Dutch LTE license 20121214

Dutch LTE license Mats Granryd, President and CEO of Tele2 AB

Günther Vogelpoel, Market Area Director Western Europe and CEO of Tele2 Netherlands

December 14, 2012

2 Dutch LTE license 2012

Tele2 Group

EBITDA

SEK 8,288 million

CapEx

SEK 3,858 million

Net sales

SEK 32,451 million

* Group figures; YTD Q3 2012


Services Devices Access

Mobile access is the future


“Tele2 is driven by its relentless focus

on developing mobile services on its

own infrastructure”


0

2,500

5,000

7,500

10,000

12,500

15,000

0

10,000

20,000

30,000

40,000

50,000

60,000

Group revenue breakdown (SEK ’000)

Total revenue Mobile revenue EBITDA (rhs)

Tele2 will continue to be a growth

company, focusing on mobile

business and a good mix of mature

and high growth markets

Revenue per geography Revenue per product area

History of mobile excellence

Mobile

Fixed

broadband

Fixed

telephony Other

Sweden

Russia

Netherlands

Norway

Revenue distribution


• Tele2 has done successful business in

the Netherlands for 15 years

• Tele2 has more than ten years of

mobile experience as full MVNO

• More than one million customers

Tele2 Netherlands

* Figures represent contribution to group; YTD Q3 2012

EBITDA CapEx Net sales 12% 14% 8%


-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Apr-12 Jun-12 Aug-12 Oct-12

EBITDA (EUR)

Wholesale

Business

Consumer

-

10,000

20,000

30,000

40,000

50,000

60,000

Apr-12 Jun-12 Aug-12 Oct-12

Revenue (EUR)

Wholesale

Business

Consumer

-

20,000

40,000

60,000

80,000

100,000

120,000

Mar-12 Jun-12 Sep-12

Cashflow (cum.) (EUR)

Tele2 NL

Stable financial performance

Dutch Mobile Market


Dutch mobile oligopoly

0%

10%

20%

30%

40%

50%

60%

2005 2006 2007 2008 2009 2010 2011 2012

Dutch Mobile Market Share 2005-2012

KPN

Vodafone

T-Mobile

Result of seven years without a challenger


Leading in fixed, lagging in mobile

Source: Analysys Mason


No incentive to move from fixed to

mobile

0

10

20

30

40

50

60

70

80

90

KPN NL T-Mobile NL Vodafone NL Denmark Norway Finland Germany Sweden

Mb

/Sec

Max download speed (Mobile internet)

Max 28.8/14.4 Mb/s only available in limited areas of the Netherlands,

average is 7.2 Mb/s or worse


High prices & low adoption leave

opportunity for Tele2

Current providers don’t stimulate innovation


A cluttered market, but competition is

limited

50+ MVNOs, but brands of 3 MNOs hold 93% of total market share

KPN Vodafone T-Mobile


Data will drive market value growth

0

1

2

3

4

5

6

7

8

2011 2029

Data

Voice

Voice:

CAGR -2.9%

Data: CAGR +4.2%

Market: CAGR +0.7%

2011 (TelecomPaper):

• Market size: 6.1 billion EUR • Penetration: 125% • SIMs: 20.9 million • Blended ARPU: 24.2 EUR • Share of voice revenues: 64%

2029 (Market forecast):

• Market size: 6.9 billion EUR • Penetration: 184% • SIMs: 31.8 million • Blended ARPU: 18.1 EUR • Share of voice revenues: 34%

Sources: Analysys Mason, Northstream, Telecompaper, March 2012

* Excluding M2M market

Dutch License Auction

2012


New situation brings back competition Today’s outcome determines Dutch playing-field until 2030

Dutch Mobile spectrum

Situation until 31 December 2012

Situation after Auction (starting January 1st 2013 / 2014)

1x10 MHz

800 MHz

900 MHz

1.8 GHz

1.9GHZ

2.1GHz

2.6GHZ

Reserved for new entrant

2x20 MHz

Vodafone

2x12.5 MHz

KPN

2x12.5 MHz

Free

14.7 MHz unpaired

Vodafone

T-Mobile

2x10 MHz

Vodafone

2x5Mhz

T-Mobile

2x30 MHz

KPN

2x20 MHz

Free

2x10 MHz

Free

2x15 MHz

KPN

2x15 MHz 1x10 MHz

2x10 MHz

2x15 Mhz 1x5 MHz

T-Mobile

Ziggo4

2x20 MHz

1x10 MHz

Tele2

2x20 MHz

Vodafone

1.9GHZ

2.1GHz

1.8 GHz

800 MHzTele2

Free

55 MHz unpaired

900 MHz

2x10 MHz

T-Mobile

2x10 MHz 2x5 MHz 2x10 MHz 2x20 MHz 2x20 MHz2.6GHZ

Vodafone T-Mobile KPN Ziggo4

Vodafone

2x10 MHz

KPN

2x10 MHz

14.7 MHz unpaired

1x5 MHz

T-Mobile

2x15 MHz

Vodafone

T-Mobile

Free

2x20 MHz

KPN

2x10 MHz 2x10 MHz

2x5 Mhz

2x10 Mhz

Vodafone

2x5 MHz

KPN

T-Mobile KPN

25 MHz unpaired 25 MHz Unpaired

2x30 MHz

2x20 MHz

Tele2

KPN

1x10 MHz2x20 MHz

T-Mobile

Vodafone

2x20 Mhz

T-Mobile

2x20Mhz

KPN

2x20 MHz


Dutch regulatory requirements Technology neutral

• All frequencies are technology neutral

Minimum roll out requirement for 10 MHz license in 800 MHz band

• 2 year = 2% of geography coverage (616 km2)

• 5 year = 40% of geography coverage (14,942 km2 )

• Free choice in geographical roll out

License duration & effective date

• License duration: 17 years, valid until 2030 in sync with 2.6 GHz licenses

• Licenses may not be sold to other MNOs during the first five years of the license period

• 800 MHz: available January 2013 for all licenses, since this is new spectrum

Access to existing sites

• 11,000 existing sites of which increasing number independent because MNOs sell off

sites

• MNO have obligation for site sharing in towers and cooperation at roof top sites

No need for new site locations (Stratix consulting 2011)

• Government research shows that restructuring current sites with multiband equipment

enables all operators to roll out nationwide network without need of new locations

Why is Tele2 Netherlands

pursuing an MNO status


Dutch market needs a challenger

The newcomer reservation created a unique opportunity for Tele2

Natural next step for Tele2 Netherlands

The Dutch mobile market is underdeveloped and overpriced

A new network operator will bring back competition

4G technique will offer new experience to Dutch consumers

Tele2 Netherlands has a growing mobile customer base

Opportunity fits within Tele2 Group strategy


MNO building blocks N

etw

ork

C

om

me

rcia

l

1. Frequency license

2. Base stations

3. Mobile switches

4. Backhaul

5. Radio nodes

1. Brand awareness

2. Customer base

3. Ordering + Billing systems

4. Distribution

Greenfield Tele2 NL

• 2x10 MHz 800 + 2x20 MHz 2.6

• Nationwide fiber optic

• 55 radio nodes

• 15 years presence, 47% b.a.

• Over 1 million customers


Fixed backbone already in place

Specification of Tele2 Fiber optic

network

1. Total length 5,213 KM

2. Nationwide coverage

3. Connected to 55 Radio Nodes

4. 80% of existing antenna sites

within reach of Tele2’s radio

nodes

5. 40% of existing antenna sites

within reach of Tele2’s fiber

optic access lines

Maximize synergy with existing infrastructure


Scenarios for a mobile network

Roll out obligation for 2x10 MHz in

800 MHz band

• 40% of geographical coverage

= 1.000 base stations

Nationwide network

• 100% geographical coverage

= +/- 4.000 base stations

= Tele2’s current Fiber optic Network


4G possibilities

Great opportunities for incremental growth

• LTE build on own fiber optic infrastructure, no legacy and successful efficient

organization.

Optimal spectrum mix

• With 2x10 MHz 800 and 2x20 MHz 2,600 Tele2 has acquired the optimal spectrum

mix for capacity, coverage and speeds up to 100 Mb/s

Become a full service MNO

• We will be a full service Voice and Data provider, given the accelerated

implementation of VoLTE in the US and Europe and support of VoLTE on handsets,

we will be able to carry voice over LTE. Where required, we can fallback for Voice on

our 2G/3G MVNO host

Clear opportunity for newcomer

• Market price levels clearly leave room for a newcomer, offering next generation

services, based on a lowest possible cost level


Summary

Opportunity fits with group strategy

Utilize Tele2’s experience in network roll out

Differentiate with full focus on 4G

Additional leverage on existing operations


Documents

Dutch LTE license 20121214