   |  |  | 9,561  |  
|Other operating expenses                                                    |  |      | 8,9   |                         |  |      | 12,397 |      |  |  | 13,188 |   |  |  | 12,506 |  
|Losses on disposal of fixed assets and operations                           |  |      |       |                         |  |      | 63     |      |  |  | 147    |   |  |  | 229    |  
|Depreciation and amortization                                               |  |      | 14,15 |                         |  |      | 7,251  |      |  |  | 10,236 |   |  |  | 10,597 |  
|Write-downs                                                                 |  |      | 14,15 |                         |  |      | 3,822  |      |  |  | 3,553  |   |  |  | 145    |  
|Total operating expenses                                                    |  |      |       |                         |  |      | 42,863 |      |  |  | 49,146 |   |  |  | 45,561 |  
|Operating profit (loss)                                                     |  |      |       |                         |  |      | 3,177  |      |  |  | (320   | ) |  |  | 7,560  |  
|Associated companies                                                        |  |      | 16    |                         |  |      | 8,237  |      |  |  | (2,450 | ) |  |  | 1,231  |  
|Financial income and expenses                                               |  |      |       |                         |  |      |        |      |  |  |        |   |  |  |        |  
|Financial income                                                            |  |      |       |                         |  |      | 897    |      |  |  | 567    |   |  |  | 586    |  
|Financial expenses                                                          |  |      |       |                         |  |      | (1,396 | )    |  |  | (1,833 | ) |  |  | (2,023 | )
|Net currency loss                                                           |  |      |       |                         |  |      | (402   | )    |  |  | (311   | ) |  |  | (1     | )
|Net gain (loss) and write-downs of financial items                          |  |      |       |                         |  |      | (258   | )    |  |  | (789   | ) |  |  | 73     |  
|Net financial items                                                         |  |      | 12    |                         |  |      | (1,159 | )    |  |  | (2,366 | ) |  |  | (1,365 | )
|Profit (loss) before taxes and minority
    interests                       |  |      |       |                         |  |      | 10,255 |      |  |  | (5,136 | ) |  |  | 7,426  |  
|Taxes                                                                       |  |      | 13    |                         |  |      | (3,897 | )    |  |  | 480    |   |  |  | (2,376 | )
|Profit (loss) before minority
    interests                                 |  |      |       |                         |  |      | 6,358  |      |  |  | (4,656 | ) |  |  | 5,050  |  
|Minority interests                                                          |  |      |       |                         |  |      | 721    |      |  |  | 358    |   |  |  | (490   | )
|Net income (loss)                                                           |  |      |       |                         |  |      | 7,079  |      |  |  | (4,298 | ) |  |  | 4,560  |  
|Net income (loss) per share in NOK (basic),
    excluding treasury shares   |  |      |       |                         |  |      | 3.99   |      |  |  | (2.42  | ) |  |  | 2.57   |  
|Net income (loss) per share in NOK (diluted),
    excluding treasury shares |  |      |       |                         |  |      | 3.99   |      |  |  | (2.42  | ) |  |  | 2.57   |  

F-5



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CONSOLIDATED BALANCE SHEET

Telenor Group at December 31


|                                            |  |      |        |                   |  |      |        |  |  |  |        | 
|------------------------------------------- |  | ---- | ------ | ----------------- |  | ---- | ------ |  |  |  | ------ | 
|                                            |  | Note |        | 2002              |  | 2003
|                                            |  |      |        |                   |  |     
|                                            |  |      |        |                  
|                                            |  |      |        | (NOK in millions)
|Assets                                      |  |      |        |                   |  |      |        |  |  |  |        | 
|Deferred tax assets                         |  |      | 13     |                   |  |      | 4,866  |  |  |  | 3,850  | 
|Goodwill                                    |  |      | 15     |                   |  |      | 10,100 |  |  |  | 9,224  | 
|Other intangible assets                     |  |      | 15     |                   |  |      | 6,682  |  |  |  | 5,536  | 
|Tangible assets                             |  |      | 15     |                   |  |      | 39,265 |  |  |  | 35,722 | 
|Financial assets                            |  |      | 16     |                   |  |      | 13,249 |  |  |  | 14,014 | 
|                                            |  |      |        |                   |  |      |        |  |  |  |        | 
|Total fixed assets                          |  |      |        |                   |  |      | 74,162 |  |  |  | 68,346 | 
|                                            |  |      |        |                   |  |      |        |  |  |  |        | 
|Inventories                                 |  |      |        |                   |  |      | 632    |  |  |  | 504    | 
|Current receivables, etc.                   |  |      | 17     |                   |  |      | 8,868  |  |  |  | 9,232  | 
|Short-term investments                      |  |      | 18     |                   |  |      | 532    |  |  |  | 384    | 
|Cash and cash equivalents                   |  |      | 27     |                   |  |      | 5,264  |  |  |  | 7,644  | 
|Total current assets                        |  |      |        |                   |  |      | 15,296 |  |  |  | 17,764 | 
|                                            |  |      |        |                   |  |      |        |  |  |  |        | 
|Total assets                                |  |      |        |                   |  |      | 89,458 |  |  |  | 86,110 | 
|                                            |  |      |        |                   |  |      |        |  |  |  |        | 
|Equity and liabilities                      |  |      |        |                   |  |      |        |  |  |  |        | 
|Shareholders equity                        |  |      |        |                   |  |      | 33,685 |  |  |  | 37,237 | 
|Minority interests                          |  |      |        |                   |  |      | 3,603  |  |  |  | 3,646  | 
|                                            |  |      |        |                   |  |      |        |  |  |  |        | 
|Total equity and minority interests         |  |      |        |                   |  |      | 37,288 |  |  |  | 40,883 | 
|                                            |  |      |        |                   |  |      |        |  |  |  |        | 
|Liabilities                                 |  |      |        |                   |  |      |        |  |  |  |        | 
|Provisions                                  |  |      | 19     |                   |  |      | 1,176  |  |  |  | 1,645  | 
|Long-term interest-bearing liabilities      |  |      | 20, 21 |                   |  |      | 28,805 |  |  |  | 25,376 | 
|Long-term non-interest-bearing liabilities  |  |      | 22     |                   |  |      | 473    |  |  |  | 754    | 
|Total long-term liabilities                 |  |      |        |                   |  |      | 29,278 |  |  |  | 26,130 | 
|                                            |  |      |        |                   |  |      |        |  |  |  |        | 
|Short-term interest-bearing liabilities     |  |      | 20     |                   |  |      | 3,591  |  |  |  | 386    | 
|Short-term non-interest-bearing liabilities |  |      | 22     |                   |  |      | 18,125 |  |  |  | 17,066 | 
|Total short-term liabilities                |  |      |        |                   |  |      | 21,716 |  |  |  | 17,452 | 
|                                            |  |      |        |                   |  |      |        |  |  |  |        | 
|Total equity and liabilities                |  |      |        |                   |  |      | 89,458 |  |  |  | 86,110 | 
|                                            |  |      |        |                   |  |      |        |  |  |  |        | 
|Assets pledged                              |  |      | 23     |                   |  |      | 9,892  |  |  |  | 8,148  | 
|Guarantee liabilities                       |  |      | 23     |                   |  |      | 2,515  |  |  |  | 2,557  | 
|Contingent liabilities                      |  |      | 24     |                   |  |      |        |  |  |  |        | 

F-6



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##### Table of Contents



CONSOLIDATED CASH FLOW STATEMENT

Telenor Group January 1 
December 31

|                                                                                              |  |                   |         |      |  |      |         |   |  |  |         |  
|--------------------------------------------------------------------------------------------- |  | ----------------- | ------- | ---- |  | ---- | ------- | - |  |  | ------- | -
|                                                                                              |  | 2001              |         | 2002 |  | 2003
|                                                                                              |  |                   |         |      |  |     
|                                                                                              |  |                  
|                                                                                              |  | (NOK in millions)
|Proceeds from sale of goods and services                                                      |  |                   | 39,771  |      |  |      | 50,480  |   |  |  | 53,208  |  
|Payments to suppliers of goods and services and
    of other operating expenses               |  |                   | (22,234 | )    |  |      | (25,056 | ) |  |  | (25,714 | )
|Payments to employees, pensions, social security
    tax, tax deductions                      |  |                   | (9,186  | )    |  |      | (9,643  | ) |  |  | (9,400  | )
|Interest etc. received                                                                        |  |                   | 739     |      |  |      | 796     |   |  |  | 1,318   |  
|Interest etc. paid                                                                            |  |                   | (1,405  | )    |  |      | (1,629  | ) |  |  | (2,494  | )
|Other proceeds and payments related to operating
    activities                               |  |                   | 366     |      |  |      | (142    | ) |  |  | (131    | )
|Payment of taxes and public duties                                                            |  |                   | (1,058  | )    |  |      | (1,948  | ) |  |  | (3,111  | )
|Net cash flow from operating
    activities(1)                                                |  |                   | 6,993   |      |  |      | 12,858  |   |  |  | 13,676  |  
|Proceeds from sale of tangible and intangible
    assets                                      |  |                   | 1,413   |      |  |      | 210     |   |  |  | 523     |  
|Purchase of tangible and intangible assets                                                    |  |                   | (11,558 | )    |  |      | (9,098  | ) |  |  | (6,536  | )
|Cash receipts from sale of subsidiaries and
    associated companies, net of cash transferred |  |                   | 37,919  |      |  |      | 191     |   |  |  | 2,327   |  
|Cash payments on purchase of subsidiaries and
    associated companies, net of cash received  |  |                   | (6,125  | )    |  |      | (12,232 | ) |  |  | (506    | )
|Proceeds from sale of other investments                                                       |  |                   | 314     |      |  |      | 271     |   |  |  | 1,072   |  
|Payments for other investments                                                                |  |                   | (1,072  | )    |  |      | (1,069  | ) |  |  | (334    | )
|Net cash flow from investment
    activities                                                  |  |                   | 20,891  |      |  |      | (21,727 | ) |  |  | (3,454  | )
|Proceeds from long-term liabilities                                                           |  |                   | 4,199   |      |  |      | 19,567  |   |  |  | 779     |  
|Proceeds from short-term liabilities                                                          |  |                   | 442     |      |  |      | 184     |   |  |  | 311     |  
|Payments on long-term liabilities                                                             |  |                   | (28,103 | )    |  |      | (10,140 | ) |  |  | (4,990  | )
|Payments on short-term liabilities                                                            |  |                   | (482    | )    |  |      | (549    | ) |  |  | (3,122  | )
|Proceeds from issuance of shares to minorities in
    subsidiaries                            |  |                   | 89      |      |  |      | 181     |   |  |  | 32      |  
|Proceeds from issuance of shares                                                              |  |                   | 21      |      |  |      | 19      |   |  |  |        |  
|Purchase of own shares from and dividend paid to
    minorities in subsidiaries               |  |                   |        |      |  |      |        |   |  |  | (7      | )
|Payment of dividends                                                                          |  |                   | (532    | )    |  |      | (621    | ) |  |  | (890    | )
|Net cash flow from financing
    activities                                                   |  |                   | (24,366 | )    |  |      | 8,641   |   |  |  | (7,887  | )
|Effect on cash and cash equivalents of changes in
    foreign exchange rates                  |  |                   | 15      |      |  |      | (347    | ) |  |  | 45      |  
|Net change in cash and cash
    equivalents                                                   |  |                   | 3,533   |      |  |      | (575    | ) |  |  | 2,380   |  
|Cash and cash equivalents at January 1                                                        |  |                   | 2,306   |      |  |      | 5,839   |   |  |  | 5,264   |  
|Cash and cash equivalents at
    December 31                                                  |  |                   | 5,839   |      |  |      | 5,264   |   |  |  | 7,644   |  
|Reconciliation(1)                                                                             |  |                   |         |      |  |      |         |   |  |  |         |  
|Net income                                                                                    |  |                   | 7,079   |      |  |      | (4,298  | ) |  |  | 4,560   |  
|Minority interests                                                                            |  |                   | (721    | )    |  |      | (358    | ) |  |  | 490     |  
|Taxes                                                                                         |  |                   | 3,897   |      |  |      | (480    | ) |  |  | 2,376   |  
|Profit before taxes and minority
    interests                                                |  |                   | 10,255  |      |  |      | (5,136  | ) |  |  | 7,426   |  
|Taxes paid                                                                                    |  |                   | (1,173  | )    |  |      | (2,050  | ) |  |  | (3,283  | )
|Net (gain) loss including write-downs of
    financial items                                  |  |                   | (5,115  | )    |  |      | 778     |   |  |  | (76     | )
|Depreciation, amortization and write-downs                                                    |  |                   | 11,073  |      |  |      | 13,789  |   |  |  | 10,742  |  
|Associated companies                                                                          |  |                   | (8,237  | )    |  |      | 2,450   |   |  |  | (1,231  | )
|Changes in inventories                                                                        |  |                   | 32      |      |  |      | (39     | ) |  |  | 3       |  
|Changes in accounts receivable and prepayments
    from customers                             |  |                   | (368    | )    |  |      | 1,593   |   |  |  | 1,017   |  
|Changes in accounts payable and prepaid expenses                                              |  |                   | (436    | )    |  |      | 126     |   |  |  | 119     |  
|Difference between expensed and paid pensions                                                 |  |                   | (106    | )    |  |      | 359     |   |  |  | 134     |  
|Currency (gains) losses not relating to operating
    activities                              |  |                   | 367     |      |  |      | 391     |   |  |  | (78     | )
|Change in other accruals                                                                      |  |                   | 701     |      |  |      | 597     |   |  |  | (1,097  | )
|Net cash flow from operating
    activities                                                   |  |                   | 6,993   |      |  |      | 12,858  |   |  |  | 13,676  |  

F-7



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##### Table of Contents



CONSOLIDATED STATEMENTS OF SHAREHOLDERS
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, 2000         |  |           | 1,802,151,899 |        |  |         | 6 |         |  |        | 10,813 |             |  |          | 18,613 |        |  |  | 6,565  |   |  |  | (337   | ) |  |  | (180 | ) |  |  | 35,474 |  
|Net income for the year 2001            |  |           |               |        |  |         |   |         |  |        |        |             |  |          |        |        |  |  | 7,079  |   |  |  |        |   |  |  |      |   |  |  | 7,079  |  
|Dividends                               |  |           |               |        |  |         |   |         |  |        |        |             |  |          |        |        |  |  | (621   | ) |  |  |        |   |  |  |      |   |  |  | (621   | )
|Translation adjustments                 |  |           |               |        |  |         |   |         |  |        |        |             |  |          |        |        |  |  |        |   |  |  | 192    |   |  |  |      |   |  |  | 192    |  
|Employee share issue                    |  |           | 578,753       |        |  |         | 6 |         |  |        | 3      |             |  |          | 17     |        |  |  |        |   |  |  |        |   |  |  |      |   |  |  | 20     |  
|Distribution of shares to the employees |  |           |               |        |  |         | 6 |         |  |        |        |             |  |          | (11    | )      |  |  |        |   |  |  |        |   |  |  | 11   |   |  |  |       |  
|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             |  |           |               |        |  |         |   |         |  |        |        |             |  |          |        |        |  |  | (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 issues                   |  |           | 595,109       |        |  |         | 6 |         |  |        | 4      |             |  |          | 22     |        |  |  |        |   |  |  |        |   |  |  |      |   |  |  | 26     |  
|Consolidation Comincom/ Combellga       |  |           |               |        |  |         |   |         |  |        |        |             |  |          |        |        |  |  | (35    | ) |  |  |        |   |  |  |      |   |  |  | (35    | )
|Consolidation GrameenPhone              |  |           |               |        |  |         |   |         |  |        |        |             |  |          |        |        |  |  | (39    | ) |  |  |        |   |  |  |      |   |  |  | (39    | )
|Balance as of December 31, 2003         |  |           | 1,804,021,281 |        |  |         | 6 |         |  |        | 10,824 |             |  |          | 18,656 |        |  |  | 9,978  |   |  |  | (2,052 | ) |  |  | (169 | ) |  |  | 37,237 |  

|                                                                       |  |      |               |      |  |      |               |  |  |  |               | 
|---------------------------------------------------------------------- |  | ---- | ------------- | ---- |  | ---- | ------------- |  |  |  | ------------- | 
|                                                                       |  | 2001 |               | 2002 |  | 2003
|                                                                       |  |      |               |      |  |     
|Average number of shares primary (exclusive
    treasury shares)       |  |      | 1,772,330,267 |      |  |      | 1,774,637,008 |  |  |  | 1,775,340,935 | 
|Average number of shares fully diluted (exclusive
    treasury shares) |  |      | 1,774,086,782 |      |  |      | 1,774,637,008 |  |  |  | 1,775,755,932 | 
|Dividend per share in NOK                                              |  |      | 0.35          |      |  |      | 0.45          |  |  |  | 1.00          | 

Please see note 30 for further information
about number of shares etc.

In 2003, Telenor increased its ownership
interests in the subsidiaries Comincom/ Combellga and
GrameenPhone. The increase in net excess values beside goodwill
was recorded directly against the shareholders equity in
2003.

In 2002, the shareholders equity decreased
by NOK 658 million in connection with the consolidation of
Canal Digital. As of June 30, 2002, the acquisition of the
remaining 50% of Canal Digital was completed and Telenor
obtained effective control. Due to the transfer of risk for the
companys results of operations at the time of entering
into the agreement to acquire Canal Digital in June 2001, 50% of
the companys loss, amortization of net excess values and
calculated financing expenses in the period between the
agreement and consolidation has been recorded directly against
the shareholders equity.

Equity available for distribution as dividends
from Telenor ASA was NOK 11,341 million as of
December 31, 2003.

F-8



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##### Table of Contents



Minority Interests

|                            |  |              |      |                   |  |             |      |             |  |                  |      |                  |  |  |     |   |  |  |       |  |  |  |       | 
|--------------------------- |  | ------------ | ---- | ----------------- |  | ----------- | ---- | ----------- |  | ---------------- | ---- | ---------------- |  |  | --- | - |  |  | ----- |  |  |  | ----- | 
|                            |  |              |      |                   |  |             |      |             |  | Minority         |      | Minority        
|                            |  | Minority     |      | Minority          |  | Minority    |      | Minority    |  | interests in the |      | interests in the
|                            |  | share in %   |      | part of           |  | part of     |      | part of     |  | balance sheet    |      | balance sheet   
|                            |  | December 31, |      | net income        |  | net income  |      | net income  |  | December 31,     |      | December 31,    
|                            |  | 2003         |      | (loss) 2001       |  | (loss) 2002 |      | (loss) 2003 |  | 2002             |      | 2003            
|                            |  |              |      |                   |  |             |      |             |  |                  |      |                 
|                            |  |              |      |                  
|                            |  |              |      | (NOK in millions)
|Telenor Venture AS(1)       |  |              |     |                   |  |             | (83  | )           |  |                  | (6   | )                |  |  | (30 | ) |  |  | 65    |  |  |  |      | 
|Telenor Venture II ASA      |  |              | 49.9 |                   |  |             | (7   | )           |  |                  | (67  | )                |  |  | (32 | ) |  |  | 143   |  |  |  | 136   | 
|Kyvistar G.S.M. JSC         |  |              | 44.7 |                   |  |             |     |             |  |                  | 51   |                  |  |  | 256 |   |  |  | 787   |  |  |  | 998   | 
|OJSC Comincom/ Combellga(1) |  |              |     |                   |  |             | 6    |             |  |                  | 15   |                  |  |  | 14  |   |  |  | 160   |  |  |  |      | 
|DiGi.Com bhd                |  |              | 39.0 |                   |  |             | 44   |             |  |                  | 47   |                  |  |  | 68  |   |  |  | 1,113 |  |  |  | 1,131 | 
|GrameenPhone Ltd(1)         |  |              | 49.0 |                   |  |             | 126  |             |  |                  | 162  |                  |  |  | 283 |   |  |  | 328   |  |  |  | 448   | 
|EDB Business Partner ASA    |  |              | 48.2 |                   |  |             | (764 | )           |  |                  | (555 | )                |  |  | (26 | ) |  |  | 914   |  |  |  | 888   | 
|Other                       |  |              |      |                   |  |             | (43  | )           |  |                  | (5   | )                |  |  | (43 | ) |  |  | 93    |  |  |  | 45    | 
|                            |  |              |      |                   |  |             |      |             |  |                  |      |                  |  |  |     |   |  |  |       |  |  |  |       | 
|Total                       |  |              |      |                   |  |             | (721 | )           |  |                  | (358 | )                |  |  | 490 |   |  |  | 3,603 |  |  |  | 3,646 | 
|                            |  |              |      |                   |  |             |      |             |  |                  |      |                  |  |  |     |   |  |  |       |  |  |  |       | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In 2003, Telenor increased its ownership interest
    to 51.0% in GramenPhone Ltd. The voting interest remained
    unchanged at 51.0%. In August 2003, Telenor increased its
    ownership interests in the subsidiary Comincom/ Combellga to
    100%. Telenor sold its ownership interests in exchange for
    shares in the listed company Golden Telecom Inc. as of
    December 1, 2003. In December 2003, Telenor sold its
    ownership interests in Telenor Venture AS.

F-9



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##### Table of Contents



SUMMARY OF SIGNIFICANT ACCOUNTING
PRINCIPLES

Telenor Group

General

When Telenor AS was established as a public
company on October 31, 1994, assets and liabilities were
transferred at their carrying values as recorded in the final
records of the Norwegian State Administration, except for
required adjustments to comply with Norwegian generally accepted
accounting principles (Norwegian GAAP).

The Norwegian Government formed Telenor ASA in
July 2000 to act as the holding company for the Telenor Group.
In October 2000, the Norwegian Government contributed all of the
shares of Telenor AS (subsequently renamed Telenor
Communications AS), the former holding company for the Telenor
Group, to Telenor ASA in exchange for all of the issued shares
of Telenor ASA. Telenor ASA was formed with identical share
capital as Telenor AS and, prior to its acquisition of Telenor
AS, had no assets or liabilities and conducted no operations
other than those incidental to its formation.

The consolidated financial statements for Telenor
ASA and its subsidiaries (the Group) are prepared in accordance
with Norwegian GAAP. The Groups accounting principles
differ, in certain respects, from United States generally
accepted accounting principles (US GAAP). The differences
and the related effects on the Groups net income (loss),
shareholders equity, revenues, total assets and long-term
interest-bearing liabilities are set forth in note 31.

Consolidation principles

The Groups consolidated accounts include
Telenor ASA and subsidiaries in which Telenor ASA has effective
control. Subsidiaries are consolidated from the moment effective
control is obtained. Effective control generally exists when
Telenor has more than 50% ownership.

Successive share purchases are treated separately
when the successive purchases are small, fair value has
increased significantly or a long time has passed since the
previous share purchase.

All significant intercompany transactions and
balances have been eliminated.

Investments in joint ventures and entities in
which Telenor has an equity ownership interest normally of 20 to
50% and exercises significant influence are accounted for using
the equity method.

Investments considered to be of a temporary
nature are accounted for at cost.

Increase in minority interest from a
subsidiarys equity transactions and sale of shares in a
subsidiary are recorded at fair value as minority interest. The
difference between the minority interest measured at fair value
and the recorded equity in the subsidiary is amortized or
written down through allocating results to minority.

Goodwill

Goodwill represents the excess of the purchase
price over the fair value of net of tangible and intangible
assets acquired and liabilities incurred in business
combinations. Goodwill is amortized on a straight-line basis
over the estimated useful economic life, based on an individual
assessment.

Revenue recognition

Revenues are primarily comprised of traffic fees,
subscription and connection fees, interconnection fees, fees for
leased lines and leased networks, fees for data network
services, fees for TV distribution and satellite services, IT
service, installation and sale of customer equipment. Revenues
from directory advertising activities of Telenor Media were
included up to October 1, 2001, the effective date for the
sale of this subsidiary.

For PSTN/ISDN, mobile telephony, leased lines, TV
distribution, satellite services and other network based
services, traffic revenues and interconnection revenues are
recognized based on actual traffic while

F-10



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##### Table of Contents



subscription fees, including ADSL, are recognized
as revenue over the subscription period. Revenues related to
prepaid phone cards are deferred and recorded as revenue based
on the actual use.


Revenues from connection fees that are received
from the sale of new subscriptions are recognized at the time of
sale to the extent of direct costs incurred. Direct costs
incurred in connection with mobile connection revenues consist
primarily of the first payment of distributor commission, costs
for credit check, cost of the SIM card and the cost of the
printed new customer information package. For the fixed line
connection revenues, the direct costs consist primarily of
installation work and expenses for customer care. To date,
direct costs associated with mobile and fixed line connection
fees have exceeded such revenues.

Revenues from sale of customer equipment and IT
service and installation are recognized when products are
delivered or when services are rendered to customers. Revenues
from sale of equipment which are delivered together with
services are recognized at the time of delivery of the equipment
when the delivery of the equipment can be separated from the
delivery of the services. If the delivery of equipment cannot be
separated from the sale of services, revenue from equipment is
recognized when revenue from services are recognized. Revenues
from operating services are recognized on the basis of actual
use for volume-based contracts, and on a linear basis over the
contract period for term-based contracts. Revenues from software
licenses are recognized when delivered. Revenues from software
developed specifically for customers are recognized over the
development period in line with the percentage of completion.

Revenues from directory advertising were
recognized when the directories were published.

Revenues are normally reported gross with a
separate recording of expenses to vendors of products or
services. However, when Telenor only acts as an agent or broker
on behalf of suppliers of products or services, revenues are
reported on a net basis.

Pensions

Defined benefit plans are valued at the present
value of accrued future pension benefits at the balance sheet
date. Pension plan assets are valued at their fair value.
Changes in the pension obligations due to changes in pension
plans are recognized over the estimated average remaining
service period (12 years). Accumulated effect of changes in
estimates, changes in assumptions and deviations from actuarial
assumptions (actuarial gains or losses) that is less than 10% of
the higher of pension benefit obligations and pension plan
assets at the beginning of the year is not recorded. When the
accumulated effect is between 10% and 15% the excess amount is
recognized in the profit and loss statement over the estimated
average remaining service period. Accumulated effects above 15%
are recognized in the profit and loss statement over
5 years. The net pension cost for the period is classified
as salaries and personnel costs.

Research and development costs

Research and development costs are expensed as
incurred.

Software costs

Direct development costs associated with
internal-use software are capitalized and amortized. This
includes external direct costs of material and services and
payroll costs for employees devoting time to the software
projects.

Costs incurred during the preliminary project
stage, as well as maintenance and training costs, are expensed
as incurred.

Leases

Finance leases, which provide the Group with
substantially all the rights and obligations of ownership are
capitalized as fixed assets. The capital lease liabilities are
valued at the present value of minimum lease payments.

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##### Table of Contents



Foreign currency transactions

Transactions involving foreign currencies are
translated into Norwegian Krone using the prevailing exchange
rates at the time of the transactions. Financial instruments
denominated in foreign currencies are translated using period
end exchange rates. The resulting gain or loss is charged to
financial items for the period, unless hedge accounting is
applied.

Foreign currency translation and hedge
accounting for net investments

The financial statements of the Groups
foreign operations are maintained in the currency in which the
entity primarily conducts business. When translating financial
statements for foreign entities (subsidiaries, associated
companies and joint ventures) from local currencies to Norwegian
Krone, assets and liabilities are translated using year-end
exchange rates and results are translated using the average
exchange rates for the reporting period. The resulting
translation adjustments, and the gains and losses on financial
instruments designated and proven effective as hedges of net
investments in foreign entities, are reported as a component of
shareholders equity.

For entities located in countries defined as
highly-inflationary and with financial reporting in local
currency, fixed assets and related depreciation are remeasured
to functional currency using the exchange rate at the date of
acquisition. Other balance sheet items are remeasured at the
year-end exchange rate. Other profit and loss items are
translated using the average exchange rates for the reporting
period. The gain or loss resulting from these remeasurements is
charged to income for the period.

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

For interest-bearing liabilities Telenor does not
recognize changes in fair value due to changes in interest rates.

Telenor uses derivatives to manage its exposure
to fluctuations in exchange rates and interest rates.
Instruments used are interest rate swaps, interest rate options,
forward rate agreements, cross currency swaps and foreign
currency forward contracts.

To qualify for hedge accounting, the instruments
must meet pre-defined correlation criteria. This involves
prospective documentation that justifies expectations that the
hedge will be effective in the future, as well as assessment of
sufficient hedge effectiveness during the lifetime of the hedge.
It is a requirement that the hedges generate financial statement
effects which substantially offset the position being hedged.

For interest rate derivatives that qualify for
hedge accounting, Telenor does not recognize unrealized changes
in fair value due to changes in interest rates. Amounts to be
paid or received under interest rate swaps and cross currency
interest rate swaps that are designated and effective as a hedge
of interest-bearing liabilities are accrued as interest income
or expense, respectively. Hedge of interest rate risk on
interest-bearing liabilities is conducted on a portfolio basis.

Exchange rate effects on currency swaps
designated as hedges of interest-bearing assets or liabilities
are recorded as foreign exchange gain or loss and included in
the carrying value of the hedged item. Foreign currency forward
contracts are marked to market and changes in fair value are
recorded as foreign exchange gain or loss.

Gains and losses on foreign exchange contracts
that are designated as hedges of firm commitments are deferred
and recognized in income at the same time as the related
transactions, provided that the hedged transaction is eligible
for hedge accounting.

Gains and losses on termination of hedge
contracts are recognized in income when terminated in
conjunction with the termination of the hedged position, or to
the extent that such position remains outstanding, deferred and
amortized to income over the original hedging period.

Derivatives that do not meet the hedging criteria
are recorded at their market value with the resulting gain or
loss reflected under financial items.

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Taxes

Deferred tax assets and liabilities are
calculated with full allocation for all temporary differences
between the carrying amount of assets and liabilities in the
financial statements and for tax purposes, including tax losses
carried forward. The enacted tax rates at the balance sheet date
and undiscounted amounts are used. Deferred tax assets are
recorded in the balance sheet to the extent it is more likely
than not that the tax assets will be utilized. Deferred tax
assets which will be realized upon sale or liquidation of
subsidiaries or associated companies are not recorded until
realization or liquidation is decided. Deferred taxes are
calculated on retained earnings in foreign subsidiaries based on
the estimated taxation on transfer of funds to the parent
company, based on the enacted tax rates and regulation as of the
date of the balance sheet.

Cash and cash equivalents

Cash and cash equivalents include cash, bank
deposits, fixed rate bonds and commercial paper with original
maturity of three months or less.

Investments

For shares classified as current assets and
managed as a whole, adjustments in the book value are only made
if the aggregated holdings have a lower estimated fair value
than the original cost. Other current shares are valued at the
lower of cost and estimated fair value.

Long-term shares and other investments, excluding
shares in associated companies and joint ventures are valued at
historical cost or, if lower, estimated fair value if the fall
in value is not temporary.

For investments in associated companies and joint
ventures, a loss in value which is other than a temporary
decline is recognized.

Impairment is assessed when changes in
circumstances indicate that the carrying amount of the
investments may not be recoverable. This may be indicated by a
fall in market values or revised earnings forecasts for the
individual companies. When evaluating if a decline in value has
occurred and if the decline is other than temporary, several
factors are considered, including discounted cash flows, quoted
share prices (if available), market values of similar companies
and third party evaluations where appropriate.

Inventories

Inventories are valued at the lower of cost or
market price. Cost is determined using the FIFO method.

Advertising costs, marketing and sales
commissions

Advertising costs, marketing and sales
commissions are expensed as incurred.

Tangible assets, intangible assets,
depreciation and amortization

Tangible and intangible assets are carried at
historical cost less accumulated depreciation and amortization.
Interest has been capitalized on assets under construction.

Impairment of tangible and intangible assets is
assessed when changes in circumstances indicate that their
carrying amount may not be recoverable. The assessment is made
based on estimated recoverable amount, which is the highest of
estimated discounted future cash flows and sales price less cost
to sell. When such amounts are less than the carrying amount of
the asset, a write-down to estimated recoverable amount is
recorded.

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Tangible assets are, for the most part,
depreciated on a straight-line basis over their expected
economic useful lives using the following rates:

|                                                                             |  |  |        | 
|---------------------------------------------------------------------------- |  |  | ------ | 
|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%   | 

Intangible assets are amortized over the expected
economic useful life, mainly on a straight-line basis.

Assets retirement obligation

Telenor has contractual obligations to remove
assets at the termination of lease contracts or when Telenor
decide to leave a location within fixed telephone, mobile
telephone or TV-distribution. The amounts of the obligations to
be paid in the future are highly uncertain and depend on a
series of assumptions such as the following: technological
development, economical and regulatory issues, whether lessor
will require the installation removed and if a third party will
take over the obligations on acquisition of assets. In most
situations, the timing of the asset retirement, if any, will be
a long way into the future and result in significant uncertainty
whether the obligation will actually be paid. Assets retirement
obligations are therefore limited to known and planned removals
within a reasonable timeframe.

Options and employee stock ownership
program

For options that have an intrinsic value when
they are granted a compensation expense is recognised over the
estimated option period. Options with no intrinsic value as of
grant date are not expensed. Social security tax on options is
recorded over the estimated option period. Discounts in the
employee stock ownership program has been recorded as salaries
and personnel costs when the discount is given or when bonus
shares are issued. Payments from employees for shares which are
issued by Telenor ASA under the option plan or the employee
stock ownership program are recorded as an increase in
shareholders equity. Payments from employees for shares which
are issued under the subsidiaries option plans are recorded as
an increase in minority interests.

Use of estimates

The preparation of financial statements in
accordance with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, as well
as the disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of
revenue and expenses during the reporting period.

Actual results could differ from those estimates.

Changes in classification

In 2003, a reclassification of software in
administrative support systems from tangible assets to
intangible assets was made. NOK 1,737 million in book
value as of December 31, 2002, NOK 648 million in
amortization and NOK 101 million in write-downs for
2002 and NOK 403 million in amortization for 2001 was
reclassified. These changes affected mainly our Mobile and Fixed
business areas.

In 2001, some adjustments related to gross/net
reporting of revenues and expenses were made. The changes had no
material effect on the financial statements. The adjustments
were mainly related to accounting for dealer commissions for
prepaid cards and for content services. Dealer commissions are
now recorded as an expense instead of a reduction of revenue.
Commissions are expensed as incurred. Revenues and related other
operating expenses were increased with NOK 204 million
for 2001. In addition, accrued expenses of
NOK 42 million were expensed in 2001 related to this
change. This change affected our Mobile business area.

F-14



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##### Table of Contents



Payment for content sold on behalf of external
content providers has been recorded as a reduction in revenues
from 2001. Previously, this was recorded gross as revenues and
expenses, respectively. Revenues and related costs of materials
were decreased with NOK 332 million for 2001. These
changes affected our Mobile and Fixed business areas.

Implementation of International Financial
Reporting Standards (IFRS)

The European Union (EU) have decided that listed
companies within the EU will have to use International Financial
Reporting Standards (IFRS) in the consolidated financial
statements as of January 1, 2005. Due to the agreement with
the European Economic Association, this also applies to
Norwegian listed companies.

Telenor expects that the first reporting
according to IFRS will be the first quarter of 2005 with
comparable figures for 2004. Telenor has made a preliminary
evaluation of the potential differences between the current
accounting principles for Telenor and the accounting principles
in accordance with IFRS. Because not all accounting principles
according to IFRS and the rules for first time implementation of
IFRS are finalized yet, other material differences may occur
beside those mentioned below.

The implementation of IFRS may affect:



| |   |                                                                                                                             
| | - | ----------------------------------------------------------------------------------------------------------------------------
| |  | Accounting for acquired goodwill.                                                                                           
|
| |  | Accounting for tangible and intangible assets
    including depreciation and amortization and asset removal
    obligations.
|
| |  | Accounting for financial investments, liabilities
    and derivatives including hedge accounting.                           
|
| |  | Accounting for pensions.                                                                                                    
|
| |  | Accounting for share based payments                                                                                         
|
| |  | Accounting for dividends  dividends
    are not recorded as deduction to equity before it is declared.                     
|
| |  | Accounting for translation adjustments.                                                                                     
|
| |  | Accounting for taxes.                                                                                                       

In addition, presentation and note disclosures
may be affected.

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##### Table of Contents



NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS

1.     ACQUISITIONS
AND DISPOSALS

During the three years ended December 31,
2003, Telenor entered into the following significant
acquisitions and disposals. Each acquisition was recorded using
the purchase method of accounting. The summary does not include
capital increases or other types of financing by Telenor.

Significant acquisitions in 2003

|                            |  |         |            |             |  |          |      |                   |  |            |                     |              |  |  |       |  |  |  |     |        |  |  |             |    
|--------------------------- |  | ------- | ---------- | ----------- |  | -------- | ---- | ----------------- |  | ---------- | ------------------- | ------------ |  |  | ----- |  |  |  | --- | ------ |  |  | ----------- | ---
|                            |  |         |            | Change      |  |          |      | Purchase          |  | Net excess |                     | Amortization
|Company                     |  | Country |            | in interest |  | Business |      | price             |  | value      |                     | period      
|                            |  |         |            |             |  |          |      |                   |  |            |                     |             
|                            |  |         |            | %           |  |          |      |                   |  |           
|                            |  |         |            |             |  |          |      | (NOK in millions) |  |           
|Golden Telecom Inc(4)       |  |         | Russia     |             |  |          | 20.4 |                   |  |            | Telecommunication   |              |  |  | 1,378 |  |  |  | 850 | (1)(2) |  |  | 5-20  years | (2)
|APR Media Holding AS(5)     |  |         | Norway     |             |  |          | 44.8 |                   |  |            | TV-distribution     |              |  |  | 402   |  |  |  | 74  | (1)(2) |  |  | 5-15  years | (2)
|GrameenPhone                |  |         | Bangladesh |             |  |          | 4.6  |                   |  |            | Mobil Communication |              |  |  | 86    |  |  |  | 39  | (3)    |  |  | 10 years    |    
|OJSC Comincom/ Combellga(4) |  |         | Russia     |             |  |          | 25.0 |                   |  |            | Telecommunication   |              |  |  | 217   |  |  |  | 30  | (3)    |  |  | 18 years    |    






|    |                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Net excess value is included in the book value of
    associated companies and joint ventures.                                                                           
|   
|(2) | Preliminary evaluations and allocations.                                                                                                                                 
|   
|(3) | Partially recorded directly to equity.                                                                                                                                   
|   
|(4) | In 2003 Comincom/ Combellga became a wholly-owned
    subsidiary and later in 2003 Telenor sold its ownership
    interests in exchange for shares in Golden Telecom Inc.
|   
|(5) | The ownership interest in APR Media Holding AS
    was acquired by exchange of Telenors shareholding in
    A-Pressen ASA.                                              

Acquisition of Sonofon Holding A/S in
2004

On February 12, 2004, Telenor acquired an
additional 46.5% of the outstanding common shares in Sonofon
Holding A/S. After completion of the acquisition, Telenor owns
100% of the outstanding common shares and the result of
operations will be included in the consolidated financial
statements from that date. Sonofon Holding A/S is one of the
leading mobile operators in Denmark and offers high quality GSM
voice and data communication services on 900 and 1800 MHz
frequency in addition to fixed line telephony and Internet
access primarily to the business segment. This acquisition is
part of Telenors strategy to gain control of operations to
take advantage of synergies stemming from coordinated activities
in a number of markets. The aggregate purchase price was
approximately NOK 3.66 billion and was paid in cash. The
value was set based on a fair value after negotiations between
the parties. The allocation of the purchase price has been based
on independent financial experts estimates of the fair
values of assets and liabilities acquired.

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##### Table of Contents



The following table summarizes the estimated fair
values of the assets acquired and liabilities assumed at the
dates of consolidation(1):

|                                                                     |  |                   |        |  
|-------------------------------------------------------------------- |  | ----------------- | ------ | -
|                                                                     |  | Sonofon          
|                                                                     |  | February 12, 2004
|                                                                     |  |                  
|                                                                     |  | (NOK in millions)
|Deferred tax assets                                                  |  |                   |       |  
|Goodwill                                                             |  |                   | 5,660  |  
|Other intangible assets                                              |  |                   | 4,358  |  
|Tangible assets and financial fixed assets                           |  |                   | 2,447  |  
|Current assets                                                       |  |                   | 1,187  |  
|                                                                     |  |                   |        |  
|Total assets                                                         |  |                   | 13,652 |  
|                                                                     |  |                   |        |  
|Deferred taxes                                                       |  |                   | 1,090  |  
|Long-term liabilities                                                |  |                   | 3,072  |  
|Short-term liabilities                                               |  |                   | 1,831  |  
|                                                                     |  |                   |        |  
|Total liabilities                                                    |  |                   | 5,993  |  
|                                                                     |  |                   |        |  
|Minority interest                                                    |  |                   |       |  
|Net assets at the date of
    consolidation                          |  |                   | 7,660  |  
|Book value as an associated company at the date
    of consolidation |  |                   | (3,999 | )
|Purchase price last acquisition                                      |  |                   | 3,661  |  






|    |                                                                                                                                                                                    
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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.

Total other intangible assets of Sonofon Holding
A/S were NOK 4,358 million at the date of consolidation, of
which NOK 1,398 million relates to identified intangible
assets in Telenors latest acquisition. Of this amount NOK
706 million was assigned to customer relationship
(4 years average useful life) and NOK 373 million was
assigned to trademarks (15 years average useful life) NOK
22 million to licenses (8 years average useful life)
and NOK 297 million in administrative software systems
(5 years average useful life).

Goodwill of NOK 5,660 million relates to the
Mobile Business Area. Of this NOK 2,929 million relates to
Telenors latest acquisition and is estimated to have a
useful life of 20 years. Goodwill on prior acquisitions is
amortized according to original plan.

Significant disposals 2003

Telenor sold the shares in Comincom/ Combellga in
exchange for shares in the listed Russian fixed-line operator
Golden Telecom Inc. A loss of NOK 26 million before taxes
was recorded.

Telenor sold 9% of its shares in Cosmote and
recorded a gain before taxes of NOK 1,515 million. The cash
consideration was NOK 2.1 billion.

Significant Acquisitions in 2002:

|                                |  |           |  |             |       |          |  |                                 |  |            |       |              |  |  |       |     |  |  |            | 
|------------------------------- |  | --------- |  | ----------- | ----- | -------- |  | ------------------------------- |  | ---------- | ----- | ------------ |  |  | ----- | --- |  |  | ---------- | 
|                                |  |           |  | Changing    |       |          |  | Purchase                        |  | Net excess |       | Amortization
|Company                         |  | Country   |  | in interest |       | Business |  | price                           |  | value      |       | period      
|                                |  |           |  |             |       |          |  |                                 |  |            |       |             
|                                |  |           |  | %           |       |          |  |                                 |  |           
|                                |  |           |  |             |       |          |  | (NOK in millions)               |  |           
|Pannon GSM RT.                  |  | Hungary   |  |             | 74.2  |          |  | Mobile Communication            |  |            | 7,906 |              |  |  | 7,741 |     |  |  | 5-20 years | 
|Canal Digital                   |  | Norway(5) |  |             | 50.0  |          |  | TV-distribution                 |  |            | 2,166 |              |  |  | 2,244 |     |  |  | 5-15 years | 
|Kyivstar G.S.M. JSC(6)          |  | Ukraine   |  |             | 8.8   |          |  | Mobile Communication            |  |            | 294   |              |  |  | 1,005 | (7) |  |  | 5-20 years | 
|COMSAT Mobile Communications(2) |  | USA       |  |             | 100.0 |          |  | Satellite Mobile Communications |  |            | 743   |              |  |  | 22    |     |  |  | 10 years   | 
|Utfors AB(1)(4)                 |  | Sweden    |  |             | 90.0  |          |  | Telecommunication               |  |            | 153   |              |  |  | (351  | )   |  |  | 18 years   | 
|Glocalnet AB(4)                 |  | Sweden    |  |             | 37.2  |          |  | Telecommunication               |  |            | 102   |              |  |  | 50    | (3) |  |  | 10 years   | 
|VimpelCom-Region                |  | Russia    |  |             | 17.5  |          |  | Mobile Communication            |  |            | 432   |              |  |  |      |     |  |  |           | 




F-17



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##### Table of Contents





|    |                                                                                                                                              
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------
|(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) | Preliminary evaluations and allocations.                                                                                                     
|   
|(5) | The parent company is Norwegian. Canal Digital
    Group conducts business in the Nordic region via subsidiaries.                            
|   
|(6) | Telenor has an option to acquire a further 2.3%
    of the share capital.                                                                    
|   
|(7) | Includes minority share of NOK 533 million.                                                                                                  

Acquisition of Pannon GSM, Kyivstar and Canal
Digital in 2002

On February 4, 2002, Telenor acquired an
additional 74.2% of the outstanding common shares in Pannon GSM.
After completion of the acquisition, Telenor owns 100% of the
outstanding common shares and the result of Pannon GSM
operations have been included in the consolidated financial
statements from that date. Pannon GSM is one of the leading
mobile operators in Hungary and offers high quality GSM voice
and data communication services on 900 and 1800 MHz frequency.
This acquisition is part of Telenors strategy to gain
control of operations to take advantage of synergies stemming
from coordinated activities in a number of markets. The
aggregate purchase price was approximately
NOK 8 billion and was paid in cash. The value was set
based on a fair value after negotiations between the parties.
The allocation of the purchase price has been based on
independent financial experts estimates of the fair values of
assets and liabilities acquired.

On June 30, 2002, Telenor acquired an
additional 50% of the outstanding common shares in Canal
Digital. After completion of the acquisition, Telenor owns 100%
of the outstanding common shares and the result of Canal Digital
operations have been included in the consolidated financial
statements from that date. As a result of the transfer of risk
for the companys operating results at the time of entering
into the agreement in June 2001, 50% of the Canal Digitals
loss, amortization of net excess values and calculated financing
expenses in the period between agreement and consolidation has
been recorded directly against the shareholders equity in
2002. Canal Digital distributes subscription based satellite
broadcasting to households based on smart cards and to cable-TV
operators. Furthermore, the company delivers solutions for
distribution and management. The aggregate purchase price was
approximately NOK 2.2 billion and was paid in cash.
This acquisition is part of Telenors strategy to gain
control of operations to take advantage of synergies stemming
from coordinated activities in a number of markets. The value
was set based on a fair value after negotiations between the
parties. The allocation of the purchase price has been based on
independent financial experts estimates of the fair values of
assets and liabilities acquired.

In 2002, Telenor acquired an additional 8.8% of
the outstanding common shares in Kyivstar. After completion of
the acquisition, Telenor owns 54.2% of the outstanding common
shares and the result of Kyivstar operations have been included
in the consolidated financial statements from September 1,
2002. Telenor has an option to acquire a further 2.3% of the
share capital. Kyivstar is a leading mobile operator in the
Ukraine and offers high quality GSM voice and data communication
services on 900 and 1800 MHz frequency. This acquisition is
part of Telenors strategy to gain control of operations to
take advantage of synergies stemming from coordinated activities
in a number of markets. The aggregate purchase price was
approximately NOK 0.3 billion and was paid in cash.
The value was set based on a fair value after negotiations
between the parties. The allocation of the purchase price has
been based on independent financial experts estimates of the
fair values of assets and liabilities acquired.

F-18



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##### Table of Contents



The following table summarizes the estimated fair
values of the assets acquired and liabilities assumed at the
dates of consolidation(1):

|                                                                     |  |                   |        |               |  |                   |       |   |  |  |       |  
|-------------------------------------------------------------------- |  | ----------------- | ------ | ------------- |  | ----------------- | ----- | - |  |  | ----- | -
|                                                                     |  | Pannon GSM        |        | Canal Digital |  | Kyivstar         
|                                                                     |  | February 4, 2002  |        | June 30, 2002 |  | September 1, 2002
|                                                                     |  |                   |        |               |  |                  
|                                                                     |  |                  
|                                                                     |  | (NOK in 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 interest                                                    |  |                   |       |               |  |                   |      |   |  |  | 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.

Total other intangible assets of Pannon GSM were
NOK 2,626 million at the date of consolidation, of
which NOK 2,128 million relates to identified
intangible assets in Telenors latest acquisition. Of this
amount NOK 1,727 million was assigned to customer
relationship (5 years average useful life) and NOK
275 million was assigned to trademarks (10 years
average useful life) and NOK 126 million to licenses
(6-12 years average useful life).

Goodwill of NOK 5,613 million relates
to the Mobile Business Area with a useful life of 20 years.
Goodwill on prior acquisitions is amortized according to
original plan.

Total other intangible assets of Canal Digital
were NOK 298 million at the date of consolidation, of
which NOK 227 million relates to identified intangible
assets in Telenors latest acquisition. Of this amount
NOK 111 million was assigned to customer relationship
(5 years average useful life) and NOK 116 million
was assigned to trademarks (15 years average useful life).

Goodwill of NOK 1,988 million relates
to the Plus Business Area with a useful life of 15 years.
Goodwill on prior acquisitions is amortized according to
original plan.

Total other intangible assets of Kyivstar were
NOK 956 million at the date of consolidation, of which
NOK 635 million relates to identified intangible
assets in Telenors latest acquisition. Of this amount
NOK 522 million was assigned to customer relationship
(5 years average useful life) and NOK 48 million
was assigned to licenses (9 years average useful life) and
NOK 65 million was assigned to trademarks
(10 years average useful life).

Goodwill of NOK 371 million relates to
the Mobile Business Area with a useful life of 20 years.
Goodwill on prior acquisitions is amortized according to
original plan.

F-19



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##### Table of Contents



Pro forma information (unaudited)

The following unaudited pro forma financial
information presents results as if the acquisition of Pannon
GSM, Kyivstar, Canal Digital, COMSAT and Utfors had occurred at
the beginning of the respective periods:

|                                           |  |                   |        |      |  |  |        |  
|------------------------------------------ |  | ----------------- | ------ | ---- |  |  | ------ | -
|                                           |  | 2001              |        | 2002
|                                           |  |                   |        |     
|                                           |  |                  
|                                           |  | (NOK in millions,
|                                           |  | except per share 
|                                           |  | data)            
|Pro forma revenues                         |  |                   | 53,999 |      |  |  | 52,023 |  
|Profit before taxes and minority interests |  |                   | 8,322  |      |  |  | (5,693 | )
|Pro forma net income                       |  |                   | 5,487  |      |  |  | (4,854 | )
|Pro forma net income per share in NOK      |  |                   | 3.10   |      |  |  | (2.74  | )

The pro forma results are adjusted for
Telenors interest expenses and amortization of excess
values and the results in the period prior to the acquisitions.
These pro forma figures have been prepared for comparative
purposes only and are not necessarily indicative of the results
of operations which actually would have resulted had the
acquisitions been in effect in the respective periods or of
future results.

Significant Disposals in 2002

There were no significant disposals in 2002.

Significant Acquisitions in 2001

|                            |  |         |          |           |  |          |       |                   |  |                                 |  |              |       |  |  |  |       |     |  |  |            | 
|--------------------------- |  | ------- | -------- | --------- |  | -------- | ----- | ----------------- |  | ------------------------------- |  | ------------ | ----- |  |  |  | ----- | --- |  |  | ---------- | 
|                            |  |         |          | Change in |  |          |       | Purchase          |  | Net excess                      |  | Amortization
|Company                     |  | Country |          | interest  |  | Business |       | price             |  | value                           |  | period      
|                            |  |         |          |           |  |          |       |                   |  |                                 |  |             
|                            |  |         |          |           |  |          |       |                  
|                            |  |         |          | %         |  |          |       | (NOK in millions)
|DiGi.Com bhd                |  |         | Malaysia |           |  |          | 28.1  |                   |  | Mobile Communication            |  |              | 3,223 |  |  |  | 3,003 |     |  |  | 3-20 years | 
|VimpelCom                   |  |         | Russia   |           |  |          |       | (1)               |  | Mobile Communication            |  |              | 255   |  |  |  |      |     |  |  |           | 
|Otrum Electronics ASA       |  |         | Norway   |           |  |          | 33.1  |                   |  | TV-distribution                 |  |              | 266   |  |  |  | 91    | (2) |  |  | 10 years   | 
|Sweden On-Line AB           |  |         | Sweden   |           |  |          | 100.0 |                   |  | TV-distribution                 |  |              | 165   |  |  |  | 130   |     |  |  | 10 years   | 
|Telenordia AB               |  |         | Sweden   |           |  |          | 50.0  |                   |  | Telecommunication               |  |              | 130   |  |  |  | 115   |     |  |  | 0.5-1 year | 
|SAIT Communications S.A     |  |         | Belgium  |           |  |          | 100.0 |                   |  | Satellite Mobile Communications |  |              | 189   |  |  |  | 180   |     |  |  | 10 years   | 
|DnB IT-operations           |  |         | Norway   |           |  |          | 100.0 |                   |  | Operation services              |  |              | 597   |  |  |  | 390   |     |  |  | 7 years    | 
|Unigrid AB                  |  |         | Sweden   |           |  |          | 100.0 |                   |  | Operation services              |  |              | 122   |  |  |  | 97    |     |  |  | 10 years   | 
|Accept Data AS              |  |         | Norway   |           |  |          | 100.0 |                   |  | Information technology          |  |              | 65    |  |  |  | 56    |     |  |  | 10 years   | 
|Wireless Matrix Corporation |  |         | Canada   |           |  |          | 30.8  |                   |  | Mobile Communication            |  |              | 317   |  |  |  | 225   | (2) |  |  | 3 years    | 






|    |                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Telenor reduced its ownership share through a
    share issue in VimpelCom, and acquired shares to maintain the
    voting interest of 25%.
|   
|(2) | Net excess value is included in the book value of
    associated companies and joint ventures.                                             

On September 1, 2001, Telenor acquired an
additional 28.1% of the outstanding common shares in DiGi.Com.
After completion of the acquisition Telenor owns 61% of the
outstanding common shares and the results of DiGi.Com operations
have been included in the consolidated financial statements
since that date. Under current Malaysian law Telenor is required
to reduce its ownership interest in DiGi.Com to below 50% by
2006. DiGi.Com is a leading telecommunications service provider
in Malaysia with a full range of telecommunications-related
services. DiGi.Com is Malaysias market leader in prepaid
services. This acquisition is part of Telenors strategy to
gain control of operations to take advantage of synergies
stemming from coordinated activities in a number of markets. The
aggregate purchase price was NOK 3.2 billion and was
paid in cash. The value was set based on the stock price through
a partial tender offer.

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##### Table of Contents



The following table summarizes the estimated fair
values of the assets acquired and liabilities assumed at the
dates of consolidation(1):

|                                            |  |                   |       | 
|------------------------------------------- |  | ----------------- | ----- | 
|                                            |  | DiGi.Com         
|                                            |  | September 1, 2001
|                                            |  |                  
|                                            |  | (NOK in millions)
|Goodwill                                    |  |                   | 3,835 | 
|Other intangible assets                     |  |                   | 773   | 
|Tangible assets and financial assets        |  |                   | 4,271 | 
|Current assets                              |  |                   | 794   | 
|                                            |  |                   |       | 
|Total assets                                |  |                   | 9,673 | 
|                                            |  |                   |       | 
|Long-term liabilities                       |  |                   | 1,727 | 
|Short-term liabilities                      |  |                   | 968   | 
|                                            |  |                   |       | 
|Total liabilities                           |  |                   | 2,695 | 
|                                            |  |                   |       | 
|Minority interests                          |  |                   | 1,316 | 
|                                            |  |                   |       | 
|Net assets at the date of
    consolidation |  |                   | 5,662 | 
|                                            |  |                   |       | 






|    |                                                                                                                                                                                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | These figures include consideration for the last
    acquisition and the carrying value for the prior investment,
    when the company was accounted for as an associated company.

Total intangible assets of DiGi.Com was
NOK 773 million at the date of consolidation, of which
NOK 668 million relates to identified intangible
assets in Telenors latest acquisition. Of this amount
NOK 302 million was assigned to customer relationship
(3-5 years average useful life), NOK 199 million
was assigned to licenses (15 years average useful life) and
NOK 167 million was assigned to trademarks
(10-20 years average useful life).

Goodwill of NOK 3,835 million relates
to the Mobile Business Area with a useful life of 20 years.

Pro forma information (unaudited)

The following unaudited pro forma financial
information presents results as if the acquisition of DiGi.Com
had occurred at the beginning of 2001:

|                                           |  |                   |        | 
|------------------------------------------ |  | ----------------- | ------ | 
|                                           |  | 2001             
|                                           |  |                  
|                                           |  | (NOK in millions,
|                                           |  | except per share 
|                                           |  | data)            
|Pro forma revenues                         |  |                   | 47,678 | 
|Profit before taxes and minority interests |  |                   | 10,122 | 
|Pro forma net income                       |  |                   | 6,922  | 
|Pro forma net income per share in NOK      |  |                   | 3.905  | 

The pro forma results are adjusted for
Telenors interest expenses and amortization of excess
values and the results in DiGi.Com in the period prior to the
acquisition. These pro forma figures have been prepared for
comparative purposes only and are not necessarily indicative of
the results of operations which actually would have resulted had
the purchase of DiGi.Com been in effect at the respective
periods or of future results.

Significant Disposals in 2001

In January 2001, Telenor sold Norcom Networks
Communications Inc. in exchange for shares in the listed company
Wireless Matrix Corporation. A gain of NOK 259 million
before taxes was recorded.

In January 2001, Telenor sold its 10% ownership
interest in VIAG Interkom and recorded a gain before taxes of
NOK 10.7 billion. The cash consideration was NOK
20.7 billion.

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##### Table of Contents



In April 2001, Telenor sold its 49.5% ownership
interest in Esat Digifone and recorded a gain before taxes of
NOK 10.7 billion. The cash consideration was
NOK 11.4 billion.

Telenor sold the business area Telenor Media with
effect from October 1, 2001. A gain of
NOK 5.0 billion before taxes was recorded. The cash
consideration was NOK 5.8 billion. The disposal was in
line with the strategy to dispose of non-core business.

Set forth below is the split between the
continued and the discontinued operations of Telenor Media:

|                                                                                    |  |                  |       |  
|----------------------------------------------------------------------------------- |  | ---------------- | ----- | -
|                                                                                    |  | 2001            
|                                                                                    |  |                 
|                                                                                    |  | (NOK in millions
|                                                                                    |  | except per      
|                                                                                    |  | share data)     
|Net income for Telenor Media                                                        |  |                  | 187   |  
|Gain on sale of Telenor Media                                                       |  |                  | 5,000 |  
|Tax on gain on sale of Telenor Media                                                |  |                  | (72   | )
|                                                                                    |  |                  |       |  
|Effect on net income of discontinued
    operations                                 |  |                  | 5,115 |  
|Net income for Telenor Group                                                        |  |                  | 7,079 |  
|                                                                                    |  |                  |       |  
|Net income from continued operations
    (excluding Telenor Media)                  |  |                  | 1,964 |  
|Net income per share in NOK from discontinued
    operations (Telenor Media)        |  |                  | 2.89  |  
|Net income per share in NOK from continued
    operations (excluding Telenor Media) |  |                  | 1.11  |  

2.     REVENUES

|                                                |  |                   |        |      |  |      |        |  |  |  |        | 
|----------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                                |  | 2001              |        | 2002 |  | 2003
|                                                |  |                   |        |      |  |     
|                                                |  |                  
|                                                |  | (NOK in millions)
|Analog (PSTN)/digital (ISDN and ADSL)           |  |                   | 13,668 |      |  |      | 14,189 |  |  |  | 15,031 | 
|Mobile telephony                                |  |                   | 9,531  |      |  |      | 17,199 |  |  |  | 20,823 | 
|Leased lines                                    |  |                   | 1,065  |      |  |      | 1,008  |  |  |  | 994    | 
|Satellite and TV-distribution                   |  |                   | 3,879  |      |  |      | 5,903  |  |  |  | 6,758  | 
|Other network based activities                  |  |                   | 2,633  |      |  |      | 2,784  |  |  |  | 3,324  | 
|Customer equipment                              |  |                   | 2,165  |      |  |      | 1,528  |  |  |  | 1,146  | 
|IT service and installations                    |  |                   | 5,009  |      |  |      | 4,626  |  |  |  | 3,527  | 
|Advertising, etc.                               |  |                   | 1,266  |      |  |      |       |  |  |  |       | 
|Other                                           |  |                   | 1,388  |      |  |      | 1,431  |  |  |  | 1,286  | 
|                                                |  |                   |        |      |  |      |        |  |  |  |        | 
|Revenues                                        |  |                   | 40,604 |      |  |      | 48,668 |  |  |  | 52,889 | 
|Gain on disposal of fixed assets and operations |  |                   | 5,436  |      |  |      | 158    |  |  |  | 232    | 
|                                                |  |                   |        |      |  |      |        |  |  |  |        | 
|Total revenues                                  |  |                   | 46,040 |      |  |      | 48,826 |  |  |  | 53,121 | 
|                                                |  |                   |        |      |  |      |        |  |  |  |        | 

Analog (PSTN)/digital (ISDN and
ADSL)includes revenues from traffic,
subscription and connection for analog (PSTN) and digital (ISDN
and ADSL). Further, it includes revenues from incoming traffic
from other telephone operators.

Mobile telephonyincludes revenues from traffic, subscription and connection for
mobile telephones, incoming traffic from other mobile operators,
text messages and content.

Leased linesincludes revenues from subscription and connection for digital
and analog circuits.

Satelliteincludes
revenues from satellite broadcasting, distribution of TV
channels to the Nordic market, satellite-based network, and
revenues from maritime satellite communication.
TV-distribution includes revenues from subscription,
connection and distribution of TV channels through cable and
satellite, and sale of program cards.

Other network-based
activitiesinclude revenues from
leased networks, data network services, Internet subscriptions,
etc.

F-22



---



##### Table of Contents



Customer equipmentincludes sale of customer equipment (telephone sets, mobile
phones, computers, PABXs, etc.).

IT service and
installationsincludes revenues from
installations, sales and operation of IT-systems, together with
consultancy services and sale of software.

Advertising, etc.includes sale of advertising related
to directory activities and sales of directories, etc, mainly
through our subsidiary Telenor Media, which we sold as of
October 1, 2001.

Otherincludes
revenues from contracting, rent etc.

3.     BUSINESS
AREAS

As of January 1, 2003 the business area
structure was changed. Fixed consists of the former
business area Networks and parts of the operations in the former
business area Business Solutions, and IT-operations from
Corporate functions and Group activities and the Internet part
of the former business area Plus. The broadcast part of the
former business area Plus is reported as Broadcast.
Nextra International and the software services part of the
former business area Business Solutions is included in Other
businesses units. Mobile is unchanged. The comparable
figures for previous years are restated to reflect the new
business area structure.

Mobilecomprises the
Groups mobile communication business, including voice,
data, Internet, content services and electronic commerce in
Norway and in selected countries outside Norway. Fixed
comprises the Groups fixed network in Norway and delivers
services including analog PSTN, digital ISDN, ADSL, Internet and
leased lines, as well as communication solutions and managed
services to the business market in Norway, and has activity in
selected countries outside of Norway. Broadcast comprises
the Groups TV-based activities within the Nordic region
EDB Business Partner is an Oslo Stock Exchange listed IT
group, which delivers solutions and operating services. Other
Business units comprised business units as Satellite
Services, Satellite Networks, Teleservice, Venture, Software
services as well as Nextra International whose activities were
phased out during 2003. Corporate functions and Group
activities comprise activities such as Real Estate, Research
and Development, strategic Group projects, Group Treasury,
International services, the internal insurance company and
central staff and support functions. Telenor Media was sold with
effect from October 1, 2001.

The business area information reported below for
2003, 2002 and 2001 was consistent with reporting to the chief
operating decision-makers in these periods, considered changes
in the structure of the business areas in 2003, and was used by
the chief operating decision-makers for assessing performance
and allocating resources.

Deliveries of network-based regulated services
within the Group are based on cost oriented prices based on
negotiations between the units. For contract-based services,
product development etc., prices are negotiated between the
parties based on market prices. All other deliveries between the
business areas are to be based on market prices.

Gains and losses from Internal transfer of
business, Group contribution and dividends are not included in
the profit and loss statements for the business areas.
Eliminations of profit and loss items are primarily sales and
purchases between the business areas. Balance sheet eliminations
are primarily Group internal receivables and payables.

F-23



---



##### Table of Contents



Profit and loss 2003

|                                         |  |                   |        |             |  |           |        |               |  |           |        |            |  |           |        |               |  |  |       |   |  |  |       |   |  |  |        |   |  |  |       |  
|---------------------------------------- |  | ----------------- | ------ | ----------- |  | --------- | ------ | ------------- |  | --------- | ------ | ---------- |  | --------- | ------ | ------------- |  |  | ----- | - |  |  | ----- | - |  |  | ------ | - |  |  | ----- | -
|                                         |  |                   |        |             |  |           |        |               |  |           |        |            |  |           |        | Profit (loss)
|                                         |  |                   |        |             |  |           |        | Depreciation, |  |           |        | Associated |  |           |        | before       
|                                         |  |                   |        |             |  |           |        | amortization  |  | Operating |        | Companies  |  | Net       |        | taxes and    
|                                         |  |                   |        | External    |  |           |        | and           |  | profit    |        | and joint  |  | financial |        | minority     
|                                         |  | Revenues(1)       |        | revenues(1) |  | EBITDA(2) |        | write-downs   |  | (loss)    |        | ventures   |  | items     |        | interests    
|                                         |  |                   |        |             |  |           |        |               |  |           |        |            |  |           |        |              
|                                         |  |                  
|                                         |  | (NOK in millions)
|Mobile                                   |  |                   | 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 |  
|Elimination                              |  |                   | (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 below for definition and reconciliation
    of EBITDA.      

Definition and reconciliation of
EBITDA

|                                                      |  |                   |        |      |  |      |        |   |  |  |        |  
|----------------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                      |  | 2001              |        | 2002 |  | 2003
|                                                      |  |                   |        |      |  |     
|                                                      |  |                  
|                                                      |  | (NOK in millions)
|Net income (loss)                                     |  |                   | 7,079  |      |  |      | (4,298 | ) |  |  | 4,560  |  
|Minority interests                                    |  |                   | (721   | )    |  |      | (358   | ) |  |  | 490    |  
|Taxes                                                 |  |                   | 3,897  |      |  |      | (480   | ) |  |  | 2,376  |  
|Profit (loss) before taxes and minority
    interests |  |                   | 10,255 |      |  |      | (5,136 | ) |  |  | 7,426  |  
|Net financial items                                   |  |                   | 1,159  |      |  |      | 2,366  |   |  |  | 1,365  |  
|Associated companies                                  |  |                   | (8,237 | )    |  |      | 2,450  |   |  |  | (1,231 | )
|Operating profit (loss)                               |  |                   | 3,177  |      |  |      | (320   | ) |  |  | 7,560  |  
|Depreciation and amortization                         |  |                   | 7,251  |      |  |      | 10,236 |   |  |  | 10,597 |  
|Write-downs                                           |  |                   | 3,822  |      |  |      | 3,553  |   |  |  | 145    |  
|EBITDA                                                |  |                   | 14,250 |      |  |      | 13,469 |   |  |  | 18,302 |  

Balance and investments at December 31,
2003

|                                         |  |                   |         |            |  |         |        |        |  |             |         |             |  |             |         |   |  |  |         |   |  |  |         |   |  |  |       |  
|---------------------------------------- |  | ----------------- | ------- | ---------- |  | ------- | ------ | ------ |  | ----------- | ------- | ----------- |  | ----------- | ------- | - |  |  | ------- | - |  |  | ------- | - |  |  | ----- | -
|                                         |  |                   |         |            |  |         |        |        |  | Long-term   |         |             |  |            
|                                         |  |                   |         |            |  |         |        |        |  | liabilities |         |             |  |            
|                                         |  | Other fixed       |         | Associated |  | Current |        | Total  |  | incl.       |         | Short-term  |  |            
|                                         |  | assets            |         | companies  |  | assets  |        | assets |  | provisions  |         | liabilities |  | Investments
|                                         |  |                   |         |            |  |         |        |        |  |             |         |             |  |            
|                                         |  |                  
|                                         |  | (NOK in millions)
|Mobile                                   |  |                   | 37,883  |            |  |         | 8,064  |        |  |             | 12,151  |             |  |             | 58,098  |   |  |  | 38,542  |   |  |  | 12,828  |   |  |  | 3,762 |  
|Fixed                                    |  |                   | 13,761  |            |  |         | 1,451  |        |  |             | 8,595   |             |  |             | 23,807  |   |  |  | 10,571  |   |  |  | 8,556   |   |  |  | 2,161 |  
|Broadcast                                |  |                   | 6,268   |            |  |         | 514    |        |  |             | 3,278   |             |  |             | 10,060  |   |  |  | 8,503   |   |  |  | 2,530   |   |  |  | 266   |  
|EDB Business Partner                     |  |                   | 2,326   |            |  |         |       |        |  |             | 995     |             |  |             | 3,321   |   |  |  | 790     |   |  |  | 926     |   |  |  | 305   |  
|Other business units                     |  |                   | 2,644   |            |  |         | 18     |        |  |             | 2,528   |             |  |             | 5,190   |   |  |  | 2,891   |   |  |  | 1,479   |   |  |  | 263   |  
|Corporate functions and Group activities |  |                   | 64,081  |            |  |         |       |        |  |             | 12,170  |             |  |             | 76,251  |   |  |  | 19,782  |   |  |  | 27,944  |   |  |  | 346   |  
|Elimination                              |  |                   | (68,783 | )          |  |         | 119    |        |  |             | (21,953 | )           |  |             | (90,617 | ) |  |  | (53,304 | ) |  |  | (36,811 | ) |  |  | (86   | )
|                                         |  |                   |         |            |  |         |        |        |  |             |         |             |  |             |         |   |  |  |         |   |  |  |         |   |  |  |       |  
|Total                                    |  |                   | 58,180  |            |  |         | 10,166 |        |  |             | 17,764  |             |  |             | 86,110  |   |  |  | 27,775  |   |  |  | 17,452  |   |  |  | 7,017 |  
|                                         |  |                   |         |            |  |         |        |        |  |             |         |             |  |             |         |   |  |  |         |   |  |  |         |   |  |  |       |  

F-24



---



##### Table of Contents



Profit and loss 2002

|                                         |  |                   |        |             |  |           |        |               |  |           |        |            |  |           |        |               |  |  |       |   |  |  |        |   |  |  |        |   |  |  |        |  
|---------------------------------------- |  | ----------------- | ------ | ----------- |  | --------- | ------ | ------------- |  | --------- | ------ | ---------- |  | --------- | ------ | ------------- |  |  | ----- | - |  |  | ------ | - |  |  | ------ | - |  |  | ------ | -
|                                         |  |                   |        |             |  |           |        |               |  |           |        |            |  |           |        | Profit (loss)
|                                         |  |                   |        |             |  |           |        | Depreciation, |  |           |        | Associated |  |           |        | before       
|                                         |  |                   |        |             |  |           |        | amortization  |  | Operating |        | Companies  |  | Net       |        | taxes and    
|                                         |  |                   |        | External    |  |           |        | and           |  | profit    |        | and joint  |  | financial |        | minority     
|                                         |  | Revenues(1)       |        | revenues(1) |  | EBITDA(2) |        | write-downs   |  | (loss)    |        | ventures   |  | items     |        | interests    
|                                         |  |                   |        |             |  |           |        |               |  |           |        |            |  |           |        |              
|                                         |  |                  
|                                         |  | (NOK in millions)
|Mobile                                   |  |                   | 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    |  
|Elimination                              |  |                   | (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.      

Balance and investments at December 31,
2002

|                                         |  |                   |         |            |  |         |       |        |  |             |         |             |  |             |          |   |  |  |         |   |  |  |         |   |  |  |        |  
|---------------------------------------- |  | ----------------- | ------- | ---------- |  | ------- | ----- | ------ |  | ----------- | ------- | ----------- |  | ----------- | -------- | - |  |  | ------- | - |  |  | ------- | - |  |  | ------ | -
|                                         |  |                   |         |            |  |         |       |        |  | Long-term   |         |             |  |            
|                                         |  | Other             |         |            |  |         |       |        |  | liabilities |         | Short-      |  |            
|                                         |  | fixed             |         | Associated |  | Current |       | Total  |  | incl.       |         | term        |  |            
|                                         |  | assets            |         | companies  |  | assets  |       | assets |  | provisions  |         | liabilities |  | Investments
|                                         |  |                   |         |            |  |         |       |        |  |             |         |             |  |            
|                                         |  |                  
|                                         |  | (NOK in millions)
|Mobile                                   |  |                   | 36,644  |            |  |         | 8,532 |        |  |             | 8,833   |             |  |             | 54,009   |   |  |  | 36,846  |   |  |  | 23,377  |   |  |  | 12,625 |  
|Fixed                                    |  |                   | 16,647  |            |  |         | 112   |        |  |             | 8,277   |             |  |             | 25,036   |   |  |  | 12,789  |   |  |  | 10,790  |   |  |  | 3,530  |  
|Broadcast                                |  |                   | 7,448   |            |  |         | 608   |        |  |             | 3,321   |             |  |             | 11,377   |   |  |  | 11,379  |   |  |  | 2,203   |   |  |  | 2,769  |  
|EDB Business Partner                     |  |                   | 2,433   |            |  |         | 17    |        |  |             | 1,495   |             |  |             | 3,945    |   |  |  | 921     |   |  |  | 1,358   |   |  |  | 255    |  
|Other business units                     |  |                   | 4,092   |            |  |         | 210   |        |  |             | 3,166   |             |  |             | 7,468    |   |  |  | 5,000   |   |  |  | 2,026   |   |  |  | 1,072  |  
|Corporate functions and Group activities |  |                   | 70,326  |            |  |         | 1     |        |  |             | 20,033  |             |  |             | 90,360   |   |  |  | 22,498  |   |  |  | 25,117  |   |  |  | 1,120  |  
|Elimination                              |  |                   | (72,917 | )          |  |         | 9     |        |  |             | (29,829 | )           |  |             | (102,737 | ) |  |  | (58,979 | ) |  |  | (43,155 | ) |  |  | (71    | )
|                                         |  |                   |         |            |  |         |       |        |  |             |         |             |  |             |          |   |  |  |         |   |  |  |         |   |  |  |        |  
|Total                                    |  |                   | 64,673  |            |  |         | 9,489 |        |  |             | 15,296  |             |  |             | 89,458   |   |  |  | 30,454  |   |  |  | 21,716  |   |  |  | 21,300 |  
|                                         |  |                   |         |            |  |         |       |        |  |             |         |             |  |             |          |   |  |  |         |   |  |  |         |   |  |  |        |  

Profit and loss 2001

|                                         |  |                   |        |             |  |           |        |               |  |           |        |            |  |           |        |               |  |  |        |   |  |  |       |   |  |  |        |   |  |  |        |  
|---------------------------------------- |  | ----------------- | ------ | ----------- |  | --------- | ------ | ------------- |  | --------- | ------ | ---------- |  | --------- | ------ | ------------- |  |  | ------ | - |  |  | ----- | - |  |  | ------ | - |  |  | ------ | -
|                                         |  |                   |        |             |  |           |        |               |  |           |        |            |  |           |        | Profit (loss)
|                                         |  |                   |        |             |  |           |        | Depreciation, |  |           |        | Associated |  |           |        | before       
|                                         |  |                   |        |             |  |           |        | amortization  |  | Operating |        | companies  |  | Net       |        | taxes and    
|                                         |  |                   |        | External    |  |           |        | and           |  | profit    |        | and joint  |  | financial |        | minority     
|                                         |  | Revenues(1)       |        | revenues(1) |  | EBITDA(2) |        | write-downs   |  | (loss)    |        | ventures   |  | items     |        | interests    
|                                         |  |                   |        |             |  |           |        |               |  |           |        |            |  |           |        |              
|                                         |  |                  
|                                         |  | (NOK in millions)
|Mobile                                   |  |                   | 12,558 |             |  |           | 11,260 |               |  |           | 4,067  |            |  |           | 1,572  |               |  |  | 2,495  |   |  |  | 9,677 |   |  |  | (496   | ) |  |  | 11,676 |  
|Fixed                                    |  |                   | 19,691 |             |  |           | 17,824 |               |  |           | 5,546  |            |  |           | 4,511  |               |  |  | 1,035  |   |  |  | (874  | ) |  |  | (319   | ) |  |  | (158   | )
|Broadcast                                |  |                   | 2,626  |             |  |           | 2,420  |               |  |           | 344    |            |  |           | 1,070  |               |  |  | (726   | ) |  |  | (546  | ) |  |  | (397   | ) |  |  | (1,669 | )
|EDB Business Partner                     |  |                   | 4,811  |             |  |           | 3,353  |               |  |           | 447    |            |  |           | 1,655  |               |  |  | (1,208 | ) |  |  | 130   |   |  |  | (94    | ) |  |  | (1,172 | )
|Media                                    |  |                   | 1,343  |             |  |           | 1,263  |               |  |           | 313    |            |  |           | 51     |               |  |  | 262    |   |  |  | (12   | ) |  |  | 21     |   |  |  | 271    |  
|Other business units                     |  |                   | 5,719  |             |  |           | 4,528  |               |  |           | (718   | )          |  |           | 1,925  |               |  |  | (2,643 | ) |  |  | (107  | ) |  |  | (551   | ) |  |  | (3,301 | )
|Corporate functions and Group activities |  |                   | 7,259  |             |  |           | 5,396  |               |  |           | 4,494  |            |  |           | 316    |               |  |  | 4,178  |   |  |  | (6    | ) |  |  | 691    |   |  |  | 4,863  |  
|Elimination                              |  |                   | (7,967 | )           |  |           | (4     | )             |  |           | (243   | )          |  |           | (27    | )             |  |  | (216   | ) |  |  | (25   | ) |  |  | (14    | ) |  |  | (255   | )
|                                         |  |                   |        |             |  |           |        |               |  |           |        |            |  |           |        |               |  |  |        |   |  |  |       |   |  |  |        |   |  |  |        |  
|Total                                    |  |                   | 46,040 |             |  |           | 46,040 |               |  |           | 14,250 |            |  |           | 11,073 |               |  |  | 3,177  |   |  |  | 8,237 |   |  |  | (1,159 | ) |  |  | 10,255 |  
|                                         |  |                   |        |             |  |           |        |               |  |           |        |            |  |           |        |               |  |  |        |   |  |  |       |   |  |  |        |   |  |  |        |  






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

F-25



---



##### Table of Contents



Geographic distribution of revenues based on
customer location(1)

|                |  |                   |        |      |  |      |        |  |  |  |        | 
|--------------- |  | ----------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                |  | 2001              |        | 2002 |  | 2003
|                |  |                   |        |      |  |     
|                |  |                  
|                |  | (NOK in millions)
|Norway          |  |                   | 36,555 |      |  |      | 31,044 |  |  |  | 31,206 | 
|Other Nordic    |  |                   | 2,235  |      |  |      | 3,298  |  |  |  | 4,699  | 
|Western Europe  |  |                   | 2,061  |      |  |      | 1,588  |  |  |  | 1,343  | 
|Central Europe  |  |                   | 800    |      |  |      | 5,348  |  |  |  | 5,998  | 
|Eastern Europe  |  |                   | 828    |      |  |      | 1,619  |  |  |  | 3,551  | 
|Asia            |  |                   | 2,346  |      |  |      | 4,409  |  |  |  | 4,906  | 
|Other countries |  |                   | 1,215  |      |  |      | 1,520  |  |  |  | 1,418  | 
|                |  |                   |        |      |  |      |        |  |  |  |        | 
|Total revenues  |  |                   | 46,040 |      |  |      | 48,826 |  |  |  | 53,121 | 
|                |  |                   |        |      |  |      |        |  |  |  |        | 

Geographic distribution of revenues based on
company location(1)

|                |  |                   |        |      |  |      |        |  |  |  |        | 
|--------------- |  | ----------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                |  | 2001              |        | 2002 |  | 2003
|                |  |                   |        |      |  |     
|                |  |                  
|                |  | (NOK in millions)
|Norway          |  |                   | 39,453 |      |  |      | 33,224 |  |  |  | 33,589 | 
|Other Nordic    |  |                   | 878    |      |  |      | 2,492  |  |  |  | 4,032  | 
|Western Europe  |  |                   | 2,144  |      |  |      | 1,580  |  |  |  | 923    | 
|Central Europe  |  |                   | 505    |      |  |      | 4,966  |  |  |  | 5,720  | 
|Eastern Europe  |  |                   | 705    |      |  |      | 1,427  |  |  |  | 3,378  | 
|Asia            |  |                   | 2,088  |      |  |      | 4,295  |  |  |  | 4,706  | 
|Other countries |  |                   | 267    |      |  |      | 842    |  |  |  | 773    | 
|                |  |                   |        |      |  |      |        |  |  |  |        | 
|Total revenues  |  |                   | 46,040 |      |  |      | 48,826 |  |  |  | 53,121 | 
|                |  |                   |        |      |  |      |        |  |  |  |        | 






|    |                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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
|                |  |                   |        |             
|                |  | 2002              |        | 2003         |  | 2002 |        | 2003
|                |  |                   |        |              |  |      |        |     
|                |  |                  
|                |  | (NOK in millions)
|Norway          |  |                   | 26,365 |              |  |      | 23,167 |      |  |  | 33,290 |  |  |  | 31,849 | 
|Other Nordic    |  |                   | 1,495  |              |  |      | 1,361  |      |  |  | 7,509  |  |  |  | 8,524  | 
|Western Europe  |  |                   | 164    |              |  |      | 67     |      |  |  | 13,997 |  |  |  | 13,190 | 
|Central Europe  |  |                   | 2,881  |              |  |      | 2,817  |      |  |  | 13,827 |  |  |  | 12,635 | 
|Eastern Europe  |  |                   | 2,363  |              |  |      | 2,137  |      |  |  | 6,646  |  |  |  | 7,668  | 
|Asia            |  |                   | 5,584  |              |  |      | 5,828  |      |  |  | 13,184 |  |  |  | 11,342 | 
|Other countries |  |                   | 413    |              |  |      | 345    |      |  |  | 1,005  |  |  |  | 902    | 
|                |  |                   |        |              |  |      |        |      |  |  |        |  |  |  |        | 
|Total assets    |  |                   | 39,265 |              |  |      | 35,722 |      |  |  | 89,458 |  |  |  | 86,110 | 
|                |  |                   |        |              |  |      |        |      |  |  |        |  |  |  |        | 

4.     COSTS OF
MATERIALS AND TRAFFIC CHARGES

|                                                 |  |                   |        |      |  |      |        |  |  |  |        | 
|------------------------------------------------ |  | ----------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                                 |  | 2001              |        | 2002 |  | 2003
|                                                 |  |                   |        |      |  |     
|                                                 |  |                  
|                                                 |  | (NOK in millions)
|Traffic charges  network capacity               |  |                   | 4,853  |      |  |      | 6,463  |  |  |  | 7,183  | 
|Traffic charges  satellite capacity             |  |                   | 1,190  |      |  |      | 1,527  |  |  |  | 1,343  | 
|Costs of materials etc.                          |  |                   | 4,161  |      |  |      | 4,495  |  |  |  | 4,568  | 
|                                                 |  |                   |        |      |  |      |        |  |  |  |        | 
|Total costs of materials and traffic
    charges |  |                   | 10,204 |      |  |      | 12,485 |  |  |  | 13,094 | 
|                                                 |  |                   |        |      |  |      |        |  |  |  |        | 

F-26



---



##### Table of Contents



5.     OWN WORK
CAPITALIZED

|                             |  |                   |       |      |  |      |     |  |  |  |     | 
|---------------------------- |  | ----------------- | ----- | ---- |  | ---- | --- |  |  |  | --- | 
|                             |  | 2001              |       | 2002 |  | 2003
|                             |  |                   |       |      |  |     
|                             |  |                  
|                             |  | (NOK in millions)
|Costs of materials etc.      |  |                   | 220   |      |  |      | 29  |  |  |  | 25  | 
|Salaries and personnel costs |  |                   | 396   |      |  |      | 303 |  |  |  | 301 | 
|Other operating expenses     |  |                   | 386   |      |  |      | 235 |  |  |  | 245 | 
|                             |  |                   |       |      |  |      |     |  |  |  |     | 
|Total own work capitalized   |  |                   | 1,002 |      |  |      | 567 |  |  |  | 571 | 
|                             |  |                   |       |      |  |      |     |  |  |  |     | 

6.     SALARIES AND
PERSONNEL COSTS

|                                            |  |                   |        |      |  |      |        |  |  |  |       | 
|------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ |  |  |  | ----- | 
|                                            |  | 2001              |        | 2002 |  | 2003
|                                            |  |                   |        |      |  |     
|                                            |  |                  
|                                            |  | (NOK in millions)
|Salaries and holiday pay                    |  |                   | 7,897  |      |  |      | 7,659  |  |  |  | 7,248 | 
|Social security tax                         |  |                   | 1,132  |      |  |      | 1,168  |  |  |  | 1,151 | 
|Pension costs including social security tax |  |                   | 591    |      |  |      | 789    |  |  |  | 760   | 
|Other personnel costs                       |  |                   | 508    |      |  |      | 488    |  |  |  | 402   | 
|                                            |  |                   |        |      |  |      |        |  |  |  |       | 
|Total salaries and personnel costs          |  |                   | 10,128 |      |  |      | 10,104 |  |  |  | 9,561 | 
|                                            |  |                   |        |      |  |      |        |  |  |  |       | 

The average number of employees was 21,750 in
2003, 23,000 in 2002, and 22,400 in 2001.

7.     PENSION
OBLIGATIONS

Telenor provides defined benefit pension plans
for substantially all employees in Norway. In addition, the
Norwegian government provides social security payments to all
retired Norwegian citizens. Such payments are calculated by
reference to a base amount annually approved by the Norwegian
parliament. Benefits are determined based on the employees
length of service and compensation. The cost of pension benefit
plans is expensed over the period which the employee renders
services and becomes eligible to receive benefits.

12,904 of the Groups employees were covered
through Telenor Pension Fund as of December 31, 2003. The
Group has a few group pension schemes with independent insurance
companies and a separate pension plan for executive employees.
Plan assets consisting primarily of bonds and shares fund these
pension plans. For employees outside of Norway, contribution
plans are dominant.

Telenor has two early retirement pensions plans.
The agreement-based early retirement plan (AFP) was established
in 1997. Under this scheme employees may retire upon reaching
the age of 62 years or later. The other plan is an early
retirement plan that was offered to the employees within
established criteria until the end of 1996. Telenor ASA covers
the cost of early retirement. The present value of the estimated
pension obligation is included in the calculation of the pension
obligation presented below. This early retirement plan does not
have any plan assets.

Actuarial gains and losses are mainly due to
changes in assumptions in 2003 and in 1999, primarily reduction
in the discount rate, as well as lower actual return on plan
assets than estimated, due to the reduction in share prices
earlier years, partially offset by higher return on plan assets
in 2003. In 2003 the long term interest rates in Norway were
reduced, which led to a reduction in the discount rate to 5.7%
as of December 31, 2003 compared to 6.5% as of
December 31, 2002.

F-27



---



##### Table of Contents



The plan assets are measured at December 31,
2003. The benefit obligations are measured at September 30,
2003 adjusted for best estimate of the financial assumptions at
December 31, 2003.

|                                                                  |  |                   |       |      |  |  |        |  
|----------------------------------------------------------------- |  | ----------------- | ----- | ---- |  |  | ------ | -
|                                                                  |  | 2002              |       | 2003
|                                                                  |  |                   |       |     
|                                                                  |  |                  
|                                                                  |  | (NOK in millions)
|Change in benefit obligation                                      |  |                   |       |      |  |  |        |  
|Benefit obligation at the beginning of the year                   |  |                   | 3,335 |      |  |  | 3,929  |  
|Service cost                                                      |  |                   | 543   |      |  |  | 455    |  
|Interest cost                                                     |  |                   | 218   |      |  |  | 252    |  
|Actuarial gains and losses                                        |  |                   | 40    |      |  |  | 463    |  
|Acquisitions and sale                                             |  |                   | 5     |      |  |  | (21    | )
|Benefits paid                                                     |  |                   | (212  | )    |  |  | (343   | )
|                                                                  |  |                   |       |      |  |  |        |  
|Benefit obligations at the end of the
    year                    |  |                   | 3,929 |      |  |  | 4,735  |  
|                                                                  |  |                   |       |      |  |  |        |  
|Change in plan assets                                             |  |                   |       |      |  |  |        |  
|Fair value of plan assets at the beginning of the
    year        |  |                   | 2,400 |      |  |  | 2,759  |  
|Actual return on plan assets                                      |  |                   | (38   | )    |  |  | 409    |  
|Acquisitions and sale                                             |  |                   | 8     |      |  |  | (17    | )
|Pension contribution                                              |  |                   | 531   |      |  |  | 454    |  
|Benefits paid                                                     |  |                   | (142  | )    |  |  | (317   | )
|                                                                  |  |                   |       |      |  |  |        |  
|Fair value of plan assets at the end of the
    year              |  |                   | 2,759 |      |  |  | 3,288  |  
|                                                                  |  |                   |       |      |  |  |        |  
|Funded status                                                     |  |                   | 1,170 |      |  |  | 1,447  |  
|Unrecognized prior service costs                                  |  |                   | (154  | )    |  |  | (137   | )
|Unrecognized net actuarial losses                                 |  |                   | (852  | )    |  |  | (1,016 | )
|Prepaid social security tax                                       |  |                   | 27    |      |  |  | 44     |  
|                                                                  |  |                   |       |      |  |  |        |  
|Total provision for pensions                                      |  |                   | 191   |      |  |  | 338    |  
|                                                                  |  |                   |       |      |  |  |        |  
|Total provision for pensions at
    January 1                     |  |                   | 64    |      |  |  | 191    |  
|Acquisitions and sale                                             |  |                   | 63    |      |  |  | (2     | )
|Net periodic benefit costs                                        |  |                   | 737   |      |  |  | 698    |  
|Pension contribution                                              |  |                   | (531  | )    |  |  | (454   | )
|Benefits paid                                                     |  |                   | (70   | )    |  |  | (26    | )
|Social security tax on pension contribution and
    benefits paid |  |                   | (74   | )    |  |  | (69    | )
|                                                                  |  |                   |       |      |  |  |        |  
|Total provision for pensions at
    December 31 (Note 19)         |  |                   | 191   |      |  |  | 338    |  
|                                                                  |  |                   |       |      |  |  |        |  

The accumulated benefit obligation for all
defined benefit pension plans was 3,731 NOK and
2,984 NOK at December 31, 2003 and 2002 respectively.

Information for pension plans with an
accumulated benefit obligation in excess of plan
assets

|                               |  |      |       |      |  |  |       | 
|------------------------------ |  | ---- | ----- | ---- |  |  | ----- | 
|                               |  | 2002 |       | 2003
|                               |  |      |       |     
|Projected benefit obligation   |  |      | 3,387 |      |  |  | 4,281 | 
|Accumulated benefit obligation |  |      | 2,585 |      |  |  | 3,367 | 
|Fair value of plan assets      |  |      | 2,307 |      |  |  | 2,872 | 

Assumptions used to determine benefit
obligations at December 31

|                                                              |  |      |     |      |  |  |     | 
|------------------------------------------------------------- |  | ---- | --- | ---- |  |  | --- | 
|                                                              |  | 2002 |     | 2003
|                                                              |  |      |     |     
|Discount rate in %                                            |  |      | 6.5 |      |  |  | 5.7 | 
|Rate of compensation increase in %                            |  |      | 3.5 |      |  |  | 3.4 | 
|Expected increase in the social security base
    amount in % |  |      | 3.0 |      |  |  | 3.4 | 
|Annual adjustments to pensions in %                           |  |      | 3.0 |      |  |  | 3.4 | 

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Assumptions used to determine net periodic
benefit costs for years ended December 31

|                                                              |  |      |     |      |  |      |     |  |  |  |     | 
|------------------------------------------------------------- |  | ---- | --- | ---- |  | ---- | --- |  |  |  | --- | 
|                                                              |  | 2001 |     | 2002 |  | 2003
|                                                              |  |      |     |      |  |     
|Discount rate in %                                            |  |      | 6.5 |      |  |      | 6.5 |  |  |  | 6.5 | 
|Expected return on plan assets in %                           |  |      | 7.5 |      |  |      | 7.5 |  |  |  | 7.5 | 
|Rate of compensation increase in %                            |  |      | 3.5 |      |  |      | 3.5 |  |  |  | 3.5 | 
|Expected increase in the social security base
    amount in % |  |      | 3.0 |      |  |      | 3.0 |  |  |  | 3.0 | 
|Annual adjustments in pensions in %                           |  |      | 3.0 |      |  |      | 3.0 |  |  |  | 3.0 | 

Components of net periodic benefit
cost

|                                                              |  |                   |      |      |  |      |      |   |  |  |      |  
|------------------------------------------------------------- |  | ----------------- | ---- | ---- |  | ---- | ---- | - |  |  | ---- | -
|                                                              |  | 2001              |      | 2002 |  | 2003
|                                                              |  |                   |      |      |  |     
|                                                              |  |                  
|                                                              |  | (NOK in millions)
|Service cost                                                  |  |                   | 435  |      |  |      | 543  |   |  |  | 455  |  
|Interest cost                                                 |  |                   | 186  |      |  |      | 218  |   |  |  | 252  |  
|Expected return on plan assets                                |  |                   | (164 | )    |  |      | (185 | ) |  |  | (204 | )
|Amortization of prior service costs                           |  |                   | 23   |      |  |      | 14   |   |  |  | 11   |  
|Amortization of actuarial gains and losses                    |  |                   | 16   |      |  |      | 57   |   |  |  | 100  |  
|Social security tax                                           |  |                   | 68   |      |  |      | 90   |   |  |  | 84   |  
|                                                              |  |                   |      |      |  |      |      |   |  |  |      |  
|Net periodic benefit costs                                    |  |                   | 564  |      |  |      | 737  |   |  |  | 698  |  
|                                                              |  |                   |      |      |  |      |      |   |  |  |      |  
|Contribution plan costs                                       |  |                   | 27   |      |  |      | 52   |   |  |  | 62   |  
|                                                              |  |                   |      |      |  |      |      |   |  |  |      |  
|Total pension costs charged to profit (loss)
    for the year |  |                   | 591  |      |  |      | 789  |   |  |  | 760  |  
|                                                              |  |                   |      |      |  |      |      |   |  |  |      |  

Telenors pension plan weighted average
asset allocations at December 31, 2003 and 2002, by asset
category were as follows:

|                  |  |      |     |      |  |  |     |  
|----------------- |  | ---- | --- | ---- |  |  | --- | -
|Asset category    |  | 2002 |     | 2003
|                  |  |      |     |     
|Bonds             |  |      | 79  | %    |  |  | 72  | %
|Equity securities |  |      | 16  | %    |  |  | 25  | %
|Other             |  |      | 5   | %    |  |  | 3   | %
|                  |  |      |     |      |  |  |     |  
|Total             |  |      | 100 | %    |  |  | 100 | %
|                  |  |      |     |      |  |  |     |  

The plan assets are invested in bonds issued by
governments, municipals, financial institutions and
corporations. Bonds held in foreign currencies are mainly
currency hedged. Investments in equity securities are restricted
to a maximum of 35% of the plan assets. The plan assets are
invested both in Norwegian and foreign equity securities. The
currency hedging policy for foreign equity securities is
evaluated per investment.

The expected long-term return on plan assets as
of December 31, 2003 was 6.1%. Expected return on plan
assets are calculated based on the estimated 20-year Norwegian
government bond yield at December 31, 2003, adjusted for a
credit spread to high quality corporate bonds and an expected
longterm yield on equity securities above government
bonds, weighted by the expected long-term allocations between
government bonds, corporate bonds and equity securities. The
calculations of the expected longterm yield on equity
securities above government bonds are based on historical
long-term yield.

Telenor expects to contribute with approximately
NOK 570 million to the pension funds in 2004.

In 2003, some of Telenors Swedish
subsidiaries, mainly Telenor AB (including Utfors AB), changed
their pension plan to a multiemployer plan. The plan is
currently accounted for as a defined contribution plan.

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8.     OTHER
OPERATING EXPENSES

|                                                                     |  |                   |        |      |  |      |        |  |  |  |        | 
|-------------------------------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ |  |  |  | ------ | 
|                                                                     |  | 2001              |        | 2002 |  | 2003
|                                                                     |  |                   |        |      |  |     
|                                                                     |  |                  
|                                                                     |  | (NOK in millions)
|Cost of premises, vehicles, office equipment etc.                    |  |                   | 2,267  |      |  |      | 2,196  |  |  |  | 1,876  | 
|Operation and maintenance                                            |  |                   | 2,673  |      |  |      | 3,418  |  |  |  | 3,477  | 
|Travel and travel allowances                                         |  |                   | 750    |      |  |      | 560    |  |  |  | 474    | 
|Postage freight, distribution and
    telecommunication              |  |                   | 343    |      |  |      | 327    |  |  |  | 281    | 
|Concession fees                                                      |  |                   | 130    |      |  |      | 425    |  |  |  | 505    | 
|Marketing and sales commission                                       |  |                   | 1,787  |      |  |      | 2,069  |  |  |  | 2,583  | 
|Advertising                                                          |  |                   | 598    |      |  |      | 916    |  |  |  | 1,187  | 
|Bad debt(1)                                                          |  |                   | 362    |      |  |      | 337    |  |  |  | 209    | 
|Consultancy fees and external personnel(2)                           |  |                   | 2,246  |      |  |      | 1,394  |  |  |  | 1,298  | 
|Workforce reductions, loss contracts and exit
    from activities(3) |  |                   | 625    |      |  |      | 982    |  |  |  | 287    | 
|Other                                                                |  |                   | 616    |      |  |      | 564    |  |  |  | 329    | 
|                                                                     |  |                   |        |      |  |      |        |  |  |  |        | 
|Total other operating expenses                                       |  |                   | 12,397 |      |  |      | 13,188 |  |  |  | 12,506 | 
|                                                                     |  |                   |        |      |  |      |        |  |  |  |        | 






|    |                                                                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | See note 9.                                                                                                                                             
|   
|(2) | Includes fees for consultants and external
    personnel, which perform services that are sold to external
    customers or capitalized on fixed assets.
|   
|(3) | See note 11.                                                                                                                                            

9.     BAD
DEBT

|                                            |  |                   |     |      |  |      |      |   |  |  |     |  
|------------------------------------------- |  | ----------------- | --- | ---- |  | ---- | ---- | - |  |  | --- | -
|                                            |  | 2001              |     | 2002 |  | 2003
|                                            |  |                   |     |      |  |     
|                                            |  |                  
|                                            |  | (NOK in millions)
|Provisions as of January 1                  |  |                   | 462 |      |  |      | 543  |   |  |  | 643 |  
|Provisions as of December 31                |  |                   | 543 |      |  |      | 643  |   |  |  | 592 |  
|Change in provisions for bad debt           |  |                   | 81  |      |  |      | 100  |   |  |  | (51 | )
|Other changes in provisions for bad debt(1) |  |                   | 60  |      |  |      | (119 | ) |  |  | 36  |  
|Realized losses for the year                |  |                   | 264 |      |  |      | 418  |   |  |  | 309 |  
|Recovered amounts previously written off    |  |                   | (43 | )    |  |      | (62  | ) |  |  | (85 | )
|                                            |  |                   |     |      |  |      |      |   |  |  |     |  
|Total bad debt                              |  |                   | 362 |      |  |      | 337  |   |  |  | 209 |  
|                                            |  |                   |     |      |  |      |      |   |  |  |     |  






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

10.     RESEARCH AND
DEVELOPMENT COSTS

Research and development costs amounted to NOK
461 million, NOK 531 million and NOK 916 million
for 2003, 2002 and 2001, respectively. Research and development
activities relate to new technologies, new products, security in
the network and new usages of the existing network. It is
expected that research and development costs will create future
profitability.

11.     WORKFORCE
REDUCTIONS, LOSS CONTRACTS AND EXIT FROM ACTIVITIES

In 2003, 2002 and 2001, provisions were made for
workforce reduction, loss contracts and exit from activities.

Loss contracts relate mainly to contractual
obligations related to activities that are no longer of use in
the ongoing business, loss on delivery contracts and loss on
property leases.

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The following tables displays roll forward of the
accruals from December 31, 2000:

|                                                  |  |                   |    |           |  |             |     |          |  |          |    |              |  |  |     |  |  |  |   |  |  |  |     | 
|------------------------------------------------- |  | ----------------- | -- | --------- |  | ----------- | --- | -------- |  | -------- | -- | ------------ |  |  | --- |  |  |  | - |  |  |  | --- | 
|                                                  |  |                   |    |           |  | 2001        |     |          |  |          |    |             
|                                                  |  |                   |    | 2001      |  | additions   |     |          |  | 2001     |    |             
|                                                  |  | December 31,      |    | additions |  | recorded    |     | 2001     |  | amounts  |    | December 31,
|                                                  |  | 2000              |    | in profit |  | directly in |     | amounts  |  | taken to |    | 2001        
|                                                  |  | balance           |    | and loss  |  | balance     |     | utilized |  | income   |    | balance     
|                                                  |  |                   |    |           |  |             |     |          |  |          |    |             
|                                                  |  |                  
|                                                  |  | (NOK in millions)
|Workforce reductions                              |  |                   |    |           |  |             |     |          |  |          |    |              |  |  |     |  |  |  |   |  |  |  |     | 
|Mobile                                            |  |                   |   |           |  |             | 12  |          |  |          |   |              |  |  |    |  |  |  |  |  |  |  | 12  | 
|Fixed                                             |  |                   |   |           |  |             | 35  |          |  |          |   |              |  |  |    |  |  |  |  |  |  |  | 35  | 
|EDB                                               |  |                   |   |           |  |             | 38  |          |  |          |   |              |  |  |    |  |  |  |  |  |  |  | 38  | 
|Other business units                              |  |                   |   |           |  |             | 60  |          |  |          |   |              |  |  | 33  |  |  |  |  |  |  |  | 27  | 
|Total workforce reductions                        |  |                   |   |           |  |             | 145 |          |  |          |   |              |  |  | 33  |  |  |  |  |  |  |  | 112 | 
|Loss contracts and exit from
    activities       |  |                   |    |           |  |             |     |          |  |          |    |              |  |  |     |  |  |  |   |  |  |  |     | 
|Mobile                                            |  |                   | 47 |           |  |             |    |          |  |          |   |              |  |  | 39  |  |  |  |  |  |  |  | 8   | 
|Fixed                                             |  |                   |   |           |  |             | 22  |          |  |          |   |              |  |  |    |  |  |  |  |  |  |  | 22  | 
|Broadcast                                         |  |                   |   |           |  |             | 49  |          |  |          |   |              |  |  | 22  |  |  |  |  |  |  |  | 27  | 
|EDB                                               |  |                   | 6  |           |  |             | 132 |          |  |          | 42 |              |  |  | 55  |  |  |  |  |  |  |  | 125 | 
|Other business units                              |  |                   | 5  |           |  |             | 203 |          |  |          |   |              |  |  | 83  |  |  |  |  |  |  |  | 125 | 
|Corporate functions and group activities          |  |                   |   |           |  |             | 74  |          |  |          |   |              |  |  | 4   |  |  |  |  |  |  |  | 70  | 
|                                                  |  |                   |    |           |  |             |     |          |  |          |    |              |  |  |     |  |  |  |   |  |  |  |     | 
|Total loss contracts and exit from
    activities |  |                   | 58 |           |  |             | 480 |          |  |          | 42 |              |  |  | 176 |  |  |  |  |  |  |  | 377 | 
|                                                  |  |                   |    |           |  |             |     |          |  |          |    |              |  |  |     |  |  |  |   |  |  |  |     | 
|Total                                             |  |                   | 58 |           |  |             | 625 |          |  |          | 42 |              |  |  | 236 |  |  |  |  |  |  |  | 489 | 
|                                                  |  |                   |    |           |  |             |     |          |  |          |    |              |  |  |     |  |  |  |   |  |  |  |     | 

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|                                                              |  |                   |     |              |  |             |       |          |  |          |    |              |  |  |     |  |  |  |    |  |  |  |       | 
|------------------------------------------------------------- |  | ----------------- | --- | ------------ |  | ----------- | ----- | -------- |  | -------- | -- | ------------ |  |  | --- |  |  |  | -- |  |  |  | ----- | 
|                                                              |  |                   |     |              |  | 2002        |       |          |  |          |    |             
|                                                              |  |                   |     | 2002         |  | additions   |       |          |  | 2002     |    |             
|                                                              |  | December 31,      |     | additions in |  | recorded    |       | 2002     |  | amounts  |    | December 31,
|                                                              |  | 2001              |     | profit       |  | directly in |       | amounts  |  | taken to |    | 2002        
|                                                              |  | balance           |     | and loss     |  | balance     |       | utilized |  | income   |    | balance     
|                                                              |  |                   |     |              |  |             |       |          |  |          |    |             
|                                                              |  |                  
|                                                              |  | (NOK in millions)
|Workforce reductions                                          |  |                   |     |              |  |             |       |          |  |          |    |              |  |  |     |  |  |  |    |  |  |  |       | 
|Mobile                                                        |  |                   | 12  |              |  |             | 120   |          |  |          |   |              |  |  | 21  |  |  |  |   |  |  |  | 111   | 
|Fixed                                                         |  |                   | 35  |              |  |             | 275   |          |  |          | 22 |              |  |  | 56  |  |  |  | 1  |  |  |  | 275   | 
|Broadcast                                                     |  |                   |    |              |  |             | 46    |          |  |          |   |              |  |  | 2   |  |  |  |   |  |  |  | 44    | 
|EDB                                                           |  |                   | 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 and exit from
    activities                   |  |                   |     |              |  |             |       |          |  |          |    |              |  |  |     |  |  |  |    |  |  |  |       | 
|Mobile                                                        |  |                   | 8   |              |  |             |      |          |  |          |   |              |  |  | 8   |  |  |  |   |  |  |  |      | 
|Fixed                                                         |  |                   | 22  |              |  |             | 37    |          |  |          | 39 |              |  |  | 36  |  |  |  |   |  |  |  | 62    | 
|Broadcast                                                     |  |                   | 27  |              |  |             | 19    |          |  |          |   |              |  |  | 12  |  |  |  |   |  |  |  | 34    | 
|EDB                                                           |  |                   | 125 |              |  |             | 6     |          |  |          |   |              |  |  | 94  |  |  |  |   |  |  |  | 37    | 
|Other business units                                          |  |                   | 125 |              |  |             | 7     |          |  |          |   |              |  |  | 40  |  |  |  | 39 |  |  |  | 53    | 
|Corporate functions and group activities and
    eliminations |  |                   | 70  |              |  |             | 237   |          |  |          |   |              |  |  | 57  |  |  |  |   |  |  |  | 250   | 
|                                                              |  |                   |     |              |  |             |       |          |  |          |    |              |  |  |     |  |  |  |    |  |  |  |       | 
|Total loss contracts and exit from
    activities             |  |                   | 377 |              |  |             | 306   |          |  |          | 39 |              |  |  | 247 |  |  |  | 39 |  |  |  | 436   | 
|                                                              |  |                   |     |              |  |             |       |          |  |          |    |              |  |  |     |  |  |  |    |  |  |  |       | 
|Total                                                         |  |                   | 489 |              |  |             | 1,022 |          |  |          | 61 |              |  |  | 433 |  |  |  | 40 |  |  |  | 1,099 | 
|                                                              |  |                   |     |              |  |             |       |          |  |          |    |              |  |  |     |  |  |  |    |  |  |  |       | 

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|                                                           |  |                   |       |              |  |             |     |          |  |          |    |              |  |  |     |  |  |  |     |  |  |  |     | 
|---------------------------------------------------------- |  | ----------------- | ----- | ------------ |  | ----------- | --- | -------- |  | -------- | -- | ------------ |  |  | --- |  |  |  | --- |  |  |  | --- | 
|                                                           |  |                   |       |              |  | 2003        |     |          |  |          |    |             
|                                                           |  |                   |       | 2003         |  | additions   |     |          |  | 2003     |    |             
|                                                           |  | December 31,      |       | additions in |  | recorded    |     | 2003     |  | amounts  |    | December 31,
|                                                           |  | 2002              |       | profit       |  | directly in |     | amounts  |  | taken to |    | 2003        
|                                                           |  | balance           |       | and loss     |  | balance     |     | utilized |  | income   |    | balance     
|                                                           |  |                   |       |              |  |             |     |          |  |          |    |             
|                                                           |  |                  
|                                                           |  | (NOK in millions)
|Workforce reductions                                       |  |                   |       |              |  |             |     |          |  |          |    |              |  |  |     |  |  |  |     |  |  |  |     | 
|Mobile                                                     |  |                   | 111   |              |  |             |    |          |  |          |   |              |  |  | 80  |  |  |  | 21  |  |  |  | 10  | 
|Fixed                                                      |  |                   | 275   |              |  |             | 56  |          |  |          | 6  |              |  |  | 175 |  |  |  | 52  |  |  |  | 110 | 
|Broadcast                                                  |  |                   | 44    |              |  |             | 18  |          |  |          | 3  |              |  |  | 43  |  |  |  | 3   |  |  |  | 19  | 
|EDB                                                        |  |                   | 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 and exit from
    activities                |  |                   |       |              |  |             |     |          |  |          |    |              |  |  |     |  |  |  |     |  |  |  |     | 
|Fixed                                                      |  |                   | 62    |              |  |             | 16  |          |  |          | 3  |              |  |  | 48  |  |  |  | 14  |  |  |  | 19  | 
|Broadcast                                                  |  |                   | 34    |              |  |             |    |          |  |          |   |              |  |  | 13  |  |  |  | 8   |  |  |  | 13  | 
|EDB                                                        |  |                   | 37    |              |  |             | 138 |          |  |          |   |              |  |  | 32  |  |  |  | 2   |  |  |  | 141 | 
|Other business units                                       |  |                   | 53    |              |  |             | 9   |          |  |          | 6  |              |  |  | 35  |  |  |  | 33  |  |  |  |    | 
|Corporate functions, group activities and
    eliminations |  |                   | 250   |              |  |             | 39  |          |  |          | 7  |              |  |  | 115 |  |  |  |    |  |  |  | 181 | 
|                                                           |  |                   |       |              |  |             |     |          |  |          |    |              |  |  |     |  |  |  |     |  |  |  |     | 
|Total loss contracts and exit from
    activities          |  |                   | 436   |              |  |             | 202 |          |  |          | 16 |              |  |  | 243 |  |  |  | 57  |  |  |  | 354 | 
|                                                           |  |                   |       |              |  |             |     |          |  |          |    |              |  |  |     |  |  |  |     |  |  |  |     | 
|Total                                                      |  |                   | 1,099 |              |  |             | 439 |          |  |          | 30 |              |  |  | 778 |  |  |  | 152 |  |  |  | 638 | 
|                                                           |  |                   |       |              |  |             |     |          |  |          |    |              |  |  |     |  |  |  |     |  |  |  |     | 

Provisions as of December 31:

|                     |  |                   |       |      |  |  |     | 
|-------------------- |  | ----------------- | ----- | ---- |  |  | --- | 
|                     |  | 2002              |       | 2003
|                     |  |                   |       |     
|                     |  |                  
|                     |  | (NOK in millions)
|Short term (note 22) |  |                   | 865   |      |  |  | 402 | 
|Long term (note 19)  |  |                   | 234   |      |  |  | 236 | 
|                     |  |                   |       |      |  |  |     | 
|Total                |  |                   | 1,099 |      |  |  | 638 | 
|                     |  |                   |       |      |  |  |     | 

Additions recorded directly in the balance sheet
in 2003 mainly consisted of translations adjustments. Additions
recorded directly in the balance sheet in 2002 and 2001 related
to provisions for liabilities in companies which were acquired
during these years, as a consequence of events and decisions
made in the companies prior to the time of consolidation.

Provisions for workforce reductions as of
December 31, 2001 included more than 250 employees,
approximately 1,600 employees as of December 31, 2002 and
more than 800 employees as of December 31, 2003.

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12.     FINANCIAL
INCOME AND EXPENSES

|                                                                |  |                   |        |      |  |      |        |   |  |  |        |  
|--------------------------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                                |  | 2001              |        | 2002 |  | 2003
|                                                                |  |                   |        |      |  |     
|                                                                |  |                  
|                                                                |  | (NOK in millions)
|Dividends from satellite organizations                          |  |                   | 97     |      |  |      |       |   |  |  |       |  
|Interest income                                                 |  |                   | 740    |      |  |      | 476    |   |  |  | 484    |  
|Other financial income                                          |  |                   | 60     |      |  |      | 91     |   |  |  | 102    |  
|                                                                |  |                   |        |      |  |      |        |   |  |  |        |  
|Total financial income                                          |  |                   | 897    |      |  |      | 567    |   |  |  | 586    |  
|Interest expenses                                               |  |                   | (1,638 | )    |  |      | (1,901 | ) |  |  | (2,033 | )
|Other financial expenses                                        |  |                   | (53    | )    |  |      | (96    | ) |  |  | (45    | )
|Capitalized interest                                            |  |                   | 295    |      |  |      | 164    |   |  |  | 55     |  
|Total financial expenses                                        |  |                   | (1,396 | )    |  |      | (1,833 | ) |  |  | (2,023 | )
|                                                                |  |                   |        |      |  |      |        |   |  |  |        |  
|Net foreign currency (loss)                                     |  |                   | (402   | )    |  |      | (311   | ) |  |  | (1     | )
|                                                                |  |                   |        |      |  |      |        |   |  |  |        |  
|Gain on disposal of financial assets                            |  |                   | 491    |      |  |      | 59     |   |  |  | 95     |  
|Loss on disposal of financial assets                            |  |                   | (150   | )    |  |      | (31    | ) |  |  | (91    | )
|Write-downs and reversal of write-downs of
    financial assets |  |                   | (599   | )    |  |      | (817   | ) |  |  | 69     |  
|Net gain (loss) and write-downs of financial
    assets         |  |                   | (258   | )    |  |      | (789   | ) |  |  | 73     |  
|                                                                |  |                   |        |      |  |      |        |   |  |  |        |  
|Net financial items                                             |  |                   | (1,159 | )    |  |      | (2,366 | ) |  |  | (1,365 | )
|                                                                |  |                   |        |      |  |      |        |   |  |  |        |  

In 2003, the write-downs, which were made in 2002
on the shares in the listed company New Skies satellites and on
the capital contribution to Telenor Pension Fund, were reversed
due to increased market values. During 2002 and 2001,
write-downs were made on shares and other financial assets, for
diminution in values other than temporary. The write-downs were
triggered by a fall in market values. Listed shares were written
down to the quoted market prices. For non-listed shares,
individual estimates of the fair values were made. In 2002, the
value of the capital contribution to Telenor Pension Fund was
written down to the book value of the equity in the Pension Fund
as of December 31, 2002.

13.     TAXES

|                                                            |  |                   |        |      |  |      |        |   |  |  |       | 
|----------------------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ | - |  |  | ----- | 
|                                                            |  | 2001              |        | 2002 |  | 2003
|                                                            |  |                   |        |      |  |     
|                                                            |  |                  
|                                                            |  | (NOK in millions)
|Profit (loss) before taxes and minority
    interests       |  |                   |        |      |  |      |        |   |  |  |       | 
|Norway                                                      |  |                   | 2,683  |      |  |      | (1,150 | ) |  |  | 3,464 | 
|Outside Norway(1)                                           |  |                   | 7,572  |      |  |      | (3,986 | ) |  |  | 3,962 | 
|                                                            |  |                   |        |      |  |      |        |   |  |  |       | 
|Total profit (loss) before taxes and minority
    interests |  |                   | 10,255 |      |  |      | (5,136 | ) |  |  | 7,426 | 
|                                                            |  |                   |        |      |  |      |        |   |  |  |       | 
|Current taxes                                               |  |                   |        |      |  |      |        |   |  |  |       | 
|Norway                                                      |  |                   | 1,826  |      |  |      | 2,769  |   |  |  | 11    | 
|Outside Norway                                              |  |                   | 1,758  |      |  |      | 1,478  |   |  |  | 761   | 
|                                                            |  |                   |        |      |  |      |        |   |  |  |       | 
|Total current taxes                                         |  |                   | 3,584  |      |  |      | 4,247  |   |  |  | 772   | 
|Deferred taxes                                              |  |                   |        |      |  |      |        |   |  |  |       | 
|Norway                                                      |  |                   | (555   | )    |  |      | (4,005 | ) |  |  | 916   | 
|Outside Norway                                              |  |                   | 868    |      |  |      | (722   | ) |  |  | 688   | 
|                                                            |  |                   |        |      |  |      |        |   |  |  |       | 
|Total deferred taxes                                        |  |                   | 313    |      |  |      | (4,727 | ) |  |  | 1,604 | 
|Total income tax expense (income)                           |  |                   | 3,897  |      |  |      | (480   | ) |  |  | 2,376 | 
|                                                            |  |                   |        |      |  |      |        |   |  |  |       | 






|    |                                                                                                                                                                                                                                                                                                                                  
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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, except the sale of VIAG Interkom in
    2001.

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Effective tax rate

|                                                                            |  |                   |        |      |  |      |        |      |  |  |       |  
|--------------------------------------------------------------------------- |  | ----------------- | ------ | ---- |  | ---- | ------ | ---- |  |  | ----- | -
|                                                                            |  | 2001              |        | 2002 |  | 2003
|                                                                            |  |                   |        |      |  |     
|                                                                            |  |                  
|                                                                            |  | (NOK in millions)
|Expected income taxes according to statutory tax
    rate (28%)(1)          |  |                   | 2,871  |      |  |      | (1,438 | )    |  |  | 2,079 |  
|Net losses from associated companies and
    subsidiaries outside Norway(2) |  |                   | 1,778  |      |  |      | 1,012  |      |  |  | 347   |  
|Net non-deductible expenses and (non-taxable
    income)                    |  |                   | (1,404 | )    |  |      | 85     |      |  |  | 108   |  
|Amortization and write-downs of goodwill                                    |  |                   | 399    |      |  |      | 850    |      |  |  | 148   |  
|Previous not recognized deferred tax assets                                 |  |                   | (205   | )    |  |      | (725   | )    |  |  | (747  | )
|Not recognized tax assets current year                                      |  |                   | 470    |      |  |      | 73     |      |  |  | 52    |  
|Tax claim related to Sonofon                                                |  |                   |       |      |  |      | 2,409  |      |  |  |      |  
|Court case in Greece                                                        |  |                   |       |      |  |      | 414    |      |  |  | (200  | )
|Liquidation of Telenor Digifone Holding AS                                  |  |                   |       |      |  |      | (3,227 | )    |  |  |      |  
|Deferred taxes on retained earnings in
    subsidiaries                     |  |                   | 76     |      |  |      |       |      |  |  | 655   |  
|Other                                                                       |  |                   | (88    | )    |  |      | 67     |      |  |  | (66   | )
|                                                                            |  |                   |        |      |  |      |        |      |  |  |       |  
|Income tax expense (income)                                                 |  |                   | 3,897  |      |  |      | (480   | )(3) |  |  | 2,376 |  
|                                                                            |  |                   |        |      |  |      |        |      |  |  |       |  
|Effective tax rate in %                                                     |  |                   | 38.0   |      |  |      | N/A    | (3)  |  |  | 32.0  |  






|    |                                                                                                         
|--- | --------------------------------------------------------------------------------------------------------
|(1) | Norwegian nominal statutory tax rate is 28 %.                                                           
|   
|(2) | Includes amortization and write-downs of
    Telenors excess values in respect of associated companies.
|   
|(3) | There was a loss before taxes and minority
    interests in 2002, and a tax income.                     

In 2003, Telenor recorded deferred taxes on
retained earnings in certain companies outside Norway due to
their good financial performance. Telenor now expects to receive
dividends from these companies. The effective tax rate in 2003
and previous years was also affected by negative results from
certain associated companies and subsidiaries outside Norway and
amortization and write-downs of goodwill, on which deferred tax
assets have not been recognized. This was partially offset by
tax-related losses upon decisions for liquidation and disposal
of companies included in the line item Previous not
recognized deferred tax assets. A large portion of the
amortization and write-downs of goodwill in EDB Business Partner
in 2003 and previous years have reduced taxes.

In 2003, Telenor Eiendom Holding AS realized a
tax loss of NOK 2.8 billion in connection with the
sale of shares in Telenor Business Solutions AS to Telenor
Business Solutions Holding AS as part of the overall
restructuring of the Group. Telenors opinion is that this
is a bona fide tax loss and Telenor intends to claim this loss
as a regular loss on our tax returns for 2003. Due to the
challenge of Telenors tax return regarding the tax loss in
connection with the sale of shares in Sonofon in 2001, discussed
below, Telenor did not reflect the tax effect deriving from the
sale of shares in Telenor business Solutions AS in the results
for 2003. However, we will recognize this tax effect if either
the final court decision regarding the Sonofon tax loss is
favorable to Telenor, or the Norwegian tax authorities recognize
the tax loss following the assessment of Telenors 2003 tax
returns.

In 2002, Telenor realized tax losses on the
simultaneous liquidation of Telenor Digifone Holding AS and Nye
Telenor Communications I AS. Telenor Digifone Holding AS was the
company that realized the sale of shares in Esat Digifone in
2001. The taxable loss was due to a high cost price for tax
purposes for the shares owned by Telenor ASA. Furthermore, in
2002 Telenor decided to sell or liquidate some companies on
which valuation allowances had been recorded in previous years.
These effects have been recorded or the deferred tax assets had
not been recognized in the reconciliation line item
Previous not recognized deferred tax assets.

During the ordinary tax assessment for 2002, the
tax assessment authorities in Norway notified Telenor
Communication AS (now Telenor Eiendom Holding AS) that its tax
return for the financial year 2001 had not been accepted insofar
as the loss deriving from the disposal of the shares in Sonofon
Holding A/S was concerned. As a result of this tax claim, the
current tax for 2001 was increased by NOK 2.4 billion,
which was expensed in 2002. Telenor recognized this tax loss
upon the disposal of shares in Sonofon Holding A/S

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to Dansk Mobil Holding AS, a sister company of
Telenor Eiendom Holding AS. The disposal was carried out as an
integral part of the overall restructuring of our Group. In
January 2003, Telenor initiated proceedings against the
Norwegian Tax Authorities. The change of Telenors tax
return has increased the RISK adjustment (adjustment of the
taxable costprice, that only affect Norwegian investors) for
Telenor ASA as of January 1, 2002 by NOK 3.44 per
share. Any subsequent reassessment as a result of a court ruling
in favor of Telenor will decrease the RISK adjustment with
effect from January 1 in the year of reassessment.


In 2002, Telenor expensed NOK 0.4 billion in
connection with a court ruling in Greece, as this was the best
estimate of the amount Telenor could be required to pay in case
of a final outcome unfavorable to Telenor. However, in 2003
Telenor agreed to a settlement of this judicial proceeding, and
NOK 0.2 billion was taken to income.

The disposal of shares in Sonofon was realized in
2001 for tax purposes, and reduced Telenors estimated
current taxes by NOK 2.4 billion. As mentioned above,
the tax authorities in 2002 challenged the tax return for 2001.
In 2001, Telenor recorded current taxes of
NOK 4.6 billion on the gains on sale of VIAG Interkom
and Esat Digifone, in addition to deferred taxes on these sales
of NOK 1.5 billion. There was also a low taxable gain
from the sale of Telenor Media due to a high cost price for tax
purposes established in connection with the formation of the new
holding company Telenor ASA in 2000, where the new tax values
established was based on estimated market values at that time.

Tax losses carried forward

Tax losses carried forward in selected countries
expire as follows:

|                                 |  |                   |       |        |  |        |       |          |  |       |     |       |  |  |     |  |  |  |     |  |  |  |        | 
|-------------------------------- |  | ----------------- | ----- | ------ |  | ------ | ----- | -------- |  | ----- | --- | ----- |  |  | --- |  |  |  | --- |  |  |  | ------ | 
|                                 |  |                   |       |        |  | Other  |       |          |  |       |     |      
|                                 |  | Norway            |       | Sweden |  | Nordic |       | Malaysia |  | Other |     | Total
|                                 |  |                   |       |        |  |        |       |          |  |       |     |      
|                                 |  |                  
|                                 |  | (NOK in millions)
|2004                             |  |                   | 6     |        |  |        |      |          |  |       | 3   |       |  |  |    |  |  |  | 27  |  |  |  | 36     | 
|2005                             |  |                   |      |        |  |        |      |          |  |       | 12  |       |  |  |    |  |  |  | 19  |  |  |  | 31     | 
|2006                             |  |                   |      |        |  |        |      |          |  |       | 26  |       |  |  |    |  |  |  | 38  |  |  |  | 64     | 
|2007                             |  |                   |      |        |  |        |      |          |  |       | 72  |       |  |  |    |  |  |  | 89  |  |  |  | 161    | 
|2008                             |  |                   |      |        |  |        |      |          |  |       | 46  |       |  |  |    |  |  |  | 100 |  |  |  | 146    | 
|2009 and later                   |  |                   | 7,300 |        |  |        |      |          |  |       | 206 |       |  |  |    |  |  |  | 330 |  |  |  | 7,836  | 
|Not time-limited                 |  |                   |      |        |  |        | 3,324 |          |  |       | 52  |       |  |  | 421 |  |  |  | 108 |  |  |  | 3,905  | 
|                                 |  |                   |       |        |  |        |       |          |  |       |     |       |  |  |     |  |  |  |     |  |  |  |        | 
|Total tax losses carried forward |  |                   | 7,306 |        |  |        | 3,324 |          |  |       | 417 |       |  |  | 421 |  |  |  | 711 |  |  |  | 12,179 | 
|                                 |  |                   |       |        |  |        |       |          |  |       |     |       |  |  |     |  |  |  |     |  |  |  |        | 

In 2002, Telenor realized a tax loss to be
carried forward in Norway, related mainly to the liquidation of
Telenor Digifone Holding AS. Most of the tax effect of tax
losses in Norway and Malaysia (DiGi.Com) are recorded as tax
assets because it is more probable than not that these tax
losses will be utilized in the future. Deferred tax assets on
the main part of the rest of the tax losses have been reduced by
valuation allowances.

Tax losses in subsidiaries which will be
liquidated are to a large extent not included in the preceding
table.

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Deferred taxes

|                                            |  |                   |        |             |  |        |        |             |  |  |        |   |  |  |        |  
|------------------------------------------- |  | ----------------- | ------ | ----------- |  | ------ | ------ | ----------- |  |  | ------ | - |  |  | ------ | -
|                                            |  | Assets            |        | Liabilities |  | Assets |        | Liabilities
|                                            |  | 2002              |        | 2002        |  | 2003   |        | 2003       
|                                            |  |                   |        |             |  |        |        |            
|                                            |  |                  
|                                            |  | (NOK in millions)
|Tangible and intangible assets              |  |                   | 2,669  |             |  |        | (1,342 | )           |  |  | 2,658  |   |  |  | (1,367 | )
|Associated companies                        |  |                   | 5,777  |             |  |        | (704   | )           |  |  | 5,122  |   |  |  | (124   | )
|Retained earnings in foreign subsidiaries   |  |                   |       |             |  |        | (76    | )           |  |  |       |   |  |  | (737   | )
|Other long-term items                       |  |                   | 534    |             |  |        | (868   | )           |  |  | 1,237  |   |  |  | (542   | )
|                                            |  |                   |        |             |  |        |        |             |  |  |        |   |  |  |        |  
|Total long-term assets and
    liabilities  |  |                   | 8,980  |             |  |        | (2,990 | )           |  |  | 9,017  |   |  |  | (2,770 | )
|Total current assets and liabilities        |  |                   | 703    |             |  |        | (198   | )           |  |  | 417    |   |  |  | (156   | )
|Tax losses carried forward                  |  |                   | 4,943  |             |  |        |       |             |  |  | 3,426  |   |  |  |       |  
|                                            |  |                   |        |             |  |        |        |             |  |  |        |   |  |  |        |  
|Deferred taxes                              |  |                   | 14,626 |             |  |        | (3,188 | )           |  |  | 12,860 |   |  |  | (2,926 | )
|Valuation allowances                        |  |                   | (7,088 | )           |  |        |       |             |  |  | (6,900 | ) |  |  |       |  
|                                            |  |                   |        |             |  |        |        |             |  |  |        |   |  |  |        |  
|Net deferred taxes                          |  |                   | 4,350  |             |  |        |       |             |  |  | 3,034  |   |  |  |       |  
|                                            |  |                   |        |             |  |        |        |             |  |  |        |   |  |  |        |  
|Of which deferred tax assets                |  |                   | 4,866  |             |  |        |       |             |  |  | 3,850  |   |  |  |       |  
|Of which deferred tax liabilities (note 19) |  |                   | (516   | )           |  |        |       |             |  |  | (816   | ) |  |  |       |  

Deferred taxes have not been recognized on
undistributed earnings from domestic entities, which can be
remitted tax-free as dividends. Deferred taxes are calculated on
retained earnings in foreign subsidiaries based on the estimated
taxation on transfer of funds to the parent company, based on
the enacted tax rates and regulation as of the date of the
balance sheet.

Changes in valuation allowances

|                                                                         |  |                   |       |      |  |  |       |  
|------------------------------------------------------------------------ |  | ----------------- | ----- | ---- |  |  | ----- | -
|                                                                         |  | 2002              |       | 2003
|                                                                         |  |                   |       |     
|                                                                         |  |                  
|                                                                         |  | (NOK in millions)
|Balance at the beginning of the year                                     |  |                   | 5,597 |      |  |  | 7,088 |  
|Changes in opening balance of valuation allowances                       |  |                   | (103  | )    |  |  | (554  | )
|Net losses from associated companies and
    subsidiaries outside Norway |  |                   | 1,012 |      |  |  | 347   |  
|Other not recognized tax assets this year                                |  |                   | 73    |      |  |  | 52    |  
|Acquisitions and divestitures                                            |  |                   | 171   |      |  |  | 3     |  
|Currency adjustment                                                      |  |                   | 338   |      |  |  | (36   | )
|                                                                         |  |                   |       |      |  |  |       |  
|Balance at the end of the year                                           |  |                   | 7,088 |      |  |  | 6,900 |  
|                                                                         |  |                   |       |      |  |  |       |  

Valuation allowances as of December 31, 2003
were mainly related to losses from associated companies,
including amortization and write-downs of net excess values, by
approximately NOK 5.1 billion, and tax losses carried
forward, mainly in foreign subsidiaries, by approximately NOK
1.3 billion.

Preliminary RISK regulation (regulation of the
taxable cost price) per share for Telenor ASA for 2003 is
calculated to be negative by NOK 0.99 per share.

14.     AMORTIZATION,
DEPRECIATION AND WRITE-DOWNS

Specification of amortization, depreciation
and write-downs:

|                              |  |                   |       |          |  |                  |       |      |  |      |       |      |  |      |       |      |  |      |       |  |  |  |     |  |  |  |     |  |  |  |       |  |  |  |       | 
|----------------------------- |  | ----------------- | ----- | -------- |  | ---------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- |  |  |  | --- |  |  |  | --- |  |  |  | ----- |  |  |  | ----- | 
|                              |  |                   |       |          |  |                  |       |      |  |      |       |      |  |     
|                              |  |                   |       |          |  | Other intangible
|                              |  | Tangible assets   |       | Goodwill |  | assets          
|                              |  |                   |       |          |  |                 
|                              |  | 2001              |       | 2002     |  | 2003             |       | 2001 |  | 2002 |       | 2003 |  | 2001 |       | 2002 |  | 2003
|                              |  |                   |       |          |  |                  |       |      |  |      |       |      |  |      |       |      |  |     
|                              |  |                  
|                              |  | (NOK in millions)
|Amortization and depreciation |  |                   | 5,863 |          |  |                  | 7,624 |      |  |      | 7,986 |      |  |      | 668   |      |  |      | 1,002 |  |  |  | 686 |  |  |  | 720 |  |  |  | 1,610 |  |  |  | 1,925 | 
|Write-downs                   |  |                   | 1,430 |          |  |                  | 424   |      |  |      | 104   |      |  |      | 2,266 |      |  |      | 2,632 |  |  |  | 16  |  |  |  | 126 |  |  |  | 497   |  |  |  | 25    | 
|                              |  |                   |       |          |  |                  |       |      |  |      |       |      |  |      |       |      |  |      |       |  |  |  |     |  |  |  |     |  |  |  |       |  |  |  |       | 
|Total                         |  |                   | 7,293 |          |  |                  | 8,048 |      |  |      | 8,090 |      |  |      | 2,934 |      |  |      | 3,634 |  |  |  | 702 |  |  |  | 846 |  |  |  | 2,107 |  |  |  | 1,950 | 
|                              |  |                   |       |          |  |                  |       |      |  |      |       |      |  |      |       |      |  |      |       |  |  |  |     |  |  |  |     |  |  |  |       |  |  |  |       | 

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Specification of write-downs

|                     |  |                   |       |          |  |            |       |          |  |          |     |            |  |          |     |          |  |            |       |   |  |  |     |  |  |  |     |  |  |  |    |  |  |  |    | 
|-------------------- |  | ----------------- | ----- | -------- |  | ---------- | ----- | -------- |  | -------- | --- | ---------- |  | -------- | --- | -------- |  | ---------- | ----- | - |  |  | --- |  |  |  | --- |  |  |  | -- |  |  |  | -- | 
|                     |  |                   |       |          |  |           
|                     |  | 2001              |       | 2002     |  | 2003      
|                     |  |                   |       |          |  |           
|                     |  |                   |       | Other    |  |            |       | Other    |  |          |     | Other     
|                     |  | Tangible          |       |          |  | intangible |       | Tangible |  |          |     | intangible |  | Tangible |     |          |  | intangible
|                     |  | assets            |       | Goodwill |  | assets     |       | assets   |  | Goodwill |     | assets     |  | assets   |     | Goodwill |  | assets    
|                     |  |                   |       |          |  |            |       |          |  |          |     |            |  |          |     |          |  |           
|                     |  |                  
|                     |  | (NOK in millions)
|Mobile               |  |                   | 22    |          |  |            |      |          |  |          |    |            |  |          | 33  |          |  |            | 2,138 |   |  |  | 118 |  |  |  | 33  |  |  |  |   |  |  |  | 2  | 
|Fixed                |  |                   | 649   |          |  |            | 187   |          |  |          | 6   |            |  |          | 340 |          |  |            | 160   |   |  |  |    |  |  |  | 19  |  |  |  |   |  |  |  | 5  | 
|Broadcast            |  |                   | 494   |          |  |            |      |          |  |          |    |            |  |          | 47  |          |  |            |      |   |  |  | 83  |  |  |  | 15  |  |  |  |   |  |  |  | 3  | 
|EDB Business Partner |  |                   |      |          |  |            | 1,259 |          |  |          | 3   |            |  |          | 8   |          |  |            | 356   |   |  |  |    |  |  |  | 12  |  |  |  | 16 |  |  |  |   | 
|Others               |  |                   | 265   |          |  |            | 820   |          |  |          | 117 |            |  |          | (4  | )        |  |            | (22   | ) |  |  | 296 |  |  |  | 25  |  |  |  |   |  |  |  | 15 | 
|                     |  |                   |       |          |  |            |       |          |  |          |     |            |  |          |     |          |  |            |       |   |  |  |     |  |  |  |     |  |  |  |    |  |  |  |    | 
|Total                |  |                   | 1,430 |          |  |            | 2,266 |          |  |          | 126 |            |  |          | 424 |          |  |            | 2,632 |   |  |  | 497 |  |  |  | 104 |  |  |  | 16 |  |  |  | 25 | 
|                     |  |                   |       |          |  |            |       |          |  |          |     |            |  |          |     |          |  |            |       |   |  |  |     |  |  |  |     |  |  |  |    |  |  |  |    | 

The write-downs of tangible assets in 2003 were
insignificant. The write-downs of tangible assets in Fixed in
2002 were mainly related to Fixed-Norway. In connection with the
integration of our operating service business in Fixed-Norway
with our internal IT operating environment, we decided to reduce
the number of operating platforms and we wrote down operating
platforms and equipment that no longer were in use. Equipment
related to operating contracts was evaluated based on expected
cash flows including terminal value at the end of the contract
period. In Broadcast, in 2002 write-downs were made primarily on
equipment for TV-distribution due to the low demand in the small
antenna TV-networks market in Denmark and Sweden. Write-downs of
tangible assets in Fixed in 2001 related mainly to the
transatlantic fiber capacity (TAT 14) by NOK 533
million. Write-downs in Broadcast were mainly related to
satellite and satellite equipment by NOK 490 million.
Write-downs of tangible assets on Others in 2001 related mainly
to Nextra International due to evaluations of the earnings
potential and a review of our strategy, TTYL which we decided to
close down in 2001 and Satellite Networks in connection with
evaluations of the earnings potential in parts of the
operations, including the Poland operations.

Write-downs of goodwill were insignificant in
2003. The write-downs of goodwill in 2002: In Mobile DiGi.Com
was written-down as a result of continued low publicly quoted
share prices. The write-down was based on the publicly quoted
share price at December 31, 2002, adjusted to reflect a
control premium. The write-downs in Fixed were partially related
to the Internet operations in the Czech Republic and Slovakia.
The write-downs in EDB Business Partner was based on discounted
expected cash flows.

The write-downs of goodwill in 2001: Write-downs
in Fixed was made within managed services based on evaluations
of the earnings potential in parts of the operations. Due to the
significant decline in the market value of EDB Business
Partners shares and the entire sector in which EDB
Business Partner operates, goodwill related to the Consulting,
IT Operations and Bank & Finance areas were written down. In
Others, the write-downs mainly related to Nextra International
and Itworks as a result of a reassessment of the business
prospects and strategy of the activities.

Write downs of other intangible assets were
insignificant in 2003. In 2002, we wrote down parts of our
IT-systems portfolio in Mobile that was no longer in use. The
write-downs of other intangible assets in Broadcast in 2002 was
primarily related to delayed commercialization of new
broadcasting standards, as well as reduced expectations for the
use of interactive TV as a payment facility. The write-downs in
Others in 2002 related to CA-software based on a review of the
sales potential. Write-downs in 2001: others related
to Nextra International and TTYL.

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##### Table of Contents



15.     TANGIBLE AND
INTANGIBLE ASSETS

|                                      |  |                   |        |                  |  |              |        |                  |  |              |       |             |  |              |      |              |  |  |        |   |  |  |        |   |  |  |         |   |  |  |        | 
|------------------------------------- |  | ----------------- | ------ | ---------------- |  | ------------ | ------ | ---------------- |  | ------------ | ----- | ----------- |  | ------------ | ---- | ------------ |  |  | ------ | - |  |  | ------ | - |  |  | ------- | - |  |  | ------ | 
|                                      |  |                   |        |                  |  |              |        |                  |  |             
|                                      |  |                   |        | Accumulated cost |  |              |        |                  |  |             
|                                      |  |                   |        |                  |  |              |        | Acc. depr.       |  |             
|                                      |  |                   |        |                  |  | Translation  |        |                  |  | Depreciation |       | and         |  |             
|                                      |  | Book value        |        |                  |  | adjustm. and |        |                  |  | and          |       | write-downs |  | Book value  
|                                      |  | December 31,      |        | January 1,       |  | Additions    |        | reclassification |  | Disposals    |       | write-downs |  | December 31, |      | December 31,
|                                      |  | 2002              |        | 2003             |  | 2003         |        | 2003             |  | 2003         |       | 2003        |  | 2003         |      | 2003        
|                                      |  |                   |        |                  |  |              |        |                  |  |              |       |             |  |              |      |             
|                                      |  |                  
|                                      |  | (NOK in millions)
|Local, regional & trunk networks      |  |                   | 10,849 |                  |  |              | 37,759 |                  |  |              | 1,457 |             |  |              | 364  |              |  |  | (591   | ) |  |  | (2,235 | ) |  |  | (28,821 | ) |  |  | 10,168 | 
|Mobile telephone network and switches |  |                   | 9,625  |                  |  |              | 16,073 |                  |  |              | 2,487 |             |  |              | (259 | )            |  |  | (28    | ) |  |  | (2,050 | ) |  |  | (8,388  | ) |  |  | 9,885  | 
|Subscriber equipment                  |  |                   | 82     |                  |  |              | 323    |                  |  |              | 80    |             |  |              | 20   |              |  |  | (41    | ) |  |  | (59    | ) |  |  | (285    | ) |  |  | 97     | 
|Switches & equipment                  |  |                   | 3,335  |                  |  |              | 14,408 |                  |  |              | 485   |             |  |              | 347  |              |  |  | (1,187 | ) |  |  | (1,223 | ) |  |  | (11,614 | ) |  |  | 2,439  | 
|Radio installations                   |  |                   | 1,034  |                  |  |              | 1,675  |                  |  |              | 15    |             |  |              | (1   | )            |  |  | (33    | ) |  |  | (12    | ) |  |  | (638    | ) |  |  | 1,018  | 
|Cable TV equipment                    |  |                   | 996    |                  |  |              | 1,741  |                  |  |              | 69    |             |  |              | (157 | )            |  |  | (30    | ) |  |  | (202   | ) |  |  | (832    | ) |  |  | 791    | 
|Land                                  |  |                   | 822    |                  |  |              | 829    |                  |  |              | 8     |             |  |              | (99  | )            |  |  | (26    | ) |  |  | (2     | ) |  |  | (1      | ) |  |  | 711    | 
|Buildings                             |  |                   | 6,417  |                  |  |              | 10,267 |                  |  |              | 537   |             |  |              | 90   |              |  |  | (319   | ) |  |  | (403   | ) |  |  | (4,107  | ) |  |  | 6,468  | 
|Support systems                       |  |                   | 2,908  |                  |  |              | 8,312  |                  |  |              | 1,042 |             |  |              | (40  | )            |  |  | (1,257 | ) |  |  | (1,788 | ) |  |  | (6,338  | ) |  |  | 1,719  | 
|Satellites                            |  |                   | 789    |                  |  |              | 2,185  |                  |  |              |      |             |  |              | (395 | )            |  |  |       |   |  |  | (116   | ) |  |  | (1,173  | ) |  |  | 617    | 
|                                      |  |                   |        |                  |  |              |        |                  |  |              |       |             |  |              |      |              |  |  |        |   |  |  |        |   |  |  |         |   |  |  |        | 
|Total(1)                              |  |                   | 36,857 |                  |  |              | 93,572 |                  |  |              | 6,180 |             |  |              | (130 | )            |  |  | (3,512 | ) |  |  | (8,090 | ) |  |  | (62,197 | ) |  |  | 33,913 | 
|                                      |  |                   |        |                  |  |              |        |                  |  |              |       |             |  |              |      |              |  |  |        |   |  |  |        |   |  |  |         |   |  |  |        | 
|Work in progress(2)                   |  |                   | 2,408  |                  |  |              | 2,408  |                  |  |              | (585  | )           |  |              | (14  | )            |  |  |       |   |  |  |       |   |  |  |        |   |  |  | 1,809  | 
|Total                                 |  |                   | 39,265 |                  |  |              | 95,980 |                  |  |              | 5,595 |             |  |              | (144 | )            |  |  | (3,512 | ) |  |  | (8,090 | ) |  |  | (62,197 | ) |  |  | 35,722 | 
|                                      |  |                   |        |                  |  |              |        |                  |  |              |       |             |  |              |      |              |  |  |        |   |  |  |        |   |  |  |         |   |  |  |        | 






|    |                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes book value of NOK 2,533 million for
    capital leases as of December 31, 2003, mainly switches,
    GSM Mobile telephone network, fixed-line network and satellites.
|   
|(2) | Net additions.                                                                                                                                                                

The Group has entered into Cross Border QTE
Leases for telephony switches, GSM Mobile network and fixed-line
network with a book value as of December 31, 2003 of
NOK 1,530 million. Telenor has provided defeseance all
amounts due by us under these agreements with highly rated
financial institutions and US Government related securities. The
financial institutions then release the payments over the life
of the leases in accordance with their contractual terms. During
the course of the leases, Telenor maintains the rights and
benefits of ownership of the equipment. Telenor has received
benefits of NOK 530 million since the parties can
depreciate the equipment for tax purposes. The amounts are
deferred over the expected lease periods. See note 31 for
further information.

Intangible assets

In 2003, a reclassification of software in
administrative support systems from tangible assets to
intangible assets was made. The reclassification amounted to NOK
1,737 million in book value as of December 31, 2002,
NOK 648 million in amortization and NOK 101 million in
write-downs for 2002 and NOK 403 million in amortization
for 2001. These changes affected mainly our Mobile and Fixed
business areas.

Accumulated capitalized interest (cost) was NOK
1,169 million as of December 31, 2003.

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|                              |  |                   |        |                  |  |              |        |                  |  |              |      |                 |  |              |     |              |  |  |        |   |  |  |        |   |  |  |         |   |  |  |        | 
|----------------------------- |  | ----------------- | ------ | ---------------- |  | ------------ | ------ | ---------------- |  | ------------ | ---- | --------------- |  | ------------ | --- | ------------ |  |  | ------ | - |  |  | ------ | - |  |  | ------- | - |  |  | ------ | 
|                              |  |                   |        |                  |  |              |        |                  |  |             
|                              |  |                   |        | Accumulated cost |  |              |        |                  |  |             
|                              |  |                   |        |                  |  |              |        | Acc. depr.       |  |             
|                              |  |                   |        |                  |  | Translation  |        |                  |  |              |      | and             |  |             
|                              |  | Book value        |        |                  |  | adjustm. and |        |                  |  | Depreciation |      | write-downs     |  | Book value  
|                              |  | December 31,      |        | January 1,       |  | Additions    |        | reclassification |  | Disposals    |      | and write-downs |  | December 31, |     | December 31,
|                              |  | 2002              |        | 2003             |  | 2003         |        | 2003             |  | 2003         |      | 2003            |  | 2003         |     | 2003        
|                              |  |                   |        |                  |  |              |        |                  |  |              |      |                 |  |              |     |             
|                              |  |                  
|                              |  | (NOK in millions)
|Goodwill                      |  |                   | 10,100 |                  |  |              | 16,942 |                  |  |              | 3    |                 |  |              | 70  |              |  |  | (1,500 | ) |  |  | (702   | ) |  |  | (6,291  | ) |  |  | 9,224  | 
|Other intangible assets       |  |                   |        |                  |  |              |        |                  |  |              |      |                 |  |              |     |              |  |  |        |   |  |  |        |   |  |  |         |   |  |  |        | 
|Customer base                 |  |                   | 2,237  |                  |  |              | 2,714  |                  |  |              | 16   |                 |  |              | 46  |              |  |  | (61    | ) |  |  | (554   | ) |  |  | (983    | ) |  |  | 1,732  | 
|Licenses                      |  |                   | 1,030  |                  |  |              | 1,725  |                  |  |              | 76   |                 |  |              | (4  | )            |  |  | (30    | ) |  |  | (199   | ) |  |  | (905    | ) |  |  | 862    | 
|Trademarks                    |  |                   | 530    |                  |  |              | 574    |                  |  |              |     |                 |  |              | 3   |              |  |  |       |   |  |  | (55    | ) |  |  | (100    | ) |  |  | 477    | 
|Others                        |  |                   | 2,555  |                  |  |              | 4,568  |                  |  |              | 967  |                 |  |              | 42  |              |  |  | (225   | ) |  |  | (1,142 | ) |  |  | (2,992  | ) |  |  | 2,360  | 
|                              |  |                   |        |                  |  |              |        |                  |  |              |      |                 |  |              |     |              |  |  |        |   |  |  |        |   |  |  |         |   |  |  |        | 
|Work in progress(1)           |  |                   | 330    |                  |  |              | 330    |                  |  |              | (225 | )               |  |              |    |              |  |  |       |   |  |  |       |   |  |  |        |   |  |  | 105    | 
|Total other intangible assets |  |                   | 6,682  |                  |  |              | 9,911  |                  |  |              | 834  |                 |  |              | 87  |              |  |  | (316   | ) |  |  | (1,950 | ) |  |  | (4,980  | ) |  |  | 5,536  | 
|                              |  |                   |        |                  |  |              |        |                  |  |              |      |                 |  |              |     |              |  |  |        |   |  |  |        |   |  |  |         |   |  |  |        | 
|Total                         |  |                   | 16,782 |                  |  |              | 26,853 |                  |  |              | 837  |                 |  |              | 157 |              |  |  | (1,816 | ) |  |  | (2,652 | ) |  |  | (11,271 | ) |  |  | 14,760 | 
|                              |  |                   |        |                  |  |              |        |                  |  |              |      |                 |  |              |     |              |  |  |        |   |  |  |        |   |  |  |         |   |  |  |        | 






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

Changes in the carrying value of goodwill for
the year ended December 31, 2003:

|                                                               |  |                   |       |       |  |           |      |              |  |        |       |       |  |  |       |   |  |  |     |   |  |  |        |  
|-------------------------------------------------------------- |  | ----------------- | ----- | ----- |  | --------- | ---- | ------------ |  | ------ | ----- | ----- |  |  | ----- | - |  |  | --- | - |  |  | ------ | -
|                                                               |  |                   |       |       |  |           |      | EDB Business |  |        |       |      
|                                                               |  | Mobile            |       | Fixed |  | Broadcast |      | Partner      |  | Others |       | Total
|                                                               |  |                   |       |       |  |           |      |              |  |        |       |      
|                                                               |  |                  
|                                                               |  | (NOK in millions)
|Balance as of January 1, 2003                                  |  |                   | 6,111 |       |  |           | (33  | )            |  |        | 2,311 |       |  |  | 1,498 |   |  |  | 213 |   |  |  | 10,100 |  
|Goodwill acquired                                              |  |                   | 4     |       |  |           | (77  | )            |  |        |      |       |  |  | 79    |   |  |  | (3  | ) |  |  | 3      |  
|Translation adjustments and reclassification                   |  |                   | 172   |       |  |           | (77  | )            |  |        | (16   | )     |  |  | 19    |   |  |  | 29  |   |  |  | 127    |  
|Amortization                                                   |  |                   | (400  | )     |  |           | 95   |              |  |        | (197  | )     |  |  | (151  | ) |  |  | (33 | ) |  |  | (686   | )
|Write-downs (impairment losses)                                |  |                   |      |       |  |           |     |              |  |        |      |       |  |  | (16   | ) |  |  |    |   |  |  | (16    | )
|Goodwill written off related to disposal of
    business units |  |                   |      |       |  |           | (251 | )            |  |        | (32   | )     |  |  | (7    | ) |  |  | (14 | ) |  |  | (304   | )
|                                                               |  |                   |       |       |  |           |      |              |  |        |       |       |  |  |       |   |  |  |     |   |  |  |        |  
|Balance as of December 31, 2003                                |  |                   | 5,887 |       |  |           | (343 | )            |  |        | 2,066 |       |  |  | 1,422 |   |  |  | 192 |   |  |  | 9,224  |  
|                                                               |  |                   |       |       |  |           |      |              |  |        |       |       |  |  |       |   |  |  |     |   |  |  |        |  

F-40



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##### Table of Contents



Goodwill related to the following subsidiaries
and operations

|                            |  |                   |       |              |  |             |             |  |  |  |      | 
|--------------------------- |  | ----------------- | ----- | ------------ |  | ----------- | ----------- |  |  |  | ---- | 
|                            |  | Book value        |       |              |  |            
|                            |  | December 31,      |       | Amortization |  | Year of    
|                            |  | 2003              |       | period       |  | acquisition
|                            |  |                   |       |              |  |            
|                            |  |                  
|                            |  | (NOK in millions)
|Pannon GSM                  |  |                   | 5,027 |              |  |             | 10-20 years |  |  |  | 2002 | 
|Canal Digital Group         |  |                   | 1,732 |              |  |             | 10-15 years |  |  |  | 2002 | 
|Kyivstar                    |  |                   | 288   |              |  |             | 12-20 years |  |  |  | 2002 | 
|Utfors AB                   |  |                   | (343  | )            |  |             | 18 years    |  |  |  | 2002 | 
|DiGi.Com bhd                |  |                   | 567   |              |  |             | 15-20 years |  |  |  | 2001 | 
|Canal Digital Sverige AB(1) |  |                   | 147   |              |  |             | 10 years    |  |  |  | 2001 | 
|Unigrid AB                  |  |                   | 107   |              |  |             | 10 years    |  |  |  | 2001 | 
|Marlink                     |  |                   | 149   |              |  |             | 10 years    |  |  |  | 2001 | 
|DnB IT Operations           |  |                   | 274   |              |  |             | 7 years     |  |  |  | 2001 | 
|Fellesdata AS               |  |                   | 861   |              |  |             | 20 years    |  |  |  | 2000 | 
|Telenor Avidi AS (alfaNett) |  |                   | 168   |              |  |             | 10 years    |  |  |  | 2000 | 
|Others                      |  |                   | 247   |              |  |             | 3-20 years  |  |  |  |      | 
|                            |  |                   |       |              |  |             |             |  |  |  |      | 
|Total                       |  |                   | 9,224 |              |  |             |             |  |  |  |      | 
|                            |  |                   |       |              |  |             |             |  |  |  |      | 






|    |                                     
|--- | ------------------------------------
|(1) | Sweden On Line AB and Nät Holding AB

16.     FINANCIAL
ASSETS

|                                             |  |                   |        |      |  |  |        | 
|-------------------------------------------- |  | ----------------- | ------ | ---- |  |  | ------ | 
|                                             |  | 2002              |        | 2003
|                                             |  |                   |        |     
|                                             |  |                  
|                                             |  | (NOK in millions)
|Long-term receivables(*)                     |  |                   | 1,299  |      |  |  | 1,629  | 
|Shares and other investments(**)             |  |                   | 2,461  |      |  |  | 2,219  | 
|Associated companies and joint ventures(***) |  |                   | 9,489  |      |  |  | 10,166 | 
|                                             |  |                   |        |      |  |  |        | 
|Total financial assets                       |  |                   | 13,249 |      |  |  | 14,014 | 
|                                             |  |                   |        |      |  |  |        | 

(*) Long-term receivables

|                                                              |  |                   |       |      |  |  |       |  
|------------------------------------------------------------- |  | ----------------- | ----- | ---- |  |  | ----- | -
|                                                              |  | 2002              |       | 2003
|                                                              |  |                   |       |     
|                                                              |  |                  
|                                                              |  | (NOK in millions)
|Interest-bearing                                              |  |                   |       |      |  |  |       |  
|Receivables on associated companies and joint
    ventures(1) |  |                   | 1,169 |      |  |  | 1,456 |  
|Loans to employees                                            |  |                   | 31    |      |  |  | 24    |  
|Other long-term receivables                                   |  |                   | 63    |      |  |  | 27    |  
|Provision for bad debt                                        |  |                   | (4    | )    |  |  | (5    | )
|Non-interest-bearing                                          |  |                   |       |      |  |  |       |  
|Receivables on associated companies and joint
    ventures    |  |                   | 4     |      |  |  | 1     |  
|Other long-term receivables                                   |  |                   | 36    |      |  |  | 126   |  
|Provision for bad debt                                        |  |                   |      |      |  |  |      |  
|                                                              |  |                   |       |      |  |  |       |  
|Total long-term receivables                                   |  |                   | 1,299 |      |  |  | 1,629 |  
|                                                              |  |                   |       |      |  |  |       |  






|    |                                                                                                                                                                                                                                                                                                                                                                               
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | In 2002 and 2003, interest-bearing receivables on
    associated companies and joint ventures related mainly to
    Bravida and Sonofon. As of December 31, 2003,
    interest-bearing receivables on Bravida and Sonofon were
    NOK 551 million and NOK 823 million
    respectively, and as of December 31, 2002
    NOK 430 million and NOK 685 million
    respectively.

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##### Table of Contents



(**) Shares and other
investments:

Specification of shares and other
investments as of December 31, 2003:

|                                             |  |                    |            |            |  |            |      |  |  |  |           | 
|-------------------------------------------- |  | ------------------ | ---------- | ---------- |  | ---------- | ---- |  |  |  | --------- | 
|                                             |  | No. of shares      |            |            |  |           
|                                             |  | owned by           |            | Share      |  |           
|                                             |  | Telenor            |            | owned in % |  | Book value
|                                             |  |                    |            |            |  |           
|                                             |  |                   
|                                             |  | (NOK in thousands)
|Inmarsat Holding Ltd.                        |  |                    | 79,539,869 |            |  |            | 15.0 |  |  |  | 669,925   | 
|COSMOTE S.A.(1)                              |  |                    | 29,705,225 |            |  |            | 9.0  |  |  |  | 472,543   | 
|Intelsat Ltd.                                |  |                    | 6,855,530  |            |  |            | 4.1  |  |  |  | 441,544   | 
|New Skies Satellites N.V.(1)                 |  |                    | 4,709,400  |            |  |            | 4.0  |  |  |  | 224,901   | 
|Eutelsat S.A.                                |  |                    | 4,127,130  |            |  |            | 0.4  |  |  |  | 35,458    | 
|Cosmoholding Albania S.A.                    |  |                    | 48,000     |            |  |            | 3.0  |  |  |  | 23,283    | 
|Inmarsat Group Holding Ltd.                  |  |                    | 4,036,143  |            |  |            | 15.0 |  |  |  | 16,350    | 
|Carrot Communication ASA                     |  |                    | 1,662,791  |            |  |            | 5.9  |  |  |  | 10,500    | 
|Essnet AB                                    |  |                    | 330,000    |            |  |            | 3.3  |  |  |  | 9,900     | 
|OnTarget AS                                  |  |                    | 2,048      |            |  |            | 10.0 |  |  |  | 6,250     | 
|Energivekst AS                               |  |                    | 45,000     |            |  |            | 4.3  |  |  |  | 4,750     | 
|Sørlandets Teknologisenter AS                |  |                    | 1,300      |            |  |            | 11.5 |  |  |  | 1,300     | 
|Leiv Eiriksson AS                            |  |                    | 14,969     |            |  |            | 1.5  |  |  |  | 1,030     | 
|RKS AB(1)                                    |  |                    | 194,401    |            |  |            | 1.2  |  |  |  | 766       | 
|Capital contribution to Telenor Pensjon Fund |  |                    |           |            |  |            |     |  |  |  | 285,755   | 
|                                             |  |                    |            |            |  |            |      |  |  |  |           | 
|Other(2)                                     |  |                    |           |            |  |            |     |  |  |  | 14,251    | 
|                                             |  |                    |            |            |  |            |      |  |  |  |           | 
|Total other shares and investments           |  |                    |            |            |  |            |      |  |  |  | 2,218,506 | 
|                                             |  |                    |            |            |  |            |      |  |  |  |           | 






|    |                                                                                                                                                                                                                                                                                                                                                           
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | COSMOTE S.A., New Skies Satellites N.V., and RKS
    AB are listed companies. The market values as of
    December 31, 2003 for Telenors shares were
    NOK 2,692 million, NOK 228 million and
    NOK 1 million respectively. As of February 26,
    2004 Telenor entered an agreement to sell the remaining shares
    in COSMOTE for NOK 3.1 billion.
|   
|(2) | Other includes shares in companies where Telenor
    owns more than 10%, which are not specified due to insignificant
    book values.                                                                                                                                                                                                                    

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##### Table of Contents



(***) Associated companies and joint
ventures

|                                                                                            |  |                   |         |      |  |      |        |   |  |  |        |  
|------------------------------------------------------------------------------------------- |  | ----------------- | ------- | ---- |  | ---- | ------ | - |  |  | ------ | -
|                                                                                            |  | 2001              |         | 2002 |  | 2003
|                                                                                            |  |                   |         |      |  |     
|                                                                                            |  |                  
|                                                                                            |  | (NOK in millions)
|Balance as of January 1                                                                     |  |                   | 39,088  |      |  |      | 14,186 |   |  |  | 9,439  |  
|Investments                                                                                 |  |                   | 2,319   |      |  |      | 883    |   |  |  | 1,914  |  
|Transferred to/from other investments and disposal                                          |  |                   | (34,626 | )    |  |      | (1,420 | ) |  |  | (3,167 | )
|Net income                                                                                  |  |                   | (318    | )    |  |      | 341    |   |  |  | 329    |  
|Gains (losses) on disposal(1)                                                               |  |                   | 21,579  |      |  |      | 36     |   |  |  | 1,507  |  
|Amortization of net excess values                                                           |  |                   | (1,427  | )    |  |      | (862   | ) |  |  | (579   | )
|Write-downs of net excess values                                                            |  |                   | (11,597 | )    |  |      | (1,965 | ) |  |  | (26    | )
|Equity and translations adjustments                                                         |  |                   | (832    | )    |  |      | (1,760 | ) |  |  | 592    |  
|                                                                                            |  |                   |         |      |  |      |        |   |  |  |        |  
|Balance as of December 31                                                                   |  |                   | 14,186  |      |  |      | 9,439  |   |  |  | 10,009 |  
|                                                                                            |  |                   |         |      |  |      |        |   |  |  |        |  
|Of which investments carried with a negative
    value (classified as provisions) (note 19) |  |                   | 60      |      |  |      | 50     |   |  |  | 157    |  
|                                                                                            |  |                   |         |      |  |      |        |   |  |  |        |  
|Total associated companies and joint
    ventures                                           |  |                   | 14,246  |      |  |      | 9,489  |   |  |  | 10,166 |  
|                                                                                            |  |                   |         |      |  |      |        |   |  |  |        |  






|    |                                               
|--- | ----------------------------------------------
|(1) | Specification of gains and losses on disposal:

|                                    |  |                   |        |      |  |      |    |   |  |  |       |  
|----------------------------------- |  | ----------------- | ------ | ---- |  | ---- | -- | - |  |  | ----- | -
|                                    |  | 2001              |        | 2002 |  | 2003
|                                    |  |                   |        |      |  |     
|                                    |  |                  
|                                    |  | (NOK in millions)
|VIAG Interkom                       |  |                   | 10,705 |      |  |      |   |   |  |  |      |  
|Esat Digifone                       |  |                   | 10,740 |      |  |      |   |   |  |  |      |  
|Ephorma AS                          |  |                   | 100    |      |  |      |   |   |  |  |      |  
|European Medical Solutions Group AS |  |                   | 41     |      |  |      |   |   |  |  |      |  
|Extel                               |  |                   |       |      |  |      | 40 |   |  |  |      |  
|COSMOTE S.A.                        |  |                   |       |      |  |      |   |   |  |  | 1,515 |  
|StavTeleSot J.S.C                   |  |                   |       |      |  |      |   |   |  |  | 65    |  
|A-pressen ASA                       |  |                   |       |      |  |      |   |   |  |  | (72   | )
|Other                               |  |                   | (7     | )    |  |      | (4 | ) |  |  | (1    | )
|                                    |  |                   |        |      |  |      |    |   |  |  |       |  
|Total                               |  |                   | 21,579 |      |  |      | 36 |   |  |  | 1,507 |  
|                                    |  |                   |        |      |  |      |    |   |  |  |       |  

Associated companies and joint ventures are
carried at negative values where Telenor has a corresponding
liability above and beyond the capital contributed.

Write-downs of Telenors net excess values
on associated companies in 2003 were insignificant. Write-downs
of Telenors net excess values on associated companies in 2002
were mainly related to Sonofon, with NOK 1,000 million,
DTAC NOK 829 million and UCOM NOK 52 million. The
write-downs were triggered by a significant fall in the market
values for telecommunication companies. For DTAC and UCOM the
write-downs were made to the quoted market price as of
December 31, 2002. The fair value for Sonofon was estimated
based on estimates of future cash flows and comparison to
similar companies. Furthermore, the engagement in OniWay was
written down by NOK 316 million (included in net income
from associated companies) to zero based on an evaluation of the
values in the company.

Write-downs of Telenors net excess values
on associated companies in 2001 related primarily to Sonofon
(NOK 7,500 million), DTAC/UCOM (NOK 3,400 million) and
Telenordia (NOK 665 million).

F-43



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Specifications of investments in associated
companies and joint ventures:

|                                    |  |                   |      |              |  |              |       |                 |  |              |        |             |  |              |       |              |  |  |      |   |  |  |      |   |  |  |        |   |  |  |       | 
|----------------------------------- |  | ----------------- | ---- | ------------ |  | ------------ | ----- | --------------- |  | ------------ | ------ | ----------- |  | ------------ | ----- | ------------ |  |  | ---- | - |  |  | ---- | - |  |  | ------ | - |  |  | ----- | 
|                                    |  |                   |      |              |  |              |       |                 |  | Amortization |        |             |  |              |       |             
|                                    |  |                   |      |              |  |              |       |                 |  | and write-   |        |             |  |              |       | Net excess  
|                                    |  | Share             |      | Book value   |  | Investments/ |       |                 |  | downs of net |        | Equity and  |  | Book value   |       | values      
|                                    |  | owned             |      | December 31, |  | disposals    |       | Share of net    |  | excess       |        | translation |  | December 31, |       | December 31,
|Company                             |  | in %              |      | 2002         |  | during 2003  |       | income(1)(2)(6) |  | values(6)    |        | adjustments |  | 2003         |       | 2003(10)    
|                                    |  |                   |      |              |  |              |       |                 |  |              |        |             |  |              |       |             
|                                    |  |                  
|                                    |  | (NOK in millions)
|Sonofon Holding A/S(3)              |  |                   | 53.5 |              |  |              | 3,747 |                 |  |              |       |             |  |              | 19    |              |  |  | (444 | ) |  |  | 548  |   |  |  | 3,870  |   |  |  | 3,960 | 
|VimpelCom(4)(11)                    |  |                   | 29.0 |              |  |              | 2,025 |                 |  |              |       |             |  |              | 544   |              |  |  | (37  | ) |  |  | (152 | ) |  |  | 2,380  |   |  |  | 166   | 
|COSMOTE S.A.(5)                     |  |                   |     |              |  |              | 1,011 |                 |  |              | (2,649 | )           |  |              | 1,540 |              |  |  | (2   | ) |  |  | 100  |   |  |  |       |   |  |  |      | 
|DTAC(6)(11)                         |  |                   | 29.9 |              |  |              | 554   |                 |  |              |       |             |  |              | 71    |              |  |  | (66  | ) |  |  | 27   |   |  |  | 586    |   |  |  | 277   | 
|UCOM(6)(11)                         |  |                   | 24.9 |              |  |              | 219   |                 |  |              |       |             |  |              | 35    |              |  |  | (26  | ) |  |  | 11   |   |  |  | 239    |   |  |  | 257   | 
|European Telecom S.A (ProMonte)(7)  |  |                   | 44.1 |              |  |              | 172   |                 |  |              |       |             |  |              | 35    |              |  |  |     |   |  |  | 2    |   |  |  | 209    |   |  |  |      | 
|StavTeleSot J.S.C(8)                |  |                   |     |              |  |              | 32    |                 |  |              | (104   | )           |  |              | 65    |              |  |  |     |   |  |  | 7    |   |  |  |       |   |  |  |      | 
|ZebSign AS                          |  |                   | 50.0 |              |  |              | 20    |                 |  |              |       |             |  |              | (14   | )            |  |  | (15  | ) |  |  | 6    |   |  |  | (3     | ) |  |  |      | 
|Teleringen AS                       |  |                   | 47.5 |              |  |              | 2     |                 |  |              |       |             |  |              | 1     |              |  |  |     |   |  |  |     |   |  |  | 3      |   |  |  |      | 
|ONE GmbH                            |  |                   | 17.5 |              |  |              | 745   |                 |  |              |       |             |  |              | (94   | )            |  |  |     |   |  |  | 110  |   |  |  | 761    |   |  |  |      | 
|Wireless Matrix Corporation(9)      |  |                   | 22.7 |              |  |              | 21    |                 |  |              |       |             |  |              | (33   | )            |  |  | 40   |   |  |  | 4    |   |  |  | 32     |   |  |  |      | 
|Nordialog Oslo AS                   |  |                   | 48.0 |              |  |              | 10    |                 |  |              |       |             |  |              | 7     |              |  |  |     |   |  |  |     |   |  |  | 17     |   |  |  |      | 
|Oslo Lufthavn Tele & Data AS        |  |                   | 50.0 |              |  |              | 9     |                 |  |              |       |             |  |              | 1     |              |  |  |     |   |  |  | (2   | ) |  |  | 8      |   |  |  |      | 
|Glocalnet AB(11)                    |  |                   | 37.0 |              |  |              | 104   |                 |  |              |       |             |  |              | 19    |              |  |  | (5   | ) |  |  | (16  | ) |  |  | 102    |   |  |  | 53    | 
|Golden Telecom Inc.                 |  |                   | 20.4 |              |  |              |      |                 |  |              | 1,379  |             |  |              | 12    |              |  |  | (15  | ) |  |  | (26  | ) |  |  | 1,350  |   |  |  | 820   | 
|A-pressen ASA(10)                   |  |                   |     |              |  |              | 484   |                 |  |              | (414   | )           |  |              | (54   | )            |  |  | (16  | ) |  |  |     |   |  |  |       |   |  |  |      | 
|APR Media Holding AS(10)            |  |                   | 44.8 |              |  |              |      |                 |  |              | 402    |             |  |              | 2     |              |  |  | (5   | ) |  |  |     |   |  |  | 399    |   |  |  | 68    | 
|Otrum Electronics ASA(11)           |  |                   | 33.0 |              |  |              | 96    |                 |  |              |       |             |  |              | (5    | )            |  |  |     |   |  |  |     |   |  |  | 91     |   |  |  |      | 
|BitCom AB                           |  |                   | 49.0 |              |  |              | 8     |                 |  |              |       |             |  |              | 65    |              |  |  |     |   |  |  | 1    |   |  |  | 9      |   |  |  | 3     | 
|TIBE Reklame Holding AS             |  |                   |     |              |  |              | 9     |                 |  |              |       |             |  |              | 1     |              |  |  | (9   | ) |  |  | (1   | ) |  |  |       |   |  |  |      | 
|World Wide Mobile Communications AS |  |                   | 40.0 |              |  |              | 43    |                 |  |              |       |             |  |              | 16    |              |  |  |     |   |  |  | (9   | ) |  |  | 50     |   |  |  |      | 
|Bravida ASA                         |  |                   | 47.1 |              |  |              | 150   |                 |  |              | 82     |             |  |              | (314  | )            |  |  |     |   |  |  |     |   |  |  | (82    | ) |  |  |      | 
|TeleVenture Management AS           |  |                   | 23.9 |              |  |              | 12    |                 |  |              |       |             |  |              | 1     |              |  |  |     |   |  |  | (3   | ) |  |  | 10     |   |  |  |      | 
|Doorstep AS                         |  |                   | 50.0 |              |  |              | 5     |                 |  |              |       |             |  |              | 2     |              |  |  |     |   |  |  |     |   |  |  | 7      |   |  |  |      | 
|Telenor Renhold & Kantine AS        |  |                   | 50.0 |              |  |              | 3     |                 |  |              |       |             |  |              | 3     |              |  |  |     |   |  |  | (2   | ) |  |  | 4      |   |  |  |      | 
|Extend AS                           |  |                   | 43.9 |              |  |              |      |                 |  |              | 3      |             |  |              | (1    | )            |  |  |     |   |  |  |     |   |  |  | 2      |   |  |  |      | 
|Polarsat Inc.                       |  |                   | 44.0 |              |  |              |      |                 |  |              | 14     |             |  |              | 2     |              |  |  |     |   |  |  | 2    |   |  |  | 18     |   |  |  |      | 
|Others                              |  |                   |      |              |  |              | (42   | )               |  |              | 34     |             |  |              | (25   | )            |  |  | (5   | ) |  |  | (15  | ) |  |  | (53    | ) |  |  | 3     | 
|                                    |  |                   |      |              |  |              |       |                 |  |              |        |             |  |              |       |              |  |  |      |   |  |  |      |   |  |  |        |   |  |  |       | 
|Total                               |  |                   |      |              |  |              | 9,439 |                 |  |              | (1,253 | )           |  |              | 1,836 |              |  |  | (605 | ) |  |  | 592  |   |  |  | 10,009 |   |  |  | 5,607 | 
|                                    |  |                   |      |              |  |              |       |                 |  |              |        |             |  |              |       |              |  |  |      |   |  |  |      |   |  |  |        |   |  |  |       | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 partly based
    on preliminary results for some of the companies. Actual figures
    may deviate from the preliminary figures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(3) | Jointly controlled according to a shareholders
    agreement. A wholly-owned subsidiary subsequent to the
    acquisition of the remaining shares as of February 12, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(4) | Telenor had a voting interest of 25% plus 13
    shares in VimpelCom as of December 31, 2003. As of
    December 31, 2003 Telenor also had an direct ownership
    interest of 14.9% in VimpelComs 55.3% owned subsidiary
    VimpelCom-Region, which is included in the results and book
    value of VimpelCom in the table above. An extraordinary General
    Meeting of Shareholders of VimpelCom approved the statutory
    merger of VimpelCom and VimpelCom-Region, subject to regulatory
    approval among other things. Subsequent to the merger Telenor
    will own approximately 26.6% and 29.9% of VimpelComs total
    voting stock and total common stock, respectively.
|   
|(5) | As of December 31, 2003, Telenor had an
    ownership interest of 9% in COSMOTE S.A, included as part of
    shares and other investments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(6) | As of December 31, 2003, UCOM had an
    ownership interest of 41.7% in DTAC.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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|     |                                                                                                                                                                                                                                                
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(7)  | As of December 31, 2003, ProMonte GSM was
    wholly-owned by European Telecom S.A. and Telenor had an
    ownership interest of 44.1% in European Telecom.                                                                                    
|    
|(8)  | StavTeleSot was sold in January 2003 to
    VimpelCom-Region.                                                                                                                                                                                  
|    
|(9)  | Reclassifications of Telenors net excess
    values on Wireless Matrix Corporation as of January 1, 2003
    led to a reversal in 2003 of previously amortized net excess
    values.                                                         
|    
|(10) | In 2003, Telenors shareholdings in
    A-pressen ASA was transferred to APR Media Holding AS. As of
    December 31, 2003 APR Media Holding AS owned 98.9% of the
    shares in A-pressen ASA.                                                
|    
|(11) | Market values as of December 31, 2003 for
    listed associated companies: VimpelCom:
    NOK 7,647 million, DTAC: NOK 1,716 million,
    UCOM: NOK 546 million, Glocalnet AB:
    NOK 320 million, Otrum Electronics ASA:
    NOK 108 million.
|    
|(12) | Net excess values at the date of acquisition are
    the differences between Telenors acquisition cost and
    Telenors share of equity of the associated companies.                                                                         

17.     CURRENT
RECEIVABLES

|                                                           |  |                   |       |      |  |  |       |  
|---------------------------------------------------------- |  | ----------------- | ----- | ---- |  |  | ----- | -
|                                                           |  | 2002              |       | 2003
|                                                           |  |                   |       |     
|                                                           |  |                  
|                                                           |  | (NOK in millions)
|Accounts receivables                                       |  |                   |       |      |  |  |       |  
|Accounts receivables                                       |  |                   | 6,481 |      |  |  | 6,241 |  
|Provision for bad debt                                     |  |                   | (585  | )    |  |  | (564  | )
|                                                           |  |                   |       |      |  |  |       |  
|Total accounts receivables                                 |  |                   | 5,896 |      |  |  | 5,677 |  
|                                                           |  |                   |       |      |  |  |       |  
|Other current receivables                                  |  |                   |       |      |  |  |       |  
|Interest-bearing                                           |  |                   |       |      |  |  |       |  
|Receivables on associated companies and joint
    ventures |  |                   | 16    |      |  |  |      |  
|Receivables on employees                                   |  |                   | 3     |      |  |  |      |  
|Other receivables                                          |  |                   | 17    |      |  |  | 29    |  
|Non-interest-bearing                                       |  |                   |       |      |  |  |       |  
|Receivables on associated companies and joint
    ventures |  |                   | 182   |      |  |  | 322   |  
|Receivable on employees                                    |  |                   | 27    |      |  |  | 26    |  
|Other short-term receivables                               |  |                   | 330   |      |  |  | 421   |  
|Provision for bad debt                                     |  |                   | (54   | )    |  |  | (23   | )
|                                                           |  |                   |       |      |  |  |       |  
|Total other current receivables                            |  |                   | 521   |      |  |  | 775   |  
|                                                           |  |                   |       |      |  |  |       |  
|Prepaid expenses and accrued
    revenues                  |  |                   |       |      |  |  |       |  
|Prepaid expenses                                           |  |                   | 772   |      |  |  | 1,260 |  
|Accrued revenues                                           |  |                   | 1,679 |      |  |  | 1,520 |  
|                                                           |  |                   |       |      |  |  |       |  
|Total prepaid expenses and accrued
    revenues            |  |                   | 2,451 |      |  |  | 2,780 |  
|                                                           |  |                   |       |      |  |  |       |  
|Total current receivables                                  |  |                   | 8,868 |      |  |  | 9,232 |  
|                                                           |  |                   |       |      |  |  |       |  

Due to the large volume and diversity of the
Groups customer base, concentrations of credit risk with
respect to trade accounts receivables are limited.

18.     SHORT TERM
INVESTMENTS

|                             |  |                   |     |      |  |  |     | 
|---------------------------- |  | ----------------- | --- | ---- |  |  | --- | 
|                             |  | 2002              |     | 2003
|                             |  |                   |     |     
|                             |  |                  
|                             |  | (NOK in millions)
|Bonds/ Commercial paper      |  |                   | 260 |      |  |  | 301 | 
|Shares(1)                    |  |                   | 272 |      |  |  | 83  | 
|                             |  |                   |     |      |  |  |     | 
|Total short term investments |  |                   | 532 |      |  |  | 384 | 
|                             |  |                   |     |      |  |  |     | 






|    |                                                                                  
|--- | ---------------------------------------------------------------------------------
|(1) | Specification of shares classified as current
    assets as of December 31, 2003.

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##### Table of Contents



|                                              |  |                  |             |                    |  |            |      |  |  |  |        | 
|--------------------------------------------- |  | ---------------- | ----------- | ------------------ |  | ---------- | ---- |  |  |  | ------ | 
|                                              |  | No. of shares    |             | Share              |  |           
|                                              |  | owned by Telenor |             | owned in %         |  | Book value
|                                              |  |                  |             |                    |  |           
|                                              |  |                  |             |                   
|                                              |  |                  |             | (in NOK thousands)
|North Node AB                                 |  |                  | 1,350,924   |                    |  |            | 46.4 |  |  |  | 24,753 | 
|Virtual Garden AS                             |  |                  | 2,500,000   |                    |  |            | 21.0 |  |  |  | 8,535  | 
|Viva Technologies AS                          |  |                  | 74,806,919  |                    |  |            | 18.0 |  |  |  | 7,521  | 
|Voice Provider AB                             |  |                  | 45,217      |                    |  |            | 25.9 |  |  |  | 5,972  | 
|Sonat AB                                      |  |                  | 52,063      |                    |  |            | 27.6 |  |  |  | 5,682  | 
|The Mobile Media Company AS                   |  |                  | 365,896,990 |                    |  |            | 30.9 |  |  |  | 5,409  | 
|Trøndelag Vekst AS                            |  |                  | 18,961      |                    |  |            | 2.9  |  |  |  | 3,000  | 
|Other listed companies                        |  |                  |             |                    |  |            |     |  |  |  | 21,367 | 
|Other shares etc.(1)                          |  |                  |             |                    |  |            |     |  |  |  | 844    | 
|                                              |  |                  |             |                    |  |            |      |  |  |  |        | 
|Total shares classified as current
    assets |  |                  |             |                    |  |            |      |  |  |  | 83,083 | 
|                                              |  |                  |             |                    |  |            |      |  |  |  |        | 






|    |                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------
|(1) | Includes companies where Telenor owns more than
    10%, which are not specified due to insignificant book values.

Market value of Telenors ownership interest
in other listed companies totaled NOK 34.4 million as of
December 31, 2003.

19.     PROVISIONS

|                                                                                   |  |                   |       |      |  |  |       | 
|---------------------------------------------------------------------------------- |  | ----------------- | ----- | ---- |  |  | ----- | 
|                                                                                   |  | 2002              |       | 2003
|                                                                                   |  |                   |       |     
|                                                                                   |  |                  
|                                                                                   |  | (NOK in millions)
|Provisions for pensions                                                            |  |                   | 191   |      |  |  | 338   | 
|Deferred tax liabilities                                                           |  |                   | 516   |      |  |  | 816   | 
|Provisions for workforce reduction, loss
    contracts and exit from activities(1) |  |                   | 234   |      |  |  | 236   | 
|Negative values associated companies                                               |  |                   | 50    |      |  |  | 157   | 
|Other provisions                                                                   |  |                   | 185   |      |  |  | 98    | 
|                                                                                   |  |                   |       |      |  |  |       | 
|Total provisions                                                                   |  |                   | 1,176 |      |  |  | 1,645 | 
|                                                                                   |  |                   |       |      |  |  |       | 






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

20.     INTEREST-BEARING
LIABILITIES

|                                                                     |  |       |           |                   |  |      |        |   |  |  |        |  
|-------------------------------------------------------------------- |  | ----- | --------- | ----------------- |  | ---- | ------ | - |  |  | ------ | -
|                                                                     |  | Limit |           | 2002              |  | 2003
|                                                                     |  |       |           |                   |  |     
|                                                                     |  |       |           |                  
|                                                                     |  |       |           | (NOK in millions)
|Euro Commercial paper program (ECP)                                  |  | USD   | 500       |                   |  |      |       |   |  |  |       |  
|U.S. Commercial paper program (USCP)                                 |  | USD   | 1,000     |                   |  |      |       |   |  |  |       |  
|Norwegian Commercial paper                                           |  |       |           |                   |  |      | 1,105  |   |  |  |       |  
|EMTN program                                                         |  | USD   | 6,000     |                   |  |      | 17,563 |   |  |  | 17,480 |  
|Norwegian Bonds                                                      |  |       |           |                   |  |      | 3,142  |   |  |  | 3,076  |  
|Capital discount related to bonds                                    |  |       |           |                   |  |      | (40    | ) |  |  | (31    | )
|Derivatives related to long term interest-bearing
    liabilities(1) |  |       |           |                   |  |      | (300   | ) |  |  | (990   | )
|Revolving credit facility EUR                                        |  |       | EUR 1,500 |                   |  |      |       |   |  |  |       |  
|                                                                     |  |       |           |                   |  |      |        |   |  |  |        |  
|Total long-term interest-bearing liabilities
    Telenor ASA         |  |       |           |                   |  |      | 21,470 |   |  |  | 19,535 |  
|Long-term interest-bearing liabilities
    subsidiaries(2)           |  |       |           |                   |  |      | 7,335  |   |  |  | 5,841  |  
|                                                                     |  |       |           |                   |  |      |        |   |  |  |        |  
|Total long-term interest-bearing liabilities
    Telenor Group       |  |       |           |                   |  |      | 28,805 |   |  |  | 25,376 |  
|Short-term interest-bearing liabilities Telenor
    Group            |  |       |           |                   |  |      | 3,591  |   |  |  | 386    |  
|                                                                     |  |       |           |                   |  |      |        |   |  |  |        |  
|Total interest-bearing liabilities Telenor Group                     |  |       |           |                   |  |      | 32,396 |   |  |  | 25,762 |  
|                                                                     |  |       |           |                   |  |      |        |   |  |  |        |  




F-46



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##### Table of Contents





|    |                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------
|(1) | Foreign currency derivatives used to convert the
    cash flows of a debt instrument into another currency (hedging
    instruments).
|   
|(2) | Specified below.                                                                                                                     

Long-term interest-bearing liabilities Telenor
ASA

Up to November 2003, Telenor had a
EUR 1 billion and a USD 1 billion revolving
credit facility. These facilities have been replaced with a
EUR 1.5 billion revolving credit facility with final
maturity in November 2008. According to Telenors Finance
Policy, this committed credit facility should at any time serve
as refinancing source for all outstanding commercial paper (ECP,
USCP and Norwegian). Commercial paper is classified as
long-term, irrespective of the actual maturity date.

All borrowings in Telenor ASA are unsecured. The
financing agreements except commercial paper, contain provisions
restricting the pledge of assets to secure future borrowings
without granting a similar secured status to the existing
lenders (negative pledge) and also contain certain covenants
limiting disposals of significant subsidiaries and assets.

The table below shows the debt instruments issued
by Telenor ASA. Hedging instruments related to these borrowings
are not included in the table.

|                           |  |              |        |               |  |              |      |              |  |  |        |  |  |  |        | 
|-------------------------- |  | ------------ | ------ | ------------- |  | ------------ | ---- | ------------ |  |  | ------ |  |  |  | ------ | 
|                           |  | Amount in    |        | Average       |  | Amount in    |      | Amount in   
|                           |  | NOK          |        | interest rate |  | currency     |      | NOK         
|                           |  | December 31, |        | December 31,  |  | December 31, |      | December 31,
|                           |  | 2002         |        | 2003          |  | 2003         |      | 2003        
|                           |  |              |        |               |  |              |      |             
|Norwegian commercial paper |  |              |        |               |  |              |      |              |  |  |        |  |  |  |        | 
|NOK                        |  |              | 1,105  |               |  |              |     |              |  |  |       |  |  |  |       | 
|EMTN program               |  |              |        |               |  |              |      |              |  |  |        |  |  |  |        | 
|AUD                        |  |              | 146    |               |  |              | 4.45 | %            |  |  | 37     |  |  |  | 185    | 
|CHF                        |  |              | 4,002  |               |  |              | 3.70 | %            |  |  | 550    |  |  |  | 2,972  | 
|EUR                        |  |              | 9,001  |               |  |              | 5.60 | %            |  |  | 1,240  |  |  |  | 10,413 | 
|JPY                        |  |              | 1,818  |               |  |              | 2.39 | %            |  |  | 22,500 |  |  |  | 1,404  | 
|SEK                        |  |              | 119    |               |  |              | 3.42 | %            |  |  | 150    |  |  |  | 139    | 
|USD                        |  |              | 2,437  |               |  |              | 5.50 | %            |  |  | 350    |  |  |  | 2,336  | 
|Norwegian bonds            |  |              |        |               |  |              |      |              |  |  |        |  |  |  |        | 
|NOK                        |  |              | 3,142  |               |  |              | 5.13 | %            |  |  | 3,076  |  |  |  | 3,076  | 
|                           |  |              |        |               |  |              |      |              |  |  |        |  |  |  |        | 
|Total Telenor ASA          |  |              | 21,770 |               |  |              |      |              |  |  |        |  |  |  | 20,525 | 
|                           |  |              |        |               |  |              |      |              |  |  |        |  |  |  |        | 

F-47



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##### Table of Contents



The table below includes debt instruments, cross
currency swaps and interest rate swaps. When the currency or
interest rate exposure of the underlying borrowings has been
altered through the use of derivatives, this is reflected in the
figures in the table.

|                           |  |              |        |               |  |              |      |              |  |  |       |  |  |  |        | 
|-------------------------- |  | ------------ | ------ | ------------- |  | ------------ | ---- | ------------ |  |  | ----- |  |  |  | ------ | 
|                           |  | Amount in    |        | Average       |  | Amount in    |      | Amount in   
|                           |  | NOK          |        | interest rate |  | currency     |      | NOK         
|                           |  | December 31, |        | December 31,  |  | December 31, |      | December 31,
|                           |  | 2002         |        | 2003          |  | 2003         |      | 2003        
|                           |  |              |        |               |  |              |      |             
|Norwegian commercial paper |  |              |        |               |  |              |      |              |  |  |       |  |  |  |        | 
|NOK                        |  |              | 1,105  |               |  |              |     |              |  |  |      |  |  |  |       | 
|EMTN program               |  |              |        |               |  |              |      |              |  |  |       |  |  |  |        | 
|CZK                        |  |              | 107    |               |  |              | 3.38 | %            |  |  | 461   |  |  |  | 119    | 
|EUR                        |  |              | 6,183  |               |  |              | 3.16 | %            |  |  | 748   |  |  |  | 6,297  | 
|GBP                        |  |              | 146    |               |  |              | 5.13 | %            |  |  | 13    |  |  |  | 155    | 
|NOK                        |  |              | 6,498  |               |  |              | 5.52 | %            |  |  | 5,949 |  |  |  | 5,949  | 
|SEK                        |  |              | 944    |               |  |              | 4.75 | %            |  |  | 653   |  |  |  | 606    | 
|USD                        |  |              | 3,422  |               |  |              | 2.22 | %            |  |  | 491   |  |  |  | 3,279  | 
|Norwegian bonds            |  |              |        |               |  |              |      |              |  |  |       |  |  |  |        | 
|EUR                        |  |              | 981    |               |  |              | 2.87 | %            |  |  | 47    |  |  |  | 396    | 
|GBP                        |  |              | 224    |               |  |              | 4.93 | %            |  |  | 20    |  |  |  | 238    | 
|NOK                        |  |              | 1,860  |               |  |              | 5.37 | %            |  |  | 2,496 |  |  |  | 2,496  | 
|                           |  |              |        |               |  |              |      |              |  |  |       |  |  |  |        | 
|Total Telenor ASA          |  |              | 21,470 |               |  |              |      |              |  |  |       |  |  |  | 19,535 | 
|                           |  |              |        |               |  |              |      |              |  |  |       |  |  |  |        | 

Long-term interest-bearing liabilities in
subsidiaries

|                                                                 |  |                                        |  |          |     |                  |  |                   |       |              |  |  |       |  |  |  |       | 
|---------------------------------------------------------------- |  | -------------------------------------- |  | -------- | --- | ---------------- |  | ----------------- | ----- | ------------ |  |  | ----- |  |  |  | ----- | 
|                                                                 |  |                                        |  |          |     | Average interest |  |                   |       |             
|                                                                 |  |                                        |  |          |     | rate             |  |                   |       |             
|                                                                 |  |                                        |  |          |     | December 31,     |  | December 31,      |       | December 31,
|Company                                                          |  | Debt instrument                        |  | Currency |     | 2003             |  | 2002              |       | 2003        
|                                                                 |  |                                        |  |          |     |                  |  |                   |       |             
|                                                                 |  |                                        |  |          |     |                  |  |                  
|                                                                 |  |                                        |  |          |     |                  |  | (NOK in millions)
|DiGi.Com                                                         |  | Borrowings from financial institutions |  |          | USD |                  |  |                   | 2.39  | %            |  |  | 226   |  |  |  | 130   | 
|DiGi.Com                                                         |  | Borrowings from financial institutions |  |          | MYR |                  |  |                   | 6.87  | %            |  |  | 1,191 |  |  |  | 1,023 | 
|GrameenPhone                                                     |  | Borrowings from financial institutions |  |          | USD |                  |  |                   | 4.74  | %            |  |  | 262   |  |  |  | 120   | 
|GrameenPhone                                                     |  | Borrowings from financial institutions |  |          | NOK |                  |  |                   | 3.70  | %            |  |  | 25    |  |  |  | 25    | 
|GrameenPhone                                                     |  | Borrowings from NORAD                  |  |          | NOK |                  |  |                   | 3.40  | %            |  |  | 50    |  |  |  | 50    | 
|Kyivstar                                                         |  | Vendor financing                       |  |          | USD |                  |  |                   |      |              |  |  | 113   |  |  |  |      | 
|Kyivstar                                                         |  | Bonds                                  |  |          | USD |                  |  |                   | 12.23 | %            |  |  | 696   |  |  |  | 1,105 | 
|Pannon GSM                                                       |  | Bonds                                  |  |          | HUF |                  |  |                   | 13.78 | %            |  |  | 1,040 |  |  |  | 1,076 | 
|EDB Business Partner                                             |  | Borrowings from financial institutions |  |          | NOK |                  |  |                   | 7.50  | %            |  |  | 450   |  |  |  | 450   | 
|EDB Business Partner                                             |  | Borrowings from financial institutions |  |          | NOK |                  |  |                   | 4.12  | %            |  |  | 50    |  |  |  | 50    | 
|EDB Business Partner                                             |  | Borrowings from financial institutions |  |          | SEK |                  |  |                   | 4.00  | %            |  |  | 147   |  |  |  | 56    | 
|EDB Business Partner                                             |  | Finance lease                          |  |          | NOK |                  |  |                   | 8.03  | %            |  |  | 64    |  |  |  | 37    | 
|Business Solutions                                               |  | Vendor financing  SW licenses         |  |          | NOK |                  |  |                   | 8.00  | %            |  |  | 656   |  |  |  | 175   | 
|Business Solutions                                               |  | Finance lease                          |  |          | NOK |                  |  |                   | 7.00  | %            |  |  | 200   |  |  |  | 68    | 
|Satellite Services                                               |  | Finance lease(1)                       |  |          | NOK |                  |  |                   | 1.77  | %            |  |  | 1,114 |  |  |  | 1,004 | 
|Canal Digital                                                    |  | Finance lease(2)                       |  |          |     |                  |  |                   |      |              |  |  | 550   |  |  |  | 455   | 
|Telenor Eiendom Holding                                          |  | Norwegian Commercial Paper             |  |          | NOK |                  |  |                   |      |              |  |  | 435   |  |  |  |      | 
|Miscellaneous                                                    |  |                                        |  |          |     |                  |  |                   |       |              |  |  | 66    |  |  |  | 17    | 
|                                                                 |  |                                        |  |          |     |                  |  |                   |       |              |  |  |       |  |  |  |       | 
|Total long-term interest-bearing liabilities
    in subsidiaries |  |                                        |  |          |     |                  |  |                   |       |              |  |  | 7,335 |  |  |  | 5,841 | 
|                                                                 |  |                                        |  |          |     |                  |  |                   |       |              |  |  |       |  |  |  |       | 






|    |                                                                                       
|--- | --------------------------------------------------------------------------------------
|(1) | Satellite leases (Thor II and III). This
    financing is guaranteed by Telenor ASA   
|   
|(2) | This financing is guaranteed by Telenor ASA.
    Denominated in DKK, EUR, NOK and SEK.

The interest-bearing liabilities in subsidiaries
are generally not guaranteed by Telenor ASA and are subject to
standard financial covenants.

F-48



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##### Table of Contents



Telenor entered into Cross Border QTE Leases for
telephony switches, GSM Mobile network and for fixed-line
network in 1998, 1999 and 2003. Telenor has provided a
defeasance of all amounts due by us under these agreements with
highly rated financial institutions and US Government related
securities. The leasing obligations and the defeased amounts are
shown net on the balance sheet, and are not reflected in the
tables. See notes 15, 21, 23 and 31.

Short-term interest-bearing
liabilities  Telenor Group

|                                                                  |  |                                 |  |                  |       |                   |  |              |       |  |  |  |     | 
|----------------------------------------------------------------- |  | ------------------------------- |  | ---------------- | ----- | ----------------- |  | ------------ | ----- |  |  |  | --- | 
|                                                                  |  |                                 |  | Average interest |       |                   |  |             
|                                                                  |  |                                 |  | rate             |       |                   |  |             
|                                                                  |  |                                 |  | December 31,     |       | December 31,      |  | December 31,
|                                                                  |  |                                 |  | 2003             |       | 2002              |  | 2003        
|                                                                  |  |                                 |  |                  |       |                   |  |             
|                                                                  |  |                                 |  |                  |       |                  
|                                                                  |  |                                 |  |                  |       | (NOK in millions)
|Telenor Eiendom Holding                                           |  | Provision tax claim             |  |                  |      |                   |  |              | 2,409 |  |  |  |    | 
|Telenor Mobile Communication                                      |  | Provision court case            |  |                  |      |                   |  |              | 530   |  |  |  |    | 
|DiGi.Com                                                          |  | Vendor financing and term loans |  |                  | 6.84  | %                 |  |              | 362   |  |  |  | 334 | 
|Kyivstar                                                          |  | Bonds and vendor financing      |  |                  | 13.00 | %                 |  |              | 144   |  |  |  | 37  | 
|Miscellaneous                                                     |  |                                 |  |                  |       |                   |  |              | 146   |  |  |  | 15  | 
|                                                                  |  |                                 |  |                  |       |                   |  |              |       |  |  |  |     | 
|Total Short-term interest-bearing
    liabilities  Telenor Group |  |                                 |  |                  |       |                   |  |              | 3,591 |  |  |  | 386 | 
|                                                                  |  |                                 |  |                  |       |                   |  |              |       |  |  |  |     | 

At the end of 2003, Telenor reduced short-term
interest-bearing liabilities by approximately
NOK 3 billion by paying a tax claim regarding the sale
of Sonofon Holding A/S and in connection with a settlement of
the legal dispute in Greece.

Maturity profile of interest-bearing
liabilities as of December 31, 2003

|                         |  |                   |        |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |       |  |  |       |  |  |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 
|------------------------ |  | ----------------- | ------ | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ----- |  |  | ----- |  |  |  | ----- |  |  |  | --- |  |  |  | --- |  |  |  | ----- | 
|                         |  | Total as of       |        |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      
|                         |  | December 31,      |        |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       | After
|                         |  | 2003              |        | 2004 |  | 2005 |       | 2006 |  | 2007 |       | 2008 |  | 2009 |       | 2010 |  | 2011 |       | 2011 
|                         |  |                   |        |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |      
|                         |  |                  
|                         |  | (NOK in millions)
|EMTN program             |  |                   | 16,405 |      |  |      | 1,054 |      |  |      | 1,526 |      |  |      | 3,311 |      |  |      | 3,079 |       |  |  | 1,159 |  |  |  | 2,403 |  |  |  |    |  |  |  | 377 |  |  |  | 3,496 | 
|Domestic bonds           |  |                   | 3,130  |      |  |      |      |      |  |      | 1,059 |      |  |      |      |      |  |      | 1,872 |       |  |  |      |  |  |  |      |  |  |  |    |  |  |  |    |  |  |  | 199   | 
|                         |  |                   |        |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |       |  |  |       |  |  |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 
|Total Telenor ASA        |  |                   | 19,535 |      |  |      | 1,054 |      |  |      | 2,585 |      |  |      | 3,311 |      |  |      | 4,951 |       |  |  | 1,159 |  |  |  | 2,403 |  |  |  |    |  |  |  | 377 |  |  |  | 3,695 | 
|Subsidiaries, short-term |  |                   | 386    |      |  |      | 386   |      |  |      |      |      |  |      |      |      |  |      |      |       |  |  |      |  |  |  |      |  |  |  |    |  |  |  |    |  |  |  |      | 
|Subsidiaries, long-term  |  |                   | 5,841  |      |  |      | 1,619 |      |  |      | 2,426 |      |  |      | 721   |      |  |      | 432   |       |  |  | 271   |  |  |  | 244   |  |  |  | 128 |  |  |  |    |  |  |  |      | 
|                         |  |                   |        |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |       |  |  |       |  |  |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 
|Total subsidiaries       |  |                   | 6,227  |      |  |      | 2,005 |      |  |      | 2,426 |      |  |      | 721   |      |  |      | 432   |       |  |  | 271   |  |  |  | 244   |  |  |  | 128 |  |  |  |    |  |  |  |      | 
|                         |  |                   |        |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |       |  |  |       |  |  |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 
|                         |  |                   |        |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |       |  |  |       |  |  |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 
|Telenor Group            |  |                   | 25,762 |      |  |      | 3,059 |      |  |      | 5,011 |      |  |      | 4,032 |      |  |      | 5,383 |       |  |  | 1,430 |  |  |  | 2,647 |  |  |  | 128 |  |  |  | 377 |  |  |  | 3,695 | 
|                         |  |                   |        |      |  |      |       |      |  |      |       |      |  |      |       |      |  |      |       |       |  |  |       |  |  |  |       |  |  |  |     |  |  |  |     |  |  |  |       | 

21.     FINANCIAL
INSTRUMENTS AND RISK MANAGEMENT

Telenor ASAs treasury function is
responsible for funding, foreign exchange risk, interest rate
risk and credit risk management for the parent company and for
companies owned more than 90%. Subsidiaries owned less than 90%
normally have standalone financing.

Telenor has limited activity related to interest
rate and currency trading. As of December 31, 2003, Telenor
did not have any outstanding open trading positions.

Interest rate risk

Telenor is exposed to interest rate risk through
funding and cash management activities. Changes in market
interest rates affects the fair value of assets and liabilities.
Interest income and interest expense in the profit and loss
statement, as well as interest payments, are influenced by
interest rate changes.

F-49



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##### Table of Contents



The objective for interest rate risk management
is to minimize interest cost and at the same time hold the
volatility of future interest payments within acceptable limits.
To achieve this, Telenor use a simulation model that takes into
account market variables and the portfolio composition. The
average duration band of the liability portfolio is
0.5-2.5 years. As at December 31, 2003, the average
duration was 2.05 years.

Telenor applies interest rate derivatives to
manage the interest rate risk of the debt portfolio. This
typically involves interest rate swaps, whereas forward rate
agreements and interest rate options are used to a lesser extent.

Below is a sensitivity analysis that shows the
change in fair value due to a one percentage point increase in
interest rates. The matrix is divided into time intervals. The
interest rate risk is allocated to the next rate fixing date for
floating rate instruments, and to the maturity date for fixed
rate instruments. Consequently, the matrix shows the interest
rate risk distribution of the portfolio.

The table below includes interest-bearing
liabilities, interest rate derivatives and currency derivatives.

|                                |  |                                                      |        |                                                             |  |       |       |       |  |       |        |       |  |       |   |       |  |         |        |  |  |  |       |  |  |  |      |  |  |  |      |  |  |  |        | 
|------------------------------- |  | ---------------------------------------------------- | ------ | ----------------------------------------------------------- |  | ----- | ----- | ----- |  | ----- | ------ | ----- |  | ----- | - | ----- |  | ------- | ------ |  |  |  | ----- |  |  |  | ---- |  |  |  | ---- |  |  |  | ------ | 
|                                |  |                                                      |        |                                                            
|                                |  |                                                      |        | Decrease in fair value due to 1% increase in interest rates
|                                |  |                                                      |        |                                                            
|                                |  |                                                      |        | 0  1                                                       |  | 1  2 |       | 3  4 |  | 4  5 |        | 6  7 |  | 7  8 |   | 8  9 |  | Beyond 
|Currency                        |  | Face value                                           |        | year                                                        |  | years |       | years |  | years |        | years |  | years |   | years |  | 9 years
|                                |  |                                                      |        |                                                             |  |       |       |       |  |       |        |       |  |       |   |       |  |        
|                                |  |                                                     
|                                |  | (NOK in millions equivalent as of December 31, 2003)
|CZK                             |  |                                                      | 188    |                                                             |  |       | 0.50  |       |  |       |       |       |  |       |  |       |  |         |       |  |  |  |      |  |  |  |     |  |  |  |     |  |  |  |       | 
|DKK                             |  |                                                      | 48     |                                                             |  |       |      |       |  |       |       |       |  |       |  |       |  |         | 0.65   |  |  |  |      |  |  |  |     |  |  |  |     |  |  |  |       | 
|EUR                             |  |                                                      | 6,751  |                                                             |  |       | 5.51  |       |  |       | 31.47  |       |  |       |  |       |  |         | 25.98  |  |  |  | 24.37 |  |  |  | 6.76 |  |  |  | 6.27 |  |  |  | 139.93 | 
|GBP                             |  |                                                      | 300    |                                                             |  |       | 1.22  |       |  |       |       |       |  |       |  |       |  |         |       |  |  |  |      |  |  |  |     |  |  |  |     |  |  |  |       | 
|HUF                             |  |                                                      | 802    |                                                             |  |       | 7.23  |       |  |       |       |       |  |       |  |       |  |         |       |  |  |  |      |  |  |  |     |  |  |  |     |  |  |  |       | 
|MYR                             |  |                                                      | 1,333  |                                                             |  |       | 7.11  |       |  |       |       |       |  |       |  |       |  |         |       |  |  |  |      |  |  |  |     |  |  |  |      |  |  |  |       | 
|NOK                             |  |                                                      | 8,820  |                                                             |  |       | 21.12 |       |  |       | 53.89  |       |  |       |  |       |  |         | 63.14  |  |  |  | 8.64  |  |  |  |     |  |  |  |     |  |  |  | 117.31 | 
|SEK                             |  |                                                      | 1,340  |                                                             |  |       | 1.75  |       |  |       | 9.47   |       |  |       |  |       |  |         | 3.00   |  |  |  |      |  |  |  |     |  |  |  |     |  |  |  |       | 
|UAH                             |  |                                                      | 73     |                                                             |  |       | 0.35  |       |  |       |       |       |  |       |  |       |  |         |       |  |  |  |      |  |  |  |     |  |  |  |     |  |  |  |       | 
|USD                             |  |                                                      | 6,220  |                                                             |  |       | 13.08 |       |  |       | 24.03  |       |  |       |  |       |  |         | 10.75  |  |  |  | 1.49  |  |  |  |     |  |  |  |     |  |  |  |       | 
|                                |  |                                                      |        |                                                             |  |       |       |       |  |       |        |       |  |       |   |       |  |         |        |  |  |  |       |  |  |  |      |  |  |  |      |  |  |  |        | 
|Interest-bearing liabilities(1) |  |                                                      | 25,875 |                                                             |  |       | 57.87 |       |  |       | 118.86 |       |  |       |  |       |  |         | 103.52 |  |  |  | 34.50 |  |  |  | 6.76 |  |  |  | 6.27 |  |  |  | 257.24 | 
|                                |  |                                                      |        |                                                             |  |       |       |       |  |       |        |       |  |       |   |       |  |         |        |  |  |  |       |  |  |  |      |  |  |  |      |  |  |  |        | 






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

Exchange rate risk

Telenor is exposed to changes in the value of the
Norwegian Krone relative to other currencies. Telenor has
invested in companies that have other functional currencies than
Norwegian Krone. In addition, companies that mainly operate in
Norwegian Krone will have transactions denominated in currencies
other than Norwegian Krone.

The book value of Telenors net investments
in foreign entities varies with changes in the value of
Norwegian Krone compared to other currencies. The net income of
the Group is also affected by changes in exchange rates, as the
profit and loss contributions of foreign entities are translated
to Norwegian Krone using the average exchange rate for the
period. If these companies pay dividends, it will typically be
done in their local currency. Managements strategy to
handle exchange rate exposures related to net investments is to
issue financial instruments in the currencies involved.
Combinations of money market instruments (commercial paper and
bonds) and derivatives (foreign currency forward contracts and
currency swaps) are typically used for this purpose.

Norwegian entities will also be exposed to
exchange rate risk rising from revenues or operating expenses in
foreign currencies. This exchange rate risk is normally not
hedged by Telenor.

Exchange rate risk also arises when Norwegian
entities enter into other transactions denominated in foreign
currency, or when agreements are made to acquire or dispose of
investments outside Norway. Committed cash flows equivalent to
NOK 50 million or higher are hedged economically using
options or forward contracts. Hedge accounting is often not
permitted for these kinds of hedging relationships, which

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leads to gains and losses on the transactions
being charged directly to profit and loss. Exchange rate risk
related to debt instruments in foreign entities is also a part
of the risk exposure of the Telenor Group.


Hedging as described above is only carried out in
currencies that have well-functioning capital markets.

The table below shows the currency distribution
of the Groups interest-bearing assets, liabilities and
derivatives in other currencies than Norwegian Krone as of
December 31, 2003:

|                             |  |                                          |     |     |  |     |      |     |  |     |      |     |  |     |     |     |  |     |        |     |  |     |     |     |  |  |         |   |  |  |         |   |  |  |      |   |  |  |        |   |  |  |     |   |  |  |      |  
|---------------------------- |  | ---------------------------------------- | --- | --- |  | --- | ---- | --- |  | --- | ---- | --- |  | --- | --- | --- |  | --- | ------ | --- |  | --- | --- | --- |  |  | ------- | - |  |  | ------- | - |  |  | ---- | - |  |  | ------ | - |  |  | --- | - |  |  | ---- | -
|                             |  | AUD                                      |     | CHF |  | CZK |      | DKK |  | EUR |      | GBP |  | HUF |     | JPY |  | MYR |        | SEK |  | UAH |     | USD
|                             |  |                                          |     |     |  |     |      |     |  |     |      |     |  |     |     |     |  |     |        |     |  |     |     |    
|                             |  |                                         
|                             |  | (Face value in millions, local currency)
|Interest-bearing assets      |  |                                          |    |     |  |     |     |     |  |     |     |     |  |     | 68  |     |  |     | 7      |     |  |     |    |     |  |  | 17,745  |   |  |  |        |   |  |  | 339  |   |  |  | 178    |   |  |  |    |   |  |  | 448  |  
|Interest-bearing liabilities |  |                                          | (37 | )   |  |     | (550 | )   |  |     |     |     |  |     | (42 | )   |  |     | (1,368 | )   |  |     |    |     |  |  |        |   |  |  | (22,500 | ) |  |  | (758 | ) |  |  | (461   | ) |  |  | (58 | ) |  |  | (560 | )
|Currency swaps               |  |                                          | 37  |     |  |     | 550  |     |  |     | (461 | )   |  |     |    |     |  |     | 556    |     |  |     | (33 | )   |  |  | (33,363 | ) |  |  | 22,500  |   |  |  |     |   |  |  | (503   | ) |  |  |    |   |  |  | (141 | )
|Forward contracts            |  |                                          |    |     |  |     |     |     |  |     | (270 | )   |  |     |    |     |  |     |       |     |  |     | 8   |     |  |  | (10,700 | ) |  |  |        |   |  |  |     |   |  |  | (480   | ) |  |  |    |   |  |  | (230 | )
|                             |  |                                          |     |     |  |     |      |     |  |     |      |     |  |     |     |     |  |     |        |     |  |     |     |     |  |  |         |   |  |  |         |   |  |  |      |   |  |  |        |   |  |  |     |   |  |  |      |  
|Total                        |  |                                          |    |     |  |     |     |     |  |     | (731 | )   |  |     | 26  |     |  |     | (805   | )   |  |     | (25 | )   |  |  | (4,918  | ) |  |  |        |   |  |  | (419 | ) |  |  | (1,266 | ) |  |  | (58 | ) |  |  | (483 | )
|                             |  |                                          |     |     |  |     |      |     |  |     |      |     |  |     |     |     |  |     |        |     |  |     |     |     |  |  |         |   |  |  |         |   |  |  |      |   |  |  |        |   |  |  |     |   |  |  |      |  

Credit risk

Credit Risk is the loss that the Group would
suffer if a counterpart failed to perform its financial
obligations.

There is limited credit risk related to the
account receivables due to the high number of customers.

Telenor has entered into Cross Border QTE Leases
for telephony switches, GSM Mobile network and fixed-line
network. Telenor has provided a defeasance of all amounts due by
us under these agreements with highly rated financial
institutions and US Government related securities. The leasing
obligations and the defeased amounts are shown net on the
balance sheet, see notes 15, 20, 23 and 31. The payment
obligation was NOK 6.6 billion as of December 31,
2003.

Telenor invests surplus liquidity in short-term
interest-bearing assets. Credit risk is inherent in such
instruments. Financial derivatives with positive replacement
value for Telenor, taking into account legal netting agreements,
also represent a credit risk.

Credit risk arising from financial transactions
is reduced through diversification, through accepting
counterparts with high credit ratings only and through setting
strict limits on aggregated credit exposure towards each
counterpart. Telenor ASA has legal netting agreements (ISDA
agreements), which allows gains to be offset against losses in a
bankruptcy situation with the 16 banks that are counterparts in
derivative transactions. As of December 31, 2003, Telenor
ASA has collateral agreements with three banks in derivative
transactions. Both ISDA agreements and collateral agreements are
means to reduce overall credit risk.

Fair value of derivatives with positive
replacement value for Telenor ASA was equivalent to
NOK 1,757 million as of December 31, 2003, taking
into account netting agreements. Credit exposure for Telenor ASA
is monitored on a daily basis.

Liquidity risk

Liquidity risk is the risk that companies in the
Group do not have liquidity available to pay their obligations
on time.

The Group has established Group account systems
in Norway, Sweden, Denmark, Hungary and the United Kingdom to
manage the cash flows in the Group as efficient as possible.
Efficient cash management also involves using currency swaps
when appropriate.

Surplus liquidity within the Group account
systems is invested in interest-bearing instruments with short
time to maturity and low default risk. Telenor ASA has also
established one committed credit facility to minimize the
Groups liquidity risk, see note 20.

Management emphasizes financial flexibility. An
important part of this is to minimize liquidity risk through
ensuring access to a diversified set of funding sources.

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Other market risks

Telenor is exposed to equity market risk through
investments in equity instruments.

Fair values of financial instruments

The estimated fair values of the companys
financial instruments are based on market prices and the
valuation methodologies described below. However, prudence is
recommended in interpreting market data to arrive at an
estimated fair value. Accordingly, the estimates presented
herein may only be indicative of the amounts the company could
realize in the future.

Fair values of debt instruments issued by Telenor
ASA have been calculated using an interest rate curve, which
incorporates estimates of the Telenor ASA credit spreads as of
December 31, 2003. The credit curve has been extrapolated
from trades observed in the secondary market of Telenor ASA debt
instruments with different maturities.

Fair value of debt instruments issued by
subsidiaries has been determined by market quotes where such are
available. Fair value of other floating rate instruments in
subsidiaries is assumed to be equal to the book value.

For all other interest-bearing liabilities fair
values have been estimated using the Telenor ASA credit curve
described above.

Fair values of currency swaps, foreign currency
forward contracts and interest rate swaps are estimated by the
present value of future cash flows, calculated by using quoted
swap curves and exchange rates as of December 31, 2003.
Options are revalued using appropriate option pricing models.

Fair values for listed shares are based on quoted
prices at the end of the relevant years. Listed companies
consolidated in the Telenor Group or accounted for by using the
equity method, are not included in the table below.

The table below shows book value and fair value
of some financial instruments as of December 31, 2003 and
2002:

|                                                                         |  |                   |         |            |  |            |         |            |  |  |         |   |  |  |         |  
|------------------------------------------------------------------------ |  | ----------------- | ------- | ---------- |  | ---------- | ------- | ---------- |  |  | ------- | - |  |  | ------- | -
|                                                                         |  | Book value        |         | Fair value |  | Book value |         | Fair value
|                                                                         |  | 2002              |         | 2002       |  | 2003       |         | 2003      
|                                                                         |  |                   |         |            |  |            |         |           
|                                                                         |  |                  
|                                                                         |  | (NOK in millions)
|Financial assets                                                         |  |                   |         |            |  |            |         |            |  |  |         |   |  |  |         |  
|Listed shares                                                            |  |                   | 296     |            |  |            | 275     |            |  |  | 720     |   |  |  | 2,955   |  
|Cash and short-term money market investments                             |  |                   | 5,524   |            |  |            | 5,524   |            |  |  | 7,952   |   |  |  | 7,952   |  
|Financial liabilities                                                    |  |                   |         |            |  |            |         |            |  |  |         |   |  |  |         |  
|Long-term interest-bearing liabilities(1)                                |  |                   | (29,105 | )          |  |            | (29,813 | )          |  |  | (26,366 | ) |  |  | (27,713 | )
|Short-term interest-bearing liabilities                                  |  |                   | (3,591  | )          |  |            | (3,591  | )          |  |  | (386    | ) |  |  | (386    | )
|Instruments used for interest rate and
    exchange rate risk management |  |                   |         |            |  |            |         |            |  |  |         |   |  |  |         |  
|Gain interest rate swaps                                                 |  |                   |        |            |  |            | 205     |            |  |  |        |   |  |  | 285     |  
|Loss interest rate swaps                                                 |  |                   |        |            |  |            | (214    | )          |  |  |        |   |  |  | (377    | )
|Interest rate options asset                                              |  |                   | 2       |            |  |            | 1       |            |  |  | 49      |   |  |  | 90      |  
|Interest rate options liability                                          |  |                   |        |            |  |            | (4      | )          |  |  |        |   |  |  | (24     | )
|Gain cross currency interest rate swaps(1)                               |  |                   | 1,153   |            |  |            | 1,528   |            |  |  | 1,944   |   |  |  | 2,235   |  
|Loss cross currency interest rate swaps(1)                               |  |                   | (853    | )          |  |            | (697    | )          |  |  | (954    | ) |  |  | (670    | )
|Gain foreign currency forward contracts                                  |  |                   | 34      |            |  |            | 34      |            |  |  | 12      |   |  |  | 12      |  
|Loss foreign currency forward contracts                                  |  |                   | (167    | )          |  |            | (167    | )          |  |  | (62     | ) |  |  | (62     | )






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

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22.     NON-INTEREST-BEARING
LIABILITIES

|                                                                                   |  |                   |        |      |  |  |        | 
|---------------------------------------------------------------------------------- |  | ----------------- | ------ | ---- |  |  | ------ | 
|                                                                                   |  | 2002              |        | 2003
|                                                                                   |  |                   |        |     
|                                                                                   |  |                  
|                                                                                   |  | (NOK in millions)
|Accounts payable                                                                   |  |                   | 3,072  |      |  |  | 3,750  | 
|Government taxes, tax deductions etc.                                              |  |                   | 2,199  |      |  |  | 2,135  | 
|Dividends payable                                                                  |  |                   | 799    |      |  |  | 1,776  | 
|Current taxes                                                                      |  |                   | 2,717  |      |  |  | 641    | 
|Accrued expenses                                                                   |  |                   | 5,315  |      |  |  | 4,484  | 
|Prepaid revenues                                                                   |  |                   | 2,647  |      |  |  | 3,163  | 
|Provision for workforce reductions, loss
    contracts and exit from activities(1) |  |                   | 865    |      |  |  | 402    | 
|Other current liabilities                                                          |  |                   | 511    |      |  |  | 715    | 
|                                                                                   |  |                   |        |      |  |  |        | 
|Total current non-interest-bearing
    liabilities                                 |  |                   | 18,125 |      |  |  | 17,066 | 
|                                                                                   |  |                   |        |      |  |  |        | 
|Long-term non-interest-bearing liabilities                                         |  |                   | 473    |      |  |  | 754    | 
|                                                                                   |  |                   |        |      |  |  |        | 
|Total non-interest-bearing
    liabilities                                         |  |                   | 18,598 |      |  |  | 17,820 | 
|                                                                                   |  |                   |        |      |  |  |        | 






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

23.     PLEDGES AND
GUARANTEES

|                                                           |  |                   |       |      |  |  |       | 
|---------------------------------------------------------- |  | ----------------- | ----- | ---- |  |  | ----- | 
|                                                           |  | 2002              |       | 2003
|                                                           |  |                   |       |     
|                                                           |  |                  
|                                                           |  | (NOK in millions)
|Interest-bearing liabilities secured by assets
    pledged |  |                   | 3,278 |      |  |  | 2,692 | 
|Book value of assets pledged                               |  |                   | 9,892 |      |  |  | 8,148 | 

Pledged assets and the liabilities secured by
pledged assets as of December 31, 2003 related to DiGi.Com,
GrameenPhone and the satellite leases (Thor II and
Thor III).

|           |  |                   |       |      |  |  |       | 
|---------- |  | ----------------- | ----- | ---- |  |  | ----- | 
|           |  | 2002              |       | 2003
|           |  |                   |       |     
|           |  |                  
|           |  | (NOK in millions)
|Guarantees |  |                   | 2,515 |      |  |  | 2,557 | 
|           |  |                   |       |      |  |  |       | 

Guarantees provided, where the related liability
is included in the balance sheet are not shown in the table.
Furthermore, purchased bank guarantees are not included.
Guarantees as of December 31, 2003 are described below.

Guarantees provided in connection with entering
into the Cross Border QTE Leases are not included in the
preceding table, see notes 15, 20, 21 and 31. These
guarantees are provided for the payment of all lease
obligations. As of December 31, 2003 and 2002 these
guarantees amounted to NOK 7,165 million (USD 1,073
million) and NOK 4,293 million (USD 616 millions),
respectively.

The table above includes a guarantee liability of
approximately NOK 854 million related to Bravida, mainly in
connection with Bravidas deliveries to a project in
Sweden, see note 26.

In 2001, Telenor provided a guarantee to Intelsat
of USD 117 million (NOK 781 million as of
December 31, 2003) for the fulfilment of the committed
investment in satellite capacity in 2004 of NOK 626
million, see note 25.

In 2002, Telenor provided a guarantee for up to
approximately EUR 68 million (NOK 570 million as
of December 31, 2003) in favor of the lenders of
interest-bearing financing to the associated company
ONE GmbH (previously Connect Austria). Payments under the
guarantee may be required if the financial covenants in these
loan agreements are breached by ONE GmbH.

Telenor has provided a guarantee for a
termination fee of the satellite leases (Thor II and
Thor III) of NOK 271 million. The leasing periods
end in 2009 and 2010, respectively.

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In addition, Telenor has provided performance and
payment guarantees for subsidiaries of an aggregate amount of
approximately NOK 81 million.

24.     COMMITMENTS
AND CONTINGENCIES

Telenor is involved in a number of legal
proceedings, including among others those regarded as being
material and described below, concerning matters arising in
connection with the conduct of Telenors business.
Provisions have been made to cover unfavorable rulings or
deviations in tax assessments, pending the outcome of appeals by
Telenor against these decisions, as described below.
Furthermore, provisions have been made to cover the expected
outcome of the other proceedings to the extent that negative
outcomes are likely, and reliable estimates can be made.
However, most of the proceedings against Telenor are of such a
nature that provisions cannot be estimated. While acknowledging
the uncertainties of litigation Telenor believes that, based on
the information available to date, these matters will be
resolved without any material negative effect on Telenors
financial position.

In January 2003, Telenor initiated proceedings
against the Norwegian tax authorities before the Oslo District
Court relating to the non-recognition of a tax loss deriving
from the sale of shares in Sonofon Holding A/S from Telenor
Eiendom Holding AS to Dansk Mobil Holding AS. The disputed
amount is approximately NOK 8.6 billion, which results in a
tax charge of NOK 2.4 billion. Proceedings before the Oslo
District Court were held in January 2004 and the ruling is
pending.

In November 2003, Sense Communication AS
initiated legal proceedings against Telenor before the Oslo
District Court claiming up to NOK 170 million excluding
interest, based on allegations that Telenor prices in a service
provider agreement for the period 2000  2003 had been
excessive and not in accordance with the requirements for cost
oriented pricing. Sense has given notice to the effect that the
claim might be recalculated in order to encompass year 2003 and
such other relevant years. The Oslo District Court has not yet
decided a date for commencement of court hearings.

The Liquidators of Enitel AS initiated in
December 2003 legal proceedings against Telenor before Asker and
Bærum District Court. The claim of damages and
reimbursement of NOK 121 million plus interest is based on
alleged overcharging for leased lines and traffic terminated in
the fixed and mobile networks. The Oslo District Court has not
yet decided a date for commencement of court hearings.

Disputes mentioned in note 24 to the
Telenors financial statements for 2002, where a verdict
has been reached.

In 2001, NSB (Norwegian State Railways) initiated
legal proceedings against Telenor. In a judgment from the Oslo
District Court of March 2003 Telenor was acquitted. The result
is legally binding.

The legal proceedings between Telenor and S&A
Telecom Cyprus Ltd. (on behalf of WR Com Enterprises Ltd.) came
to an end in 2003 after the parties agreed to an out of court
settlement.

In 2002, TDC Tele Danmark AS, Telia Mobile AB,
Sonera AB and Iceland Telecom Ltd. initiated legal proceedings
against Telenor before a court of arbitration. The final legally
binding judgment from the arbitration panel was presented to the
parties in December 2003 and Telenor won the case in its
entirety.

Tele 2 had initiated several legal
proceedings against Telenor. An out of court settlement was
reached in January 2004.

The legal proceedings initiated by Teletopia
against Telenor before the Court of Appeal resulted in a
judgment were Telenor was acquitted upon payment of
NOK 0.6 million. Teletopia has filed an appeal with
the Supreme Court.

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25.     CONTRACTUAL
OBLIGATIONS

The Group has entered into agreements with fixed
payments in the following areas as of December 31, 2003:

|                                       |  |                   |       |      |  |      |       |      |  |      |       |       |  |  |     |  |  |  |     |  |  |  |       | 
|-------------------------------------- |  | ----------------- | ----- | ---- |  | ---- | ----- | ---- |  | ---- | ----- | ----- |  |  | --- |  |  |  | --- |  |  |  | ----- | 
|                                       |  |                   |       |      |  |      |       |      |  |      |       | After
|                                       |  | 2004              |       | 2005 |  | 2006 |       | 2007 |  | 2008 |       | 2008 
|                                       |  |                   |       |      |  |      |       |      |  |      |       |      
|                                       |  |                  
|                                       |  | (NOK in millions)
|Rent of premises                       |  |                   | 603   |      |  |      | 524   |      |  |      | 418   |       |  |  | 327 |  |  |  | 320 |  |  |  | 1,063 | 
|Rent of cars, office equipment, etc.   |  |                   | 71    |      |  |      | 48    |      |  |      | 20    |       |  |  | 7   |  |  |  | 4   |  |  |  | 8     | 
|Rent of satellite and network capacity |  |                   | 448   |      |  |      | 176   |      |  |      | 672   |       |  |  | 71  |  |  |  | 66  |  |  |  | 287   | 
|IT-related agreements                  |  |                   | 346   |      |  |      | 203   |      |  |      | 112   |       |  |  | 17  |  |  |  |    |  |  |  |      | 
|Other contractual obligations          |  |                   | 552   |      |  |      | 163   |      |  |      | 46    |       |  |  | 39  |  |  |  | 7   |  |  |  |      | 
|Committed investments                  |  |                   |       |      |  |      |       |      |  |      |       |       |  |  |     |  |  |  |     |  |  |  |       | 
|Properties and equipment               |  |                   | 381   |      |  |      | 34    |      |  |      | 31    |       |  |  | 29  |  |  |  | 25  |  |  |  |      | 
|Other contractual investments          |  |                   | 4,358 |      |  |      | 4     |      |  |      | 4     |       |  |  |    |  |  |  |    |  |  |  |      | 
|                                       |  |                   |       |      |  |      |       |      |  |      |       |       |  |  |     |  |  |  |     |  |  |  |       | 
|Total contractual obligations          |  |                   | 6,759 |      |  |      | 1,152 |      |  |      | 1,303 |       |  |  | 490 |  |  |  | 422 |  |  |  | 1,358 | 
|                                       |  |                   |       |      |  |      |       |      |  |      |       |       |  |  |     |  |  |  |     |  |  |  |       | 

The table does not include agreements under which
Telenor has no binding obligation to purchase, and do not
include future investments due to the UMTS license in Norway.

Rent of satellite and network capacity includes
payments under a MVNO-agreement (Mobile Virtual Network
Operator) of NOK 558 million for 2006.

Other contractual investments for 2004 include
USD 88 million for capital expenditure in satellite
capacity (NOK 626 million calculated using the hedged
USD/NOK exchange rate). Furthermore, payment for the remaining
46.5% ownership interest in Sonofon as of February 12, 2004
is included by NOK 3,661 million.

26.     RELATED
PARTIES

Telenor ASA was 62.6% owned by the Norwegian
state (including treasury shares) as of December 31, 2003.

The Norwegian telecommunications market is
governed by the Electronic Communications Act of June 25,
2003 and other regulations issued pursuant to this Act, as well
as by concessions (licenses) for certain activities in 2003.
According to the concession on fixed network and the public
telephony service, Telenor had to provide and maintain Universal
Service Obligations (USO)  PSTN telephony to all
households and companies, public pay phones, services for the
disabled, emergency services  and Special Service
Obligations (SSO)  the defense of Norway, coastal
radio, services concerning Svalbard, wire services for ships,
provisions of emergency lines for the police, fire department
and ambulances  at a certain level in 2003. Telenor
receives no compensation from the state for the provision of USO
services, whereas compensation is given to Telenor for the
provision of SSO. In 2003, 2002 and 2001 Telenor received
NOK 106 million, NOK 82 million and NOK 80
million, respectively, under this agreement.

Due to the introduction of the Electronic
Communications Act Telenors fixed line operations will no
longer be subject to a concession, but the requirements for
USO/SSO services will be continued in general regulation.
Telenor expects that the duties will continue.

Telenor provides mobile and fixed telephony
services, leased lines, customer equipment, Internet
connections, TV distributions and installation and IT
operations/ services to the state and companies controlled by
the state in the normal course of business and at
arms-length prices.

As of December 31, 2003 GrameenPhone has
borrowed NOK 50 million from NORAD. NORAD is part of the
Ministry of foreign Affairs. The fixed rate loan has an interest
of 3.4% and is a interest-only loan until June 30, 2004 and
is thereafter paid off until December 31, 2010.

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Telenor pays an annual fee to the Norwegian Post
and Telecommunications Authority (PT) for delivering
telephony and mobile services. The fee was NOK 87 million
in 2003, NOK 81 million in 2002 and NOK 81 million in
2001, respectively.

Canal Digital is a wholly-owned subsidiary of
Telenor, performing satellite Broadcasting. The company was
owned 50% by Telenor up to June 30, 2002, when Telenor
completed the acquisition of the remaining 50% of the company
and started consolidating the company. Canal Digital had
agreements to sell products and services to other Telenor
companies, mainly satellite broadcasting and cards for
TV-decoders. The total amount invoiced for these products and
services was NOK 223 million in 2002 (half year) and
NOK 475 million in 2001, respectively. The transactions
were based on arms-length agreements.

Associated companies abroad hire personnel from
Telenor. A total of NOK 24 million, NOK 21 million and
NOK 29 million was invoiced for these services in 2003,
2002 and 2001, respectively.

Bravida has been an associated company from
1 November 2000, when Bravida was merged with BPA AB.
Telenors ownership share was 47.05% as of
December 31, 2003. According to a shareholders agreement
entered into at the time of the merger, Telenor shall decrease
its ownership share in event of a listing of Bravida. In 2003,
Group companies purchased goods and services for NOK 1,305
million from Bravida, NOK 1,868 million in 2002 and
NOK 2,142 million in 2001, mainly for installation and
other services. NOK 92 million, NOK 85 million and
NOK 450 million in 2003, 2002 and 2001, respectively, were
invoiced from Group companies to Bravida for sale of customer
equipment and administrative services. Bravida also has
agreements which ensures that Bravida is awarded a certain share
of the purchases the business area Fixed will make related to
installation and other services until the end of 2005. The
transactions are based on arms-length prices. Telenor had
provided guarantees related to Bravida with a frame of
approximately SEK 920 million (NOK 854 million)
as of December 31, 2003. This is mainly related to a
fulfillment guarantee given by Telenor in 2000 when Bravida was
a subsidiary regarding Södra Länken, which is a
engineering contract in Sweden. Telenor had outstanding loans of
NOK 553 million to Bravida as of December 31, 2003, of
which approximately NOK 551 million was long-term
(NOK 442 million in outstanding loans as of
December 31, 2002 of which NOK 430 million was long
term loans). As of December 31, 2003, Telenor had
outstanding liabilities to Bravida of NOK 86 million
(NOK 30 million as of December 31, 2002). In February
2003, Telenor provided a short-term convertible loan of
NOK 150 million to Bravida. This loan was reduced to
NOK 73 million during 2003 as the other shareholders in
Bravida subscribed for their pro rata share of the loan. The
loan was converted to share capital in 2003. A new convertible
loan of NOK 150 million was established in September 2003.
Telenor participated with NOK 73 million (equal to their
ownership interest in Bravida). The loan matures for payment
January 29, 2007 and can in the period May 2006 to April
2007 be converted to shareholders equity. In February 2003,
Telenor provided a financial guarantee to Svensk Eksportkreditt
of SEK 331 million plus interest related to the Bravida
engagement, in connection with which external parties provided
collateral security in the form of mortgages of shares. This
guarantee was redeemed on maturity in 2003.

The associated company TeleVenture Management AS
performs management services for Telenor Venture, Telenor
Venture II and Telenor Venture III. TeleVenture
Management AS invoiced NOK 18 million in 2003, NOK 21
million in 2002 and NOK 23 million in 2001.

Zebsign, established in 2001 with 50% ownership
by Telenor, delivers services for electronic identification and
signature. In 2003, Zebsign had revenues for sale to other
Telenor companies of NOK 1 million, NOK 41 million in
2002 and NOK 43 million in 2001.

Telenor acquired the associated company Glocalnet
as of December 31, 2002. During 2003 Telenor invoiced
Glocalnet NOK 361 million for telephony and dial-up
Internet services. Accounts receivable from Glocalnet was
NOK 124 million as of December 31, 2003.

27.     ADDITIONAL
INFORMATION ABOUT CASH FLOW

With the exception of certain companies, the
Group has purchased bank guarantees for payment of the
employees tax deductions. The Group has established Group
bank accounts with two banks. Under these

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agreements, Telenor ASA is the Group account
holder, whereas the other companies in the Group are sub-account
holders or participants. The banks can set off balances in their
favor against deposits, so that the net position represents the
net balance between the bank and the Group account holder.


Restricted bank accounts

|                             |  |                   |     |      |  |      |     |  |  |  |    | 
|---------------------------- |  | ----------------- | --- | ---- |  | ---- | --- |  |  |  | -- | 
|                             |  | 2001              |     | 2002 |  | 2003
|                             |  |                   |     |      |  |     
|                             |  |                  
|                             |  | (NOK in millions)
|For employees tax deduction |  |                   | 114 |      |  |      | 88  |  |  |  | 22 | 
|Other                        |  |                   | 179 |      |  |      | 45  |  |  |  | 32 | 
|                             |  |                   |     |      |  |      |     |  |  |  |    | 
|Total                        |  |                   | 293 |      |  |      | 133 |  |  |  | 54 | 
|                             |  |                   |     |      |  |      |     |  |  |  |    | 

Material non-monetary transactions

|                          |  |                   |     |      |  |      |     |  |  |  |       | 
|------------------------- |  | ----------------- | --- | ---- |  | ---- | --- |  |  |  | ----- | 
|                          |  | 2001              |     | 2002 |  | 2003
|                          |  |                   |     |      |  |     
|                          |  |                  
|                          |  | (NOK in millions)
|Investments in businesses |  |                   | 678 |      |  |      | 105 |  |  |  | 2,403 | 
|Financial leases          |  |                   |    |      |  |      | 346 |  |  |  | 27    | 
|                          |  |                   |     |      |  |      |     |  |  |  |       | 
|Total                     |  |                   | 678 |      |  |      | 451 |  |  |  | 2,430 | 
|                          |  |                   |     |      |  |      |     |  |  |  |       | 

Investments in businesses in 2003 consisted
mainly of the following transactions related to changes in
ownership interests: sales of shares in Comincom/ Combellga in
exchange for shares in Golden Telecom Inc. (NOK 1.3 billion
recorded as associated companies), the sale of shares in
Inmarsat in exchange for an ownership interest in
Inmarsats new holding company (NOK 0.7 billion
recorded as shares and other investments), and the sale of
shares in A-Pressen ASA in exchange for shares in APR Media
Holding AS (NOK 0.4 billion recorded as associated
companies).

28.     MANAGEMENT
COMPENSATION ETC.

The Group Management consist of Jon Fredrik
Baksaas, Arve Johansen, Torstein Moland, Berit Svendsen, Jan
Edvard Thygesen, Stig Eide Sivertsen, Morten Karlsen Sørby
and Asmund Løset (from January 6, 2004).

Aggregate remuneration for the board of directors
and the corporate assembly for 2003 was NOK 1,630,834, and
NOK 551,996, respectively. The members of the board of
directors do not have any agreements which entitles them to
extraordinary remuneration in the event of termination or change
of office, or agreement for bonus, profit sharing, options or
similar.

The annual salary for the president and chief
executive officer Jon Fredrik Baksaas was NOK 3,200,000 in
2003. Telenor also paid pension premiums of NOK 1,677,463
and other compensation of NOK 118,478. Jon Fredrik Baksaas
had no annual bonus agreement in 2003, however, he was granted
250,000 share options on February 21, 2003 with a maturity
of 7 years. In addition 150,000 when he was appointed
President and CEO on June 21, 2002 and 100,000 in the share
option program in 2002. Telenors pension plan gives
Mr. Baksaas the right to retire at the age of 60 with a
supplementary pension, resulting in a total pension equal to 66%
of pension-qualifying income. Pension-qualifying income is
restricted to NOK 3,000,000, adjusted annually with the
Consumer Price Index. The first adjustment occurred on
January 1, 2003. Mr. Baksaas has the right to receive
salary for a period of 24 months if Telenor terminates the
employment, provided that he does not undertake any other
employment during such period, in which case the payment would
be reduced by 75% of the salary for the new employment. There
will be no holiday payment on this amount. The agreed period of
termination notice is six months.

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The table below shows information attached to
each member of the Group Management, except for Jon Fredrik
Baksaas, which is mentioned above.

|                                                                    |  |           |          |           |  |                     |          |         |  |                                                                                                                                                                                                                                                                        |  |  |         |  |  |  |         | 
|------------------------------------------------------------------- |  | --------- | -------- | --------- |  | ------------------- | -------- | ------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  | ------- |  |  |  | ------- | 
|                                                                    |  | Agreed    |          |           |  |                     |          | Share   |  | Share                                                                                                                                                                                                                                                                 
|                                                                    |  | period of |          | Severance |  |                     |          | Options |  | Options                                                                                                                                                                                                                                                               
|Name/title                                                          |  | notice    |          | Pay       |  | Pension benefits(1) |          | 2002(2) |  | 2003(2)                                                                                                                                                                                                                                                               
|                                                                    |  |           |          |           |  |                     |          |         |  |                                                                                                                                                                                                                                                                       
|Senior Executive Vice
    President Arve Johansen(3)                |  |           | 6 months |           |  |                     | 6 months |         |  | 66% of Pension-qualifying income at the date of
    retirement with the right to retire at the age of 60.                                                                                                                                                              |  |  | 100,000 |  |  |  | 100,000 | 
|Senior Executive
    Vice President and CFO,
    Torstein Moland(3) |  |           | 6 months |           |  |                     | 6 months |         |  | 66% of Pension-qualifying income at the date of
    retirement with the right to retire at the age of 60.                                                                                                                                                              |  |  | 100,000 |  |  |  | 100,000 | 
|Executive Vice President
    and CTO, Berit Svendsen                |  |           | 6 months |           |  |                     | 6 months |         |  | 66% of Pension-qualifying income at the date of
    retirement with the right to retire at the age of 62.                                                                                                                                                              |  |  | 100,000 |  |  |  | 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.                                                                                                                                                              |  |  | 75,000  |  |  |  | 75,000  | 
|Executive Vice President
    Asmund Løset                           |  |           | 6 months |           |  |                     | 6 months |         |  | 66% of Pension-qualifying income at the date of
    retirement with the right to retire at the age of 62.                                                                                                                                                              |  |  |        |  |  |  | 30,000  | 
|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  | 
|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.                                                                                                                                                              |  |  | 75,000  |  |  |  | 75,000  | 




The bonus frame was 4 months of fixed salary
in 2003. In addition, there may be an adjustment of +
/ -20% conditional upon performance according to certain
non-financial criteria. If the budget is reached (under any
given bonus criterion), 50% of the bonus is paid. 100% of the
bonus may only be paid as a result of exceptional financial
performance beyond budget.



|    |                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Pension qualifying salary may be lower than
    actual fixed salary at the date of retirement. Any increase in
    fixed salary for the group management is conditional upon the
    implementation of a cap on pension qualifying salary
    similar to that provided in Morten Karlsen Sørbys
    pension agreement.
|   
|(2) | The share option programs for 2002 and 2003 are
    described in note 29.                                                                                                                                                                                                                                                
|   
|(3) | 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                                                                                               

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| |                                                                                                                                                                  
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.

Total loans to employees were NOK 41 million
as of December 31, 2003. The loans were mainly provided to
finance cars purchased by the employees as an alternative to
company cars and loans were provided in connection with the
purchase of shares in the employee stock ownership program in
December 2003 (NOK 16 million). The loans for purchase of
shares were limited to NOK 5,970 per employee after
discount. Loans for purchase of shares are non-interest-bearing
and have terms of 11 months.

None of the directors have loans in the company.

The number of shares owned by the members of the
board of directors, the corporate assembly and the Group
management as of December 31, 2003 is shown below. Shares
owned by the board of directors and the Group management
includes closely related parties.

|                       |  |              |        | 
|---------------------- |  | ------------ | ------ | 
|                       |  | Number      
|                       |  | of shares   
|                       |  | as of       
|                       |  | December 31,
|                       |  | 2003        
|                       |  |             
|The Board of Directors |  |              |        | 
|Thorleif Enger         |  |              | 2,000  | 
|Bjørg Ven              |  |              | 10,000 | 
|Harald Stavn           |  |              | 3,503  | 
|Per Gunnar Salomonsen  |  |              | 1,671  | 
|Irma Tystad            |  |              | 813    | 
|The Corporate Assembly |  |              |        | 
|Mona Røkke             |  |              | 200    | 
|Berit Kopren           |  |              | 275    | 
|Stein Erik Olsen       |  |              | 989    | 
|Jan Riddervold         |  |              | 1,914  | 
|Arne Jenssen           |  |              | 407    | 
|The Group Management   |  |              |        | 
|Jon Fredrik Baksaas    |  |              | 20,511 | 
|Arve Johansen          |  |              | 24,791 | 
|Torstein Moland        |  |              | 16,699 | 
|Berit Svendsen         |  |              | 4,767  | 
|Jan Edvard Thygesen    |  |              | 55,937 | 
|Asmund Løset           |  |              | 3,118  | 
|Morten Karlsen Sørby   |  |              | 3,453  | 
|Stig Eide Sivertsen    |  |              | 28,424 | 

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Fees to auditors

The table below summarizes suggested audit fees
for 2003 and 2002 and fees for audit related services, tax
services and other services during 2003 and 2002. Fees include
both Norwegian and foreign subsidiaries.

|                      |  |                                 |      |              |  |              |      |            |  |      |     |      |  |      |      |      |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|--------------------- |  | ------------------------------- | ---- | ------------ |  | ------------ | ---- | ---------- |  | ---- | --- | ---- |  | ---- | ---- | ---- |  |  | --- |  |  |  | --- |  |  |  | --- |  |  |  | --- | 
|                      |  |                                 |      |              |  |              |      |            |  |      |     |     
|                      |  |                                 |      | Audit        |  | Fees for tax |      |           
|                      |  | Audit fees                      |      | related fees |  | services     |      | Other fees
|                      |  |                                 |      |              |  |              |      |           
|                      |  | 2002                            |      | 2003         |  | 2002         |      | 2003       |  | 2002 |     | 2003 |  | 2002 |      | 2003
|                      |  |                                 |      |              |  |              |      |            |  |      |     |      |  |      |      |     
|                      |  |                                
|                      |  | (NOK in millions excluding VAT)
|Telenor ASA           |  |                                 |      |              |  |              |      |            |  |      |     |      |  |      |      |      |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|Group Auditor         |  |                                 | 2.5  |              |  |              | 2.6  |            |  |      | 5.4 |      |  |      | 4.9  |      |  |  | 1.5 |  |  |  | 1.1 |  |  |  | 0.9 |  |  |  |    | 
|Other Auditors        |  |                                 |     |              |  |              |     |            |  |      |    |      |  |      | 1.1  |      |  |  |    |  |  |  |    |  |  |  |    |  |  |  | 0.4 | 
|Other Group companies |  |                                 |      |              |  |              |      |            |  |      |     |      |  |      |      |      |  |  |     |  |  |  |     |  |  |  |     |  |  |  |     | 
|Group Auditor         |  |                                 | 16.1 |              |  |              | 21.9 |            |  |      | 6.7 |      |  |      | 12.2 |      |  |  | 3.0 |  |  |  | 5.2 |  |  |  | 0.7 |  |  |  | 1.0 | 
|Other Auditors        |  |                                 | 8.1  |              |  |              | 3.1  |            |  |      | 2.4 |      |  |      | 2.5  |      |  |  | 1.8 |  |  |  | 1.3 |  |  |  | 7.1 |  |  |  | 1.1 | 

Fees for audit services include fees associated
with the required statutory audits and the reviews of the
Companys quarterly reports. Audit-related fees principally
included due diligence in connection with acquisitions and
dispositions, information system audits and regulatory reporting
audits. Tax fees included review of tax compliance and tax
advice, mainly outside Norway.

29.     SHARE OPTION
PLANS

In the Telenor Group there are three share
options programs: One for shares in Telenor ASA, one for the
listed subsidiary company EDB Business Partner ASA and one for
the listed subsidiary Utfors AB. The option program for Utfors
was terminated in February 2004 without any exercise in 2003 or
2004, and is therefore not disclosed.

Option program for shares in Telenor
ASA

In 2002, 85 managers and key personnel were
granted options, and 110 managers and key personnel were granted
options in 2003.

For options granted in 2002: One third of the
options are vested each of the three years subsequent to the
date of grant. The latest possible exercise date is seven years
subsequent to the date of grant. The exercise price corresponds
to the average closing price at Oslo Stock Exchange five trading
days prior to the date of grant, increasing with an interest per
commenced month corresponding to  1/12 of 12 months
NIBOR (Norwegian Interbank interest rate). The options may only
be exercised four times a year, during a ten-day period after
the publication of the companys quarterly results. For
options granted on February 21, 2002, the price at the end
of exercise life will be NOK 50.96. For options granted to
Jon Fredrik Baksaas on June 21, 2002, the price at end of
exercise life will be NOK 42.12.

For options granted in 2003: One third of the
options are vested each of the three years subsequent to the
date of grant and are exercisable if the stock price at the time
of exercise is higher than the average closing price at Oslo
Stock Exchange five trading days prior to the date of grant,
adjusted with 5.38% per year. The latest possible exercise date
is seven years subsequent to the date of grant. The exercise
price corresponds to the average closing price at Oslo Stock
Exchange five trading days prior to the date of grant
NOK 26.44. The options may only be exercised four times a
year, during a ten-day period after the publication of the
companys quarterly results.

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|                             |                                       |               |           |                |  |  |       |       | 
|---------------------------- | ------------------------------------- | ------------- | --------- | -------------- |  |  | ----- | ----- | 
|                             |                                       |               |           | Exercise price
|                             |                                       | Numer of      |           | at the end of 
|Share options Telenor ASA    |                                       | 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 |      

The table below details our options outstanding
by related option exercise price as of December 31, 2003
and is based on the final exercise price. Some options may be
exercised prior to the termination of the plan.

|                 |          |             |  |                  |           |                      |  |  |         |  |  |  |         | 
|---------------- | -------- | ----------- |  | ---------------- | --------- | -------------------- |  |  | ------- |  |  |  | ------- | 
|Weighted average |          |             |  | Weighted average |           | Options exercisable 
|exercise price   |          | Options     |  | remaining life   |           | as of               
|(in NOK)         |          | outstanding |  | in years         |           | December 31, 2003(1)
|                 |          |             |  |                  |           |                     
|                 | 50.96(2) |             |  |                  | 2,323,333 |                      |  |  | 5 years |  |  |  | 726,666 | 
|                 | 42.12(3) |             |  |                  | 150,000   |                      |  |  | 5 years |  |  |  | 50,000  | 
|                 | 26.44(4) |             |  |                  | 2,630,000 |                      |  |  | 6 years |  |  |  |        | 






|    |                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Exercise prices 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, the
    exercise price is fixed throughout the options term, and
    is NOK 26.44.

The options may only be exercised in a period
right after the publication of Telenors quarterly financial
results.



|    |                                                                       
|--- | ----------------------------------------------------------------------
|(2) | First possible exercise was February 2003
    for  1/3 of the options.
|   
|(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.

At the exercise of the options, Telenor maintains
the right to redeem options by paying an amount in cash
corresponding to the difference between the exercise price and
closing price on the day the notification reached the company.
The options may be exercised earlier than the end of the options
term, as long as they are exercisable.

Option program for shares in EDB Business
Partner ASA

The subsidiary EDB Business Partner ASA has stock
compensation plans for its employees. The exercise price is
based on the share price when the option was granted and is
increased by 1% for each subsequent month until the date of
exercise. Most of the options that are not exercised according
to the plan can be carried forward to the next year. Options
granted had one to four year terms, where one-third of vested
options become exercisable each year. Options vest over a one to
three year period of continued employment. Vested but
unexercised options can be carried forward to May 2004 or expire.

In 2003, 600,000 options at an exercise price of
NOK 15.94 was granted to the new CEO for EDB Business
Partner ASA at the time of appointment. One third of the options
are vested each of the three years subsequent to the date of the
grant and are exercisable if the stock price at time of exercise
is higher than the price of the grant date adjusted with 5.38 %
per year. The options may only be exercised four times a year,
during a ten-day period after the publication of the
companys quarterly results. The latest possible exercise
date is seven year after the grant date.

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|                             |                           |               |            |                |  |  |       |       | 
|---------------------------- | ------------------------- | ------------- | ---------- | -------------- |  |  | ----- | ----- | 
|                             |                           |               |            | Weighted      
|                             |                           | Number of     |            | average       
|                             |                           | share options |            | exercise price
|                             |                           |               |            |               
|                             |                           |               |            | (NOK)         
|Balance at December 31, 2000 |                           |               | 12,324,478 |                |  |  | 121.6 |      
|                             | Options granted in 2001   |               |            | 699,070        |  |  |       | 106.3 | 
|                             | Options exercised in 2001 |               |            | 1,400,594      |  |  |       | 62.9  | 
|                             | Options forfeited in 2001 |               |            | 1,667,104      |  |  |       | 134.0 | 
|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 |      

The table below details EDB Business
Partners options outstanding by related option exercise
price as of December 31, 2003 and is based on the final
exercise dates. Some options may be exercised prior to the
termination of the plan.

|                                |  |                     |           |                  |  |                   |     |  |  |  |           | 
|------------------------------- |  | ------------------- | --------- | ---------------- |  | ----------------- | --- |  |  |  | --------- | 
|                                |  |                     |           |                  |  | Options          
|                                |  |                     |           | Weighted average |  | exercisable as of
|Weighted average exercise price |  | Options outstanding |           | remaining life   |  | December 31, 2003
|                                |  |                     |           |                  |  |                  
|(in NOK)                        |  |                     |           | (in years)       |  |                  
|16                              |  |                     | 600,000   |                  |  |                   | 6.5 |  |  |  |          | 
|62                              |  |                     | 3,774,335 |                  |  |                   | 0.3 |  |  |  | 3,774,335 | 
|67                              |  |                     | 219,515   |                  |  |                   | 0.3 |  |  |  | 219,515   | 
|106                             |  |                     | 590,995   |                  |  |                   | 0.3 |  |  |  | 590,995   | 
|137                             |  |                     | 372,246   |                  |  |                   | 0.3 |  |  |  | 372,246   | 
|183                             |  |                     | 4,327,906 |                  |  |                   | 0.3 |  |  |  | 4,327,906 | 

30.     NUMBER OF
SHARES, OWNERSHIP ETC.

Telenor ASA had as of December 31, 2003 a
share capital of NOK 10,824,127,686 divided into
1,804,021,281 ordinary shares with a nominal value of NOK 6
each. All shares have equal voting rights and the right to
receive dividends. As of December 31, 2003, the company had
remaining 28,103,172 treasury shares of the total of 30,000,000,
which were issued to Telenor as treasury shares to be used to
grant additional bonus shares to retail investors in Norway
pursuant to the global offering in December 2000. On
December 4, 2001, 1,896,828 treasury shares were
transferred as additional bonus shares to retail investors. The
general meeting held in 2001 granted an authority to the Board
of Directors that the remaining shares could be used for other
purposes.

At the general meeting held on May 8, 2003,
it was resolved to grant an authority to the board of directors
to increase the share capital up to NOK 1,065,193,800
through issuance of up to 177,532,300 ordinary shares of
NOK 6 nominal value each in connection with future
investments. Such authority lasts until July 1, 2004. The
Board of Directors may waive the pre-emptive rights of
shareholders to such shares. The authority includes the issuance
of shares against consideration other than cash and the issuance
of shares in a merger. The purpose of the authority is to place
the company in a better position for further growth. Such an
increase in share capital may also be used in share option plans
for managers and key personnel and stock ownership programs for
employees. An employee stock ownership program took place in
2001, 2002 and 2003, under which 595,109 shares at a nominal
value of NOK 6 each were subscribed for in December 2003.
Telenor ASA established a share option plan on February 21,
2002 and on February 2003, see note 29.

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At the general meeting May 8, 2003 approval
was given for the Board of Directors to acquire up to 90,171,308
own shares with a nominal value totaling up to
NOK 541,027,848.


The amount paid per share shall be a minimum of
NOK 6 and a maximum of NOK 200. This authorization is valid
until July 1, 2004.

The following shareholders had 1% or more of the
total number of the 1,775,918,109 outstanding shares (excluding
the 28,103,172 treasury shares) as of December 31, 2003:

|                               |  |           |               |   |  |  |       | 
|------------------------------ |  | --------- | ------------- | - |  |  | ----- | 
|                               |  | Number of |               |  
|Name of shareholders           |  | shares    |               | %
|                               |  |           |               |  
|Ministry of Trade and Industry |  |           | 1,129,842,400 |   |  |  | 63.62 | 
|State Street Bank (nominee)    |  |           | 70,761,238    |   |  |  | 3.98  | 
|National Insurance Scheme Fund |  |           | 49,754,000    |   |  |  | 2.80  | 
|Morgan Stanley (nominee)       |  |           | 24,020,822    |   |  |  | 1.35  | 

In July 2003, the Norwegian state represented by
the Ministry of Trade and Industry reduced its ownership
interest in Telenor ASA (excluding the 28,103,173 treasury
shares) from 78.9% to 63.6% through a private placement to
institutional and other investors.

In January 2003, Telenor entered into an
agreement with the Kingdom of Norway, as the largest shareholder
in Telenor, regarding share buy back according to the approval
by Telenors Annual General Meeting on May 8, 2003.
The Kingdom of Norway is committed to participate on a
proportionate basis by way of canceling a proportionate number
of its shares at the ordinary General Meeting in 2004. The
Kingdom of Norways ownership percentage in Telenor will
thus remain unaffected.

31.     UNITED STATES
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The Groups consolidated financial
statements have been prepared under Norwegian GAAP, which
differs in certain respects from US GAAP. The principal
differences between the Groups accounting principles under
Norwegian GAAP and US GAAP are set out below:

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

|                                                              |  |      |    |                              |  |      |       |      |  |  |        |   |  |  |       |  
|------------------------------------------------------------- |  | ---- | -- | ---------------------------- |  | ---- | ----- | ---- |  |  | ------ | - |  |  | ----- | -
|                                                              |  | Note |    | 2001                         |  | 2002 |       | 2003
|                                                              |  |      |    |                              |  |      |       |     
|                                                              |  |      |    |                             
|                                                              |  |      |    | (NOK in millions, except per
|                                                              |  |      |    | share amounts)              
|Net income (loss) in accordance with Norwegian
    GAAP       |  |      |    |                              |  |      | 7,079 |      |  |  | (4,298 | ) |  |  | 4,560 |  
|Adjustments for US GAAP:                                      |  |      |    |                              |  |      |       |      |  |  |        |   |  |  |       |  
|Depreciation of capitalized interest associated
    companies |  |      | 1  |                              |  |      | (38   | )    |  |  | (3     | ) |  |  | (8    | )
|Pensions                                                      |  |      | 2  |                              |  |      | (25   | )    |  |  | (24    | ) |  |  | (25   | )
|Amortization of license costs and related goodwill            |  |      | 3  |                              |  |      | (27   | )    |  |  | (2     | ) |  |  | (8    | )
|Temporary investments in entities                             |  |      | 4  |                              |  |      | 43    |      |  |  | 12     |   |  |  | 67    |  
|Stock compensation                                            |  |      | 7  |                              |  |      | 52    |      |  |  |       |   |  |  | (42   | )
|Sale and lease back of properties                             |  |      | 8  |                              |  |      | 36    |      |  |  | 49     |   |  |  | (3    | )
|Derivative financial instruments                              |  |      | 9  |                              |  |      | 171   |      |  |  | 47     |   |  |  | (173  | )
|Goodwill amortization                                         |  |      | 10 |                              |  |      | 39    |      |  |  | 1,631  |   |  |  | 1,038 |  
|Goodwill impairment                                           |  |      | 10 |                              |  |      |      |      |  |  | (390   | ) |  |  |      |  
|Measurement date                                              |  |      | 11 |                              |  |      |      |      |  |  | 12     |   |  |  | (3    | )
|Sale of software                                              |  |      | 12 |                              |  |      |      |      |  |  | (345   | ) |  |  | 78    |  
|Reversal of write-downs                                       |  |      | 13 |                              |  |      |      |      |  |  |       |   |  |  | (160  | )
|Prepayments on equal terms                                    |  |      | 19 |                              |  |      |      |      |  |  |       |   |  |  | 12    |  
|Asset retirement obligation                                   |  |      | 14 |                              |  |      |      |      |  |  |       |   |  |  | (38   | )
|Cumulative effect of change in accounting
    principle       |  |      | 14 |                              |  |      |      |      |  |  |       |   |  |  | (258  | )
|Other differences                                             |  |      |    |                              |  |      |      |      |  |  |       |   |  |  | 28    |  

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|                                                                           |  |      |    |                              |  |      |        |      |  |  |        |   |  |  |        |  
|-------------------------------------------------------------------------- |  | ---- | -- | ---------------------------- |  | ---- | ------ | ---- |  |  | ------ | - |  |  | ------ | -
|                                                                           |  | Note |    | 2001                         |  | 2002 |        | 2003
|                                                                           |  |      |    |                              |  |      |        |     
|                                                                           |  |      |    |                             
|                                                                           |  |      |    | (NOK in millions, except per
|                                                                           |  |      |    | share amounts)              
|Tax effect of US GAAP adjustments                                          |  |      | 16 |                              |  |      | (56    | )    |  |  | (68    | ) |  |  | 90     |  
|Minority interests                                                         |  |      | 5  |                              |  |      | (270   | )    |  |  | (279   | ) |  |  | (119   | )
|                                                                           |  |      |    |                              |  |      |        |      |  |  |        |   |  |  |        |  
|Net income (loss) in accordance with US
    GAAP                           |  |      |    |                              |  |      | 7,004  |      |  |  | (3,658 | ) |  |  | 5,036  |  
|                                                                           |  |      |    |                              |  |      |        |      |  |  |        |   |  |  |        |  
|Net income (loss) from continuing operations
    (excluding Telenor Media) |  |      |    |                              |  |      | 1,889  |      |  |  |       |   |  |  |       |  
|Revenues in accordance with US GAAP                                        |  |      |    |                              |  |      | 40,581 |      |  |  | 47,879 |   |  |  | 52,826 |  
|Net income (loss) per share                                                |  |      |    |                              |  |      |        |      |  |  |        |   |  |  |        |  
| From continuing operations (excluding
    Telenor Media)                 |  |      |    |                              |  |      | 1.07   |      |  |  |       |   |  |  |       |  
| Cumulative effect on prior years of
    change in accounting principle   |  |      |    |                              |  |      | 0.03   |      |  |  |       |   |  |  | (0.10  | )
| In accordance with US GAAP (basic)                                       |  |      |    |                              |  |      | 3.95   |      |  |  | (2.06  | ) |  |  | 2.84   |  
| In accordance with US GAAP (diluted)                                     |  |      |    |                              |  |      | 3.95   |      |  |  | (2.06  | ) |  |  | 2.84   |  

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

|                                                                                    |  |      |    |                   |  |      |        |   |  |  |         |  
|----------------------------------------------------------------------------------- |  | ---- | -- | ----------------- |  | ---- | ------ | - |  |  | ------- | -
|                                                                                    |  | Note |    | 2002              |  | 2003
|                                                                                    |  |      |    |                   |  |     
|                                                                                    |  |      |    |                  
|                                                                                    |  |      |    | (NOK in millions)
|Shareholders equity in accordance with
    Norwegian GAAP                          |  |      |    |                   |  |      | 33,685 |   |  |  | 37,237  |  
|Adjustments for US GAAP:                                                            |  |      |    |                   |  |      |        |   |  |  |         |  
|Dividends                                                                           |  |      | 17 |                   |  |      | 799    |   |  |  | 1,776   |  
|Capitalized interest associated companies                                           |  |      | 1  |                   |  |      | 25     |   |  |  | 17      |  
|Pensions                                                                            |  |      | 2  |                   |  |      | 116    |   |  |  | 91      |  
|Amortization of license costs and related goodwill                                  |  |      | 3  |                   |  |      | 20     |   |  |  | 12      |  
|Temporary investments in entities                                                   |  |      | 4  |                   |  |      | (98    | ) |  |  | (31     | )
|Gains on subsidiaries equity transactions
    and disposal of shares in subsidiary |  |      | 5  |                   |  |      | 700    |   |  |  | 700     |  
|Marketable equity securities  net of
    tax                                       |  |      | 6  |                   |  |      | (17    | ) |  |  | 1,676   |  
|Stock compensation                                                                  |  |      | 7  |                   |  |      | (172   | ) |  |  | (214    | )
|Sale and lease back of properties                                                   |  |      | 8  |                   |  |      | (68    | ) |  |  | (71     | )
|Derivative financial instruments                                                    |  |      | 9  |                   |  |      | (114   | ) |  |  | (251    | )
|Goodwill amortization                                                               |  |      | 10 |                   |  |      | 1,670  |   |  |  | 2,708   |  
|Goodwill impairment                                                                 |  |      | 10 |                   |  |      | (390   | ) |  |  | (390    | )
|Measurement date                                                                    |  |      | 11 |                   |  |      | 683    |   |  |  | 680     |  
|Sale of software                                                                    |  |      | 12 |                   |  |      | (345   | ) |  |  | (267    | )
|Minimum pension liability                                                           |  |      | 2  |                   |  |      | (34    | ) |  |  | (113    | )
|Reversal of write-downs                                                             |  |      | 13 |                   |  |      |       |   |  |  | (160    | )
|Asset retirement obligation                                                         |  |      | 14 |                   |  |      |       |   |  |  | (296    | )
|Subsequent acquisition                                                              |  |      | 15 |                   |  |      |       |   |  |  | 74      |  
|Prepayments on equal terms                                                          |  |      | 19 |                   |  |      |        |   |  |  | 12      |  
|Other differences                                                                   |  |      |    |                   |  |      |        |   |  |  | 28      |  
|Tax effect of US GAAP adjustments                                                   |  |      | 16 |                   |  |      | (223   | ) |  |  | (122    | )
|Minority interests                                                                  |  |      | 5  |                   |  |      | (438   | ) |  |  | (561    | )
|                                                                                    |  |      |    |                   |  |      |        |   |  |  |         |  
|Shareholders equity in accordance with
    US GAAP                                 |  |      |    |                   |  |      | 35,799 |   |  |  | 42,535  |  
|                                                                                    |  |      |    |                   |  |      |        |   |  |  |         |  
|Total assets in accordance with US GAAP                                             |  |      |    |                   |  |      | 97,511 |   |  |  | 101,088 |  
|Long-term interest-bearing liabilities in
    accordance with US GAAP               |  |      |    |                   |  |      | 33,957 |   |  |  | 34,782  |  

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

SFAS No. 130 Reporting
Comprehensive Income established standards for the
reporting and display of comprehensive income and its
components. Comprehensive income includes net income and all
changes in equity during a period that arise from non-owner
sources, such as foreign currency items and unrealized gains and
losses on securities available for sale.

|                                     |  |                   |     |      |  |      |     |        |  |     |     |     |  |        |        |     |  |     |      |   |  |  |        |   |  |  |       |   |  |  |      |   |  |  |       |  
|------------------------------------ |  | ----------------- | --- | ---- |  | ---- | --- | ------ |  | --- | --- | --- |  | ------ | ------ | --- |  | --- | ---- | - |  |  | ------ | - |  |  | ----- | - |  |  | ---- | - |  |  | ----- | -
|                                     |  |                   |     |      |  |     
|                                     |  | 2001              |     | 2002 |  | 2003
|                                     |  |                   |     |      |  |     
|                                     |  | Pretax            |     | Tax  |  | Net  |     | Pretax |  | Tax |     | Net |  | Pretax |        | Tax |  | Net
|                                     |  |                   |     |      |  |      |     |        |  |     |     |     |  |        |        |     |  |    
|                                     |  |                  
|                                     |  | (NOK in millions)
|Unrealized gain (loss) on securities |  |                   | 138 |      |  |      | (39 | )      |  |     | 99  |     |  |        | (58    | )   |  |     | 16   |   |  |  | (42    | ) |  |  | 2,343 |   |  |  | (656 | ) |  |  | 1,687 |  
|Net investment hedge                 |  |                   | 14  |      |  |      | 35  |        |  |     | 49  |     |  |        | 1,139  |     |  |     | (269 | ) |  |  | 870    |   |  |  | 445   |   |  |  | (150 | ) |  |  | 295   |  
|Minimum pension liability adjustment |  |                   |    |      |  |      |    |        |  |     |    |     |  |        | (34    | )   |  |     | 10   |   |  |  | (24    | ) |  |  | (79   | ) |  |  | 22   |   |  |  | (57   | )
|Foreign currency translation         |  |                   | (86 | )    |  |      | 84  |        |  |     | (2  | )   |  |        | (3,722 | )   |  |     | 34   |   |  |  | (3,688 | ) |  |  | 586   |   |  |  | (38  | ) |  |  | 548   |  
|                                     |  |                   |     |      |  |      |     |        |  |     |     |     |  |        |        |     |  |     |      |   |  |  |        |   |  |  |       |   |  |  |      |   |  |  |       |  
|Other comprehensive income           |  |                   | 66  |      |  |      | 80  |        |  |     | 146 |     |  |        | (2,675 | )   |  |     | (209 | ) |  |  | (2,884 | ) |  |  | 3,295 |   |  |  | (822 | ) |  |  | 2,473 |  

Reconciliation

|                                                   |  |                   |       |      |  |      |        |   |  |  |       | 
|-------------------------------------------------- |  | ----------------- | ----- | ---- |  | ---- | ------ | - |  |  | ----- | 
|                                                   |  | 2001              |       | 2002 |  | 2003
|                                                   |  |                   |       |      |  |     
|                                                   |  |                  
|                                                   |  | (NOK in millions)
|Net income (loss) in accordance with
    U.S. GAAP |  |                   | 7,004 |      |  |      | (3,658 | ) |  |  | 5,036 | 
|Other comprehensive income                         |  |                   | 146   |      |  |      | (2,884 | ) |  |  | 2,473 | 
|                                                   |  |                   |       |      |  |      |        |   |  |  |       | 
|Total comprehensive income (loss)                  |  |                   | 7,150 |      |  |      | (6,542 | ) |  |  | 7,509 | 
|                                                   |  |                   |       |      |  |      |        |   |  |  |       | 

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

|                                                     |  |                   |        |              |  |              |        |   |  |  |        |  
|---------------------------------------------------- |  | ----------------- | ------ | ------------ |  | ------------ | ------ | - |  |  | ------ | -
|                                                     |  | December 31,      |        | December 31, |  | December 31,
|                                                     |  | 2001              |        | 2002         |  | 2003        
|                                                     |  |                   |        |              |  |             
|                                                     |  |                  
|                                                     |  | (NOK in millions)
|Share capital                                        |  |                   | 10,816 |              |  |              | 10,820 |   |  |  | 10,824 |  
|Other paid capital                                   |  |                   | 18,619 |              |  |              | 18,634 |   |  |  | 18,656 |  
|Other equity                                         |  |                   | 13,796 |              |  |              | 9,423  |   |  |  | 13,685 |  
|Treasury shares                                      |  |                   | (169   | )            |  |              | (169   | ) |  |  | (169   | )
|Accumulated other comprehensive income               |  |                   |        |              |  |              |        |   |  |  |        |  
| unrealized gain (loss) on securities
    after tax |  |                   | 37     |              |  |              | (24    | ) |  |  | 1,676  |  
| net investment hedge                               |  |                   | 164    |              |  |              | 1,432  |   |  |  | 1,841  |  
| foreign currency adjustments                       |  |                   | (309   | )            |  |              | (4,029 | ) |  |  | (3,445 | )
| minimum pension liability adjustments              |  |                   |       |              |  |              | (34    | ) |  |  | (113   | )
| deferred taxes                                     |  |                   | (10    | )            |  |              | (254   | ) |  |  | (420   | )
|                                                     |  |                   |        |              |  |              |        |   |  |  |        |  
|Total                                                |  |                   | 42,944 |              |  |              | 35,799 |   |  |  | 42,535 |  
|                                                     |  |                   |        |              |  |              |        |   |  |  |        |  

(1) Capitalized interest

Under Norwegian GAAP, the Group has expensed
interest incurred in connection with the financing of associated
companies.

Under US GAAP, interest incurred on equity funds,
loans and advances to associated companies, under a period which
the associated company is undergoing activities necessary to
start its planned principal operations and such activities
include the use of funds to acquire qualifying assets for its
operations, shall be capitalized.

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(2) Pensions

In 1995, the Group began to account for pensions
according to the accounting standard, which is substantially
consistent with US GAAP. The change in accounting principle was
offset directly against shareholders equity.

Under US GAAP, the effect of adopting
SFAS 87 would be amortized over the remaining average
service period.

In accordance with US GAAP a provision is
recorded directly against shareholders equity where the
accumulated benefit obligation (ABO) exceeds plan assets. This
is not in accordance with Norwegian GAAP.

Below is an overview of the total provisions for
pensions in the balance sheet under US GAAP as of

|                                       |  |                   |      |              |  |  |      |  
|-------------------------------------- |  | ----------------- | ---- | ------------ |  |  | ---- | -
|                                       |  | December 31,      |      | December 31,
|                                       |  | 2002              |      | 2003        
|                                       |  |                   |      |             
|                                       |  |                  
|                                       |  | (NOK in millions)
|Benefit obligation                     |  |                   | 559  |              |  |  | 911  |  
|Plan assets                            |  |                   | (90  | )            |  |  | (78  | )
|Intangible assets                      |  |                   | (244 | )            |  |  | (382 | )
|Accumulated other comprehensive income |  |                   | (34  | )            |  |  | (113 | )
|Total provisions for pensions          |  |                   | 191  |              |  |  | 338  |  
|                                       |  |                   |      |              |  |  |      |  

(3) Amortization of license costs and
related goodwill

Up to the end of 1997 the Group amortized license
costs and goodwill related to acquired licenses over a period
not exceeding 10 years. With effect from 1998 the
amortization period has been changed to the term of the license.
In accordance with Norwegian GAAP this change has been accounted
for as a change of estimate, with no retroactive restatement of
prior periods.

Under the US GAAP reconciliation, this revision
in the amortization period was accounted for retroactively.

(4) Temporary investment in
entities

Investments in entities in which the Group has an
ownership that is considered to be temporary in nature are
recorded at cost or written down to fair value. The Group
invests periodically in companies for the purpose of making
profits.

Under US GAAP, all temporary investments with an
ownership greater or equal to 20% are accounted for under the
equity method or consolidated. The effect on the financial
statements of temporary investments consolidated under US GAAP,
are immaterial.

Total assets accounted for under the equity
method for US GAAP was NOK 9,627 million for the year
ended December 31, 2002 and 10,065 million for the
year ended December 31, 2003.

Total assets accounted for under the cost method
for US GAAP was NOK 64 million for the year ended
December 31, 2002 and 3 million for the year ended
December 31, 2003.

(5) Gain from subsidiaries equity
transactions, disposal of shares in a subsidiary and minority
interest

Under Norwegian GAAP, no gains from
subsidiarys equity transactions and disposal of shares in
a subsidiary are recognized.

Under US GAAP, the Group records gains from
subsidiary equity transactions (SAB 51 transactions) and
disposal of shares in a subsidiary through income.

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Under Norwegian GAAP, the minority interest is
measured at fair value of the consideration paid from the
minority. The difference between the recorded equity in the
subsidiary and value of the consideration paid by the minority
will be amortized or written down through allocating results to
minority.

This allocation is not consistent with US GAAP.

(6) Marketable equity
securities

For investments in marketable equity securities
classified as current assets that are managed as a portfolio,
adjustment in the book value are only made if the aggregate
holdings have a lower estimated fair value than the original
cost. Other marketable shares are valued at the lower of cost or
fair market value. Investment in marketable equity securities
classified as long-term are valued at historical cost or
possibly fair value if the decline in value is not temporary.

Under US GAAP, marketable equity securities are
valued at their fair value for each security. For marketable
equity securities classified as available for sale, unrealized
gains and losses after tax are recorded directly to
shareholders equity. All listed shares are classified as
available for sale in accordance with SFAS 115.

As of December 31, 2002 and 2003, available
for sale securities at cost amounted to NOK 280 million and
NOK 626 million, respectively, with unrealized loss before
tax of NOK 21 million for December 31, 2002 and
unrealized gain before tax of NOK 2,328 million for
December 31, 2003, respectively. For the years ended
December 31, 2002 and 2003, proceeds from the sale of
available for sale securities was NOK 19 million and
NOK 108 million, respectively. The gross realized loss from
such sales was NOK 5 million for the year ended
December 31, 2002 and NOK 53 million for the year
ended December 31, 2003, respectively.

(7) Stock compensation

In 2002, Telenor introduced a share option
program granting options to managers and key personnel. Options
to subscribe 2,670,000 of Telenors shares were granted in
2002 and options to subscribe 2,850,000 of Telenors shares
were granted in 2003.

The subsidiary EDB Business Partner ASA also has
a stock compensation plans for its employees. A separate plan
was introduced in 2003 for the new CEO.

In accordance with Norwegian GAAP, the Group did
not recognize expense for stock options with no intrinsic value
that were granted to employees.

In accordance with US GAAP, the measurement date
for determining compensation costs for stock options is the
first date at which the number of shares the employee is
entitled to receive and the exercise price of the options are
known.

Due to the features of the plans for Telenor ASA
and EDB partner ASA, variable plan accounting for these options
would apply under US GAAP and the intrinsic value of the options
at the end of each reporting period, based on the presumed
exercise price and the quoted market price of respective stocks,
would be calculated and recorded as compensation expense over
the vesting period.

Options for EDB Business Partner ASA are vested
over a one to three year period of continued employment. Vested
but unexercised options can be carried forward to May 2004 or
expire. Options to the CEO may continue to 2010. Of the total
options outstanding at year-end, options for 9.3 million
shares have been accounted for as fixed plan awards. In fixed
plan awards, the measurement date occurs on the grant date when
both the number of shares of stock that may be acquired and the
price to be paid by the employee are known. The options for the
remaining 0.6 million shares of stock are considered
variable plan grants because terms do not define the ultimate
exercise price of the options.

Telenor has elected to follow Accounting
Principles Board Opinion No. 25, Accounting for Stock
Issued to Employees (APB 25) and related
interpretations in accounting for its employee stock options.

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However, pro forma information regarding net
income and earnings per share is required by FASB Statement
No. 148, Accounting for Stock-Based
Compensation, and has been determined as if Telenor and
EDB Business Partner had accounted for its employee stock
options under the fair value method of that Statement. The fair
value for these options was estimated at the date of grant using
a Black-Scholes option pricing model with the following
weighted-average assumptions. The assumptions for 2003 is shown
in the table below.


|                                       |  |                |      |                |  |                   |     |              |  |  |      |   |  |  |           | 
|-------------------------------------- |  | -------------- | ---- | -------------- |  | ----------------- | --- | ------------ |  |  | ---- | - |  |  | --------- | 
|                                       |  |                |      |                |  |                   |     | Weighted    
|                                       |  | Risk free rate |      | Dividend yield |  | Volatility factor |     | average life
|                                       |  |                |      |                |  |                   |     |             
|Telenor 2002 programs                  |  |                | 6.40 | %              |  |                   | 2.0 | %            |  |  | 31.3 | % |  |  | 4.5 years | 
|Telenor 2003 program                   |  |                | 4.80 | %              |  |                   | 2.0 | %            |  |  | 32.3 | % |  |  | 4.5 years | 
|EDB Business Partner 1999-2002 program |  |                | 5.85 | %              |  |                   | 0.0 | %            |  |  | 30.0 | % |  |  | 0.3 years | 
|EDB Business Partner 2003 program      |  |                | 5.05 | %              |  |                   | 0.0 | %            |  |  | 66.9 | % |  |  | 4.5 years | 

The Black-Scholes option valuation model was
developed for use in estimating the fair value of traded options
that have no vesting restrictions and are fully transferable. In
addition, option valuation models require the input of highly
subjective assumptions including the expected stock price
volatility. Because the employee stock options have
characteristics significantly different from those of traded
options, and because changes in the subjective input assumptions
can materially affect the fair value estimate, in
managements opinion, the existing models do not
necessarily provide a reliable single measure of the fair value
of its employee stock options. Had compensation cost for these
plans been determined consistent with SFAS 123, the
Groups net income (loss) according to US GAAP would have
been the following:

|                                                                                                                            |  |                             |       |      |  |      |        |   |  |  |       |  
|--------------------------------------------------------------------------------------------------------------------------- |  | --------------------------- | ----- | ---- |  | ---- | ------ | - |  |  | ----- | -
|                                                                                                                            |  | 2001                        |       | 2002 |  | 2003
|                                                                                                                            |  |                             |       |      |  |     
|                                                                                                                            |  |                            
|                                                                                                                            |  | (NOK in millions except per
|                                                                                                                            |  | share amounts)             
|Net income (loss) as reported                                                                                               |  |                             | 7,004 |      |  |      | (3,658 | ) |  |  | 5,036 |  
|Deduct stock based employee compensation expense
    included in reported net income under US GAAP                          |  |                             | (52   | )    |  |      |       |   |  |  | 39    |  
|Add stock based employee compensation expense
    determined under fair value based method for all awards under US
    GAAP |  |                             | (94   | )    |  |      | (34    | ) |  |  | (25   | )
|                                                                                                                            |  |                             |       |      |  |      |        |   |  |  |       |  
|Pro forma net income (loss) in accordance with
    US GAAP                                                                  |  |                             | 6,858 |      |  |      | (3,692 | ) |  |  | 5,050 |  
|                                                                                                                            |  |                             |       |      |  |      |        |   |  |  |       |  
|Net income (loss) per share in accordance with
    US GAAP                                                                  |  |                             |       |      |  |      |        |   |  |  |       |  
|Basic as reported in accordance with US GAAP                                                                                |  |                             | 3.95  |      |  |      | (2.06  | ) |  |  | 2.84  |  
|Basic pro forma in accordance with US GAAP                                                                                  |  |                             | 3.87  |      |  |      | (2.08  | ) |  |  | 2.84  |  
|Diluted as reported in accordance with US GAAP                                                                              |  |                             | 3.95  |      |  |      | (2.06  | ) |  |  | 2.84  |  
|Diluted pro forma in accordance with US GAAP                                                                                |  |                             | 3.87  |      |  |      | (2.08  | ) |  |  | 2.84  |  

The stock options may have a dilutive effect.

A summary of Telenors and EDB Business
Partners stock option programs and related information are
given in note 29.

(8) Sale and lease back of
properties

Under Norwegian GAAP, the Group recognized gains
from sale and lease back of properties when the lease back
agreement is an operating lease agreement.

Under US GAAP, only gains from sale and lease
back of properties that exceed the net present value of the
lease back agreement can be recognized as gains. The remaining
gains must be deferred over the lease periods.

(9)  Derivative financial
instruments

Effective January 1, 2001, US GAAP
introduced Statement of Financial Accounting Standards
(SFAS) No. 133, Accounting for Derivative
Instruments and Hedging Activities, as amended by

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SFAS No. 138. This accounting standard
requires that all derivative instruments be recorded on the
balance sheet at fair value and establishes criteria for
designation and effectiveness of hedging relationships for which
hedge accounting is applied.


Interest rate derivatives not held for trading
purposes are carried at cost under Norwegian GAAP. Under US GAAP
all derivatives are recorded marked-to-market and recognized on
the balance sheet at fair value.

Under Norwegian GAAP Telenor may combine more
than one instrument in hedging of net investments. Under US GAAP
there are more stringent requirements of what instruments can be
designated as hedging instruments and foreign exchange gains or
losses are to a greater extent reported through earnings under
US GAAP than Norwegian GAAP. Telenors policy is to
use instruments that may be used as hedging under both Norwegian
GAAP and US GAAP, as long as this is cost effective.

The following information relates to derivative
financial instruments under SFAS 133:

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

A significant portion of the debt issued by
Telenor ASA is fixed rate bonds (87% of outstanding bonds as of
December 31, 2003). Fixed rate bonds with long maturities
impose a greater interest rate risk, in terms of mark-to-market
risk, than management wishes to take on. As such the interest
rate exposure on these bonds is often altered through entering
into a derivative instrument that allows Telenor to receive a
fixed interest and pay a specified floating interest rate.
Telenor has designated these derivatives as fair value hedging
relationships.

A common strategy for Telenor is to issue a fixed
rate bond in the currency in which funding is to be raised and
consequently enter into a receive fixed/pay floating
interest rate swap. These fair value hedging relationships
typically qualify for short cut treatment, as the requirements
set out in paragraph 68 of SFAS 133((1)) are met.

A second hedging strategy for Telenor is to hedge
a fixed rate bond issued in currency other than Norwegian Krone
with a receive fixed non base/pay floating base
cross currency interest rate swap. In these cases the hedged
risks would be benchmark interest rates and exchange rates((2)).
The swap would be the hedging instrument and the bond would be
the hedged object in the fair value hedging relationship. In
certain cases a combination of swaps are designated as the
hedging instrument. Short cut treatment would not be applicable
using this strategy. Still the hedging effectiveness for these
hedging relationships has proven to be close to 100 %, which has
been in line with managements expectations given the cash
flows of the transactions involved.

Derivative instruments designated as cash flow
hedging instruments

A hedge of a future expected transaction is a
cash flow hedge. Future expected transactions in foreign
currencies impose a foreign exchange rate risk that management
often wish to eliminate. In these situations Telenor can
mitigate the foreign exchange rate risk and fix the functional
currency equivalent cash flows from the hedged item through
entering into a derivative instrument. Gains or losses from the
hedging instrument are recorded within other comprehensive
income (OCI) until the hedged transaction occurs. The realised
gain or loss is recorded in earnings during the same accounting
periods as the hedged transaction affects profit and loss. Any
ineffective components of the hedge results are charged to
current income. Telenor had as at December 31, 2003
designated one cash flow hedging relationship.





---

(1) A number of requirements are outlined in this
paragraph. Among others; the notional amount of the swap matches
the principal amount of the interest-bearing asset or liability,
the fair value of the swap at its inception is zero, the formula
for computing net settlements under the interest rate swap is
the same for each net settlement.


(2) The benchmark interest rates in this instance
would be the swap rates.


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

As described in Note 21 to the financial
statements, Telenor hedges net investments in foreign currency
by issuing debt in the various currencies or through entering
into derivative transactions. Material hedging positions have
been designated as net investment hedges. In 2003, the
instruments involved have been bonds and forward contracts. To
the extent these hedging relationships have proven to be
effective, translation adjustments on these hedging instruments
have been reported in the Cumulative Translation Adjustment
section of equity.

Derivatives not designated as hedging
instruments

Telenor has a duration-based target for interest
rate risk management. Interest rate swaps are used to
periodically rebalance the portfolio in order to be in line with
the duration target. These derivatives do not qualify as hedging
instruments, and are marked-to-market-through earnings.

Foreign currency swaps are frequently used for
liquidity management purposes. No hedging relationships are
designated in relation to these derivatives, and any changes in
fair value are recognized through earnings.

Quantitative information

|                                                             |  |                 |      |  
|------------------------------------------------------------ |  | --------------- | ---- | -
|Fair value hedging relationships                             |  | NOK in millions
|                                                             |  |                
|Net loss recognized in 2003 earnings hedged items:           |  |                 | (692 | )
|Net gain recognized in 2003 earnings hedging
    instruments |  |                 | 688  |  
|Amount of hedge ineffectiveness                              |  |                 | (4   | )

No components of the derivative instruments
gain or loss have been excluded from the assessment of hedge
effectiveness.

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

Net amount of losses on hedging instruments
included in the cumulative translation adjustment during 2003
was NOK 539 million.

For forward contracts the forward points have
been excluded in determining hedge effectiveness. The hedge
ineffectiveness charged to profit and loss in this context is
immaterial.

Cash flow hedging relationships;

Net amount of loss on hedging instrument included
in other comprehensive income during 2003 was NOK 38
million.

(10) Goodwill amortization and impairment
of goodwill

Effective July 1, 2001, Telenor adopted
Statement of Financial Accounting Standards No. 141
(SFAS 141), Business Combinations and effective
January 1, 2002, Telenor adopted the full provision of
statement 141 and Statement No. 142 (SFAS 142),
Goodwill and Other Intangible Assets. SFAS 141
requires all business combinations initiated after June 30,
2001 to be accounted for under the purchase method, SFAS 141
also sets forth guidelines for applying the purchase method of
accounting in the determination of intangible assets, including
goodwill acquired in a business combination, and expands
financial disclosures concerning business combinations
consummated after June 30, 2001.

Under SFAS No. 142, goodwill is no
longer amortized on a straight-line basis over its estimated
useful life, but is tested for impairment on an annual basis and
whenever indicators of impairment arise. SFAS No. 142
prescribes a two-phase process for impairment testing of
goodwill. In the first phase Telenor identifies reporting units
where goodwill must be tested for impairment by comparing net
assets of each reporting unit to the respective fair value. In
the second phase (if necessary) the impairment is measured by

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determining the fair value of goodwill by
assigning the units fair value to each assets and
liability of the unit. The excess of the fair value of the
reporting unit over the amounts assigned to its assets and
liabilities is the implied fair value of goodwill. Telenor
completed its first phase impairment analysis at the end of 2003
and concluded that no reporting units had a carrying value in
excess of the fair value. The step two analyses was therefore
not necessary at year end 2003


In accordance with Accounting Principles Board
(APB) Opinion No. 20, Accounting
Changes, the effect of this accounting change is reflected
prospectively. Supplemental comparative disclosure, according to
US GAAP, as if the change had been retroactively applied, is as
follows

|                                                                      |  |                  |       | 
|--------------------------------------------------------------------- |  | ---------------- | ----- | 
|                                                                      |  | 2001            
|                                                                      |  |                 
|                                                                      |  | (NOK in million 
|                                                                      |  | except per share
|                                                                      |  | amounts)        
|Reported net income                                                   |  |                  | 7,004 | 
|Goodwill amortization net of tax and minority
    interests           |  |                  | 1,840 | 
|Adjusted net income                                                   |  |                  | 8,844 | 
|Earnings per share                                                    |  |                  |       | 
|Reported earnings per share                                           |  |                  | 3.95  | 
|Goodwill amortization per share net of tax and
    minority interests |  |                  | 1.04  | 
|Adjusted earnings per share                                           |  |                  | 4.99  | 

Under Norwegian GAAP, goodwill is amortized.
Goodwill is tested yearly for impairment as under US GAAP.
The second step of the goodwill impairment test is not
consistent with Norwegian GAAP. Under Norwegian GAAP, goodwill
is written down based on the difference between book value and
fair value.

(11) Measurement date

Under US GAAP the measurement date for a business
combination is the date assets are received and other assets are
given, liabilities are assumed or incurred, or equity interests
are issued, which is consistent with the date of consolidation

Under Norwegian GAAP, the measurement date for a
business combination is the date the risk for the companys
result of operations is transferred. The acquired companys
results, amortization of net excess values and calculated
financing expenses have been recorded directly against the
Groups shareholders equity in the period between the
date for transfer of risk and the date of consolidation. The
date of consolidation is consistent with US GAAP. This has
resulted in a charge directly to shareholders equity under
Norwegian GAAP that is not consistent with US GAAP and a
different valuation of tangible and intangible assets under
Norwegian GAAP compared to US GAAP and therefore also
differences in subsequent depreciation and amortization.

(12) Sale of software

Telenor is provider of full service application
and IT operating systems services. Under Norwegian GAAP, revenue
from sale of software licenses and software upgrades is
recognized upon the delivery of the software licenses and
software upgrades. Under US GAAP, revenue from sale of software
licenses and software upgrades is deferred and recognized as
revenue over remaining software maintenance period as the
customer does not have access to the software unless Telenor
provides software maintenance. In addition, in conjunction with
these contracts, the Company may develop additional applications
that are not essential to the use of the software. Under
Norwegian GAAP, the fees for the development of the additional
software are recognized based on the percentage of completion
method of accounting. Under US GAAP, these development fees are
also deferred and recognized as revenue over the remaining
software maintenance period.

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(13) Reversal of write-downs

Under Norwegian GAAP, a previous write down of
tangible and intangible assets (excluding goodwill) must be
reversed if the factors that triggered the impairment are no
longer valid and if the underlying asset has recovered its value.

Under US GAAP, reversal of previous write-downs
is not permitted.

(14) Asset retirement
obligation

Effective January 1, 2003, Telenor changed
its method of accounting for asset retirement obligations in
accordance with FASB Statement No. 143, Accounting for
Asset Retirement Obligations (SFAS 143). Previously,
Telenor did to a limited extent recognize amounts related to
asset retirement obligations. Under the new accounting method,
Telenor recognizes asset retirement obligations in the period in
which they are incurred. The associated asset retirement costs
are capitalized as part of the carrying amount of the long-lived
asset.

Under SFAS 143, an asset retirement
obligation exists where Telenor has a legal obligation, whether
contractual, by law, or by a promissory estoppel, to settle an
asset retirement obligation. Where Telenor is required to settle
an asset retirement obligation, Telenor has estimated and
capitalized the net present value of the obligations and
increased the carrying value of the related long-lived asset
with an amount equal to the depreciated value of the asset
retirement obligation. Subsequent to the initial recognition, an
accretion expense is recorded relating to the asset retirement
obligation, and the capitalized cost is expensed as ordinary
depreciation in accordance with the related asset. In most
situations, the timing of the assets removals will be a long
time into the future and result in significant uncertainty as to
whether the obligation actually will be paid.

Under Norwegian GAAP, asset retirement
obligations are limited to expenses to material known and
planned removals within a reasonable timeframe.

Telenor have asset retirement obligations
relating primarily to equipment and other leasehold improvements
installed on leased network sites and in administrative and
network buildings. Those leases generally contain provisions
that require Telenor to restore the sites to their original
condition at the end of the lease term. The following table
describes all changes Telenors assets retirement
obligation liability:

|                                                 |  |                   |     |  
|------------------------------------------------ |  | ----------------- | --- | -
|                                                 |  | 2003             
|                                                 |  |                  
|                                                 |  | (NOK in millions)
|Asset retirement obligation at beginning of year |  |                   | 316 |  
|Liabilities incurred                             |  |                   | 38  |  
|Liabilities settled                              |  |                   | (10 | )
|Accretion expense                                |  |                   | 22  |  
|Revision in estimated cash flows                 |  |                   |    |  
|Asset retirement obligation at end of year       |  |                   | 366 |  

Asset retirement obligations in associated
companies are included under Other differences. Telenors
share of costs for asset retirement obligations in associated
companies was NOK 29 million in 2003, of which
NOK 9 million was the cumulative change of accounting
principle.

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The cumulative effect of the change on prior
years resulted in a charge to income of
NOK 258 million (net of income taxes of
NOK 187 million, 0.10 per share), which is included in
income for the year ended December 31, 2003. The effect of
the change on the year ended December 31, 2003 was to
decrease income before the cumulative effect of the accounting
change by NOK 27 million (0.02 per share). The pro
forma effects of the application of Statement 143 as if the
Statement had been adopted on January 1, 2001 (rather than
January 1, 2003) are presented below:

|                                                                                                                                      |  |                              |       |      |  |      |        |   |  |  |       | 
|------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------- | ----- | ---- |  | ---- | ------ | - |  |  | ----- | 
|                                                                                                                                      |  | 2001                         |       | 2002 |  | 2003
|                                                                                                                                      |  |                              |       |      |  |     
|                                                                                                                                      |  |                             
|                                                                                                                                      |  | (NOK in millions, except per
|                                                                                                                                      |  | share amounts)              
|Reported net income (loss)                                                                                                            |  |                              | 7,004 |      |  |      | (3,658 | ) |  |  | 5,036 | 
|Assets retirement obligations net of tax and
    minority interests (cumulative effect of change in accounting
    principle in 2003) |  |                              | (27   | )    |  |      | (28    | ) |  |  | 187   | 
|Adjusted net income (loss)                                                                                                            |  |                              | 6,977 |      |  |      | (3,686 | ) |  |  | 5,223 | 
|Earnings per share                                                                                                                    |  |                              |       |      |  |      |        |   |  |  |       | 
|Reported earnings (loss) per share                                                                                                    |  |                              | 3.95  |      |  |      | (2.06  | ) |  |  | 2.84  | 
|Adjusted earnings (loss) per share                                                                                                    |  |                              | 3.93  |      |  |      | (2.08  | ) |  |  | 2.94  | 

The pro forma asset retirement obligation
liability balances as if Statement 143 had been adopted on
January 1, 2001 (rather than January 1, 2003) are as
follows:

|                                                                                        |  |           |     |      |  |  |     | 
|--------------------------------------------------------------------------------------- |  | --------- | --- | ---- |  |  | --- | 
|                                                                                        |  | 2001      |     | 2002
|                                                                                        |  |           |     |     
|                                                                                        |  |          
|                                                                                        |  | (NOK in  
|                                                                                        |  | millions)
|Pro forma amounts of liability for asset
    retirement obligation at beginning of year |  |           | 217 |      |  |  | 265 | 
|Pro forma amounts of liability for asset
    retirement obligation at end of year       |  |           | 265 |      |  |  | 316 | 

(15) Subsequent acquisitions of ownership
interest in subsidiaries

Under US GAAP, assets and liabilities are
identified and recorded in each subsequent acquisition of
interest in subsidiaries.

Under Norwegian GAAP, changes in fair values for
assets and liabilities for a subsequent acquisition in a
subsidiary is recorded directly against equity. Goodwill is
identified and accounted for in each acquisition.

(16) Taxes

The income tax effects of US GAAP adjustments are
recorded as deferred taxes.

(17) Dividends

Under Norwegian GAAP, dividends payable reduce
shareholders equity for the year in which they relate.

Under US GAAP, dividends payable are recorded as
a reduction of shareholders equity when approved.

(18) Cross border QTE leases

The Group has entered into Cross Border QTE
Leases for telephony switches, GSM Mobile network and fixed-line
network. Telenor has provided defeasance of all amounts due by
us under these agreements. The leasing obligations and the
defeased amounts are shown net on the balance sheet

Both under Norwegian GAAP and under US GAAP
Telenor have deferred the gain from the transactions since there
is more than a remote possibility of loss of the gain due to
indemnification or other contingencies.

Under US GAAP, assets and liabilities may not be
offset except when there exists the legal right to offset the
asset and liability. The legal right to offset the defeased
amounts against the future lease obligations does not legally
exist. Therefore, under US GAAP, the defeased amounts and the
Groups future obligations

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under the QTE Leases are recorded gross on the
consolidated balance sheet as financial assets and long-term
interest-bearing liabilities in the amount of approximately
NOK 6,203 million for the year ended December 31,
2003 and financial assets and long-term interest-bearing
liabilities of NOK 3,557 million for the year ended
December 31, 2002. This does not affect the profit and loss
statement or shareholders equity.


At December 31, 2003, future minimum annual
rental commitments under finance lease liabilities are as
follows under US GAAP:

|                                              |  |                   |        | 
|--------------------------------------------- |  | ----------------- | ------ | 
|                                              |  | As of            
|                                              |  | December 31, 2003
|                                              |  |                  
|                                              |  | (NOK in millions)
|2004                                          |  |                   | 1,252  | 
|2005                                          |  |                   | 1,054  | 
|2006                                          |  |                   | 1,012  | 
|2007                                          |  |                   | 953    | 
|Later years through 2016                      |  |                   | 7,325  | 
|                                              |  |                   |        | 
|Total minimum lease payments                  |  |                   | 11,596 | 
|Less amount representing interest             |  |                   | 3,452  | 
|Finance lease obligation under US GAAP        |  |                   | 8,144  | 
|Finance lease obligation under Norwegian GAAP |  |                   | 1,564  | 
|Deferred gain (both Norwegian and US GAAP)    |  |                   | 377    | 

Finance lease property is included in tangible
assets as follows (at net book value):

|                   |  |                   |       |      |  |  |       | 
|------------------ |  | ----------------- | ----- | ---- |  |  | ----- | 
|                   |  |                  
|                   |  | As of            
|                   |  | December 31      
|                   |  | 2002              |       | 2003
|                   |  |                   |       |     
|                   |  |                  
|                   |  | (NOK in millions)
|Telephony switches |  |                   | 221   |      |  |  | 121   | 
|GSM mobile network |  |                   | 478   |      |  |  | 276   | 
|Fixed-line network |  |                   |      |      |  |  | 1,133 | 
|Satellites         |  |                   | 732   |      |  |  | 617   | 
|Set top boxes      |  |                   | 334   |      |  |  | 304   | 
|Other              |  |                   | 105   |      |  |  | 82    | 
|                   |  |                   |       |      |  |  |       | 
|Total              |  |                   | 1,870 |      |  |  | 2,533 | 
|                   |  |                   |       |      |  |  |       | 

(19) Prepayment on equal terms

Telenor entered into Mobile Virtual Network
Operator (MVNO) agreement, which includes sale of traffic in
Telenors GSM and UMTS network in Norway. At the same time
a similar agreement for purchase of GSM and UMTS traffic in a
network in Sweden was made with the same counterpart. The
agreements contain a fixed nonrefundable prepayment and a
variable price based on the actual use of the services. In
accordance with Norwegian accounting principles the fixed and
the variable element are recognized as revenues and traffic
costs based on the actual usage. The prepayments between the
parties are recognized in the balance sheet.

Under US GAAP the fixed prepayments between
the parties have been nullified since these fixed payments are
on equal terms and are non refundable. Consequently, the
prepayments and the revenues and traffic costs have been
eliminated.

(20) Revenue recognition

Under Norwegian GAAP, gains on the sale of fixed
assets and operations are included in total revenues. Under US
GAAP, such gains would be included below other operating income.

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Under Norwegian GAAP, revenue from
telecommunications installation fees and connection fees are
recognized in revenue at the time of the sale and all initial
direct costs are expensed as incurred. Under US GAAP, such
connection and installation fees that do not represent a
separate earnings process should be deferred and recognized over
the periods that the fees are earned which is the expected
period of the customer relationship. Initial direct costs to the
extent of the deferred revenue should also be deferred over the
same period that the revenue is recognized. The effect on net
income of this difference is not material.

New US Accounting Standards

FIN 46

In January 2003, Financial Interpretation
No. 46 (FIN 46), Consolidation of
Variable Interest Entities, was issued as an
interpretation of Accounting Research Bulletin No. 51,
Consolidated Financial Statements. FIN 46
provides guidance on consolidating variable interest entities.
The concept of a variable interest entity was established by
FIN 46 and is an entity (i) which lacks sufficient
equity investment at risk to permit the entity to finance its
activities without additional subordinated financial support or
(ii) where the equity investors lack one of three specified
characteristics of a controlling financial interest.

In December 2003, the FASB published a revision
to FIN No. 46 (FIN 46-R) to clarify
some of the provisions of the interpretation and defer the
effective date of implementation for certain entities and will
now become applicable for Telenor in the first quarter of 2004.

Telenor is currently evaluating the effect that
the adoption of FIN 46-R will have on its results of
operations and financial condition.

EITF 00-21

In May 2003, the EITF reached a consensus on
Issue 00-21, addressing how to account for arrangements
that involve the delivery or performance of multiple products,
services, and/or rights to use assets. Revenue arrangements with
multiple deliverables are divided into separate units of
accounting if the deliverables in the arrangement meet the
following criteria: (1) the delivered item has value to the
customer on a standalone basis; (2) there is objective and
reliable evidence of the fair value of undelivered items; and
(3) delivery of any undelivered item is probable.
Arrangement consideration should be allocated among the separate
units of accounting based on their relative fair values, with
the amount allocated to the delivered item being limited to the
amount that is not contingent on the delivery of additional
items or meeting other specified performance conditions. Telenor
will adopt EITF 00-21 for contracts entered into on or
after January 1, 2004. Telenor is currently evaluating the
impact that the statement will have on revenues or results of
operations.

International Financial Reporting
Standards

Telenor is to adopt International Financial
Reporting Standards (IFRS) as primary generally
accepted accounting principles (GAAP) by 2005 as
required under European Regulation applicable to European public
companies. The full set of IFRS applicable by 2005 is not yet
known and still subject to endorsement by the European
Commission.

Provided SEC regulations regarding the periods to
be presented under a comprehensive set of GAAP is amended as
proposed in March 2004 to allow foreign private issuers to
include only two years of audited financial statements for their
first year of reporting under IFRS, Telenor expects to select
January 1, 2004 as its transition date to IFRS and thus to
present restated 2004 and 2005 IFRS financial statements in its
2005 Form 20-F and to continue to report under Norwegian
GAAP as primary GAAP in the meantime (2004)

Transition from Norwegian GAAP to IFRS is
described under accounting principles, the additional
reconciliation disclosure between IFRS and US GAAP will include
narrative and tabular net income and shareholders equity
reconciliations with respect to 2004 financial statements
required under SEC Rules.

F-75



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##### Table of Contents



(21) Non-consolidated
investees  100 percent basis

The following table sets forth summarized
unaudited financial information of Telenors
non-consolidated investees on a 100 percent combined basis.
Telenors share of these investments is accounted for using
the equity method.

|                                           |  |                   |        |      |  |  |        | 
|------------------------------------------ |  | ----------------- | ------ | ---- |  |  | ------ | 
|                                           |  | 2002              |        | 2003
|                                           |  |                   |        |     
|                                           |  |                  
|                                           |  | (NOK in millions)
|Income Statement Data                      |  |                   |        |      |  |  |        | 
|Operating revenues                         |  |                   | 48,285 |      |  |  | 42,498 | 
|Operating profit                           |  |                   | 5,246  |      |  |  | 3,574  | 
|Income before taxes and minority interests |  |                   | 3,177  |      |  |  | 1,751  | 
|Net income                                 |  |                   | 1,819  |      |  |  | 924    | 
|Balance Sheet Data                         |  |                   |        |      |  |  |        | 
|Current assets                             |  |                   | 14,925 |      |  |  | 12,813 | 
|Non-current assets                         |  |                   | 46,202 |      |  |  | 36,926 | 
|                                           |  |                   |        |      |  |  |        | 
|Assets                                     |  |                   | 61,127 |      |  |  | 49,739 | 
|                                           |  |                   |        |      |  |  |        | 
|Current liabilities                        |  |                   | 16,028 |      |  |  | 14,004 | 
|Non-current liabilities                    |  |                   | 29,058 |      |  |  | 29,255 | 
|Minority interest                          |  |                   | 559    |      |  |  | 34     | 
|Shareholders equity                       |  |                   | 15,482 |      |  |  | 6,446  | 
|                                           |  |                   |        |      |  |  |        | 
|Liabilities and shareholders
    equity   |  |                   | 61,127 |      |  |  | 49,739 | 
|                                           |  |                   |        |      |  |  |        | 

F-76