The Norwegian Government has today submitted a bill to parliament providing for the partial privatisation of Telenor AS by way of an intial public offering. It is currently envisaged that the offering will be executed at the earliest in the autumn of 2000, but in any case before the end of 2001.

- To ensure Norway’s position on the leading edge of information- and communications technology, Telenor AS requires additional capital and new impulses. The Government sees a domestic shareholder base as important for Telenor AS, and proposes to reduce the Government's ownership interest to no less than 51%. Due to the limited capital available through the domestic stock market, it is intended that the Norwegian Government will continue to be a long-term owner of shares in Telenor AS. The Government stresses the importance of maintaining a strong high technology industry in Norway. The increased international focus of the telecommunications industry also emphasises the need for long-term Norwegian investments, says Terje Moe Gustavsen, Minister for Transport and Communications.

As one of several shareholders in Telenor AS, the state will focus on issues relating to return on capital, capital structure and dividend policy, emphasising long-term profitable business development and the creation of value for all shareholders. The Government underscores its commitment to act as a commercial and professional owner. Telenor AS will be expected to generate a rate of return consistent with those of other European companies in the same industry and with an equivalent positioning to that of Telenor AS. The capital structure and the dividend policy should be conducive to the creation of shareholder value.

In connection with the first tranche of Telenor AS's privatisation, it is currently intended that, subject to market conditions, the Government will reduce its stake by no less 15% and no more than 25% through a combination of the sale of new shares issued by the Company and the sale of already outstanding shares by the Ministry of Transport and Communications. The Government proposes to ask the Norwegian parliament ( 'Stortinget' ) for a mandate to decide on the exact split between primary and secondary shares, provided however that the proportion of primary shares shall not represent more than 50 per cent of the total number of shares sold in the offering and that the capital increase in connection with the initial public offering be capped at NOK 25 billion. The final decision on the size of the capital injection will be taken shortly ahead of the initial public offering. The board of Telenor AS will be requested to give its recommendation regarding the decision on capital structure, which will be based on the Company's strategic plan and the capital needs associated with that strategic plan. The Government asks parliament for a mandate to sell its remaining shares in Telenor AS through a combination of the sale of new shares issued by the Company and the sale of already outstanding shares owned by the Ministry of Transport and Communications, so that the Government’s ownership interest remains no less than 51%.

In accordance with the Company’s growth strategy, the Board of Directors of Telenor AS has recommended that the Company's articles of association be amended to allow for a higher level of gearing than is currently the case. The existing stipulation prevents the Company's so called 'equity-to-total-assets-ratio' from falling below 42%. Consequently, it can be expected that the Company's external borrowing programme will be extended. In the judgement of the Board of Directors, the increased gearing will be advisable. Given that the company has good investment opportunities, the Ministry of Transport and Communications has found it acceptable that the gearing may be increased.

In connection with the IPO, it will be stated that separate listings of business units within the Company may be an option. However, the Government also recommends that there be no sale of interests to strategic partners in any of Telenor AS's core business areas prior to the intial public offering of Telenor AS.

1.1 Employee Ownership

The proposal also provides for an employee ownership programme within Telenor AS. The structure and scope of the programme will be structured within the provisions of the Tax Act. It is proposed that there be no employee or management stock option plan in connection with the initial public offering. Employees will be offered preferential treatment in the form of a minimum allocation of shares.

1.2 Retail Offer

There will be a comprehensive marketing programme directed towards the Norwegian retail market. Retail subscribers will be given preferential treatment in the allocation. The Government does not recommend that retail subscribers be offered a discount to the institutional offer price.

2 Holding Company

The question of whether the establishment of a holding company structure would be an appropriate organisational concept for the Company will be considered.

3 The Management of Government Ownership

In order to underpin the market's confidence that the ownership and regulatory roles of the state will be exercised separately and independently of each other, it is proposed that, immediately following the initial public offering, the ownership of Telenor AS be transferred from the Ministry of Transport and Communications to the Ministry of Trade and Industry.

3.1 Other Issues

The Ministry and Telenor have appointed DnB and Goldman Sachs Global Co-ordinators

for the sale. Telenor AS will have its primary listing on the Oslo Stock Exchange, and the benefits of a US listing are being considered. The exact timing of the initial public offering, and the listing currency have not been decided. The sale of shares in Telenor represents a reallocation of public sector assets. The proceeds will be placed on deposit in the Central Bank of Norway.

Please note:

"This is not an offer of Securities for sale in the United States. Securities may not be offered or sold in the United States unless they are registered or exempt from registration. Any public offering of Securities in

the United States will be made by means of a Prospectus that may be obtained from Telenor or the Norwegian State and that will contain detailed information about the Company and Management, as well as financial statements. Telenor and the Norwegian State currently may register

securities for sale in the United States."