TeliaSonera January-December 2011

Regulatory News:

TeliaSonera (STO:TLSN)(HEX:TLS1V)(LSE:TEE)(Nasdaq:TLSN):

Continued revenue growth and margin improvement

Fourth quarter

• Net sales in local currencies and excluding acquisitions increased 2.1 percent. In reported currency, net sales increased 1.0 percent to SEK 27,123 million (26,851).
• The addressable cost base in local currencies and excluding acquisitions decreased 4.6 percent. In reported currency, the addressable cost base decreased 5.8 percent to SEK 7,828 million (8,311).
• EBITDA, excluding non-recurring items, increased 3.2 percent in local currencies and excluding acquisitions. In reported currency, EBITDA increased 2.1 percent to SEK 9,191 million (9,002) and the margin increased to 33.9 percent (33.5).
• Operating income, excluding non-recurring items, decreased 5.6 percent to SEK 7,519 million (7,969).
• Net income attributable to owners of the parent company decreased 6.3 percent to SEK 4,972 million (5,309) and earnings per share to SEK 1.15 (1.18).
• Free cash flow decreased 70.0 percent to SEK 523 million (1,742) due to SEK 0.6 billion higher cash CAPEX and no dividends received from our associated companies (0.9).
• During the quarter the number of subscriptions increased by 2.4 million in the consolidated companies and by 3.3 million in the associated companies. The total number of subscriptions was 170.0 million.

Full year

• Net sales in local currencies and excluding acquisitions increased 2.6 percent. In reported currency, net sales fell 2.5 percent to SEK 104,354 million (106,979).
• Net income attributable to owners of the parent company decreased 13.7 percent to SEK 18,341 million (21,257) and earnings per share to SEK 4.20 (4.73).
• Free cash flow decreased to SEK 9,629 million (12,901), mainly due to higher cash CAPEX and lower dividends from associated companies.
• The Board of Directors proposes an ordinary dividend of SEK 2.85 per share (2.75), totaling SEK 12.3 billion (12.3), or 68 percent (58) of net income attributable to owners of the parent company.

Comments by Lars Nyberg, President and CEO

"The fourth quarter marks the end of another strong year for TeliaSonera. We are proud that we have been able to generate growth and keep a healthy balance between revenues and costs and thereby improved our EBITDA margin, excluding non-recurring items, for the third consecutive year.

When we launched our new brand identity in May, the most tangible benefit for our customers was our new offer with significantly lower cost and improved cost control for data roaming. Users are now able to keep the same mobile behavior when traveling as they do in their home country. We are convinced that increased usage in the longer perspective will compensate for a short-term negative impact on revenues. We can already now see that volumes have more than doubled compared to a year ago.

A cornerstone in our strategy is network quality and capacity. During 2011, we invested more than SEK 17 billion in networks and licenses. We have taken the technology leadership in many of our countries by being the first operator to launch 4G services. The roll-out will continue and for example in Sweden our 4G services now cover 200 locations and will expand by one city or village every day during 2012. After the launch of 4G tablets before Christmas we are now looking forward to be able to offer 4G handsets in the first quarter.

In the fourth quarter, important milestones were met for several of our operations. We have now more than half a million TV customers in Sweden. Yoigo in Spain passed 3 million subscribers and reported positive EBIT and cash flow. Ncell in Nepal became the overall market leader and with Azercell’s 3G launch in Azerbaijan in November we now provide 3G services in all our Eurasian markets.

Our free cash flow was affected by lower dividends from associated companies as well as significant investments in spectrum. The former relates to the ownership and governance disputes in Turkcell, where recent legal awards in our favor and the Capital Markets Board’s new decree regarding corporate governance principles are important steps in the right direction.

In line with our strategy of increasing ownership in core holdings we signed an agreement to increase our holding in Kcell in Kazakhstan. We will continue to look for new opportunities within or neighboring our existing footprint. Despite significant investments in capacity and ownership increases, our solid financial position paves the way for our Board of Directors to propose an increase in ordinary dividend to SEK 2.85 per share.

Looking ahead, we believe our revenues and earnings in local currencies will continue to grow in 2012 despite macroeconomic and industrial challenges.”

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 February 2, 2012.

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