TeliaSonera presentation Per-Erik Brundin Director Performance management

Från fördelningspolitik till marknasekonomi

Med AXE kunde vi erbjuda nya tjänster. AXE skulle inte bara komma att spela en viktig roll i moderniseringen av de svenska telekommunikationerna utan även bli en stor exportprodukt. Med AXE kunde vi erbjuda nya tjänster. Foto: Telemuseum

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Milestones looking 20 years back….. 1990 One country 49.000 employees in Sweden only 6 million customers 35 GSEK turnover Mainly Fixed telephony 2010 20 countries 29.700 employees in 21 countries (10.000 in Sweden) 148 million customers 109 GSEK turnover 36,666 GSEK EBITDA Mobile Broadband

Finns det någon röd tråd? 1853 -1900 Finns det någon röd tråd?

GTS, Global Telesystems Konkurrens Enitel Bred-bands-bolaget Teracom Sv. Kraftnät Banverket Stokab TeliaSonera Telenor Telitel NetNet RSL Com Worldcom/UUnet Vodaphone Mobilix Banestyrelsen Powercom Köbenhamns Belysningssellskap Tele2 BaneTele Oslo Sporveier Netcom Enator Statnett Netsource 9,5% Nor Sea Com Glocalnet Ebone LDI IKEA/Catella Framtids-fabriken Global Crossing Web A/S Image Scandinavia Rix Telecom Göteborgs Energi COLT UPC Chello Vattenfall Birka Sydkraft Supertel Delta Three Utfors KPN/Qwest EUNet Carrier1 Thalamus TeleCity Arrowhead World Online IP-Only Euro909.com Facilicom Tele8 Interoute UPC Norge Teleglobe CyberCity Global One Telenordia VR-Group (Järnväg) France Telecom Cooperation Netcom/Tele2 GTS, Global Telesystems Pangea Worldcom Sweden Norway Denmark Finland Bredbands-bolaget Europolitan Tele1 Finnet Datatie Elisa Radiolinja Telefon- föreningar 46 st Debitel ElTele ElTele Öst Tele Danmark SBC Comm. Samarbete, delägande 14% Delägare 53,5% 50% BIP Spray Kinnevik Optimal Comviq Kabelvision NetCom Cable Wireless BT Sonofon Bell South Kunskapskontoret Orkla Providence Equity 46,5%

Effektivisering – Mer för mindre! Växa i antal kunder  Högre intäkt Investera för att Klara kundbehov Växa i antal kunder! God marginal Nu! Större Produktion men Lägre intäkt Lägre kostnad Växa i volym! Pris press kostnad för att klara marginalen Varför det är nödvändigt att jobba med kostnadsbesparingar? Intäkterna går ned i takt med prispressen och färre fasttelefonikunder Volymtillväxten kompenserar i viss mån intäktsnedgången Kostnaderna måste minska i samma takt som intäkterna sjunker, trots volymökningen! - vilket betyder att vi måste kunna producera mer till lägre kostnad –för att behålla marginalen - utmaningen är dubbel! Vi måste samtidigt ta fram nya möjlighet att skapa nya tjänster och produkter för att skapa ökad ekonomisk tillväxt samt frigöra pengar för att investera i nya tillväxtområden Oavsett framgång i tillväxtsatsningar som kommer att kosta ”på egna meriter” så måste vi minska kostnaderna för befintliga affärer och arbeta för att ta fram nya, attraktiva och lönsamma affärer.

Den underliggande utvecklingen Broadband Mobility New Telecom World Telecom Industry Telephony Internet PC-LAN PC desk top computing Computer Industry main frames TV, Radio Electronic publishing and entertainment Media Industry

The Interconnected World Teknikkonvergens IP Broadband mobility Telecom Industry Programs and applications Palm computers Internet The Interconnected World PC-LAN PC desk top computing Computer Industry main frames TV, media, electronic publishing and entertainment Media Industry

The Interconnected World Marknadskonvergens Broadband mobility Telecom Industry Programs and applications Palm computers Internet The Interconnected World PC-LAN PC desk top computing Computer Industry main frames TV, media, electronic publishing and entertainment Media Industry

Kunderna gillar att vara mobila…. 18 18

RENODILING 1990 Gör allt i hela kedjan med egen personal Sälja & Televerket (SV) Televerket (No) Televerket (DK) Televerket (Fi) Växlar & Nät Telefoner Bygga nät och infra Underhålla Sälja & Distribuera 1990

Integrera och väx ”cross border” RENODILING Nätkompo- nenter Utbyggnad Underhåll Applikationer Sales & Distribution Ericsson Motorola Nokia Flex- tronics Etc. Etc TeliaSonera Partners Egen försäljning och distribution Huawei Telefoner mm Samsung Apple Sony Ericsson Eltel Produkt / paketering / Marketing Integrera och väx ”cross border” i valda delar!

Telecom har gått från att vara Lokalt och nationellt till att vara globalt

The rumor of our death is greatly exaggerated “Only five years away, when telephony will be a free service…” The Economist September 2005

Access anywhere, anytime Global IP traffic … will nearly double every two years (2007-2012) 44 exabyte per month Exabytes / month 7 exabyte per month 5 exabyte per month Data from the Cisco Visual Networking Index Projects, June 2008. Total IP traffic will increase at close to 50 % a year (CAGR) (2007-2012) Video on demand, IPTV, peer-to-peer (P2P) video, and Internet video are forecasted to account for nearly 90 percent of all consumer IP traffic in 2012. 1 exabyte = 1 billion gigabytes In This CONTEXT – THE CHANGE WILL CONTINUE and may be even be higher going forward…………… Sources: Cisco, 2008 23

Televerket på 80- talet 20 Telecommunication Areas Bangårdsgatan — Swedish Telecom International AB — Swedish Telecom Contracting AB — Telefinans AB — Tele Larm AB — Teleindustrier AB — SOS Alarmering AB (50%) — Nerion A/S — Telelogic AB — Teleannons AB Ellemtel (50%) Utvecklings AB Teleinvest AB NOTELSAT, NordiskaTelesatellit AB Board Secretarial Office Corporate Planning Staff Internal Audit Director General Televerket holds 100% of the share capital unless otherwise indicated Administrative Department EDP Department Financial Department Manage Services Dept Basic Technology and Testing Department TELI Radio Services Marketing Dept Bangårdsgatan Network Dept 20 Telecommunication Areas Equipment Dept Country-wide Profit Centres

Idag heter teleområdena……. Sverige, Norge, Danmark, Finland, Kazakstan, Moldavien. Nepal, Georgien etc

Hur ser det då ut idag?

Highest Employee Commitment Score

Our focus areas World class service company Quality in networks Cost efficiency 34

Our footprint Almost 460 million population Total number of subscriptions ~ 148 million of which ~49 million in the majority-owned operations of which ~99 in the associated companies

TeliaSonera Group Organization President & CEO Lars Nyberg CFO Per-Arne Blomquist Legal Affairs Jan Henrik Ahrnell HR Karin Eliasson Communications Cecilia Edström Group IT Åke Södermark Mobility Services Håkan Dahlström Broadband Services Anders Gylder Eurasia Tero Kivisaari Sales division Business Services Sverker Hannervall

Markets and brands

TeliaSonera – organizational structure Broadband services Fixed telephony TeliaSonera International Carrier Broadband Services Mobile communication businesses in Nordic, Baltic and Spain Mobility TeliaSonera Mobile communication businesses in high growth emerging markets Eurasia 38

Mobility Services - Nordic and Baltic leadership Country Market position* Brand Subscriptions mobile Sweden 1 Telia, Halebop 5,666,000 Finland 2 Sonera, TeleFinland 2,874,000 Norway NetCom, Chess 1,658,000 Denmark 3 Telia, Call me, dlg 1,460,000 Estonia EMT, Diil 766,000 Latvia LMT, OKarte, Amigo 1,042,000 Lithuania Omnitel, Ezys 1,991,000 Spain 4 Yoigo 1,506,000 Subscriptions, December 31, 2009 * TeliaSonera estimates

Broadband Services - Nordic and Baltic leadership Country Market position* Brand Subscriptions Sweden 1 Telia Broadband 1,125,000 Fixed 3,604,000 VOIP 158,000 IPTV 396,000 Finland 2 Broadband 458,000 Fixed 324,000 VOIP 1,000 Cable TV 175,000 IPTV 1,000 Norway 2 5 NextGenTel Broadband 223,000 VOIP 48,000 IPTV 5,000 Denmark Broadband 47,000 Fixed 205,000 VOIP 9,000 IPTV 5,000 Estonia Elion Broadband 182,000 Fixed 357,000 VOIP 8,000 Cable TV 3,000 IPTV 110,000 Lithuania TEO Broadband 313,000 Fixed 722,000 VOIP 4,000 IPTV 103,000 Latvia (49%) Lattelecom Broadband 194,000 Fixed 560,000 VOIP 5,000 IPTV 39,000 Subscriptions, December 31, 2009 * TeliaSonera estimates

Eurasia – a long term commitment Country Market position* Brand Subscriptions Mobile Azerbaijan 1 Azercell 3,847,000 Georgia Geocell 1,892,000 Kazakhstan K’cell 7,165,000 Moldova 2 Moldcell 660,000 Tajikistan Indigo, Somoncom 1,523,000 Uzbekistan UCell 5,074,000 Nepal Mero Mobile 2,202,000 Cambodia 4 Star-Cell 195,000 Russia (43.8%) 3 MegaFon 50,542,000 Turkey** (37.3%) Turkcell 36,000,000 Ukraine** Life 11,800,000 Belarus** 800,000 Subscriptions, December 31, 2009 * TeliaSonera estimates ** Subscriptions , September 30, 2009. Turkcell owns 54.2% in Ukraine and 80% in Belarus 41

TeliaSonera International Carrier Global presence More than than 43,000 km of fiber network, owned and operated The network reaches more than 100 points of presence in 35 countries across Europe, North America and Asia The network is proactively monitored 24/7/365 from Network Operation Centers The only European Tier 1 carrier in the world More than 85 percent of all European ISPs connect directly to our IP backbone. TSIC provides quality, cross-border voice, IP and capacity services. Our customers include operators, carriers, service providers, content providers and large-scale users, such as large international corporations. Voice: We provide high-quality international voice termination to virtually every destination worldwide. IP: We are the number one carrier of IP traffic in Europe, providing direct connections to our network for more than 80% of all European broadband service providers. Capacity: We have sold more capacity in Europe than anyone else. TSIC is wholly owned (100%) by the TeliaSonera Group. Because we are part of a financially strong group, customers can trust our ability to live up to our obligations both in the short and long term. The major part of our network is based on our wholly owned infrastructure. We have a European network of 20,000 km as well as a fiber-based US network of 18,000 km covering the major cities from east to west. Operating from our Nordic-Baltic home market, our expansion strategy includes new markets in Eastern Europe, Asia and South America. TSIC’s net sales increased in 2005 by 5% to 4,139 million SEK (~446 million EUR). EBITDA* (excl. non-recurring items) was 54 million SEK (~6 million EUR) in 2005.

IP backbone – Global And a global look at our capacity backbone.

Back up

Q4 2009 in brief Net sales SEK 27,410 million (28,096) Decrease -2.4% Local organic -0.5% FX effect -2.2% Acquisitions 0.3% EBITDA* SEK 9,039 million (8,272) Increase +9.3% EBITDA margin* 33.0% (29.4) EPS SEK 1.09 (1.26) Free Cash Flow SEK 4,660 million (4,918) * Excluding non-recurring items

Operational highlights during 2009 Significantly improved cash flow* in Broadband Services Strong revenue growth in Mobility Sweden** Successfully defending margins in the Baltics*** * Cash flow, measured as EBITDA, excluding non-recurring items, minus CAPEX ** Net sales in Sweden rose 5.8 percent and EBITDA margin, excluding non-recurring items, improved to 38.8 percent (37.1) *** EBITDA margin, excluding non-recurring items, in Mobility Services

An eventful year in Eurasia Improved profitability from already high levels Successfully defended or improved our market positions Network build-out in Nepal and Uzbekistan Agreement with Altimo for Turkcell and MegaFon

Full year 2009 – in line with the outlook Actual 2009 Net sales* In line with or slightly below the level of 2008 -0.3% Addressable cost base* Below the SEK 33.8 billion in 2008 -6.8% EBITDA margin** Exceed the margin level of 2008 (31.8%) 33.6% CAPEX-to-sales ratio In the range 13-14% (15.2%) 12.8% Number of employees Somewhat below 30,000 29,734 vs. 32,171 year-end 2008 * In local currencies and excluding acquisitions ** Excluding non-recurring items

Business area – Mobility Services Net sales and EBITDA margin* Net sales and EBITDA margin* -2.4% LC -1.6% LC Cost savings improved profitability in Mobility Services in Q4 09 Revenue growth continued in Swedish Mobile, +6.4 percent y/y in Q4 09 Situation in the Baltic countries still challenging * Excluding non-recurring items

Business area – Broadband Services Net sales and EBITDA margin* Net sales and EBITDA margin* -3.2% LC -3.1% LC Cash flow almost tripled in Broadband Services in Q4 09 Net sales in Sweden and Finland impacted by lower internal sales Significant improvement in EBITDA margin to 30.1 percent (23.0) in Q4 09 * Excluding non-recurring items

Business area – Eurasia Net sales and EBITDA margin* Net sales and EBITDA margin* +7.3% LC +5.0% LC Organic growth improved sequentially and profitability was maintained Kazakhstan improved in Q4 09, strong subscriber intake on new price plans Reported net sales significantly impacted by currency movements * Excluding non-recurring items

CAPEX Full year CAPEX-to-sales at 12.8 percent (15.2) Changed approval routines for CAPEX during 2009

Solid financial position * Excluding non-recurring items

Proposed dividend and capital structure Revised dividend policy The ordinary dividend shall be at least 50 percent (40) of Net income* Proposed ordinary dividend SEK 2.25 per share (1.80) Corresponding to 54 percent (43) of Net income* Increase of 25 percent compared to 2008 Proposal for authorization Repurchase a maximum of 10 percent of outstanding shares Annual General Meeting will be held on April 7, 2010 * Net income attributable to owners of the parent company

Shareholder structure year-end, 2009 Holding Swedish State 37.3% Finnish State 13.7% Swedbank Robur Funds 3.5% Alecta 2.5% SEB Funds 1.6% AMF Insurance & Funds Cevian Capital LP Nordea Funds 1.4% Skandia Life insurance 1.3% SHB Funds 1.1% AFA Insurance Fourth Swedish National Pension Fund 1.0% First Swedish National Pension Fund Second Swedish National Pension Fund 0.6% Third Swedish National Pension Fund 0.5% Other shareholders 30.2% 635,799 shareholders

Strong financial key ratios Dec 31, 2009 Dec 31, 2008 Return on equity* 15.2% 17.2% Return on capital employed* 15.5% 17.3% Equity/assets ratio 49.1% 50.5% Net debt/equity ratio 34.9% 36.5% * Rolling 12 months One of the best rated Telecom Operators in Europe

TeliaSonera AB credit ratings (A3/A-) TeliaSonera AB long-term ratings migration history 2002-to-today AA AA- A+ A A- Moody’s (A3/P-2) Standard & Poor’s (A-/A-2) January 8, 2003, lowered long-term debt rating to A2 November 1, 2006, outlook changed to Negative October 30, 2007, lowered long- and short-term debt rating to A3 and P-2 respectively February 12, 2009, debt ratings confirmed Outlook: Stable February 5, 2003, lowered long-term debt rating to A October 28, 2005, lowered long-term debt rating to A- and short-term debt rating to A-2 November 13, 2009, debt ratings confirmed Outlook: Stable One of the best rated Telecom Operators in Europe

Changing competitive dynamics Content distribution Applications Web Browser & search engine Access Telcos Hardware The business dynamics are characterized by that companies are trying to expand their business by competing in ”non traditional areas”. Many are trying to get new revenue streams by moving in to new roles in the value chain Example: -Google are moving from WEB Search in to content such as books, maps ets on one hand but also in to the hardware area via HTC phones branded and programmed with Google content. -Apple are moving in to selling Phones / I phone- They are earning money on selling Phones and other hard where but also selling content ( Music films etc) to their devices via “app store” this is their CORE business. -TELCOS are moving in to content from the belief that there are more money to earn – RISK -Content distribution ex TV cable operators are selling additional services such as Data com connections and Telephony This creates a very dynamic and changing business landscape There has been a lot of discussions and attempts from our side to develop and launch Applications and content- However we will see Access as our Core business and aggregating others content- BUT not create own. 58

From 1G to 4G in less than 30 years 100Mbit/s Data IP – 3G up to 14.4 Mbit/s WAP Digital – GSM/GPRS from 9.6 kbps Voice To put these developments into context: 10 years ago in the Nordic markets, we had a mobile telephony penetration of 50% and 34% internet penetration Internet access – With a dial-up connection, you could get internet acess at a a speed of 56Kbit/second Today we have mobile networks which can cope with 10-15 Mbits per second and soon we will have 4G in some densely populated areas providing speeds of as much as 100 Mbit/second. The core message is that the appetite for higher band with is endless– Look at your behaviors- To day you easily create a presentation (like this one) 2 MB end so on- Color pictures in your mobile / TV via IP and so on In This CONTEXT – THE CHANGE WILL CONTINUE and may be even be higher going forward…………… Mobile access Analogue – NMT

What drives the change?

Det var bättre förr! - Ju förr desto bättre!

Se upp med ”hästhållare”

World Class Customer Service EPSI Excellent EPSI High EPSI Average Lexus 89.0 (US) Amazon 86.0 (US) Google Disney 84.0 (US) Apple UPS 83.0 (US) Tesco Mobile 82.0 (UK) Toyota 80.6 (SE) General Electric 80.0 (US) Southwest Airl. 79.0 (US) Ritz-Carlton 78.9 (SG) Turkish Airlines 78.0 (TR) Starbucks 77.0 (US) BestBuy 74.0 (US) Audi 72.9 (SE) ICA 72.3 (SE) Schenker 70.9 (SE) Nordea Samsung 70.0 (US) McDonalds TeliaSonera 67.6 (SE) Folksam 67.4 (SE) LG 67.0 (SE) H&M 66.0 (SE)

För 80 - talet Så här mycket får det kosta  Så här mycket pengar har vi Det här får det kosta - använda pengarna så effektivt som möjligt Fördela intäkt klokt Varför det är nödvändigt att jobba med kostnadsbesparingar? Intäkterna går ned i takt med prispressen och färre fasttelefonikunder Volymtillväxten kompenserar i viss mån intäktsnedgången Kostnaderna måste minska i samma takt som intäkterna sjunker, trots volymökningen! - vilket betyder att vi måste kunna producera mer till lägre kostnad –för att behålla marginalen - utmaningen är dubbel! Vi måste samtidigt ta fram nya möjlighet att skapa nya tjänster och produkter för att skapa ökad ekonomisk tillväxt samt frigöra pengar för att investera i nya tillväxtområden Oavsett framgång i tillväxtsatsningar som kommer att kosta ”på egna meriter” så måste vi minska kostnaderna för befintliga affärer och arbeta för att ta fram nya, attraktiva och lönsamma affärer.