CMD2011 - Thomas Ekman - Market Area Nordic

Capital Markets Day 2011

Market Area NordicThomas Ekman

Sep 20112 Capital Markets Day 2011

Market Area Overview

Strong cash flow generation in Q2 2011: - EBITDA SEK 916 million- CAPEX SEK 123 million

Represents 38% of total net sales Q2 2011:

Sweden: 35% Norway: 3%

Current Focus:Sweden: Building on mobile growth

and 4G roll-out coupled with household/corporate fiber strategy

Norway: Integrate Network Norway


Sweden


Operational Performance

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 110

100200300400500600700800900

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 110

200

400

600

800

1000

-5%0%5%10%15%20%25%30%35%40%

EBITDA Mobile EBITDA Fixed TelephonyEBITDA Fixed Broadband EBITDA(%) MobileEBITDA(%) Fixed Broadband EBITDA(%) Fixed Telephony

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 110

500

1000

1500

2000

2500

3000

3500

Mobile Fixed Telephony Fixed Broadband

75%

12%

13%

Mobile

Fixed Telephony

Fixed Broadband

Total Revenue Q2 11

EBITDA-CAPEX

SEK MillionRevenue

SEK MillionEBITDASEK Million


Potential Uplift in Smartphone Migration

0

50

100

150

200

250

300

1103 1104 1105 1106 11070%

20%

40%

60%

80%

100%

Smartphone Feature phone Smartphone Feature phone

Smartphone Install Base (Postpaid)SEK

Average ASPU


Smartphone Price Range

Last year Today0%

20%

40%

60%

80%

100%

Low End Smartphones Entering the Market

Low endMid rangeHigh end


Shift in Mobile Broadband Market

Handset Tablets Modem Router Fiber

Individual Household


Handset Data Drives Profitability

Handset data drives profitability on mobile data Strong handset data potential 4G Mobile Broadband is a substitute to xDSL

H1 2010 vs H1 2009 H2 2010 vs H2 2009 H1 2011 vs H1 20100%

20%

40%

60%

80%

100%

120%

140%

160%

Mobile Data Revenue IncreaseGrowth

Handset data Mobile broadband data (3G)


The 4G Roll-Out Continues

99%* 4G

coverage

End of 20122011

*Percentage of the population

In Q2 2011, 4G roll-out was completed in 14 cities

4G mobile broadband is already launched

4G handsets and home router coming late 2011


Increased Fiber Focus

298 SEK

Core network

Fiber footprint

Tele2 Sweden core network


Cost Benefits of Mobile Networks in JVs

JV's Capex & Opex

Tele2 share of JV's Capex

& Opex

Tele2 saving

If Tele2 wouldbuild ownnetwork

Capex & Opex

100%40%

50%

90%

Q1 09Q2 09

Q3 09Q4 09

Q1 10Q2 10

Q3 10Q4 10

Q1 11Q2 11

0%

10%

20%

30%

40%

50%

EBITDA %

EBITDA own in-frastruc-ture %

2012 2013 20140

50

100

150

200

250

300

350

EBIT Saving

Mobile EBIT SavingNet4Mobility

Mobile EBITDA (Sweden)

JV CAPEX & OPEX Saving

SEK Million


EBITDA Development

Even more cost-efficient operations break the trend

2006 2007 2008 2009 2010 2011-1H0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

500

1000

1500

2000

2500

3000

3500

EBITDA% (left) EBITDA (right)

SEK MillionTele2 Mobile EBITDA


Norway


Operational Performance

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 110

200

400

600

800

1000

Mobile Fixed Telephony

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 110

10

20

30

40

50

60

70

80

0%

5%

10%

15%

20%

25%

EBITDA Mobile EBITDA Fixed Telephony

EBITDA(%) Mobile EBITDA(%) Fixed Telephony

Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 110

20

40

60

80

100

88%

12%

Mobile

Fixed Telephony

SEK Million

SEK Million SEK Million

Total Revenue Q2 11

EBITDA-CAPEX

Revenue

EBITDA


Norwegian Market Consolidation

Market backdrop

Aggressive price competition over the last couple of years pressuring revenue growth and margins

Fragmented market with two dominant operators Declining MTR revenues Increasing focus on scale, service offering and customer satisfaction

Strategic rationale

Realize synergy and scale possibilities Create a clear #3 mobile operator in Norway Consolidation resulting in market-repair / rationalisation

50%50%


Market Shares

53.4 %

20.2 %

5.5 %

6.3 %

7.8 % 2.8 %3.9 %

Mobile Market Shares Based on Revenue

Telenor

NetCom (Telia Sonera)

Chess (Telia Sonera)

Network Norway (with OneCall and Lebara)

Tele2

Ventelo

Others

Det norske markedet for elektroniske kommunikasjonstjenster 2010”, Post- og teletilsynet, 20 May 2011.

Nationwide coverage by 1H 2013 Long term market share of 25% Long term alignment with Tele2

Group targets


Conclusion

• Smartphones are driving revenues and margin

• Increased fiber focus• Shift in %-EBITDA trend• Norwegian market consolidation

CMD2011 - Thomas Ekman - Market Area Nordic

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