Investor’s Presentation

2008Telenor PakistanPeter Kuncewicz – CFO of Telenor Pakistan

Pakistan’s Economic Landscape

Pakistan - A brief look at economics and politics

• Population of 165 million

• Per capita income increasing

• High inflation rate

• Prevailing political tension

• Security situation fairly stable

Key Facts

• World’s 6th most populous nation

• Population of 165 million

• Approx. 100 mn < 30 yrs

• Median age approx. 20.1 yrs

• On current trajectory, Pakistan likely to be 4th largest

country by 2050

Economic overview

• GDP : US$ 145 billion

• GDP growth : 7.0% (FY07)

� FY03-07 avg. : 7.0%

• Per-capita GNP : US$ 925

� PPP basis : US$ 2,591 2007-est

• Growth in p.capita: 13% FY07/06

� FY03-07 avg. : 12%+

Key Facts

• 6th largest EM (ex-China & India)

• 4th largest EM in Asia (ex-China & India)

*ex-China & India

11.9%4.3%Share

46Rank

EM – Asia*EM – All*Pakistan:

Key Facts

• One of only 10 economies of world with:

• GDP > US$100bn AND

• POP > 100 million

Pakistan’s LT growth

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

FY51

FY53

FY55

FY57

FY59

FY61

FY63

FY65

FY67

FY69

FY71

FY73

FY75

FY77

FY79

FY81

FY83

FY85

FY87

FY89

FY91

FY93

FY95

FY97

FY99

FY01

FY03

FY05

FY07

Pakistan’s LT growth

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

FY51

FY53

FY55

FY57

FY59

FY61

FY63

FY65

FY67

FY69

FY71

FY73

FY75

FY77

FY79

FY81

FY83

FY85

FY87

FY89

FY91

FY93

FY95

FY97

FY99

FY01

FY03

FY05

FY07

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%10 yr MA

Key Economic Indicators

2006 2007 2008 2009

Real GDP growth 6.9 6.4 3.6 4.4

Nominal GDP (US$ bn) 126.8 145.4 156.5 160.2

Consumer Price Inflation* 9.4 11.7 21.5* 7.1

Exchange Rate Rs : US$* 60.9 61.2 71.9* 67.8

GDP per head (US$) 809 886 936 941

Source: Country Report Pakistan by Economist Intellignce Unit, London

* As of July 2008

Currently…

• Pakistan’s economy in rough patch

• Facing severe headwinds/challenges

– Global commodity prices

– Weakening fiscal situation

– Policy path uncertain

• Resilience from reform paying off

• Politics a potential wild card

In Sum …

To conclude:

• Pakistan is experiencing a strong pay-off from reforms

• Robust growth & investment are leading to rising incomes − & spending

• Challenges remain …

• … but underlying longer term business opportunities remain compelling

Five criteria identified before entering Pakistan..

• High growth potential

• Forward looking telecom policy

• Investment friendly climate

• Good regulatory execution

• Acceptable political and economic situation

Initial assumptions vs actual development..

4113Capex (PKR bn)

269663ARPU (PKR)

14.62.9Telenor subs (mill)

48%11%SIM penetration

Actual 2007Initial business case 2007

200

2,000

4,700

6,300

2005 2006 2007 2008E

5

50

132

160

2005 2006 2007 2008E

3 years of building network and distribution

• 5,500 sites and 55% coverage

• Largest Edge network in Pakistan

• 125,000 scratch card agents

• 110,000 easy load top-up points

• 60,000 SIM distribution agents

Network Distribution

No of sites, EoY No of agents, EoY (thousands)

Telenor subscribers (mill)Market share

> 20

0.81.9

3.2

6.7

10.7

14.6

18.1

H105 H205 H106 H206 H107 H207 H108 H208E

3 years of tremendous growth

Ufone

Warid

Mobilink

Zong

Instaphone

Telenor

0%

10%

20%

30%

40%

50%

60%

1H05 2H05 1H06 2H06 1H07 2H07 1H08 2H08E

Market statistics Q108

Q108 Mobilink Ufone Zong Instaphone Telenor Warid

Subcribers base (000) 31,774 17,198 2,142 271 16,702 14,395

Revenue (in million) 21,215 7,987 618 65 12,099 6,542

ARPU (based on PTA closing subs) 226 160 100 72 242 158

Market ARPU Trend

-

50

100

150

200

250

300

Q207 Q307 Q407 Q108

Mobilink Ufone Zong Instaphone Telenor Warid

• Revenue figures are from PTA quarterly report

• ARPU figures are calculated using revenue and subscriber numbers as per PTA report

ARPU (PKR) Revenues (PKR bn) and EBITDA %

Stable ARPU and improving margins

191

253

287268

279262

248

H105 H205 H106 H206 H107 H207 H108

2

4

8

15

20

25

0.5 -121%

-40%

-17%

4%

16%19%

-3

2

7

12

17

22

27

H105 H205 H106 H206 H107 H207 H108 -1.33

-1.13

-0.93

-0.73

-0.53

-0.33

-0.13

0.07

0.27

"Diesel Prices" increase Jan-March, 2008

PKR 33 PKR 33PKR 39

PKR 65

Mar.07 Jan 2008 March 2008 Jun.08

"Concrete Prices" increase since March 2007

PKR 18,000PKR 21,000

PKR 23,000

PKR 27,500

March 2007 Jan.08 Mar.08 June 2008

"Processed Steel prices" increase since March 2007

PKR 40

PKR 60

PKR 90PKR 85

March 2007 Jan.08 Mar.08 June 2008

"Minimum wage" increase Jan-March, 2008

PKR 3,000 PKR 3,000 PKR 3,000

PKR 6,000

March 2007 Jan-08 Mar.08 Jun.08

Source: Ministry of Labor and Manpower Pakistan

(100% Increase)

Source: Pakistan Steel Mills

(56% Increase)

Source: Construction Industry

(100% Increase)

Source: Ministry of Petroleum (Per Litter Price)

(100% Increase)

Note; %age represents month on month increase

Some areas of price hike

Opex split

Operating expenses driven by site costs

• Fibre backbone to reduce traffic costs

• Site related costs driven by number of sites and increased energy costs

• SAC driven by subscriber growth

• General marketing costs increasing

100% 100%

Capex split 2007

Capex driven by increased traffic

• Around 50% of capex related to sites. Outlook stable

• Scale effects expected in transmission and core network

• Subscriber driven capex will increase slightly

Transmission

Core

Subscribers

Other

Sites

3G coming up

• 6 blocks of 5MHz available

• 3 operators to be allocated 3G spectrum

• Uncertainty regarding timeline and conditions

Maintaining competitive edge

• Maintain innovator position

• Leverage on brand, distribution, and quality network

• Enrich customer experience

• Operational efficiencies to secure long term profitability

• Exploit broadband opportunities

Telenor Pakistan Outlook 2010-2011

• SIM penetration above 70%

• Market share above 25%

• EBITDA in mid thirties

• Capex/sales below 25%

Summary

• Still strong growth potential

• Tough competition but solid market position

• High quality network and distribution

• 2G capex peak in 2007

• Manageable surroundings