2009-09-171 Niklas Sonkin

CENTRAL EUROPE

MARKET AREA

CENTRAL EUROPE

Niklas Sonkin

Market Area Director

2009-09-173 Niklas Sonkin

INTRODUCTION

Market Area Central Europe � Represents 14 percent of total revenues Q2 2009

� EBITDA up 9 percent H1 08 vs H1 09

� Strong performance compared to competition

Short- to Medium-term focus & activities� The Baltic Manage economic turmoil and create a

platform for future growth

� Croatia Reach EBITDA break even during 2H 2010

THE BALTIC REGION

Building a platform for future growth

2009-09-175 Niklas Sonkin

THE BALTICS –

DEEP RECESSION

Source: SEB

2009-09-176 Niklas Sonkin

OPERATIONAL PERFORMANCE

Lithuania Latvia Estonia

� Strong operational performance partly due to appreciating EUR

� 39 percent EBITDA marginin Lithuania Q2 2009

REVENUE

0

200

400

600

2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2

SEK million

EBITDA - CAPEX

-40

0

40

80

120

160

2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2

SEK million

EBITDA

0

40

80

120

160

200

2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2

SEK million

2009-09-177 Niklas Sonkin

� Provide the Best Deal

� Perceived price leadership

� Network coverage and quality

on a par with competition

PERFORMANCE vs PEERSEstimated Mobile Revenue market share

0,0%

15,0%

30,0%

45,0%

60,0%

Q32007 Q42007 Q12008 Q22008 Q32008 Q42008 Q12009 Q22009

LITHUANIA

Tele2 Omnitel Bite

0,0%

15,0%

30,0%

45,0%

60,0%

75,0%

Q32007 Q42007 Q12008 Q22008 Q32008 Q42008 Q12009 Q22009

LATVIA

Tele2 LMT Bite

0,0%

15,0%

30,0%

45,0%

60,0%

Q32007 Q42007 Q12008 Q22008 Q32008 Q42008 Q12009 Q22009

ESTONIA

Tele2 EMT Elisa

2009-09-178 Niklas Sonkin

TELE2 PERFORMANCE VS.

PEERS

LATVIA YTD 2009 Revenue, YoY YTD 2009 EBITDA, YoY

Tele2 (11%) (22%)

LMT (Telia) (17%) (21%)

Bité +48% +30%

Average (12%) (21%)

ESTONIA YTD 2009 Revenue, YoY YTD 2009 EBITDA, YoY

Tele2 (9%) (9%)

EMT (Telia) (16%) (18%)

Elisa (20%) (24%)

Average (15%) (17%)

LITHUANIA YTD 2009 Revenue. YoY YTD 2009 EBITDA, YoY

Tele2 0% +15%

Omnitel (Telia) (25%) (31%)

Bité (18%) (8%)

Average (17%) (14%)

Source: Tele2 Research

Memo: This is Tele2 YoY performance in local currency for mobile operations only. Comparable competition result (for mobile only) is our best estimate using their official reporting as primary source.

Estonia: Impact of changed accounting principles regarding recognition of handsets revenue/ebitda is excluded from 2008 result.

2009-09-179 Niklas Sonkin

CUSTOMER AND

PRICING STRATEGY� Tele2 will offer the best deal by

combining perceived price leadership with expected quality of service

� Focus on relevant quality improvement

� Expand 2G rollout to cover

gaps on roads and indoor

coverage

� Tight control of sales and distribution channels

2009-09-1710 Niklas Sonkin

MARKET SHARE IN THE B2B

SEGMENT

LATVIA 2008 2009E

Tele2 15% 19%

LMT (Telia) 83% 77%

Bité 2% 4%

ESTONIA 2008 2009E

Tele2 14% 16%

EMT (Telia) 57% 55%

Elisa 29% 29%

LITHUANIA 2008 2009E

Tele2 12% 14%

Omnitel (Telia) 49% 47%

Bité 39% 39%

Source:Tele2 Research

Memo: Estimated B2B revenue share

2009-09-1711 Niklas Sonkin

BUSINESS TO

BUSINESS STRATEGY� Concentrate on SME as a

core Tele2 segment

� Take part in all public tenders and increase share of state-owned companies

� Offer the best deal

� Use customer recommendations in marketing strategies

CROATIA

EBITDA break-even during 2H 2010

2009-09-1713 Niklas Sonkin

OPERATIONAL PERFORMANCE

� Solid customer intake due to better customer perception

� Better scale leading todiminishing operational losses

REVENUE

0

80

160

240

320

400

2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2

EBITDA

-120

-80

-40

0

2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2

EBITDA - CAPEX

-240

-200

-160

-120

-80

-40

0

2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2

SEK million SEK million

SEK million

2009-09-1714 Niklas Sonkin

PERFORMANCE vs PEERSEstimated Mobile Revenue market share

� Tele2 is gaining market share but still lacks economies of scale

� Competitors are defending their positions and high prices

� Tele2’s focus is on doubling the market share and becoming EBITDA positive

0,0%

15,0%

30,0%

45,0%

60,0%

Q32007 Q42007 Q12008 Q22008 Q32008 Q42008 Q12009 Q22009Tele2 T-Mobile VIPnet

2009-09-1715 Niklas Sonkin

STRATEGY

� Tele2 to be positioned as clear price leader

� Tele2 Croatia lacks sufficient scale and needs to double its market share

� We have a proactive approach on regulatory decisions and take action on tariff changes if necessary

� Tele2 will utilize the current economical downturn to prompt customers to save on mobile telecommunications

2009-09-1716 Niklas Sonkin

CROATIA PERFORMANCE

HIGHLIGHTS

Operators

YTD 2009

Revenue,YoY

YTD 2009

EBITDA, YoY

Tele2 +55% +27%

T-Mobile 0% +7%

Vipnet (7%) (19%)

Average +1% (2%)

Changes in Vipnet and T-Mobile EBITDA YoY are driven by Tele2 National

roaming contracts, as Tele2 used Vipnet in 2008, but shifted to T-Mobile in 2009Memo: This is Tele2 YoY performance in local currency for mobile operations only.

Comparable competition result (for mobile only) is our best estimate using their official reporting as primary source.

2009-09-1717 Niklas Sonkin

CROATIA –

ROAD TO POSITIVE EBITDATo achieve positive EBITDA, Tele2 needs to:

� Further increase market share to get scale

� At least 20 percent revenue market share to align business with

group targets for the whole operation

� Further reduce National Roaming share of total traffic

� Increase Tele2 share of incoming tourist roaming revenue

2009-09-1718 Niklas Sonkin

STRATEGY TO INCREASE

MARKET SHARE� Improve quality perception

� Use the current economical downturn to stress the saving opportunity for the customers

� Improve sales experience in Tele2 shops & visibility in FMCG channel

� Increase focus on retention and prolonging customer lifetime

2009-09-1719 Niklas Sonkin

NETWORK DEPLOYMENT

Reduce NR share of traffic by continued network rollout

and by closing pockets for NR traffic

In 2009, we will close five pockets for NR traffic

� Osijek September

� Pula October

� Zadar November

� Split December

� Rijeka December

2009-09-1720 Niklas Sonkin

INCREASE SHARE OF ROAMING

� Further increase roaming agreements with world-wide operators mainly focusing on Europe. We now have 182 launched operators for inbound roaming

� Keep increasing preferred steering for voice/data

� Concentrate on data roaming which is growing rapidly

� Adapt network rollout schedule to roaming needs

2009-09-1721 Niklas Sonkin

OUTLOOK FOR CROATIA

”WE WILL REACH

EBITDA BREAK-

EVEN DURING 2H

2010”

2009-09-1722 Niklas Sonkin

Q&A

2009-09-1723 Niklas Sonkin

� Continue with traditional Tele2 practices:� Perceived price leadership

� Provide excepted quality

� Use current economical environment to further reduce costs:� Acquisition costs promoting sim-only tariff plans with no need

for subsidized handsets

� Renegotiate all major contracts for media, CapEx etc.

SUMMARY