TeliaSonera January-December 2010

TeliaSonera January-December 2010

Solid growth blazed the trail to record earnings

Fourth quarter

  · Net sales in local currencies and excluding acquisitions increased
4.2 percent. In reported currency, net sales decreased 2.8 percent to
SEK 26,774 million (27,549).
  · The addressable cost base in local currencies and excluding
acquisitions increased 5.2 percent. In reported currency, the
addressable cost base decreased 1.8 percent to SEK 8,215 million
(8,365).
  · EBITDA, excluding non-recurring items, increased 5.2 percent in
local currencies and excluding acquisitions. In reported currency,
EBITDA was unchanged at SEK 9,024 million (9,039) and the margin
increased to 33.7 percent (32.8).
  · Operating income, excluding non-recurring items, increased 5.5
percent to SEK 7,991 million (7,573).
  · Net income attributable to owners of the parent company increased
8.3 percent to SEK 5,309 million (4,902) and earnings per share to SEK
1.18 (1.09).
  · Free cash flow decreased 57.7 percent to SEK 1,742 million (4,118)
due to higher cash CAPEX of SEK 1.4 billion and higher paid taxes of SEK
1.3 billion.
  · During the quarter the number of subscriptions grew by 2.6 million
in the consolidated operations while subscriptions in the associated
companies decreased by 2.2 million. The total number of subscriptions
was 156.5 million.

Full year

  · Net sales in local currencies and excluding acquisitions increased
3.5 percent. In reported currency, a decrease by 2.4 percent to SEK
106,582 million (109,161).
  · Net income attributable to owners of the parent company increased
12.7 percent to SEK 21,257 million (18,854) and earnings per share to
SEK 4.73 (4.20).
  · Free cash flow decreased to SEK 12,901 million (16,643), mainly due
to higher paid taxes of SEK 2.9 billion.
  · The Board of Directors proposes an ordinary dividend of SEK 2.75 per
share (2.25), totaling SEK 12,349 million (10,104), or 58 percent (54)
of net income attributable to owners of the parent company. The Board
has also declared its intention to repurchase shares for a total amount
of approximately SEK 10 billion.

Comments by Lars Nyberg, President and CEO

“The fourth quarter marks the end of a successful year for TeliaSonera.
The organic revenue growth improved throughout the year and earnings per
share increased 13 percent in 2010.

TeliaSonera's three focus areas are to secure high quality in our
networks, be cost efficient and to build a world class service company,
by providing a superior customer experience. In 2010, we continued to
roll out high quality fixed and mobile networks, with improved capacity
and coverage. We also made progress in working in a more integrated way
throughout the company. Within Mobility and Broadband Services, a common
operating model was put in place in every country to serve our
customers' needs in a better way and to extract cost and scale
advantages. In Eurasia, all operations except UCell in Uzbekistan were
rebranded which further emphasizes their integration into the
TeliaSonera group.

During the year, TeliaSonera strengthened its technology leadership as
we were the first operator to launch commercial 4G services also in
Finland, Denmark and Estonia. 4G services were launched as early as in
December 2009 in Sweden and Norway and the roll-out continued throughout
2010. In October, Ncell in Nepal launched mobile data services in the
world's highest location, when they introduced 3G services in the Mount
Everest area. As we also see a major potential for mobile data in the
Eurasian countries in the coming years, we are very pleased to have
secured a 3G license in Kazakhstan in December. In Uzbekistan we
invested heavily to increase mobile voice and data capacity by expanding
our 3G network.

Our Spanish mobile operator, Yoigo, reached the EBITDA breakeven target
in the fourth quarter, only four years after the launch in 2006. Yoigo
is well positioned as the challenger in Spain and has reached a market
share of four percent. To maximize shareholder value, we will now
continue to develop the business and the next milestone is to become
cash flow positive by the end of 2011.

The demand for smart phones is growing at an exceptional rate. In 2010,
seven out of ten new mobile phones sold in our Swedish stores were smart
phones. Adding a continued strong demand for mobile broadband and the
launch of tablet devices, we are expecting an eight folded growth in
data traffic in our network in three years time. In Broadband Services,
the demand for on-demand services, such as films, is gaining momentum
and we rented out more than 2 million films through our video on demand
TV service in Sweden last year.

We are constantly reviewing our asset portfolio and during the year we
increased our ownership in UCell in Uzbekistan and Ncell in Nepal, in
line with our strategy of increasing ownership in core holdings. We also
divested our non-core asset Telia Stofa in Denmark. We will continue to
look for new opportunities within or neighboring our existing footprint.
In spite of this, our financial position remains strong and the Board of
Directors proposes a 22 percent increase in ordinary dividend. In
addition, the Board has decided to execute the authorization from the
Annual General Meeting and TeliaSonera will repurchase outstanding
shares for a total value of approximately SEK 10 billion.

One of our focus areas is to run cost efficient operations. We had
tailwind from previous cost savings during the first half of 2010.
During the second half, the organization has identified further savings
to be implemented during 2011. We also foresee that the common operating
model and cross border organization within Mobility and Broadband
Services will result in synergies. All in all, we aim to reduce the
workforce by some 800 employees whereof 640 in Sweden and 165 in
Finland. At the same time, we have a need to recruit new competence and
aim to hire 200 new employees in 2011.

Looking ahead, we believe revenue growth in local currencies will be
somewhat higher than in 2010. This will mainly be driven by mobile data
in the Nordic region, increased market share in Spain and higher mobile
penetration in Eurasia.”

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 (http://www.teliasonera.com/)