Shareholders of MegaFon realize value in MegaFon through dividends, sale of shares and a potential public offering

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MegaFon’s
shareholders, TeliaSonera, AF Telecom and Altimo have resolved the governance
disputes in Russia’s second largest mobile operator and agreed that the company
will pay a dividend of USD 5.15 billion and pursue an Initial Public Offering
(IPO). The parties have also agreed that AF Telecom will get majority control in
MegaFon, Altimo will exit and TeliaSonera will reduce its ownership whilst
keeping a long term strategic ownership. TeliaSonera is expected to receive
approximately SEK 22 billion, of which approximately SEK 14 billion in the
second quarter of 2012, in dividends and proceeds from the divestment of its
indirect stake of 8.2 percent in MegaFon. TeliaSonera further aims to keep a
long term ownership of 25 percent plus one share in MegaFon after an
IPO.

“TeliaSonera has focused on realizing the value and increasing the
liquidity of our investment in MegaFon, whilst maintaining a long term strategic
ownership in the company. By reaching an agreement with the two other partners,
whereby MegaFon will pursue an IPO and adopt an agreed dividend policy, we have
resolved the ownership disputes and found a way to increase both the liquidity
and value of our asset. By reducing our ownership we expect to realize a
significant amount of the accrued valued generated by MegaFon since its
inception. We look forward to continue developing the long-term potential of
MegaFon with AF Telecom and the other shareholders.

As Altimo exits MegaFon,
we will continue our partnership with intensified focus on resolving the
ownership disputes and establishing a good governance structure in Turkcell.
Once this has been achieved the Board can focus entirely on developing
Turkcell’s potential by growing the business, both in Turkey and abroad,” says
Lars Nyberg.

“Altimo has taken this opportunity to fully realize the value of
its investment in MegaFon. However, our partnership with TeliaSonera will
continue with regards to Turkcell. We expect the dispute with regards to the
ownership of Cukurova’s remaining stake in Turkcell to be resolved in the Privy
Council later this year. If our position is confirmed in court, we will
establish a governance structure whereby none of the major shareholders can
block majority decisions and will focus on developing Turkcell into a world
-class telecommunication company,” says Michail Fridman, Altimo.

“AF Telecom
welcomes the agreement with the other two shareholders in MegaFon, which puts
the shareholder disputes firmly behind us. We are pleased that we have been able
to reach an agreement to increase our ownership as well as pave the way for a
future listing of MegaFon. AF Telecom would like to thank Altimo for years of
cooperation and partnership in MegaFon and to wish them success in future
projects. We value the long term commitment of TeliaSonera as a strategic
partner, to share its telecom experience and contribute to developing the long
term potential of MegaFon,” says Alisher Usmanov, AF Telecom.

 
Transaction
details:

TeliaSonera’s current ownership in MegaFon is 43.8 percent, of which
it holds 35.6 percent directly and 8.2 percent indirectly through its 26.1
percent ownership in Telecominvest (TCI).

The shareholders have agreed that
MegaFon will pay a dividend of USD 5.15 billion (approx. SEK 35 billion) to the
three owners, of which TeliaSonera is expected to receive SEK 12.4 billion
before withholding tax for its direct ownership of 35.6 percent. The
shareholders have agreed that MegaFon will also adopt a dividend policy pursuant
to which the company will pay annually the higher of 50 percent of net income or
70 percent of cash flows in rubles as ordinary dividend. MegaFon shall target to
maintain a leverage of net debt/EBITDA ratio between 1.2-1.5x while excess cash
shall also be returned to shareholders.

As part of the agreement, AF Telecom
will acquire TeliaSonera’s shares in TCI for USD 1.45 billion (approx. SEK 9.8
billion). TeliaSonera is expected to receive 20 percent of the proceeds,
approximately SEK 2.0 billion, at closing with the remaining amount to be paid
in four equal annual instalments plus interest. TeliaSonera is expected to book
a capital gain of SEK 4.4 billion in the second quarter of 2012 in connection
with this sale.

Altimo will exit from MegaFon and sell its 25.1 percent
ownership in two parts; 14.4 percent to a subsidiary of MegaFon for USD 2.16
billion while the remaining 10.7 percent will be sold to AF Telecom for USD 1.61
billion. TeliaSonera has also agreed to pay USD 200 million to Altimo in order
to complete the transaction. In total, Altimo will receive USD 5.2 billion
including dividends from MegaFon.

Following these transactions, TeliaSonera
will own 35.6 percent, AF Telecom 50.0 percent plus one share while MegaFon,
through its subsidiary, will own the remaining 14.4 percent.

The shareholders
have agreed to work towards an IPO of MegaFon including a listing on the London
Stock Exchange as soon as practically possible, involving up to 20 percent of
MegaFon's shares will be publicly traded, of which TeliaSonera and MegaFon will
contribute with up to 10.6 percent and 9.4 percent, respectively. TeliaSonera
and AF Telecom will be represented by three members each on MegaFon's board
while there will be one independent director, each to have equal voting rights
at shareholders meetings, until an IPO has been completed.

The parties have
also agreed that if an IPO of MegaFon has not been consummated by the end of
2014, TeliaSonera shall have the right to sell to AF Telecom or a subsidiary of
MegaFon, and AF Telecom or a subsidiary of MegaFon will have the right to buy
10.6 percent of TeliaSonera’s shares in MegaFon. The price paid will be based on
fair market value.

The dividend of USD 5.15 billion, Altimo’s sale of shares
in MegaFon and TeliaSonera’s sale of shares in TCI are expected to be completed
on April 24, 2012.

About MegaFon:
MegaFon was founded in 2002 and is today
the second largest mobile operator in Russia with a market share of 27 percent
according to the consultant company AC&M. As of December 31, 2011, the company
had 62.8 million subscribers.

Press and Analyst Conference
Time:  9:30
(CET)
Place: TeliaSonera’s Head Office, Stureplan 8, Stockholm

Press
identification card or similar is required to attend.

The press and analyst
conference will be held in English and will be webcasted at
www.teliasonera.com.

Telephone conference in connection to the press and
analyst conference
Dial-in numbers:

  · +44 (0) 1452 555 566, 0800 694
0257
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Access code: 73792888

Please
note that there might be a time lag of up to 30 seconds between the webcast and
the conference call if you are simultaneously watching and calling in to the
conference.

You can also listen to the conference call afterwards until April
30, 2012.

Replay number: +44 (0) 1452 550 000 or +46 (0) 8 50 635 742
Access
code: 73792888#

TeliaSonera AB discloses the information provided herein
pursuant to the Swedish Securities Markets Act and/or the Swedish Financial
Instrument Trading Act. The information was submitted for publication at 06.00
a.m. CET on April 24, 2012.

 
For more information, please call the
TeliaSonera press office + 46-771 77 58 30, press@teliasonera.com

 
Forward
-Looking Statements
Statements made in the press release relating to future
status or circumstances, including future performance and other trend
projections are forward-looking statements. By their nature, forward-looking
statements involve risk and uncertainty because they relate to events and depend
on circumstances that will occur in the future. There can be no assurance that
actual results will not differ materially from those expressed or implied by
these forward-looking statements due to many factors, many of which are outside
the control of TeliaSonera.

TeliaSonera provides network access and
telecommunication services in the Nordic and Baltic countries, the emerging
markets of Eurasia, including Russia and Turkey, and in Spain. TeliaSonera’s
ambition is to be number one or two in all of its markets. TeliaSonera is also
the leading European wholesale provider with a wholly-owned international
carrier network. In 2011, TeliaSonera recorded net sales of SEK 104 billion,
EBITDA of SEK 36.9 billion and earnings per share of SEK 4.20. TeliaSonera's
shares are listed on NASDAQ OMX Stockholm and NASDAQ OMX Helsinki. Read more at
www.teliasonera.com.