Teleca divests auSystems for SEK 822 million in cash - in addition, Teleca eliminates continued losses in Obigo

Teleca divests auSystems for SEK 822 million in cash - in addition, Teleca
eliminates continued losses in Obigo

•	Teleca divests auSystems to two buyers:
      •	Cybercom acquires the Swedish, Danish and Polish operations for SEK 730
million in cash, and
      •	Devoteam acquires the operations in France, Italy, Norway and UK for a
total consideration of SEK 92 million in cash

•	Teleca halts investments into renewal of Obigo product and write down the
assets connected to Obigo. More than 200 employees in Sweden will be offered
employment by Sony Ericsson Mobile Communications.

•	Telecas board of directors plan to distribute SEK 570 - 630 million,
corresponding to SEK 9 - 10 per share. Proposal to shareholders will be
presented during April 2007.
•	In the future Teleca will focus on mobile consulting with its entire business
in the mobile device industry. Teleca Mobile Consulting has an excellent
customer base, more than 2000 employees and a proven track record of
profitability.

Today Teleca announce two major transactions. The divestment of auSystems and
the reorganization of the Obigo products business.

In total: the divestment of auSystems and the changes in Obigo will result in an
addition of SEK 784 million in cash into Teleca. Due to a write-down of goodwill
and other items the impact on the Earnings for the period will be minus SEK 198
million in 2007. Losses in Obigo will be eliminated. In the future Teleca's
business will be Mobile Consulting, which historically has exhibited a strong
profitability. 

René Svendsen-Tune, President & CEO of Teleca says: ‘With the divestment of
auSystems and the removal of the financial burden from our product business, we
have reached a very significant milestone. The new Teleca will be a focused
global services company with an excellent customer base, good profitability and
a strong balance sheet. We can now devote all our energy to strengthen the
top-line and profitability of the new streamlined company. The mobile device
industry is rapidly consolidating, and it will be crucial for us to continue the
drive for scale and improved cost base'.  


The divestment of auSystems to Cybercom and Devoteam

The Cybercom transaction
Teleca will sell to Swedish Cybercom all its shares in auSystems' four Swedish
subsidiaries (with offices in Stockholm, Malmö, Göteborg, Huskvarna, Linköping,
Karlskrona, Östersund, Örnsköldsvik) and in Copenhagen, Denmark and the
subsidiary in Poland (with offices in Warszawa and Lodz). In total these units
employ approx. 750 people. The purchase price from Cybercom, paid in cash,
totals SEK 730 million for a debt free company. The turnover of the auSystems
Swedish and Polish subsidiaries in 2006 was approx. SEK 700 million and earnings
before interest and tax (EBIT) was SEK 33 million. Excluding restructuring cost
and management fees from Teleca, EBIT was SEK 54 million  Before the end of
April 2007 the parties will enter into an agreement which is expected to lead to
future tax savings for Cybercom. The benefit of these savings will be split
equally between Teleca and Cybercom implying an expected additional payment of
SEK 14 million for Teleca. 

The transaction is subject to shareholders approval from Telecas and Cybercoms
shareholders. The companies' largest shareholders, Danir AB and JCE-Group AB
have made irrevocable commitments to vote in favour of the transaction at these
meetings. Danir AB controls 17.7% of total votes in Teleca. JCE-Group AB
controls 41.8% of the total number of votes in Cybercom. Teleca and Cybercom
will hold their extraordinary general meetings on 18 April 2007. 
The Devoteam transaction
Teleca will sell to French Devoteam all its shares in the four international
auSystems subsidiaries, with offices in Grimstad, Norway, Winchester, England,
Paris, France, Milan and Rome, Italy. In total, these units employ approx 570
people. The purchase price of SEK 92 million for a debt free company is paid in
cash. The turnover of these international auSystems subsidiaries in 2006 was SEK
500 million; earnings before interest and tax (EBIT) were SEK 0 million.
Excluding restructuring costs and management fees from Teleca, EBIT was SEK 26
million.
Additional information
In total, these transactions will give rise to a capital gain of SEK 378 million
in Teleca and add SEK 814 million in cash including transaction costs but
excluding cash from future tax benefits. As a consequence of the transaction,
deferred tax assets of SEK 94 million will be written down. auSystems result for
the first quarter and the result of the transactions will be reported as
discontinued operations in Telecas financial reports for 2007.
The Board of Directors of Teleca has concluded based on the process carried out
that the sale of auSystems to Cybercom and Devoteam is the best possible outcome
of an industrial sale of auSystems. Teleca's advisors HDR Partners has
concluded, based on an overall assessment, that the achieved purchase price is
in the range of what an IPO of auSystems would bring. Teleca's Board of
Directors is of the opinion that the presented transaction is preferable to a
later separate listing of auSystems, and hence recommends its shareholders to
vote in favour of the transaction. In addition this solution provides auSystem
with a stable and professional ownership structure for the benefit of auSystems
customers and employees.

Teleca will evaluate the possibility to wind down auSystems remaining
subsidiaries in Spain and Portugal with approximately 48 employees.

auSystems was formed in 2006 by the merger of two Teleca divisions: Operators
and Network Equipment Providers. Originally, the company has its roots in Sigma
and AU-System, where AU-System was formed already in 1974. auSystems offers
traditional IT consultancy services, testing, research and development.
Customers are primarily found within Network Equipment Providers, Operators,
Media, Automotive, Government and large enterprises. auSystems has 1 367
employees in eight European countries as of February 28 2007. The turnover of
auSystems in 2006 was SEK 1,359 million and earnings before interest and tax
(EBIT) were SEK 25 million.
Teleca halts investments into renewal of the Obigo products
Product investments will be discontinued - maintenance & services will continue
During 2006 Teleca's product business had revenues of SEK 227 million and EBIT
of minus SEK 218 million. Excluding restructuring EBIT was minus SEK 161
million.

On the backdrop of recent significant changes in OEM and operator strategies,
Teleca has decided to eliminate the risk of continued losses in its Obigo
product business. Teleca will discontinue its own investments into the software
products and continue the business under a services model. Teleca will open its
source code to customers in order to drive the change from a product to a
services model. 

Teleca will maintain and support the existing software from its offices in Korea
and Russia. Customers will be served from all relevant Teleca affiliates. 

Teleca will close its product development and integration centre in Lund-Malmö,
Sweden. 

Teleca will fulfil all customer commitments, and work closely with customers to
secure good leverage of investments made and successful completion of existing
projects. This way Teleca will seek to mitigate impacts to service revenues
outside Sweden.

Cooperation with Sony Ericsson secures more than 200 jobs in Lund-Malmö
Teleca has initiated cooperation with Sony Ericsson Mobile Communications. Due
to the expansion of Sony Ericsson and their need for additional staff, more than
200 Teleca employees will be offered employment by Sony Ericsson. Further the
parties have agreed on terms securing Teleca a preferred supplier status for
Sony Ericsson in Sweden.   

Teleca will take one-time charges of SEK 482 million related to Obigo, whereof
SEK 30 million has cash effect
Teleca will take a one-time charge including write-down of goodwill of SEK 352
million, write-down of capitalized R&D of SEK 100 million, and restructuring
expenses of SEK 30 million, in total SEK 482 million. This will eliminate the
negative results in the products business. There will be no goodwill related to
the product business and the remaining capitalized R&D will amount to SEK 22
million for the products. The restructuring expenses are preliminary and for
instance depending upon how many employees that accepts the employment offers.
This will be more specified in Teleca's Q1 report.
Teleca Board of Directors plans to distribute 
SEK 9-10 per share to shareholders
The Board of Directors in Teleca plans a distribution of SEK 570-630 million to
Teleca's shareholders through a share redemption program. The amount will be
decided during April 2007, when the restructuring cost is calculated in detail.
Teleca will call for an extraordinary general meeting to decide on the
distribution. Details of the redemption program will be presented in due time
before the shareholder's meeting. The redemption approach is selected to allow
shareholders to follow normal capital gains taxation principles. 
Teleca's balance sheet  

Teleca preliminary pro-forma balance sheet of December 31 2006, including the
sale of auSystems, write-down of products, offer of employments by Sony Ericsson
and distribution to shareholders of 570 or 630 million, is shown in appendix 1. 


Teleca going forward: Mobile Consulting

After these transactions the transformation of Teleca towards a profitable and
focused services and software solutions company has been completed. The new
Teleca has its entire business focus in the mobile device industry. It has an
excellent customer base, and a list of global leaders as partners. 

The company will have a strong balance sheet and a good profitability after
bringing the Obigo business to maintenance mode. Teleca Mobile Consulting had
revenues during 2006 of SEK 1,477 million and EBIT of SEK 113 million. Excluding
effects from losses related to BenQ Germany's bankruptcy petition, EBIT was SEK
159 million.

The units in Russia, Germany, Sweden, Finland and UK, which is about 80% of the
total number of employees, will be practically unaffected by the changes in
Obigo. They all have a strong customer base and deliver services with very good
margins based on strong competencies and strong customer relationships. The
service business in Asia is quite closely linked to Teleca's product business,
and it will need to adapt to the new situation over the next quarters. 
Teleca will invest into building competences around Open Source Software. The
initial work will be performed in Sweden, but over time Teleca plans to make use
of its competences in low cost countries. Teleca expects a significant services
market to open around Open Source Software. 
Financial impact and outlook 
For 2007, Teleca Mobile expects declining revenues compared to 2006 in both
products and services as a consequence of the changes in Obigo. 
Product revenue from maintenance and ongoing royalties today at a level of SEK
80 million annually, is expected to decline rapidly but to continue into 2008.
Cost is over time expected to be lower than expected revenues.
The product integration centre in Sweden contributed in 2006 with revenue of SEK
90 million, with slightly negative EBIT margin. This source of revenue will
practically be removed in 2007. This will affect the revenue growth for the
services business in 2007, but it will have a positive effect on the margins. A
small part of Teleca's services business, that is Sweden, Korea and US/UK, will
be significantly negatively impacted in Q1 and Q2 of 2007 due to the changes in
the Obigo business.   
Due to a write-down of goodwill and other items the impact on the Earnings for
the period will be minus SEK 198 million in 2007
After the initiated changes, Teleca targets a margin above 10% in Q3 and Q4
2007. Margin in Q1 and Q2 is negatively impacted by the changes in Obigo. 

Financial adviser
HDR Partners has been financial adviser to Teleca.



For more information, please contact:
•	René Svendsen-Tune, President and CEO, Teleca AB, mobile +45 40 54 00 68
•	Christian Luiga, CFO, Teleca AB, mobile +46 703 75 16 04
•	Mattias Stenberg, Investor Relations Manager, Teleca AB, mobile +46 706 11 96
16


Teleca will hold a press and capital markets meeting on the sale of auSystems
and the changes in the product business today, Monday 2 April 2007, between
11.15 and 12.00 (CET) at Nordic Sea Hotel (Vasaplan 4) Stockholm, in “Skeppet”
meeting room. 

René Svendsen-Tune, President and CEO, and members of the management team will
be speaking at the meeting. It will be possible to participate in the meeting by
telephone and to ask questions.

To join the conference: 
1. Dial: +46 (0)8 503 163 00, or UK: +44 (0)800 026 1411
2. Enter the Host-ID: 27012 
3. Enter the PIN-code: 7870

A recording of the presentation will be available until April 6. More
information will be available on Teleca's corporate website www.teleca.com
The presentation will be held in English.


Teleca is a world-leading supplier of software products and services to the
mobile devices industry. Services include system design and the integration of
software and hardware for mobile phones; there are also tailored solutions.
Teleca consists of 2,200 experts in 11 countries in Asia, Europe and North
America. Teleca is listed on the Mid Cap list on the Nordic Exchange.
www.teleca.com