TeliaSonera January-September 2012

Stable earnings per share and outlook reiterated
Third quarter

  · Net sales in local currencies and excluding acquisitions were unchanged. In
reported currency, net sales decreased 3.2 percent to SEK 25,842 million
(26,707).
  · The addressable cost base in local currencies and excluding acquisitions
increased 4.2 percent. In reported currency, the addressable cost base increased
0.4 percent to SEK 7,153 million (7,124).
  · EBITDA, excluding non-recurring items, decreased 4.0 percent in local
currencies and excluding acquisitions. In reported currency, EBITDA, excluding
non-recurring items, fell 6.3 percent to SEK 9,255 million (9,877). The EBITDA
margin, excluding non-recurring items, decreased to 35.8 percent (37.0).
  · Operating income, excluding non-recurring items, decreased 4.2 percent to
SEK 7,676 million (8,013).
  · Net income attributable to the owners of the parent company decreased 1.2
percent to SEK 4,803 million (4,863) and earnings per share to SEK 1.11 (1.12).
  · Free cash flow decreased to SEK 3,825 million (4,776), mainly due to lower
EBITDA and changes in working capital.
  · During the quarter the number of subscriptions grew by 4.0 million in the
consolidated operations and by 1.4 million in the associated companies. The
total number of subscriptions was 180.0 million.
  · Group outlook for 2012 remains unchanged.

Nine-month period

  · Net sales in local currencies and excluding acquisitions increased 1.0
percent. In reported currency, net sales increased 0.4 percent to SEK 77,829
million (77,545).
  · Net income attributable to owners of the parent company decreased 3.1
percent to SEK 12,958 million (13,369) and earnings per share to SEK 2.99
(3.05).
  · Free cash flow increased to SEK 20,806 million (8,863).



Comments by Lars Nyberg, President and CEO

“The third quarter was similar to the second quarter in terms of operating
trends. Our revenues in local currencies were at the same level as last year.
Although Eurasia continues to deliver double-digit growth and Broadband Services
reports a moderate decrease, we are experiencing weakness in service revenues in
many of our markets within Mobility Services. In addition, our cost base is
today growing at a higher rate than our revenues and we have to reverse this
trend. Therefore we have spent the last months analyzing our operation in depth.
The ambition is to fundamentally change our business by simplifying our way of
working. We estimate this will lead to a cost reduction of some SEK 2 billion
net over the coming two years. It will also include personnel reductions and our
initial estimate is that it will affect approximately 2,000 employees or 7
percent of the total workforce in the Group.

We must also speed up the implementation of a new, sustainable business model to
defend our revenues and deal with the increasing challenges that this industry
is facing. Therefore, we need a new leadership and Tero Kivisaari has taken up
the responsibility for Business area Mobility Services in addition to his role
as Head of Eurasia.

Our customers’ behavior is changing rapidly and we must change our business
models from being voice to data centric. As an example, we launched new
subscriptions in Sweden in September where our customers can continue using
Skype and other mobile IP-telephony services just like before. At the same time,
we have adjusted our data prices to better meet the growing demand for data
communication.

In September, TeliaSonera became subject to media allegations of bribery and
money laundering related to our 2007 investment in a 3G license and frequencies
in Uzbekistan. The allegations directed towards TeliaSonera are severe, although
we are convinced that they are unfounded. To clarify the factual circumstances
and ascertain whether there are any grounds for the allegations, TeliaSonera has
initiated an external legal review, to be presented before the end of the year.
The anticorruption unit of the Swedish Prosecuting Authorities has also
initiated an investigation, which we welcome and will cooperate with.

In recent months, TeliaSonera has accelerated its sustainability work, with
focus on privacy and freedom of expression. We have engaged the Danish Institute
for Human Rights, to assist us in conducting a human rights impact assessment,
country by country, followed by a mitigation plan. However, in order to bring
about a real step the industry has to join forces. Legislation for mobile
operators is the same for all players. Therefore, eleven of the world’s leading
telecom companies, are working closely together to define common principles for
privacy and freedom of expression, as they relate to the telecommunications
sector. The intention is to find a home for the initiative and publish the final
principles before the end of 2012.

Finally, we welcome and support MegaFon’s intentions to proceed with its initial
public offering and having its shares listed in Moscow and London. If the IPO is
successful, we have reached our goal of having a transparent, liquid and direct
ownership in Russia’s second largest mobile operator. However, our ambition is
to keep a long term strategic ownership of at least 25 percent plus one share.
At the same time, the preparation for a public listing of 25 percent of Kcell in
Kazakhstan continues and will, if market conditions allow, be finalized before
the year-end.”


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 October 17, 2012.