FIRST QUARTER 2011

April 19, 2011

2010-10-20 2

Agenda

About Q1 2011

Financial review

Guidance and Concluding remarks

2010-10-20 3

Highlights Q1

• Group

– Total customer base amounting to more than 31 million customers. Net

customer intake for the group 399,000

– Net sales grew by 0.5 percent. Currency-adjusted net sales grew by 7

percent, driven by mobile sales

– EBITDA grew by 4 percent. Currency-adjusted EBITDA grew by 11

percent. EBITDA margin amounted to 26 (25) percent

• Russia

• Nordic

• Central Europe & Eurasia

• Western Europe

2010-10-20 4

Highlights Tele2 Russia

• 547,000 (949,000) new

customers in Q1 2011

• Net sales grew by 17

percent. Currency-

adjusted net sales grew

by 27 percent

12

13

14

15

16

17

18

19

20

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

CUSTOMER BASE MILLIONS

31%

32%

33%

34%

35%

36%

37%

0

1000

2000

3000

4000

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

EBITDA 12'M ROLLING SEK MILLION / PERCENT

EBITDA 12'M rolling EBITDA-margin 12'M rolling

2010-10-20 5

180

190

200

210

220

230

240

250

180

190

200

210

220

230

240

250

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

MOU AND ARPU MINUTES

MoU (left-hand side) RUB (right-hand side)

Mobile market overview

Source: AC&M – 4Q10 Report, Analysis Mayson– Voice Quarterly Metrics, Dec 2010 *The dynamics is caused by the B2B segment

growth

93,9%

92,8% 92,5%

89,6% 89,8%

87%

90%

93%

96%

2006 2007 2008 2009 2010

PREPAID SHARE * PERCENT

-20%

0%

20%

40%

60%

80%

100%

3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 Jan 11 Feb 11

NET ADDITIONS SHARE OF ADDS (%)

MTS Vimpelcom MegaFon Tele2

3%

6%

9%

12%

15%

QUARTERLY CHURN TELE2 PERCENT

RUB

2010-10-20 6

0%

5%

10%

15%

20%

25%

30%

35%

40%

2006 2007 2008 2009 1Q10 2Q10 3Q10 4Q10

MOBILE MARKET SHARES PERCENT OF ACTIVE SUBSCRIBERS

Mobile TeleSystems VimpelCom MegaFon Tele 2

Mobile market overview

Source: AC&M Consulting – 4Q10 Report, Mayson Analysis – Voice Quarterly Metrics, Dec 2010

Average TELE2 share (all Russia) – 8.4%

Average TELE2 share (old regions) – 39% *

Average TELE2 share (new regions) – 16% *

Average TELE2 share (total 37) – 29% *

0%

5%

10%

15%

20%

25%

30%

35%

2006 2007 2008 2009 1Q10 2Q10 3Q10 4Q10

MOBILE MARKET SHARES PERCENT OF RETAIL REVENUES

Mobile TeleSystems VimpelCom MegaFon Tele 2

* T2 Initial Measurement 2011

2010-10-20 7

Mobile data market

* Tele2 regions internal, BIG 3 – J’son & Partners, 2011, otherwise AC&M, 2010

9%

7%

11%

8%

DATA REVENUE as of 4Q10 SHARE OF TOTAL REVENUE (FEDERAL)

MTS Vimpelcom MegaFon Tele2

• EDGE enabled mobile network

• Great price and smart packaging

• Large difference between major cities vs. rural areas

28%

34%

21%

17%

BIG4 DATA REVENUE BREAKDOWN PERCENT, 4Q10 (TELE2 REGIONS)

MTS

Megafon

Vimpelcom

Tele2

2010-10-20 8

Tele2’s regional expansion opportunities

COVERAGE MAP

Population (Million)

Total Market 142

New licences 11.5

Tele2 61

Won licences 1

Combined 62

Moscow

The results of the first GSM tender: Tele2 got licences in all 4 new regions in the

first round

2010-10-20 9

Highlights Tele2 Sweden

• Increased mobile revenue growth of 17 percent

• 45,000 (29,000) postpaid customers added

• Mobile EBITDA margin 30 (35) percent, due to a larger

gross intake of smartphone customers and increased

costs to JVs

• 4G launched in eight major cities

0,0%

5,0%

10,0%

15,0%

20,0%

1700

1800

1900

2000

2100

2200

2300

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

NET SALES SEK MILLION / PERCENT

Mobile net sales Mobile YoY net sales growth

2010-10-20 10

0%

20%

40%

60%

80%

100%

2001 2002 2003 2004 2005 2006 2007 2008 2009

FIXED VS. MOBILE PERSPECTIVE SWE TELECOM REVENUES (%)

Fixed Mobile

Swedish telecom market trends

Sources: Parella Weinberg Partners , Analysys Mason, PTS

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

2010 2011 2012 2013 2014 2015

MOBILE DATA TB USAGE (RESIDENTIAL) TERABYTE

Mobile data is increasing,

driven by smartphones and

mobile broadband

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015

MOBILE CONNECTIONS SWEDEN PERCENT

2G 3G 4G

2010-10-20 11

0%

20%

40%

60%

80%

100%

2009 2010 2011 2012 2013 2014

SMARTPHONES vs. FEATURE PHONES SHARE OF TOTAL MARKET

Smartphones Feature phones

Smartphones change the customers’

behaviour

Sources: Analysys Mason

More than 60 percent of Tele2’s prepaid

customers converting to postpaid

change to a smartphone

The Swedish mobile market Tele2 customers’ demand for data solutions

is increasing rapidly

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

SALES OF DATA PACKAGES

Sources: Internal data

70%

75%

80%

85%

90%

95%

Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11

POSTPAID RESIDENTIAL WITH CONTRACT PERCENT

400%

2010-10-20 12

Focused activities give results on

postpaid ASPU

• Focused on attracting and retaining the right

customers

• Continued the expansion of Tele2 stores

• Increased sales of data packaging

• Remade B2B product portfolio

• Strengthened switching solution offer

ASPU trend recovered

1 iPhone4 16 GB

2 iPhone4 32 GB

3 Sony Ericsson X10 Mini Pro

4 Sony Ericsson X10

5 HTC Desire

6 ZTE Blade

7 Sony Ericsson X8

8 Sony Ericsson X10 Mini

9 HTC Wildfire

10 HTC Desire HD

Top 10 phone sales in Tele2

Stores (Jan-Mar)

In total, 9 out of 10 sold phones are

smartphones

2010-10-20 13

The 4G roll-out continues

99% coverage

End of 2012

2011 2010

2010-10-20 14

• The Netherlands

- Strengthened the position in the

business segment through the

completion of the BBned acquisition

• Germany

- Continued strong EBITDA contribution

of 33 percent in fixed telephony

• Austria

- Continued good progress in

restructuring program leading to

sequential improvement of EBITDA

contribution

Highlights Tele2 Western Europe

0

500

1000

1500

2000

2500

3000

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

EBITDA 12'M ROLLING SEK million

Netherlands Austria Germany

2010-10-20 15

Licence Renewal / Frequency Auction

Au

ctio

n 2

015 A

uctio

ne

d 2

010

Auctio

n e

arly

20

12

2010-10-20 16

Highlights Tele2 Baltic Region

• Stabilizing economy leading to better operational

environment

- Low consumer confidence delaying improved

spend on communication services

• Investment in network capabilities, as demand for

mobile broadband increases

- Tele2 Estonia was awarded 4G licence

-40

-20

0

20

40

60

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

NET INTAKE THOUSANDS

Estonia Lithuania Latvia

-200

-100

0

100

200

300

400

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

EBITDA - CAPEX SEK MILLION

EBITDA CAPEX EBITDA - CAPEX

2010-10-20 17

• Goal to deliver positive free cash flow 2H 2011 on track

• Solid customer intake despite high seasonal churn

• Tele2 launched 21 Mbps in its 3G network

Highlights Tele2 Croatia

-50

-40

-30

-20

-10

0

10

20

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

EBITDA SEK MILLION

0

10

20

30

40

50

60

70

80

90

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

NET INTAKE THOUSANDS

2010-10-20 18

Highlights Tele2 in Kazakhstan

• Preparing for launch in late April

- Tele2 in Kazakhstan relaxed on commercial activities in Q1 2011, leading to lower net intake

• Mobile network covering almost 70% of the population

- 2G/3G enabled infrastructure

• Focus on widening the distribution network throughout the country

• Interconnect lowered as of 2011 with good support from NRA

2010-10-20 19

Agenda

About Q1 2011

Financial review

Guidance and Concluding remarks

2010-10-20 20

Q1 2011 group results

SEK million Q1 11 Q1 10 Change %

Net Sales 9 573 9 527

EBITDA 2 457 2 358 4%

- EBITDA margin (%) 26% 25%

Depreciation and Joint Ventures -897 -809

- Depreciation of Net sales (%) 9% 8%

One-off items 99 -3

EBIT 1 659 1 546 7%

Normalized EBIT 1 560 1 549

- Normalized EBIT margin (%) 16% 16%

Financial items -62 42

Taxes -371 -339

Net profit/loss 1 226 1 249

Net result, discontinued operations -13 19

Net result total operations 1 213 1 268

Mainly due to spectrum

rebalancing in 900 MHz

band

2010-10-20 21

Currency movements (vs. SEK)

YoY Difference in

YTD Ave FX Rates, 2011 vs. 2010

EUR -11.0%

RUB -8.0%

EUR/EUR pegged and RUB currencies

approximately 2/3 of sales and EBITDA

End of Quarter Spot rate

vs. 31/12-2010

EUR -1%

RUB -1%

2010-10-20 22

Currency adjusted Sales and EBITDA

-500

0

500

1 000

1 500

2 000

2 500

3 000

Q1 10 Q1 11

CURRENCY ADJUSTED EBITDA TOTAL, +11 % SEK MILLION

Kazakhstan MA Nordic MA Russia

MA Central Europe MA Western Europe

8%

17%

43%

-6%

0

1 000

2 000

3 000

4 000

5 000

6 000

7 000

8 000

9 000

10 000

Q1 10 Q1 11

CURRENCY ADJUSTED SALES, +7% SEK MILLION

Kazakhstan MA Nordic MA Russia

MA Central Europe MA Western Europe

0%

-3%

27%

5%

2010-10-20 23

Taxes

Taxes in income statement Q1 11 Q1 10

Normal -371 -339

One-Off - -

Total -371 -339

Taxes in cash flow Q1 11 Q1 10

Normal -225 -233

Deferred tax assets amounted to SEK 3.1 (3.6) billion

2010-10-20 24

SEK million Q1 11 Q1 10

OPERATING ACTIVITIES

Cash flow from operations, before paid tax 2 589 2 341

Cash flow from operations, paid taxes -225 -233

Changes in working capital -310 183

Cash flow from operating activities 2 054 2 291

INVESTING ACTIVITIES

CAPEX -933 -608

Cash flow after CAPEX 1 121 1 683

Acquisition and sale of shares and participations, net -14 -819

CASH FLOW AFTER INVESTING ACTIVITIES 1 107 864

Cash flow for Q1 2011

Negative change in working capital affected by increased

instalment sales of handsets and some other pre-payments

2010-10-20 25

0,00

0,20

0,40

0,60

0,80

1,00

1,20

1,40

1,60

1,80

0

2

4

6

8

10

12

14

16

18

20

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

NET DEBT INCL. JV / EBITDA 2010 SEK BILLION / RATIO

Net debt incl. JV Pro forma incl. proposed May dividend Net debt incl. JV / EBITDA 2010

Group financial profile

2010-10-20 26

Bal. sheet consideration / Fin. leverage

Shareholder

remuneration

Cash / Buffer

M&A / New growth

opportunities

When available, invest in value accretive

M&A or new business opportunities

meeting Tele2’s strict financial hurdles

Enhance shareholder value by distributing

recurring cash to shareholders

Retain financial buffer

Prudent assessment based on (a) status of its operations, (b) future strategic opportunities,

(c) competitive landscape and (d) general macro economic status

C

A

S

H

G

E

N

E

R

A

T

I

O

N

2010-10-20 27

Net debt and dividend targets

Shareholder remuneration

“Tele2 will seek to pay a progressive ordinary dividend of no less 50

percent of net income excluding one-off items. Extraordinary dividends

and the authority to purchase Tele2’s own shares will be recommended or

sought when the anticipated total return to shareholders is deemed to be

greater than the achievable returns from the deployment of the capital

within the group's operating segments or the acquisition of assets within

Tele2’s economic requirements.”

Balance sheet

“Tele2 has a target net debt to EBITDA ratio of between 1.25 and 1.75

times over the medium term. The company’s longer term financial

leverage should be in line with the industry and the markets in which it

operates and reflect the status of its operations, future strategic

opportunities and contingent.”

2010-10-20 28

Group EBITDA, Sales and Capex

22%

24%

26%

28%

30%

0

1 000

2 000

3 000

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

GROUP EBITDA SEK MILLION / PERCENT

Mobile Fixed broadband

Fixed telephony Other

Group EBITDA margin

0

2 000

4 000

6 000

8 000

10 000

12 000

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

GROUP SALES SEK MILLION

Mobile Fixed broadband Fixed telephony Other

0

200

400

600

800

1 000

1 200

1 400

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

GROUP CAPEX SEK MILLION

Mobile Fixed broadband Fixed telephony Other0%

5%

10%

15%

20%

25%

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

ROCE PERCENT

2010-10-20 29

Group mobile EBITDA

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

500

1 000

1 500

2 000

2 500

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11

GROUP MOBILE EBITDA SEK MILLION / PERCENT

Mobile EBITDA on own infrastructure Mobile EBITDA (MVNO)

Mobile EBITDA margin on own infrastructure Total mobile EBITDA margin

2010-10-20 30

Sweden mobile revenue explained

1919 129 (+7%)

189 (+10%) 2237 (+17%)

Revenue Q1 10 Underlying mobile Mobile equipment Revenue Q1 11

SWEDEN MOBILE REVENUE WATERFALL SEK MILLION

2010-10-20 31

Sweden mobile EBITDA explained

664

112 22 -101

-28 669

EBITDA Q110

GM1 Other Expansion /Call center

SUNAB/N4M EBITDA Q111

SWEDEN MOBILE EBITDA WATERFALL SEK MILLION

2010-10-20 32

Agenda

About Q1 2011

Financial review

Guidance and Concluding remarks

2010-10-20 33

Tele2’s general group targets

• Best Deal position

• Targeting a long-term

mobile EBITDA margin on own

infrastructure of at least 35 percent

• All operations should have the ambition of

reaching ROCE of at least 20 percent

• The capability to reach a top 2 position, in terms of customer market share, in an individual country or region

2010-10-20 34

Concluding remarks

Russia

• Strong customer intake and EBITDA contribution in market area Russia

Nordic

• Solid mobile revenue growth in market area Nordic

Western Europe

• Further strengthening its position in the consumer and business segments

Central Europe and Eurasia

• Tele2 in Kazakhstan getting ready for commercial launch

2011: Also an investment year

• Russia

• Kazakhstan

• Sweden

- 4G

• Norway

- 3G

2010-10-20 35

Q&A

2010-10-20 36