2. TELE2 MOBILE EASTERN EUROPEAN
GROWTH MACHINE
• 29 million customers in 11 countries
• We have grown our mobile footprint, today covering more than 100
million people with controlled li
illi l ith t ll d licenses
Mobile Fixed broadband Fixed telephony Other operations
6%
15%
17%
62%
Percentage of sales, 2009
2 Handelsbanken Markets Large Cap Seminar
3. TELE2 FOOTPRINT
RUSSIA
Mobile
SWEDEN
Full product suite
NORWAY
Mobile, Fixed telephone
ESTONIA
Mobile, Fixed telephone
LATVIA
Mobile, Fixed telephone
M bil Fi d t l h
LITHUANIA
Full product suite
NETHERLANDS
Full product suite
GERMANY
Fixed broadband,
fixed telephony KAZAKHSTAN
Mobile
AUSTRIA Croatia
Fixed broadband, Mobile
fixed telephony
3 Handelsbanken Markets Large Cap Seminar
4. TELE2 POSITIONING
HIGH QUALITY
HIGH PRICE
LOW PRICE
H
L
LOW QUALITY
4 Handelsbanken Markets Large Cap Seminar
5. TELE2 ALWAYS PROVIDES THE
• P i l d hi
Price leadership
through best in
class cost control
• Price winning
g
quality network
• Standardized
product portfolio
5 Handelsbanken Markets Large Cap Seminar
6. S
SWEDEN: CONTINUED REVENUE G O
CO U U GROWTH
SWEDEN HIGHLIGHTS Q2
MSEK Tele2 Sweden Mobile Net Sales
2 500
2 000
• Accelerated mobile net sales + 5
1 500
p
percent
1 000
500
0
• Adding 74 000 mobile customers
74,000
– 31,000 mobile postpaid (14,000 in Q1 2010)
• Mobile EBITDA margin 34,5 (34,0)
percent
• Awarded “Best Mobile Broadband
Network”
6 Handelsbanken Markets Large Cap Seminar
7. SWEDEN: HIGH POTENTIAL TO GAIN MARKET
SHARES IN BUSINESS SEGMENT
Swedish market share
NEW BUSINESS STRATEGY development Mobile Business
development Mobile Business
• Acquisition of Spring Mobil in order 60%
to strengthen product portfolio 50%
40%
30%
20%
• New product profile combined with
10%
new segmentation strategy has 0%
increased ARPU on business 2006 2007 2008 2009
customers while maintaining customer
Hi3G Tele2 TeliaSonera Telenor
stock
Source: PTS 2010
7 Handelsbanken Markets Large Cap Seminar
8. SWEDEN: DATA GROWTH IS DRIVEN BY
SMARTPHONES
Smartphones 2010 Smartphones 2008
LOW HIGH
ARPU ARPU
Tele2/Comviq
target segment
TOP SMARTPHONESALES AUGUST
• Smart Phones are becoming mass
1 IPHONE 4 16GB BLACK TELE2
market and prices are coming down
driving the shift even faster 2 IPHONE 4 32GB BLACK TELE2
3 IPHONE 3GS BLACK 8GB TELE2
SONY ERICSSON U20i XPERIA X10 MINI PRO
4 BLACK
• Tele2 segments have begun to use
smartphones which generate data 5 SONY ERICSSON E10i XPERIA X10 MINI BLACK
revenue 6 HTC WILDFIRE (NORDIC)
7 SONY ERICSSON XPERIA X10 WHITE
8 SAMSUNG GALAXY S I9000 METALLIC BLACK
• Tele2 launched iPhone in July 2010
8 Handelsbanken Markets Large Cap Seminar
9. TELE2 RUSSIA IS EXPANDING
• 37 regions with a population coverage of 61 million
• Close to 17 million customers
- 393 000 in August
- 436 000 in July
- 412 000 in June
9 Handelsbanken Markets Large Cap Seminar
11. CLEAR BUSINESS GOALS THROUGH
EVOLUTION
Perceived pric leadership Subscriber base
Defender 17 REGIONS
Challenger Retention
ARPU protection
p/
Subscribers acquisition
Newcomer
ARPU protection
Retention
ce
Subscribers acquisition
S b ib i iti 20 REGIONS
P
1,5 – 2 years 2,5 – 3 years >3 years
11 Handelsbanken Markets Large Cap Seminar
12. TELE2 RUSSIA – OLD REGIONS
12 Handelsbanken Markets Large Cap Seminar
13. TELE2 IS NUMBER ONE
IN 14 OF 17 OLD REGIONS
Tele2 share Beeline Share MTS Share Megafon Share Other Share
40%
rket share in existing regions, %.
%
37%
35%
30%
25%
21% 21%
20% 18%
i
15%
10%
3%
5%
Mar
0%
Source: Internal Tele2 research
As of January 2010
13 Handelsbanken Markets Large Cap Seminar
14. TELE2 RUSSIA NEW REGIONS
KALININGRAD
PETROZAVODSK
PSKOV
TVER NARYAN-MAR
VOLOGDA
BRYANSK KALUGA
KOSTROMA
OREL TULA
VLADIMIR
RYAZAN
KIROV
TAMBOV
KRASNODAR
TURA
ADYGEI
TOMSK
NOVOSIBIRSK
14 Handelsbanken Markets Large Cap Seminar
16. HIGHLIGHTS TELE2 CROATIA
• EBITDA break-even ahead of plan
p
• 32,000 (8,000) new customers added in Q2 10
16 Handelsbanken Markets Large Cap Seminar
17. HIGHLIGHTS TELE2 KAZAKHSTAN
• Implementation of new organization has started
– New organization and management in place
• Customer base will grow in 2H 2010
• Radio planning and site acquisition process ongoing
– Additional 5Mhz frequency on 900Mhz has been secured
– Sites acquisition started
– Preparing for network swap
• Launch under Tele2 brand 1H 2011
17 Handelsbanken Markets Large Cap Seminar
18. HIGHLIGHTS TELE2 NETHERLANDS
• Tele2 Netherlands successful in prolonging existing enterprise
p g g g p
accounts
• BBNed
- Acquisition will further strengthen our position in the corporate
and consumer market
• Long Term Evolution (LTE) 4G
- Acquired 2x20 MHz in the Dutch 2.6 GHz mobile auction
18 Handelsbanken Markets Large Cap Seminar
19. CONCLUDING REMARKS
Nordic
N di 2010 an i
investment year
t t
• Continued revenue growth • Russia
Russia • Kazakhstan
• 4G Sweden
• Record high EBITDA
• 3G Norway
Central Europe and Eurasia
• Integration of Spring Mobile
g p g
• Stable cash flow contribution and BBNed
Western Europe
• Solid operational performance
19 Handelsbanken Markets Large Cap Seminar
22. Q2 2010 GROUP RESULTS
SEK million Q2 10 Q2 09 Change %
Net Sales 9,967 9,912 1%
EBITDA 2,687 2,446 10%
- EBITDA margin (%) 27% 25%
Depreciation and joint venture -920 -942
- Depreciation of Net sales (%) 9% 10%
One-off items
O ff it 527 -59
EBIT 2,294 1,504
Normalized EBIT 1,767 1,445
- Normalized EBIT margin (%) 22% 15%
Financial items -224 17
Taxes 421
-421 -334
334
Net result, continuing operations 1,649 1,128
Net result, discontinued operations -5 51
Net result 1,644
1 644 1,179
1 179
22 Handelsbanken Markets Large Cap Seminar
23. CASH FLOW FOR Q2 2010
SEK million Q2 10 Q2 09
OPERATING ACTIVITIES
Cash flow from operations, less paid taxes 3,065 2,097
Taxes paid -195 -124
Changes in working capital 52 26
CASH FLOW FROM OPERATING ACTIVITIES 2,922 1,999
INVESTING ACTIVITIES
CAPEX -909 -1,078
Cash Flow after CAPEX 2,013 921
Acquisition and sale of shares and participations, net -219 -36
1,794 885
23 Handelsbanken Markets Large Cap Seminar
28. MoU AND ARPU DEVELOPMENT
Russia
Sweden
60 240
220 260
240 50 220
200
SEK
SEK
220
S
180 40 200
200
160 180 30 180
Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10
ARPU MoU ARPU MoU
• Robust ARPU development
– Swedish and Russian ARPU grew more than 8 p
g percent in one q
quarter
28 Handelsbanken Markets Large Cap Seminar
29. FREQUENCY PORTFOLIO
900MHz 1800MHz 2100MHz 2600MHz Tech neutral
Sweden 19 20 20 40 X
Estonia 11 16 15 X 2G
Latvia 11 24,8 20
Lithuania 10,2 16,4 20
3G
Croatia 5 15 15 X 4G
Norway 5 15
Russia 1-2* 15-20
Netherlands 40
Challenges and Opportunities
1. Technology neutral regulation of frequencies. When are we allowed to choose ourselves if we want to build
2G, 3G or 4G on a certain frequency?
2. y
Handset availability
3. Additional frequency bands becoming available, such as 800 MHz
* 900 Mhz in some regions
29 Handelsbanken Markets Large Cap Seminar
30. ACHIEVABLE SPEEDS
Available technologies enable different speeds
g p
Technology Speed (Mbps*) 3G will cater for
2G Edge 0,25 volume for many
years
3G Avail now 21
3G Avail expected max 80 3G/4G rollout to be
evaluated per country
4G Avail 2010 40/5 Mhz=160
4G Avail 2015 80/5Mhz=300
Availability
With 4G technology the more bandwith you can use the higher
speed you can offer the customer. 5Mhz (regardless if 900 or 2 Available today
600 or any other frequency is used) enables presently 40Mbps
Future availability
and 10Mhz 80Mbps, 20 Mhz 160Mbps
Mbps = xx
30 Handelsbanken Markets Large Cap Seminar
31. NETWORK PLAN SWEDEN
H2 2009 H1 2010 H2 2010 H1 2011 H2 2011 2012 2013
3G 2100 3G 2100 3G 2100
21 Mbps* 28 Mbps 42 Mbps*
3G Network
LTE 2600
Coverage & capacity rollout
160 Mbps
LTE* Network LTE 900
Coverage & capacity rollout
80 Mbps
LTE
300 Mbps
3G 2100 3G 2100 3G 2100
21 Mbps 28 Mbps 42 Mbps
3G Devices
LTE 2600 LTE 2600 LTE 2600 LTE 900
LTE
Pre release Commercial Commercial Commercial
LTE Devices modems modems handsets handsets
300 Mbps
Available Planned Indicative *42 Mb li i d rollout, only f capacity and PR reasons
Mbps limited ll l for i d
LTE = Long Term Evolution, GSM evolution beyond 3G
Mbps = Megabits per second
31 Handelsbanken Markets Large Cap Seminar
