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Interim Report January - March 2001

Interim Report January - March 2001. Stockholm, 10 May 2001. Marianne Nivert. President and CEO. Highlights. Net sales increased by 5.7% to MSEK 13,592 Underlying EBITDA increased by 2.7% to MSEK 3,348 Strong margin improvement in the Swedish mobile operations

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Interim Report January - March 2001

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  1. Interim Report January - March 2001 Stockholm, 10 May 2001

  2. Marianne Nivert President and CEO

  3. Highlights • Net sales increased by 5.7% to MSEK 13,592 • Underlying EBITDA increased by 2.7% to MSEK 3,348 • Strong margin improvement in the Swedish mobile operations • Svenska UMTS-nät AB established together with Tele 2 • Broadband portal launched • Increased rate of broadband delivery • Sale of Tess completed, 8 companies divested to Industri Kapital, DRS divested, offer on Eniro, Si.Mobil sold

  4. Trends • Higher prices for subscriptions and broadband • Continued strong demand for broadband • Shakeout in the carrier sector • Reduced pressure on prices in fixed services • Weaker growth in Swedish mobile, sharper focus on new services and streamlining • Continued refining efforts within Telia

  5. Continued refining Sale of 51% in: • Swedia Networks AB • Telia Prosoft AB • Respons AB • Validation AB • Telia Swedtel AB • Telia Dokumentation AB • Multicom Security AB • TA Teleadress Information AB • Combinator IT AB • Eircom (Eircell) • Telia Trading AB • Si.Mobil • DRS 13 June • IN good company AB • Starman Kaabel-televisiooni AS • Svefo AB • Telia Contracting • Telia Kompetens • Telia Konferens • Smålands- börsen Data AB • Telia Academy AB • System & Service A/S • Eniro (listed) • Scandinavia Online (listed) • Altitun • Tess • Eniro (offer) April 2001 Q4 2000 Q1 2001 Q1-Q2 2000 Q3 2000

  6. Growth Group +5.7% Broadband +62% (cf. Q4 2000) Mobile +46% International Carrier +9.6% Internet Services +24.6%

  7. Mobile Sales trend in the Nordic countries, total 46% • Norway +27% • GPRS launched • - NetCom MobiMail • Healthy improvement in profitability, underlying EBITDA +34% • Pan-Nordic service launched in May 2001 Finland +191% • Sweden +7% • GPRS Pilot test • - Telia Mobile Online • UMTS agreement complete • New positioning • services launched • Denmark +85% • License GSM 900 • network

  8. Mobile Total proportional customer base 4.9 million Customer base, Nordic countries 4,598,000 +45,000 Finland 154,000 +5,000 Sweden 3,259,000 +2,000 GSM customer growth +33,000 2) Russia North West GSM (12.7% + 11.3%) through Telecominvest 292,000 +39,000 Customer base, Baltic region/Russia 1,254,000 +95,000 ** Norway 854,000 +4,000 1) Eesti Mobiilitelefon (24.5%) 341,000 +14,000 Estonia ** Denmark 331,000 +34,000 Latvijas Mobilais (24.5%) 285,000 +15,000 Latvia ** Lithuania Omnitel (27.5%) 336,000 +27,000 ** 1) Jan-Mar, excl. 91,000 SP customers 2) Jan-Mar, excl. 60,000 SP customers ** Total number of customers

  9. Mobile Norway, 854,000 Sweden, 3,259,000 0 0 0 Denmark, 331,000 Finland, 154,000

  10. Mobile Churn 10% Without the reduction of interconnect fees from SEK 1.89 to 1.18, ARPU Q1 2001 would have been SEK 298 Sweden ARPU & MoU Postpaid Total Prepaid Postpaid Total Prepaid

  11. Mobile Churn 31% Norway ARPU & MoU Postpaid Total Prepaid Postpaid Total Prepaid

  12. Mobile Share of sales, Q1 2001 Sweden 4%, Norway 14% SMS trends Jan Feb Mar April May June July Aug Sep Oct Nov Dec

  13. Micro-payment Mobile www.teliamobile.se Right Way Near You Closest Resource Bootfighters a virtual paintball Navigation service with maps Effective planning for business critical resources Position-based interactive games House Close to You House Prices Close to You G P R S Sweden: Telia Mobile Online Norway: NetCom MobiMail Real estate listings with prices in a specific local area P for SALE

  14. International Carrier Market trends • Clear signs of impending shakeout with subsequent consolidation • The turbulence gives Telia opportunities to take customers • Lower demand on fiber and ducts • Increased demand on leased capacity and wavelength – stiffer competition and more pressure on prices • Pressure on prices for voice services – reserves for credit losses • Competitors leaving the voice business for IP-based services

  15. International Carrier Important events • Powerful growth in the IP business +210% • Growth in the IP capacity business +40% • Services for virtual private networks, IP-VPN, and for colocation of IP servers (local services) launched • Agreement with Ericsson signed for delivery of a global internal network for multimedia communications • IP-agreements signed with Rostelecom and Baltelecom • Capacity agreement signed with Sprint

  16. International Carrier Infrastructure network expansion31/12 2000 Total fiber network km (in use) 15,675 Ducts km (Europe) 5,290 PoPs (total) 52 Viking Network – Telia’s global IP platform

  17. International Carrier Signed contracts (MSEK) Storm Fibre 1,275 GTS Fibre 432 Tele 1 Europe Fibre 293 LD Com Ducts 47 Other (BT, France Telecom etc.) Fibre/Ducts 1,571 Other (Sprint, Telenor, KPNQwest) 525 Total IRU4,143 360Networks Fibre SWAP 998 Global Crossing Ducts SWAP 615 Williams Fibre SWAP 664 Colt Ducts SWAP 356 Other SWAPS (Nets, Infigate etc.) Fibre SWAP 1,627 Total SWAPS4,260 Total 8,403

  18. International Carrier External sales and price development MSEK Q1 Q1 Change 2001 2000 in % Voice 506 576 -12 Leased IP capacity 109 78 +40 IP traffic 65 21 +210 Infrastructure 38 0 Other 22 0 Total 740 675 +10 Investments 1,147 488

  19. Networks • Two brands • Telia for retail customers • Skanova for network wholesale customers • Migration from fixed telephony to broadband and mobile • External network wholesale market (Skanova) provides growth and compensates for losses on the retail market • Streamlining programs compensate for the effects of price cuts – but the prices have hit bottom • Sustained underlying EBITDA margin for established services • New services Telehost, IP telephony, split line

  20. Internet Services Narrowband Internet subscriptions increased by 11% from 641 000 Q1 2000 to 711 000 Q1 2001 (‘000) Paying broadband customers High speed Internet via cable

  21. Broadband www.startsidan.telia.se

  22. Bo Jacobsson CFO and Head of Corporate Financial Control

  23. Financial overview Key figures for the Group MSEK Q1 2001 Q1 2000 2000 Net sales 13,592 12,857 54,064 Underlying EBITDA 3,348 3,260 13,087 - margin % 24.6 25.4 24.2 Operating income 811 3,382 12,006 Earnings per share (SEK) 0.10 0.84 3.50

  24. Financial overview Consolidated net sales (MSEK)

  25. Financial overview Change in % Mobile +45.7 International Carrier +9.6 Networks -2.0 Internet Services +24.6 Equity -25.8 Total for the Group +5.7 (MSEK) Q1 2001 Q1 2000 External net sales, BA

  26. Financial overview Change in % Mobile +34.2 International Carrier - Networks -3.1 Internet Services - Equity +61.9 Group-wide - Total for the Group +2.7 (MSEK) Q1 2000 Q1 2001 Underlying EBITDA, BA

  27. Financial overview Share of earnings in associated companies MSEK Q1 2001 Q1 2000 2000 Netia Holdings (Networks) -143 -34 -411 Baltic region (Mobile/Networks) 23 15 190 Unisource/AUCS (Networks) -49 1,004 1,445 Comsource/Eircom (Networks) -204 -81 -933 Telia Overseas (Equity) -2 -257 -1,719 Eniro (Equity) 292 - 185 Other associated companies -74 -5 46 Total -157 642 -1,197

  28. Financial overview Market value, associated companies MSEK Participation Book Market Per 31 March 2001 in % value value Eniro AB (Sweden) 49.1 490 7,802 Scandinavia Online AB (Sweden) 24.6 313 201 AS Eesti Telekom (Estonia) 24.5 540 1,341 AB Lietuvos Telekomas (Lithuania) 30.0 2,502 1,211 Netia Holdings S.A. (Poland) 48.1 2,403 1,267 Infonet Services Corp. (USA) 20.1 2,543 6,479 Eircom plc 14.0 6,884 6,777 Total 15,675 25,078 *) *) Incl. loans of MSEK 6,459

  29. Financial overview Investments MSEK Q1 2001 Q1 2000 2000 Mobile 509 1,001 26,017 International Carrier 1,147 488 6,634 Networks 1,436 749 7,421 Internet Services 90 50 626 Equity 512 2,015 7,185 Group-wide -35 341 -141 Total for the Group 3,659 4,644 47,742

  30. Financial overview Financial position 31 March 31 Dec 2001 2000 Net interest-bearing liability (MSEK) 24,425 20,235 Balance sheet total (MSEK) 127,062 122,715 Debt/equity ratio (multiple) 0.42 0.37 Equity/assets ratio (%) 45.3 44.4

  31. Financial overview 3,663 (MSEK) 617 3,967 24,425 3,348 526 20,235 Tax Divesti- tures Net invest- ments Other 1 January 2001 31 March 2001 Change in net borrowings Under- lying EBITDA

  32. Financial overview Telia stock

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