Telenor ASA – Annual report – 31 December 2025
Industry: telecoms
NOTE 13 (extracts)
Cash flow information (extract 1)
Cash payments related to lease contracts
Repayments of the principal portion related to lease liabilities in 2025 of NOK 4,724 million (NOK 4,868 million in 2024) include instalment payment of spectrum licences of NOK 687 million (NOK 1,216 million in 2024) and repayments of other leases of NOK 4,037 million (NOK 3,652 million in 2024). The instalment payments of spectrum licences in 2025 were mainly in Grameenphone and Norway, whereas in 2024 it related to Grameenphone, Norway and Pakistan. The increase in repayments of other leases mainly related to Nordics, Grameenphone and Pakistan.
Repayments of the interest portion of lease liabilities in 2025 of NOK 672 million include repayments of interest related to spectrum licences of NOK 164 million (NOK 236 million in 2024) and repayments of interest related to other lease contracts of NOK 508 million (NOK 473 million in 2024).
Payments of variable, short term and low value leases of NOK 2,319 million (NOK 2,534 million in 2024) include variable lease payments of NOK 2,237 million (NOK 2,449 million in 2024) and payments of short term and low value leases of NOK 83 million (NOK 85 million in 2024).
Cash flow information (extract 2)
Prepayment of right-of-use assets including initial direct cost
Cash payments at or before lease commencement date and payments of initial direct costs are classified as cash outflows from investing activities. Subsequent payments during the lease term are classified as cash outflows from financing activities.
During 2025, the recognised lease liabilities of NOK 4,372 million represent the deferred payments of total additions in right-of-use assets of NOK 4,760 million, where NOK 200 million was paid at or before lease commencement date mainly relating to prepayments of other lease contracts in Sweden, which is classified as cash outflow from investing activities. See note 16 Right-of-use assets for more information.
Note 16
Right-of-use assets
Telenor has chosen to account for the right to use the spectrum as a lease, where the identified asset is the frequency band that is exclusive for Telenor in the lease period. Telenor also leases passive infrastructure such as towers and cables in addition to land and property. Refer to note 29 Lease liabilities for more information.
ACCOUNTING POLICIES
A lease liability and a right-of-use asset is recognised at commencement date in lease contracts where Telenor has the right to direct the use and obtains substantially all the economic benefits from the use of an identified asset. For spectrum contracts, Telenor has chosen to account for the right to use the spectrum as a lease, where the identified asset is the frequency band that is exclusive for Telenor during the lease term. Lease payments on short-term leases (less than 12 months) and low-value asset leases (mainly small non-core leases) are generally expensed on a straight-line basis over the lease term. The short-term exemption does not apply to spectrum leases or leases with purchase options.
The lease liability represents the net present value of lease payments over the lease term and include fixed payments, in-substance fixed payments, non-lease components, residual value guarantees and lease incentives. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised and termination penalties when termination is expected. Variable lease payments such as licence payments based on revenue sharing arrangements are expensed as incurred.
The incremental borrowing rate generally used to determine the net present value is based on the respective country’s risk-free rate for the term corresponding to the lease term, adjusted for own credit risk. Subsidiaries with external financing use the external borrowing rate corresponding to the lease term.
KEY SOURCES OF ESTIMATION UNCERTAINTY
For lease of land for own towers or leasing of towers from tower companies or other operators, factors considered in particular for assessing the lease term are technology development and potential changes in business models. Based on an assessment of these factors, the lease term for Telenor’s leases relating
to sites will normally be within a range of 4 to 7 years. This means that the lease term for sites with renewal options shall normally be the higher of a non-cancellable period or within a range of 4 to 7 years. Some sites may be in strategically important locations and it might be more than reasonably certain that the sites will be maintained beyond 7 years. In these cases, the lease term may be up to 10 years.
The non-cancellable lease period is basis for the lease liability, and periods covered by options to extend or terminate the lease are included only when it is reasonably certain the lease period will be extended. Determining the lease term can involve significant estimation uncertainty for lease contracts with extension or termination options, as an assessment of whether or not it is reasonably certain that the lease period will be extended is required. The broader economics of the contract and not only contractual termination payments are basis for such assessment.
The lease liability is remeasured if the lease term or lease payments change, or there are other significant event or significant change in circumstances. Significant amounts paid up-front on spectrum and other lease contracts are recognised as prepayment until commencement date. Non-refundable value-added tax is included as initial direct cost. The right-of-use asset is depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term.
Right-of-use assets
Right-of-use assets are classified based on the nature of underlying assets as follow:
1)See table below for overview spectrum licences, including lease term.
For lease of network passive infrastructure (lease of tower space in networks and lease of part of buildings for own towers), land for own sites or towers and lease of buildings for office spaces, equipment and retail stores, lease agreements generally contain termination options or renewal options.
These options are used to limit the period to which Telenor is committed to individual lease contracts and to maximise operational flexibility in terms of dynamic network requirements. The remaining noncancellable period for lease contracts under network passive infrastructure is 4 years on average. The non-cancellable period for lease contracts related to land is 2 years on average.
In 2025, the additions in network passive infrastructure were mainly related to Norway. The additions in cables were mainly in Sweden. The additions in building were mainly related to Infrastructure, Finland and Denmark. The additions in land were mainly related to discontinued operations in Pakistan. The additions in subscriber equipment were mainly related to Norway and Denmark.
In 2024, the additions in network passive infrastructure were mainly related to Infrastructure site sharing leases in Grameenphone and Norway. The additions in cables were mainly in Sweden and Grameenphone. The additions in building were mainly related to Telenor Norway, Telenor Finland, Telenor Real Estate and Sweden. The additions in land were mainly related to Grameenphone due to contract extension, Pakistan and Sweden. The additions in subscriber equipment were mainly related to Norway and Sweden.
For lease of spectrum, the agreements are generally non-cancellable. Telenor has not considered periods covered by renewal options even if in some agreements the option to renew exists, given the uncertainty around terms and conditions of renewal of licences.
Spectrum licenses
The following table sets forth the spectrum licences that Telenor holds as of 31 December 2025:
Lease expenses
Expenses recognised in the income statement related to lease contracts are presented below:
Total variable lease expenses of NOK 1 902 million (NOK 2 075 million in 2024) recognised in other
operating expenses and cost of material and traffic charges include NOK 1 147 million (NOK 1 334 million in 2024) related to spectrum and NOK 789 million (NOK 707 million in 2024) related to other lease contracts. Variable lease expenses related to spectrum agreements vary mainly with revenue, as a significant part of the expenses are based on share of revenues under the agreements. Variable lease expenses related to other lease contracts of NOK 789 million (NOK 707 million in 2024) represent mainly energy charges paid to lessors as part of the lease agreements for some mobile sites, and the expenses vary with the consumption of energy on those mobile sites in addition to changes in prices.
Note 3 (extract)
Revenues (extract)
Lease revenues (IFRS 16)
Telenor has operating lease arrangements in which it is a lessor, mainly related to passive infrastructure sharing with other telecommunication operators. Telenor has classified these leases as operating leases because they do not transfer substantially all the risks and rewards incidental to ownership of the underlying assets. Lease revenues are recognised on a straight-line basis over the lease term.
Operating lease revenues
Revenue from operating lease predominantly stems from Infrastructure segment which leases out passive infrastructure for mobile and fixed networks in Norway, Sweden and Finland. Operating lease revenue of NOK 1,390 million (NOK 1,292 million in 2024) recognised in the income statement includes variable lease revenue of NOK 193 million (NOK 196 million in 2024) primarily relating to energy charges received from lessees based on the consumption and revenue from sublease of NOK 41 million (NOK 39 million in 2024) related to surplus office space. The following table sets forth the maturity analysis of committed lease payments to be received in nominal terms after the reporting date.
Disaggregation of revenues
Revenues are disaggregated by major revenue streams divided into the reportable segments as shown in note 2 Segments in the table below.
Note 29
Lease liabilities
This note gives further information about the lease liabilities of Telenor, such as lease liabilities per currency and in addition maturity profile. Refer to note 16 Right-of-use assets for description of accounting policies and key sources of estimation uncertainty relating to lease liabilities and right-of-use assets. Note 13 Cash Flow information includes more information about the cash flow movements in lease liabilities.
Lease liabilities measured at amortised cost
Distribution of lease liabilities per currency
Lease liabilities maturity profile
Accounts examples 