TeliaSonera January-March 2012

Stable core business despite price competition

  · Net sales in local currencies and excluding acquisitions increased 2.9
percent. In reported currency, net sales increased 3.5 percent to SEK 25,693
million (24,835).
  · The addressable cost base in local currencies and
excluding acquisitions decreased 2.1 percent. In reported currency, the
addressable cost base decreased 1.7 percent to SEK 7,440 million (7,572).
  ·
EBITDA, excluding non-recurring items, decreased 1.4 percent in local currencies
and excluding acquisitions. In reported currency, EBITDA decreased 0.7 percent
to SEK 8,824 million (8,890) and the margin decreased to 34.3 percent (35.8).
· Operating income, excluding non-recurring items, decreased 8.5 percent to SEK
6,641 million (7,258). Income from associated companies decreased 36.2 percent
to SEK 1,033 million (1,619).
  · Net income attributable to owners of the
parent company decreased 15.9 percent to SEK 3,908 million (4,646) and earnings
per share to SEK 0.90 (1.04).
  · Free cash flow decreased 17.2 percent to SEK
2,193 million (2,647) due to higher cash CAPEX and higher interest paid.
  ·
During the quarter the number of subscriptions increased by 1.2 million in the
consolidated companies and by 1.1 million in the associated companies. The total
number of subscriptions was 172.4 million.
  · Group outlook for 2012 is
unchanged.

 
Comments by Lars Nyberg, President and CEO

“The organic
growth rate improved in the first quarter compared with previous quarters.
Eurasia continued to deliver double-digit growth, while revenues in Broadband
Services were almost at the same level as last year. In Mobility Services, the
growth was mainly driven by equipment sales.

Despite price competition in
many of our markets, we successfully defended our core business within Mobility
Services as growth in data revenues compensated for the decline in voice and
messaging. Changed customer behavior which leads to a mix shift in our business
highlights the need to develop our business models and how we charge for our
services going forward. We have been in the forefront stating that while prices
for voice will continue to come down there must be a stronger correlation
between usage and pricing of data.
TeliaSonera is leading this change towards a
new sustainable business model. We have been early in introducing tiered pricing
of data, lower costs for data roaming and recently openly communicated that we
will start to charge for mobile VoIP. This will be launched in Spain within a
month and in Sweden for new subscriptions during the summer.

Within Broadband
Sweden, we see a strong customer demand for our fiber offering although our
focus in the first quarter has been to improve our internal processes. In
Finland, our second largest market, we have for some time been in a negative
trend and lost market share. In order to sharpen our profile and strengthen our
business and the Sonera brand, we have recruited Robert Andersson as President
and CEO of Sonera in Finland, who will also become a member of Group
Management.

In Eurasia, Ncell in Nepal has been a success story since the
acquisition in 2008 and the company has now passed 7 million subscriptions. We
are therefore pleased that we in April were able to enter into an agreement to
further increase our ownership. While our strategy is to be a strong majority
-owner in core holdings we also aim to divest non-core minority interest.
Therefore, we decided to divest our 18.6 percent stake in Smart Mobile and exit
from the very competitive Cambodian mobile market.

With regards to MegaFon,
we have confirmed that discussions are ongoing between us and the two other
shareholders, AF Telecom and Altimo, regarding future ownership and governance
of the company.

We reiterate the outlook for 2012 and believe that our
continued work to develop our price models and scrutinize costs throughout the
organization will leave our EBITDA margin at the same level as last
year.”

 
Questions regarding the reports:
TeliaSonera AB
Investor
Relations
SE–106 63 Stockholm, Sweden
Tel. +46 8 504 550 00
Fax +46 8 611 46
42
www.teliasonera.com

 
TeliaSonera AB discloses the information provided
herein pursuant to the Swedish Securities Markets Act and/or the Swedish
Financial Instruments Trading Act. The information was submitted for publication
at 07:00 CET on April 19, 2012.