Stockholm, 10 May 2001
Interim Report
January - March 2001
2001-05-09 23:06
Marianne Nivert
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
2
President and CEO
Highlights

Net sales increased by 5.7% to MSEK 13,592

Underlying EBITDA increased by 2.7% to MSEK 3,348

Strong margin improvement in the Swedish mobile operations

Svenska UMTS-nät AB established together with Tele 2

Broadband portal launched

Increased rate of broadband delivery

Sale of Tess completed, 8 companies divested to Industri Kapital,
DRS divested, offer on Eniro, Si.Mobil sold
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
3
Trends

Higher prices for subscriptions and broadband

Continued strong demand for broadband

Shakeout in the carrier sector

Reduced pressure on prices in fixed services

Weaker growth in Swedish mobile, sharper focus on new
services and streamlining

Continued refining efforts within Telia
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
4
Continued refining
13
June
Q1-Q2
2000
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
5
Q3
2000
Q4
2000
Q1
2001
April
2001
Growth
Group +5.7%
Mobile +46%
International Carrier +9.6%
Internet Services +24.6%
Broadband +62%
(cf. Q4 2000)
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
6
Mobile
Sales trend in the Nordic countries, total 46%
Norway +27%
• GPRS launched
- NetCom MobiMail
Finland +191%
Sweden +7%
Denmark +85%
• License GSM 900
network
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
7
• GPRS Pilot test
- Telia Mobile Online
• UMTS agreement complete
• New positioning
services launched

Healthy improvement
in profitability,
underlying EBITDA
+34%

Pan-Nordic service
launched in May 2001
Mobile
Total proportional
customer base 4.9 million
Customer base,
Nordic countries
4,598,000
+45,000
Finland
154,000
+5,000
Russia
North West GSM (12.7% + 11.3%)
through Telecominvest
292,000 **
+39,000
Sweden
2)
3,259,000
+2,000
GSM customer growth
+33,000
Customer base,
Baltic region/Russia
1,254,000
+95,000
Norway
854,000 1)
+4,000
Estonia Eesti Mobiilitelefon (24.5%) 341,000 **
+14,000
Denmark
331,000
+34,000
1) Jan-Mar, excl. 91,000 SP customers
2) Jan-Mar, excl. 60,000 SP customers
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
8
Latvia
Latvijas Mobilais (24.5%) 285,000 **
+15,000
Lithuania Omnitel (27.5%) 336,000 **
+27,000
** Total number of customers
Mobile
('000)
('000)
Sweden, 3,259,000
3400
900
Norway, 854,000
800
3000
700
2600
600
500
2200
0
Q1
1999
('000)
400
Q1
2000
Q1
2001
0
Q1
1999
('000)
Denmark, 331,000
160
Q1
2000
Q1
2001
Finland, 154,000
120
300
80
200
40
100
0
0
Q1
1999
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
9
Q1
2000
Q1
2001
Q1
1999
Q1
2000
Q1
2001
Mobile
Sweden
ARPU & MoU
ARPU (SEK)
419
400
375
330
Churn 10%
348
426
331
446
333
436
314
426
418
432
306
304
303
300
200
Without the reduction of
interconnect fees from
SEK 1.89 to 1.18,
ARPU Q1 2001
would have been SEK 298
394
Postpaid
273
Total
121
119
101
108
Q3
1999
Q4
1999
100
96
109
Q1
2000
Q2
2000
123
106
101
Prepaid
0
Q1
1999
Q2
1999
MoU (minutes)
200
150
126
115
141
121
150
125
164
126
155
117
Q3
2000
167
160
126
123
58
64
Q4
2000
170
124
Q1
2001
162
117
Total
100
61
58
64
50
49
Q4
1999
Q1
2000
50
54
52
Prepaid
0
Q1
1999
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
10
Postpaid
Q2
1999
Q3
1999
Q2
2000
Q3
2000
Q4
2000
Q1
2001
Mobile
Churn 31%
Norway
ARPU & MoU
ARPU (NOK)
600
500
400
406
320
444
486
325
337
142
152
459
305
289
303
119
124
300
200
136
489
444
147
531
329
127
488
491
310
298
119
99
100
Postpaid
Total
Prepaid
0
Q1
1999
Q2
1999
Q3
1999
Q4
1999
Q1
2000
190
198
Q2
2000
Q3
2000
223
225
Q4
2000
Q1
2001
MoU (minutes)
250
200
150
161
134
100
75
182
196
141
146
79
84
134
130
71
63
143
66
145
66
208
196
137
133
62
56
50
0
Q1
1999
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
11
Q2
1999
Q3
1999
Q4
1999
Q1
2000
Q2
2000
Q3
2000
Q4
2000
Q1
2001
Postpaid
Total
Prepaid
Mobile
Share of sales, Q1 2001
Sweden 4%, Norway 14%
SMS trends
Norway 2001
400
Norway 2000
Norway 1999
Sweden 2001
200
Sweden 2000
Sweden 1999
0
Jan
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
12
Feb
Mar
April
May
June July
Aug
Sep
Oct
Nov
Dec
Mobile
www.teliamobile.se
Right Way Near You
Closest Resource
Bootfighters
a
virtual
paintball
Navigation service
with maps
Effective planning for
business critical resources
House Close to You
House Prices Close to You
Real estate listings
with prices
in a specific local area
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
13
Position-based
interactive games
Micro-payment
GPRS
for
SALE
P
Sweden:
Telia Mobile Online
Norway:
NetCom MobiMail
International Carrier
Market trends

Clear signs of impending shakeout with subsequent consolidation

The turbulence gives Telia opportunities to take customers

Lower demand on fiber and ducts

Increased demand on leased capacity and wavelength – stiffer
competition and more pressure on prices

Pressure on prices for voice services – reserves for credit losses

Competitors leaving the voice business for IP-based services
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
14
International Carrier
Important events

Powerful growth in the IP business +210%

Growth in the IP capacity business +40%

Services for virtual private networks, IP-VPN, and for colocation of
IP servers (local services) launched

Agreement with Ericsson signed for delivery of a global internal
network for multimedia communications

IP-agreements signed with Rostelecom and Baltelecom

Capacity agreement signed with Sprint
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
15
International Carrier
Viking Network – Telia’s global IP platform
Infrastructure
network expansion
31/12 2000
Total fiber network km (in use)
15,675
Ducts km (Europe)
5,290
PoPs (total)
52
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
16
International Carrier
Signed contracts
(MSEK)
Storm
GTS
Tele 1 Europe
LD Com
Other (BT, France Telecom etc.)
Other (Sprint, Telenor, KPNQwest)
Total IRU
360Networks
Global Crossing
Williams
Colt
Other SWAPS (Nets, Infigate etc.)
Total SWAPS
Total
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
17
Fibre
Fibre
Fibre
Ducts
Fibre/Ducts
Fibre
Ducts
Fibre
Ducts
Fibre
SWAP
SWAP
SWAP
SWAP
SWAP
1,275
432
293
47
1,571
525
4,143
998
615
664
356
1,627
4,260
8,403
International Carrier
External sales and price development
MSEK
Q1
2001
Q1
2000
Change
in %
Voice
506
576
-12
Leased IP capacity
109
78
+40
IP traffic
65
21
+210
Infrastructure
38
0
Other
22
0
Total
740
675
1,147
488
Investments
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
18
+10
Networks

Two brands
Telia for retail customers
— Skanova for network wholesale customers
—

Migration from fixed telephony to broadband and mobile

External network wholesale market (Skanova) provides growth
and compensates for losses on the retail market

Streamlining programs compensate for the effects of price cuts
– but the prices have hit bottom

Sustained underlying EBITDA margin for established services

New services Telehost, IP telephony, split line
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
19
Internet Services
Paying broadband customers
(‘000)
Narrowband Internet subscriptions
increased by 11% from 641 000
Q1 2000 to 711 000 Q1 2001
70
60
50
40
30
20
10
0
1999
Q1 2000
ADSL/LAN
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
20
Q2 2000
Q3 2000
Q4 2000
Q1 2001
Sverige
Danmark
High speed Internet via cable
Broadband
www.startsidan.telia.se
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
21
2001-05-09 23:06
Bo Jacobsson
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
23
CFO and Head of
Corporate Financial Control
Financial overview
Key figures for the Group
MSEK
Net sales
Underlying EBITDA
- margin %
Operating income
Earnings per share (SEK)
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
24
Q1 2001
Q1 2000
2000
13,592
12,857
54,064
3,348
3,260
13,087
24.6
25.4
24.2
811
3,382
12,006
0.10
0.84
3.50
Financial overview
Consolidated net sales
(MSEK)
15,000
10,000
Q1
Q2
Q3
Q4
5,000
0
1999
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
25
2000
2001
Financial overview
External net sales, BA
(MSEK)
Mobile
12 000 3,614
2,481
740
675
9 000
Change in %
International Carrier
Networks
6 000
7,475
0
532
1,180
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
26
Q1 2001
+9.6
-2.0
7,626
Internet Services
3 000
+45.7
427
1,590
Q1 2000
+24.6
Equity
-25.8
Total for the Group
+5.7
Financial overview
Underlying EBITDA, BA
Change in %
(MSEK)
5 000
Mobile
1,134
845
3 000
Networks
2,837
2,928
1 000
-1 000
27
Internet Services
Equity
204
-238
-235
-354
Q1 2001
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
International Carrier
126
-353
-172
-114
Q1 2000
Group-wide
Total for the Group
+34.2
-3.1
+61.9
+2.7
Financial overview
Share of earnings in associated companies
MSEK
Q1 2001
Q1 2000
2000
Netia Holdings (Networks)
Baltic region (Mobile/Networks)
Unisource/AUCS (Networks)
Comsource/Eircom (Networks)
Telia Overseas (Equity)
Eniro (Equity)
Other associated companies
-143
23
-49
-204
-2
292
-74
-34
15
1,004
-81
-257
-5
-411
190
1,445
-933
-1,719
185
46
Total
-157
642
-1,197
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
28
Financial overview
Market value, associated companies
MSEK
Per 31 March 2001
Participation
in %
Eniro AB (Sweden)
Scandinavia Online AB (Sweden)
AS Eesti Telekom (Estonia)
AB Lietuvos Telekomas (Lithuania)
Netia Holdings S.A. (Poland)
Infonet Services Corp. (USA)
Eircom plc *)
Total
*)
Incl. loans of MSEK 6,459
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
29
49.1
24.6
24.5
30.0
48.1
20.1
14.0
Book
value
Market
value
490
313
540
2,502
2,403
2,543
6,884
7,802
201
1,341
1,211
1,267
6,479
6,777
15,675
25,078
Financial overview
Investments
MSEK
Q1 2001
Q1 2000
2000
509
1,001
26,017
International Carrier
1,147
488
6,634
Networks
1,436
749
7,421
90
50
626
Equity
512
2,015
7,185
Group-wide
-35
341
-141
3,659
4,644
47,742
Mobile
Internet Services
Total for the Group
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
30
Financial overview
Financial position
31 March
2001
31 Dec
2000
24,425
20,235
Balance sheet total (MSEK)
127,062
122,715
Debt/equity ratio (multiple)
0.42
0.37
Equity/assets ratio (%)
45.3
44.4
Net interest-bearing liability (MSEK)
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
31
Financial overview
Change in net borrowings
3,967
(MSEK)
25000
20,235
526
1 January
2001
Tax
20000
3,663
617
3,348
Divestitures
Underlying
EBITDA
24,425
15000
10000
5000
0
Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
32
Net investments
Other
31 March
2001
Financial overview
Telia stock
150
140
130
120
110
100
90
80
70
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Telia, AB, IR, 008-2001 eng
2001-05-09 23:06 /Kh
33
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