Perspective on M&A

Barcelona16th of February 2010

Ghassan HasbaniCEO - International

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Global telecom M&A activity is starting to recover following the

Global Telecom M&A Evolution

Global telecom M&A activity is starting to recover following the economic downturn, yet still far from 2005 and 2006 levels

Global Telecom M&A Evolution(USD Billion) (2005 - E2010)

444

Real GDP Growth (%)

22

186192-2

64

113

52

77

2007 2008

52

E 2010200920062005 2007 2008 E 2010200920062005

Source: Thomson, Global Insight

Globalization of footprint is known to deliver superior financial Globalization of footprint is known to deliver superior financial returns

Total Shareholder Returns(1) ComparisonTotal Shareholder Returns Comparison(Annualized Return %) (2002 - 2009)

19%

9%

2%

6%

Local/Regional IncumbentsS&P 500S&P Telecom Index 1200Global Operators

3

1) Return based on share price adjusted for dividends paid and capital changesNote: Global operators include: 6 Western European operators, 1 Latin American operator, 1 African Operator, 1 Middle Eastern Operator; Regional/Local Incumbents include: 4 European operatorsSource: Bloomberg

Going forward, further consolidation should be expected in the Going forward, further consolidation should be expected in the telecom industry driving more M&A activity

Revenue Share of Top 5% By IndustryRevenue Share of Top 5% By Industry(% of Total Industry Revenues) (2009)

757778797979

50

616263687070

-11%Ø 70

50

Tech Banking Retail Media Consumer TelecomFS UtilitiesEnergy Real Estate

TransportAutomotiveHealth Care

4

EstateCare

Source: Bloomberg

Emerging markets have been the focus of telecom M&A activity in Emerging markets have been the focus of telecom M&A activity in the past 3 years

Global Telecom M&A by Region of TargetGlobal Telecom M&A by Region of Target(% of Total M&A Activity) (2005 - E2010)

10%

11%

4%

31%

15%30%

61%

37% 20%

61%

33%

23%

15%

2005 - 2007 2008 - 2010

5

North America EuropeAsiaMiddle East & Africa Latin America

Source: Thomson

Emerging markets will likely lead the next wave of consolidation, Emerging markets will likely lead the next wave of consolidation, following in the footsteps of developed markets

Mobile Subscriber Share of Top 10 Operators by Region

8084

Mobile Subscriber Share of Top 10 Operators by Region(% of Total Subscribers) (2010)

6869

Ø 62

37

4750

AfricaLatin America Middle EastAsia PacificEastern EuropeWestern EuropeNorth America

6

Relatively Consolidated Regions Relatively Fragmented Regions

Growth prospects will continue to entice investors towards Growth prospects will continue to entice investors towards emerging economies

GDP Comparison by Region Top 10 Economies in 2030

72 71

GDP Comparison by Region (% of Total GDP) (2000 vs. 2010)

China 73,5

Top 10 Economies in 2030(USD Trillion) (2030)

+145%India 30,3

38,2USA

29

+145%

28 8,4

9,3

12,2Brazil

Indonesia

Japan 8,4

Mexico 6,6

Germany 8,2

Japan

20302000 UK 5,6

France 6,4

7

USA, Japan, Europe Others

Source: IMF

Emerging Economies

As STC, we have been operating in many of the growth markets As STC, we have been operating in many of the growth markets that were the result of over three years of M&A activity

STC International Footprint

STC International FootprintOperator

Maxis

Country

Malaysia

STC International Footprint

Maxis

Aircel

Malaysia

India

Cell C South Africa

Axis Indonesia

Turk Telekom

Avea

Turkey

Turkey

Viva

Viva

Bahrain

Kuwait

8

STC International FootprintSTC Saudi Arabia

Four key success factors can be derived from post M&A experienceFour key success factors can be derived from post M&A experience

S l GScale Governance

Internationalization success

Coherent Footprint Knowledge

9