TeliaSonera January-March 2009

Strong cash generation and record-high first quarter EBITDA

· Net sales increased 11.5 percent to SEK 27,204 million (24,398).

Organic growth in local currencies was 0.6 percent.

· EBITDA, excluding non-recurring items, increased 13.7 percent to SEK

8,821 million (7,755) and the margin to 32.4 percent (31.8).

· Operating income, excluding non-recurring items, increased 10.8

percent to SEK 7,477 million (6,750).

· Net income attributable to owners of the parent company was SEK 4,440

million (4,465) and earnings per share SEK 0.99 (0.99).

· Free cash flow rose to SEK 4,282 million (1,110).

· During the quarter the number of subscriptions grew by more than 2.2

million, whereof 0.9 million new subscriptions in the majority-owned

operations and over 1.3 million in the associated companies, to 137.0

million in total.

· Group outlook for net sales 2009 revised from the Year-end Report

2008.







Financial highlights







SEK in Chg

millions, (%)

except key

ratios, per

share data Jan-Mar Jan-Mar Jan-Dec

and changes 2009 2008 2008

Net sales 27,204 24,398 12 103,585

EBITDA1)

excl. non-

recurring

items2) 8,821 7,755 14 32,954

Margin (%) 32.4 31.8 31.8

Operating

income 7,251 6,570 10 28,648

Operating

income excl.

non-recurring

items 7,477 6,750 11 30,041

Net income 5,018 4,992 1 21,442

of which

attributable

to owners of

the parent 4,440 4,465 -1 19,011

Earnings per

share (SEK) 0.99 0.99 0 4.23

Return on

equity (%,

rolling 12

months) 17.0 18.8 17.2

CAPEX-to-

sales (%) 11.3 13.2 15.2

Free cash

flow 4,282 1,110 286 11,328



1) Please refer to page 13 for definitions.

2) Non-recurring items; see table on page 17.



In this report, comparative figures are provided in parentheses

following the operational and financial results and refer to the same

item in the first quarter of 2008, unless otherwise stated.







Comments by Lars Nyberg, President and CEO





“The macroeconomic environment worsened during the first quarter and

although the telecom services industry has been less affected than other

industries there are signs of changed customer behavior in several of

our markets. Still, we were able to grow net sales for the Group in

local currencies and our efforts to reduce operational expenditures

success-fully improved our margins and cash flow compared to last year.

I am especially pleased with the developments within Broadband Services

where the margin improved considerably from the fourth quarter. In

Eurasia, the economic downturn became more evident and sales growth

slowed in the first quarter. Still, we managed to increase profitability

from an already high level.



In Mobility Services, cost efficiency has to improve. We need to

safeguard our profitability as sales are lowered in several markets by

weaker equipment sales and reduced roaming due to less business travel.

Regulatory intervention is also putting pressure on prices in all

markets. At the same time it is very encouraging to see that the usage

of mobile data is increasing substantially. This also requires us to

meet the new and different needs of our customers. Therefore we have

launched new, differentiated mobile broadband subscriptions in Sweden

and Norway that better suit our customers’ individual needs. As one of

the first operators in the world, we also plan to launch 4G-services

next year for dramatically increased speed.



Looking ahead, it is essential for TeliaSonera to reduce cost especially

in a period of increasing unemployment and we will also continue to

scrutinize ways to reduce capital expenditure to preserve a strong cash

generation. The macroeconomic trends are hard to predict but as a strong

and financially balanced company TeliaSonera is very well equipped to

meet the demands presented by a difficult economic environment and

capture any opportunities that may arise.”







Group outlook for 2009 (revised from the Year-end Report 2008)





Net sales in local currencies and excluding acquisitions are expected to

be around the same level in 2009 compared to 2008. Currency fluctuations

may to an increasing extent influence the reported figures in Swedish

krona.



TeliaSonera will continue to invest in future growth and in the quality

of networks and ser-vices, although the intention is to keep the

addressable cost base for 2009 unchanged compared to SEK 33.8 billion in

2008, in local currencies and excluding acquisitions. The ambition for

2009 is to maintain the EBITDA-margin level of 2008, excluding non-

recurring items.



Capital expenditures will be driven by continued investments in

broadband and mobile capacity as well as in network expansion in our

acquired operations. The CAPEX-to-sales ratio is expected to be somewhat

lower in 2009 than in 2008. In order to preserve strong cash generation,

capital expenditures may be reduced further if the economy continues to

deteriorate.







Efficiency measures





As stated in the Year-end Report 2008, the intention is to keep the

addressable cost base for 2009 unchanged compared to SEK 33.8 billion in

2008, in local currencies and excluding acquisitions, and that the

number of employees will be lower than 31,200 by year-end 2009 (32,171).

In the first quarter 2009, the addressable cost base in local currencies

and excluding acquisitions decreased 2.4 percent compared to the

previous year. The number of employees was 31,549 at the end of the

first quarter.



Restructuring costs, reported as non-recurring items, are estimated to

be lower than SEK 3 billion, of which about SEK 1.6 billion in 2008.

These ongoing efficiency measures affect 2,900 employees in Sweden and

Finland, of which about 1,300 in 2008 and about 1,600 in 2009, as

announced in February 2008.









Review of the Group, first quarter 2009





Net sales increased 11.5 percent to SEK 27,204 million (24,398). Organic

growth in local currencies was 0.6 percent. The positive net effect of

acquisitions was 1.3 percent and of exchange rate changes 9.6 percent.



In Mobility Services, net sales rose 9.2 percent to SEK 12,578 million

(11,519) with higher reported sales in most markets. Net sales in local

currencies decreased 0.8 percent due to regulatory intervention, lower

equipment sales and roaming revenues. In Sweden, the strong trend for

mobile data and mobile broadband continued and in Spain the number of

subscriptions nearly doubled.



In Broadband Services, net sales increased 5.0 percent to SEK 10,964

million (10,446) with higher reported sales in all markets except

Sweden. Net sales in local currencies decreased 2.1 percent. In

Wholesale, however, sales in local currencies grew driven by increased

voice and IP traffic in the international carrier operations.



In Eurasia, net sales rose 37.7 percent to SEK 3,741 million (2,717)

with higher reported sales in all markets. The acquisition of operations

in Nepal and Cambodia, consolidated in the fourth quarter 2008,

contributed to the rise. In Uzbekistan, net sales more than tripled and

in Tajikistan they almost doubled. Organic growth in local currencies

was 6.1 percent for the business area.



The number of subscriptions rose by 17.7 million from the end of the

first quarter 2008 to 137.0 million, of which approximately 6.9 million

to 44.3 million in the majority-owned operations and 10.8 million to

92.7 million in the associated companies.



EBITDA, excluding non-recurring items, rose to SEK 8,821 million

(7,755). EBITDA in local currencies increased 2.1 percent. Maintained

high profitability in Eurasia and higher EBITDA in Broadband Services,

driven by efficiency measures mainly in Sweden and Finland, contributed

to most of the rise. The margin rose to 32.4 percent (31.8).



Operating income, excluding non-recurring items, rose to SEK 7,477

million (6,750) mainly due to higher EBITDA.



Non-recurring items affecting operating income totaled SEK -226 million

(-180). Non-recurring items included charges of SEK -226 million (-233)

related to efficiency measures.



Financial items decreased to SEK -859 million (-13), of which SEK -700

million (-52) related to net interest expenses. Financial items were

negatively affected by higher net debt. The first quarter 2008 was

positively affected by penalty interest of SEK 275 million related to a

court decision on historical interconnect fees in Sweden.



Income taxes amounted to SEK -1,374 million (-1,565). The effective tax

rate decreased to 21.5 percent (23.9).



Minority interests in subsidiaries were SEK 578 million (527), of which

SEK 377 million (318) related to operations in Eurasia and SEK 195

million (201) to Eesti Telekom, LMT and TEO.



Net income attributable to owners of the parent company was SEK 4,440

million (4,465) and earnings per share were SEK 0.99 (0.99).





CAPEXwas reduced to SEK 3,074 million (3,230) and the CAPEX-to-sales

ratio to 11.3 percent (13.2).



Free cash flow rose to SEK 4,282 million (1,110) mainly as a result of

higher EBITDA and lower working capital.



Net debt amounted to SEK 45,026 million at the end of the first quarter

(48,614 at year-end 2008).



The equity/assets ratio was 50.3 percent at the end of the first quarter

(50.5 at year-end 2008).





Significant events in the first quarter



· TeliaSonera on January 15, 2009, announced its plan to build 4G city-

networks in Stockholm, Sweden, and Oslo, Norway. Ericsson was chosen to

deliver the initial network in Stockholm and Huawei in Oslo. The

evaluation of suppliers for 4G networks in other parts of the Nordic and

Baltic countries is in progress.



· TeliaSonera, through its subsidiary Fintur Holdings B.V., on January

30, 2009, increased its holding in Geocell to 100 percent from 97.5

percent by acquiring 2.5 percent of the shares in the Georgian mobile

operator from the Government of Georgia.



· TeliaSonera on March 2, 2009, issued a Eurobond of EUR 550 million

under its existing EUR 7 billion EMTN (Euro Medium Term Note) program.



· TeliaSonera introduced new, differentiated pricing for mobile

broadband in Sweden on March 23, 2009, and in Norway on March 26, in

order to better reflect varying levels of customer usage.





Significant events after the end of the first quarter



· TeliaSonera Finland on April 9, 2009, reached an agreement with Elisa

Oyj and DNA Finland Oy on new mobile interconnection fees for the years

2010-2011. Under the agreement, the parties will adopt symmetrical

interconnect pricing in December 2009. The new pricing is estimated to

have a combined positive effect on EBITDA in Mobility Services Finland

of approximately SEK 65 million (EUR 6 million) in 2010-2011, assuming

2008 traffic volumes.



· TeliaSonera’s Swedish infrastructure company Skanova Access on March

5, 2009, announced higher prices for access to the copper network

following a change in the price regulation. Consequently, Telia raised

the price for fixed telephony in Sweden on April 14, 2009. The increase,

from SEK 125 to SEK 145 per month (SEK 132, excluding VAT, for Telia

business subscriptions), was the first for fixed telephony subscriptions

since 2001. The price increases will have a gradual impact starting in

the second quarter 2009.









Economic downturn visible in Mobility Services







Business area Mobility Services provides personal mobility services to

the consumer andenterprise mass markets. Products and services include

mobile voice and data, mobile content, WLAN Hotspots, mobile over

broadband, mobile/PC convergence and Wireless Office. The business area

comprises mobile operations in Sweden, Finland, Norway, Denmark,

Lithuania, Latvia, Estonia and Spain.





· The impact of the economic downturn has been visible in some

countries in terms of lower equipment sales, reduced roaming due to less

business travel, and lower usage. Volume growth continued for mobile

data in all markets in the first quarter. The mobile market in Sweden

showed continued strength and the underlying subscriber intake in Spain

remained high.



· Regulatory intervention remains a prime cause of price pressure in

all markets. There is a risk that the regulator in Sweden will impose a

larger reduction in interconnect fees on July 1, 2009, than it had

previously signaled. The earnings impact on Broadband Services from such

intervention would, however, be positive.





SEK in

millions,

except

margins,

operational

data and Jan-Mar Jan-Mar Chg Jan-Dec

changes 2009 2008 (%) 2008

Net sales 12,578 11,519 9 48,673

EBITDA excl.

non-recurring

items 3,412 3,388 1 14,399

Margin (%) 27.1 29.4 29.6

Operating

income 2,194 2,253 -3 9,526

Operating

income excl.

non-recurring

items 2,297 2,294 0 9,926

CAPEX 749 825 -9 4,467

MoU 189 191 -1 195

ARPU, blended

(SEK) 220 222 -1 223

Churn, blended

(%) 29 26 27

Subscriptions,

period-end

(thousands) 16,120 14,797 9 15,900

Employees,

period-end 8,111 8,018 1 8,339





Additional segment information available at www.teliasonera.com/ir



· Net sales rose 9.2 percent to SEK 12,578 million (11,519). Net sales

in local currencies decreased 0.8 percent, and the negative impact from

regulatory intervention was at least 3 percent. The positive effects

from acquisitions and exchange rate fluctuations were 0.7 percent and

9.3 percent, respectively. In reported currency, Spain, Finland, Sweden

and Denmark made the largest contributions to net sales growth in

absolute terms.



In local currencies, net sales grew in Sweden and Spain. Net sales in

Sweden rose 7.5 percent of which more than half can be explained by the

strong growth in mobile data and an increasing number of paying mobile-

broadband subscribers. Voice traffic increased, inbound roaming grew,

supported by a weaker local currency, and equipment sales were higher.

Regulatory intervention concerning interconnect and roaming, however,

put downward pressure on prices.



In Spain, Yoigo strengthened its market position further by offering

low-price services that continued to attract new customers. As in the

previous quarter, revenue drew additional support from the decision in

2008 to purchase terminals directly from vendors and sell them to the

distribution channels.



Net sales in local currency fell in Finland, mainly as a result of

significantly lower equipment sales. Mobile traffic revenues also

declined due to lower revenues from domestic calls, and roaming was

negatively impacted by decreased business travel.



In the three Baltic countries, the economic recession caused a

substantial sales decline in local currencies, of which half can be

explained by the continued fall in equipment sales and half by declining

traffic revenues and volumes. Net sales in Lithuania were negatively

affected by an approximately 20 percent interconnect-fee reduction on

January 1, 2009.



· Interconnect fees that TeliaSonera receives from other mobile

operators were lowered in Denmark from DKK 0.72 to DKK 0.62 on May 1,

2008, in Sweden from SEK 0.55 to SEK 0.43 on July 1, 2008, and on the

same date in Norway from NOK 0.70 to NOK 0.60. In Finland, fees were

lowered from EUR 0.066 to EUR 0.051 on January 1, 2008, and further to

EUR 0.049 on January 1, 2009. On the same date, fees in Lithuania were

lowered from LTL 0.337 to LTL 0.267.



In Norway, the reduction of the interconnect fees and symmetric prices

with Telenor as of July 1, 2008, and the effect of losing the national

roaming agreement with Network Norway have, as previously estimated, a

total annualized negative effect of approximately SEK 600 million on

sales as of the fourth quarter 2008.



· The number of subscriptionsrose by 1.3 million from the first quarter

2008 to 16.1 million, with increases in all markets. Growth was

strongest in Spain with a rise of 541,000 to 1.1 million despite the

elimination of more than 100,000 inactive subscriptions during the first

quarter. Sweden followed with 478,000 new subscriptions and Finland with

173,000. During the quarter the total number of subscriptions rose by

220,000, with Spain and Sweden showing the largest increases.



· EBITDA, excluding non-recurring items, increased 0.7 percent to SEK

3,412 million (3,388). Addressable costs in local currencies and

excluding acquisitions increased 3.6 percent compared to last year

mainly due to high customer intake in Spain. The EBITDA margin declined

to 27.1 percent (29.4).



In Sweden, EBITDA increased to SEK 1,240 million (1,123) as a result of

higher sales and cost efficiency. Consequently the margin increased to

37.1 percent (36.1).



The EBITDA loss in Spain narrowed to SEK -340 million (-388) but widened

compared to the fourth quarter 2008 due to more gross additions and a

higher intake of postpaid subscribers.



The EBITDA margin in Finland and Denmark decreased as a result of lower

net sales in local currencies and unchanged cost levels. In Denmark, a

successful intake of mobile broadband subscribers also had a negative

effect on the margin. Despite lower operating expenses in Lithuania, the

margin fell as a result of a substantial decline in net sales.



· CAPEX was SEK 749 million (825) and the CAPEX-to-sales ratio 6.0

percent (7.2). Cash flow, measured as EBITDA minus CAPEX, increased to

SEK 2,663 million (2,563).







SEK in

millions,

except

margins Jan-Mar Jan-Mar Chg Jan-Dec

and changes 2009 2008 (%) 2008

Net sales 12,578 11,519 9 48,673

of which

Sweden 3,342 3,109 8 13,334

of which

Finland 2,653 2,411 10 9,917

of which

Norway 2,252 2,280 -1 9,433

of which

Denmark 1,866 1,660 12 6,845

of which

Lithuania 577 677 -15 2,722

of which

Latvia 652 646 1 2,635

of which

Estonia 517 525 -2 2,262

of which

Spain 843 335 152 2,050

EBITDA excl.

non-recurring

items 3,412 3,388 14,399

Margin (%),

total 27.1 29.4 29.6

Margin (%),

Sweden 37.1 36.1 37.1

Margin (%),

Finland 29.9 33.6 31.0

Margin (%),

Norway 34.1 35.0 35.3

Margin (%),

Denmark 14.8 18.0 20.1

Margin (%),

Lithuania 32.4 39.0 34.6

Margin (%),

Latvia 46.2 44.7 43.0

Margin (%),

Estonia 36.6 37.1 38.1

Margin (%),

Spain neg neg neg











Efficiency measures improved margin in Broadband Services







Businessarea Broadband Servicesprovides mass-market services for

connecting homes and offices. Products and services include broadband

over copper, fiber and cable, IPTV, voice over internet, home

communications services, IP-VPN/Business internet, leased lines and

traditional telephony. The business area operates the group common core

network, including the data network of the international carrier

business. The business area comprises operations in Sweden, Finland,

Norway, Denmark, Lithuania, Latvia (49 percent), Estonia and

international carrier operations.





· The impact of the economic downturn has so far had a limited impact

on net sales. Over-all price erosion is still evident in all markets and

the migration from traditional fixed voice services persists. The

promotion of mobile broadband continued to affect penetration growth of

DSL. Investments are directed into the backbone and transmission net-

works to support services requiring higher bandwidth, such as IPTV and

broadband. TeliaSonera has strengthened its market position in IPTV,

particularly in the Baltic countries but also in Sweden.





SEK in

millions,

except

margins,

operational

data and Jan-Mar Jan-Mar Chg Jan-Dec

changes 2009 2008 (%) 2008

Net sales 10,964 10,446 5 42,625

EBITDA excl.

non-recurring

items 3,497 3,049 15 11,705

Margin (%) 31.9 29.2 27.5

Operating

income 1,997 1,591 26 5,285

Operating

income excl.

non-recurring

items 2,116 1,784 19 6,568

CAPEX 1,080 1,071 1 5,810

Broadband ARPU

(SEK) 309 268 15 274

Subscriptions,

period-end

(thousands)

Broadband 2,479 2,368 5 2,434

Fixed voice 5,660 6,121 -8 5,806

Associated

company, total 773 764 1 777

Employees,

period-end 14,937 16,002 -7 15,410





Additional segment information available at www.teliasonera.com/ir



· Net sales increased 5.0 percent to SEK 10,964 million (10,446) with

growth in all markets except Sweden. Net sales in local currencies

decreased 2.1 percent. The positive effect from exchange rate

fluctuations was 7.1 percent. Sales of IP-based services increased 16

percent in reported currency and now represent one third of Broadband

Services’ total net sales.



In Sweden, net sales decreased 2.0 percent to SEK 4,709 million (4,804).

Growth in IP services was strong and revenues from IPTV tripled compared

to the first quarter last year but could not fully compensate for the

decline in traditional fixed-voice services and equipment sales. The

price increases in fixed telephony in Sweden that were announced in

March will have a gradual impact starting in the second quarter.



· The number of subscriptions for broadband access rose to 2,300,000,

an increase of 84,000 from the first quarter 2008 and 16,000 from year-

end 2008.



The total number of TV subscriptions rose by 100,000 from the first

quarter 2008 to 688,000, of which 509,000 were IPTV subscriptions, up

102,000. More than 20 percent of TeliaSonera’s broadband customers now

also subscribe to the TV service. The total number of IPTV subscriptions

increased by 32,000 during the quarter, of which 9,000 in Sweden.





The number of fixed-voice subscriptions decreased by 461,000 from the

first quarter 2008 to 5,660,000, and was down by 146,000 from year-end

2008.



· EBITDA, excluding non-recurring items, increased to SEK 3,497 million

(3,049), with approximately half of the rise coming from cost savings

and half from currency fluctuations. Addressable costs in local

currencies and excluding acquisitions fell 6.0 percent compared to last

year. The EBITDA margin improved to 31.9 percent (29.2).



The margin improvement in Sweden was due to lower operating expenses as

a result of efficiency measures and reduced costs of goods sold related

to lower volumes and lower interconnect costs.



In Finland, price increases, improved cost efficiency and lower

maintenance and subcontractor costs lifted the margin.



In Wholesale, the margin narrowed to 24.9 percent (30.7) partly due to

higher sales of low-margin international voice traffic.



· CAPEX was SEK 1,080 million (1,071) and the CAPEX-to-sales ratio 9.9

percent (10.3). Cash flow, measured as EBITDA minus CAPEX, increased to

SEK 2,417 million (1,978).





SEK in

millions,

except

margins Jan-Mar Jan-Mar Chg Jan-Dec

and changes 2009 2008 (%) 2008

Net sales 10,964 10,446 5 42,625

of which

Sweden 4,709 4,804 -2 19,283

of which

Finland 1,783 1,561 14 6,321

of which

Norway 238 231 3 913

of which

Denmark 290 266 9 994

of which

Lithuania 651 563 16 2,302

of which

Estonia 533 485 10 2,163

of which

Wholesale 3,085 2,784 11 12,010

EBITDA excl.

non-recurring

items 3,497 3,049 15 11,705

Margin (%),

total 31.9 29.2 27.5

Margin (%),

Sweden 34.1 29.4 27.3

Margin (%),

Finland 32.8 20.4 23.1

Margin (%),

Norway 21.0 23.4 20.0

Margin (%),

Denmark 9.7 1.5 neg

Margin (%),

Lithuania 45.8 45.6 42.7

Margin (%),

Estonia 30.8 29.9 26.7

Margin (%),

Wholesale 24.9 30.7 27.9











Maintained high profitability in Eurasia







Businessarea Eurasiacomprises mobile operations managed by Fintur in

Kazakhstan, Azerbaijan, Uzbekistan, Tajikistan, Georgia, Moldova, Nepal

and Cambodia and a shareholding of 12 percent in Afghanistan’s largest

operator Roshan. The business area is also responsible for developing

TeliaSonera’s shareholding in Russian MegaFon (44 percent) and Turkish

Turkcell (37 percent). The main responsibility is to create shareholder

value and to exploit penetration growth in the respective countries.





· Eurasia continued to show solid growth in terms of traffic volumes.

Regulatory intervention, higher penetration and increasing competition

put pressure on prices and margins in the region. In addition, the

economic downturn became more evident during the quarter, particularly

in Kazakhstan, Azerbaijan and Georgia. Mobile usage was not affected

dramatically but the average price per minute declined as a result of

price pressure and promotion campaigns.



· TeliaSonera maintained market leadership in Kazakhstan, Azerbaijan,

Tajikistan and Georgia, and maintained its positions in all other

markets.





SEK in

millions,

except

margins,

operational

data and Jan-Mar Jan-Mar Chg Jan-Dec

changes 2009 2008 (%) 2008

Net sales 3,741 2,717 38 13,204

EBITDA excl.

non-recurring

items 1,865 1,339 39 6,553

Margin (%) 49.9 49.3 49.6

Income from

associated

companies

Russia 1,202 1,017 18 5,070

Turkey 741 848 -13 3,991

Operating

income 3,132 2,802 12 13,731

Operating

income excl.

non-recurring

items 3,132 2,802 12 13,731

CAPEX 1,028 1,223 -16 4,595

Subscriptions,

period-end

(thousands)

Subsidiaries 19,168 13,304 44 18,416

Associated

companies 91,936 81,168 13 90,558

Employees,

period-end 4,732 4,142 14 4,780





Additional segment information available at www.teliasonera.com/ir





Consolidated operations



· Net sales rose 37.7 percent to SEK 3,741 million (2,717) with revenue

growth in all markets. Organic growth in local currencies was 6.1

percent. The positive effect from exchange rate fluctuations was 25.0

percent.



In reported currency, the largest contributions in absolute terms came

from Kazakhstan, Azerbaijan and Uzbekistan. In Uzbekistan, net sales

more than tripled and Tajikistan reported growth of more than 90

percent. Consolidated since October 1, 2008, the operations in Nepal and

Cambodia affected net sales positively by 6.6 percent.



· The number of subscriptions rose by 5.9 million, or 44.1 percent,

from the first quarter 2008 to 19.2 million, including 2.0 million

subscriptions from the acquired operations in Nepal and Cambodia.

Subscription growth excluding acquisitions was 29.3 percent, with the

largest increase in Uzbekistan, mainly driven by a successful rebranding

that helped grow the subscription base by 2.1 million. During the

quarter the total number of subscriptions rose by over 0.8 million.





· EBITDA, excluding non-recurring items, increased 39.3 percent to SEK

1,865 million (1,339) as a result of higher reported net sales. The

margin rose to 49.9 percent (49.3), driven by a balanced-growth approach

and efficient cost control. The profitability improvement came despite

price erosion that was caused by growing competition and higher

promotional spending.



· CAPEX was SEK 1,028 million (1,233) and included continued

investments in capacity, coverage and higher service quality in the

networks, particularly in Uzbekistan. The CAPEX-to-sales ratio fell to

27.5 percent (45.0). Cash flow, measured as EBITDA minus CAPEX,

increased to SEK 837 million (116).





SEK in

millions,

except Jan-Mar Jan-Mar Chg Jan-Dec

changes 2009 2008 (%) 2008

Net sales 3,741 2,717 38 13,204

of which

Kazakhstan 1,665 1,419 17 6,673

of which

Azerbaijan 988 741 33 3,563

of which

Uzbekistan 283 76 272 496

of which

Tajikistan 171 88 94 516

of which

Georgia 342 308 11 1,393

of which

Moldova 122 91 34 420

of which

Nepal 167 – 158

of which

Cambodia 11 – 10







Associated companies – Russia



· MegaFon (associated company, in which TeliaSonera holds 43.8 percent)

in Russia grew its subscriptions base to 43.7 million, an increase of

6.8 million from the first quarter 2008 and 0.2 million from year-end

2008. MegaFon maintained its market share of 23 percent during the

quarter in terms of subscriptions.



· TeliaSonera’s income from Russia rose to SEK 1,202 million (1,017),

driven by higher sales and earnings at MegaFon. The Russian ruble

depreciated 5.0 percent against the Swedish krona which had a negative

impact of SEK 63 million.





Associated companies – Turkey



· Turkcell (associated company, in which TeliaSonera holds 37.3

percent, reported with a one-quarter lag) in Turkey grew its

subscription base to 37.0 million, an increase of 1.6 million from the

corresponding period the previous year, and 0.7 million during the

quarter. In Ukraine, the number of subscriptions rose 2.4 million

compared to the previous year and 0.5 million during the quarter.



· TeliaSonera’s income fromTurkey decreased to SEK 741 million (848).

The Turkish lira depreciated 6.0 percent against the Swedish krona,

which had a negative impact of SEK 48 million.



· Turkcell has proposed to the Annual General Meeting 2009, to be held

on May 8, a cash dividend of approximately SEK 5.8 billion (TRY 1.1

billion), corresponding to 50 percent of Turkcell’s distributable net

income for the 2008 fiscal year. TeliaSonera’s share of the proposed

dividend will be approximately SEK 2.1 billion (the dividend received in

2008 was approximately SEK 1.1 billion).









Other operations







Other operationscomprise Other Business Services, TeliaSonera Holding

and Corporate functions. Other Business Services is responsible for

sales and production of managed-services solutions to business

customers.







SEK in

millions,

except Jan-Mar Jan-Mar Chg Jan-Dec

changes 2009 2008 (%) 2008

Net sales 1,355 1,133 20 4,906

EBITDA excl.

non-recurring

items 57 -2 333

Income from

associated

companies 22 8 175 6

Operating

income -67 -65 3 106

Operating

income excl.

non-recurring

items -62 -119 -47 -184

CAPEX 217 111 94 919





Additional segment information available at www.teliasonera.com/ir



· Net sales increased 19.6 percent to SEK 1,355 million (1,133). In

local currencies net sales increased 3.9 percent.



Net sales of the cable-TV company Stofa, which was transferred from

Broadband Services Denmark to Other operations on January 1, 2009,

increased 21 percent to SEK 361 million (299). In local currency, net

sales grew 3.4 percent. The number of subscriptions for broadband access

decreased by 3,000 to 149,000 and subscriptions for cable TV increased

by 2,000 to 211,000.







Stockholm, April 24, 2009







Lars Nyberg

President and CEO











This report has not been subject to review by TeliaSonera’s auditors.













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 07:30 CET

on April 24, 2009.

























Financial Information



TeliaSonera on April 8, 2009, restated its historical financial

information for the fiscal years 2006-2008 for business area Broadband

Services as well as for Other operations. The retail chain Veikon Kone

was moved from Broadband Services Finland to Other operations. The

cable-TV company Stofa was moved from Broadband Services Denmark to

Other operations. In addition, the business of selling backhaul to

mobile operators, e.g. capacity to the base stations, was transferred to

Broadband Services Wholesale from Broadband Services in Sweden, Finland

and Denmark.



Interim Report January–June 2009

July 24, 2009

Interim Report January–September 2009

October 28, 2009

Year-end Report January–December 2009 February

11, 2010

Interim Report January–March 2010

April 23, 2010

Interim Report January–June 2010

July 23, 2010

Interim Report January–September 2010

October 28, 2010

















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/ir





















Definitions



EBITDA: Earnings Before Interest, Tax, Depreciation and Amortization.

Equals operating income before depreciation, amortization and impairment

losses and before income from associated companies.



ARPU, blended: Average monthly revenue per subscription.



Churn, blended: The number of lost subscriptions (postpaid and prepaid)

expressed as a percentage of the average number of subscriptions

(postpaid and prepaid).



MoU: Minutes of usage per subscription and month.



DSL: Digital Subscriber Line is a family of technologies that provide

digital data transmission over the wires of a local telephone network.













Condensed Consolidated Statements of Comprehensive Income







SEK in

millions,

except per

share data,

number of

shares and Jan-Mar Jan-Mar Chg Jan-Dec

changes 2009 2008 (%) 2008

Net sales 27,204 24,398 12 103,585

Cost of sales -15,399 -13,687 13 -57,853

Gross profit 11,805 10,711 10 45,732

Selling,

admin. and

R&D expenses -6,425 -5,965 8 -25,400

Other

operating

income and

expenses, net -91 -43 112 -780

Income from

associated

companies and



joint

ventures 1,962 1,867 5 9,096

Operating

income 7,251 6,570 10 28,648

Finance costs

and other

financial

items, net -859 -13 -2,237

Income after

financial

items 6,392 6,557 -3 26,411

Income taxes -1,374 -1,565 -12 -4,969

Net income 5,018 4,992 1 21,442

Foreign

currency

translation

differences 1,750 -6,596 13,814

Income from

associated

companies 215 -32 -37

Cash flow

hedges -18 -12 -331

Available-

for-sale

financial

instruments 15 -29 -97

Income taxes

relating to

other

comprehensive

income -34 -11 209 390

Other

comprehensive

income 1,928 -6,680 13,739

Total

comprehensive

income 6,946 -1,688 35,181



Net income

attributable

to:

Owners of the

parent 4,440 4,465 -1 19,011

Minority

interests 578 527 10 2,431

Total

comprehensive

income

attributable

to:

Owners of the

parent 7,262 -1,742 31,075

Minority

interests -316 54 4,106



Earnings per

share (SEK),

basic and

diluted 0.99 0.99 0 4.23

Number of

shares

(thousands)

Outstanding

at period-end 4,490,457 4,490,457 4,490,457

Weighted

average,

basic and

diluted 4,490,457 4,490,457 4,490,457



EBITDA 8,611 7,575 14 31,658

EBITDA excl.

non-recurring

items 8,821 7,755 14 32,954

Depreciation,

amortization

and

impairment

losses -3,322 -2,872 16 -12,106

Operating

income excl.

non-recurring

items 7,477 6,750 11 30,041











Condensed Consolidated Statements of Financial Position







Mar 31, Dec 31,

SEK in millions 2009 2008

Assets

Goodwill and other

intangible assets 103,965 100,968

Property, plant and

equipment 61,446 61,946

Investments in

associates and joint

ventures, deferred tax

assets

and other non-current

assets 63,197 62,265

Total non-current

assets 228,608 225,179

Inventories 1,553 1,673

Trade receivables,

current tax assets and

other receivables 22,559 23,434

Interest-bearing

receivables 1,760 2,147

Cash and cash

equivalents 19,137 11,826

Total current assets 45,009 39,080

Non-current assets

held-for-sale 42 27

Total assets 273,659 264,286



Equity and liabilities

Equity attributable to

owners of the parent 137,649 130,387

Minority interests 10,072 11,061

Total equity 147,721 141,448

Long-term borrowings 60,322 54,178

Deferred tax

liabilities, other

long-term provisions 25,074 24,594

Other long-term

liabilities 2,039 2,565

Total non-current

liabilities 87,435 81,337

Short-term borrowings 9,269 11,621

Trade payables, current

tax liabilities, short-

term provisions

and other current

liabilities 29,234 29,880

Total current

liabilities 38,503 41,501

Total equity and

liabilities 273,659 264,286









Condensed Consolidated Statements of Cash Flows







Jan-Mar Jan-Mar Jan-Dec

SEK in millions 2009 2008 2008

Cash flow before

change in working

capital 6,516 5,005 28,480

Change in working

capital 944 -787 -1,394

Cash flow from

operating

activities 7,460 4,218 27,086

Cash CAPEX -3,178 -3,108 -15,758

Free cash flow 4,282 1,110 11,328

Cash flow from

other investing

activities -451 94 -3,876

Total cash flow

from investing

activities -3,629 -3,014 -19,634

Cash flow before

financing

activities 3,831 1,204 7,452

Cash flow from

financing

activities 3,274 4,920 -4,359

Cash flow for the

period 7,105 6,124 3,093



Cash and cash

equivalents,

opening balance 11,826 7,802 7,802

Cash flow for the

period 7,105 6,124 3,093

Exchange rate

differences 206 -107 931

Cash and cash

equivalents,

closing balance 19,137 13,819 11,826











Condensed Consolidated Statements of Changes in Equity







Jan-Mar 2009 Jan-Mar 2008

Owners Owners of

SEK in of the Minority Total the Minority Total

millions parent interests equity parent interests equity

Opening

balance 130,387 11,061 141,448 117,274 9,783 127,057

Dividends – -644 -644 -17,962 – -17,962

Transactions

with minority

interests – -29 -29 – -115 -115

Total

comprehensive

income 7,262 -316 6,946 -1,742 54 -1,688

Closing

balance 137,649 10,072 147,721 97,570 9,722 107,292









Basis of Preparation





General. As in the annual accounts for 2008, TeliaSonera’s consolidated

financial statements as of and for the three-month period ended March

31, 2009, have been prepared in accordance with International Financial

Reporting Standards (IFRSs) and, given the nature of TeliaSonera’s

transactions, with IFRSs as adopted by the European Union. As of January

1, 2009, TeliaSonera applies the revised presentation provisions of IAS

1 Presentation of Financial Statements (2007). All non-owner changes in

equity are now presented in the statement of comprehensive income, while

changes in equity resulting from transactions with owners in their

capacity as owners remain presented in the statement of changes in

equity. The revisions also include changes in the titles of the other

financial statements. The parent company TeliaSonera AB’s financial

statements have been prepared in accordance with the Swedish Annual

Accounts Act as well as standard RFR 2.2 Accounting for Legal Entities

and other statements issued by the Swedish Financial Reporting Board.

This report has been prepared in accordance with IAS 34 Interim

Financial Reporting.



New accounting standards (not yet adopted by the EU). Amendments on

embedded derivatives to IFRIC 9 Reassessment of Embedded Derivatives and

IAS 39 Financial Instruments: Recognition and Measurement (effective for

annual periods ending on or after June 30, 2009; to be applied

retrospectively) were issued on March 12, 2009. The amendments clarify

that on reclassification of a financial asset out of the “at fair value

through profit or loss” category, all embedded derivatives have to be

assessed and, if necessary, separately accounted for in financial

statements. Currently, TeliaSonera is not considering the

reclassification of any financial assets.



The second annual Improvements to IFRSs (mostly effective for annual

periods beginning on or after January 1, 2010; earlier adoption

permitted) were issued on April 16, 2009. These improvements to 12 IFRSs

make necessary, but non-urgent, amendments that have not been included

as part of other major projects. TeliaSonera is currently assessing the

effects of the improvements, if any, on its results or financial

position.



For additional information, see corresponding section in TeliaSonera’s

Annual Report 2008.









Non-recurring Items







Jan-Mar Jan-Mar Jan-Dec

SEK in millions 2009 2008 2008

Within EBITDA -210 -180 -1,296

Restructuring

charges, synergy

implementation

costs, etc.:

Mobility Services -102 -41 -397

Broadband

Services -103 -193 -1,189

Other operations -5 54 290

of which

TeliaSonera

Holding -2 56 378

Within

Depreciation,

amortization and

impairment losses -16 – -97

Impairment

losses,

accelerated

depreciation:

Mobility Services – – -3

Broadband

Services -16 – -94

Within Income

from associated

companies and

joint ventures – – –

Within Finance

costs and other

financial items,

net – – 290

Penalty interest:

Tele2 – 275 290

Total -226 95 -1,103









Deferred Taxes







Mar 31, Dec 31,

SEK in millions 2009 2008

Deferred tax assets 12,807 13,206

Deferred tax

liabilities -11,847 -11,260

Net deferred tax assets 960 1,946









Segment and Group Operating Income







Jan-Mar Jan-Mar Jan-Dec

SEK in millions 2009 2008 2008

Mobility Services 2,194 2,253 9,526

Broadband

Services 1,997 1,591 5,285

Eurasia 3,132 2,802 13,731

Other operations -67 -65 106

Total segments 7,256 6,581 28,648

Elimination of

inter-segment

profits -5 -11 0

Group 7,251 6,570 28,648











Related Party Transactions





MegaFon. As of March 31, 2009, TeliaSonera had interest-bearing claims

of SEK 387 million on its associated company OAO MegaFon. OAO

Telecominvest (TCI), 26.1 percent owned by TeliaSonera, owns 31.3

percent of the shares in MegaFon. TeliaSonera has signed agreements with

TCI and a TCI shareholder in order to secure TeliaSonera’s ownership in

MegaFon, including an agreement under which TCI has pledged 8.2 percent

of the shares in MegaFon to TeliaSonera.



Svenska UMTS-nät. In the three-month period ended March 31, 2009,

TeliaSonera purchased services from its 50 percent-owned joint venture

Svenska UMTS-nät AB worth SEK 182 million, and sold services worth SEK

127 million.







Investments







Jan-Mar Jan-Mar Jan-Dec

SEK in millions 2009 2008 2008

CAPEX 3,074 3,230 15,795

Intangible assets 253 235 2,528

Property, plant

and equipment 2,821 2,995 13,267

Acquisitions and

other investments 93 239 9,060

Asset retirement

obligations 12 – 443

Goodwill and fair

value adjustments 73 233 8,578

Equity holdings 8 6 39

Total 3,167 3,469 24,855









Net Debt







Mar 31, Dec 31,

SEK in millions 2009 2008

Long-term and short-

term borrowings 69,591 65,799

Less derivatives

recognized as financial

assets and hedging

long-term and short-

term borrowings -4,945 -4,327

Less short-term

investments, cash and

bank -19,620 -12,858

Net debt 45,026 48,614









Loan Financing and Credit Rating





The underlying cash flow generation was positive during the first

quarter of 2009.



Conditions for funding activities have continued to improve during the

early part of the year and, in early March, TeliaSonera issued longer

dated bond financing including a EUR 550 million five-year public

syndicated Eurobond at reasonable terms. No shorter dated debt issuance

was made during the first quarter. Even taking into consideration the

dividend payout to the shareholders in April and maturing debt,

TeliaSonera is now well funded for the remainder of the year.





Massive government liquidity injections in the financial system

alongside radical cuts of official central bank lending rates have

helped to improve credit market conditions, but it is not clear whether

the worst effects of the financial turmoil are behind us, since real

economy effects and credit losses tend to lag. The Swedish krona

strengthened somewhat by the end of the quarter, but remains weak.

During the quarter, TeliaSonera increased the debt volume allocated to

hedging of net investments to some EUR 1.5 billion in total.



In February, Moody's Investors Service confirmed its A-3 long-term

credit rating with a Stable Outlook on TeliaSonera AB.







Financial Key Ratios







Mar 31, Dec 31,

2009 2008

Return on equity (%,

rolling 12 months) 17.0 17.2

Return on capital

employed (%, rolling 12

months) 16.9 17.3

Equity/assets ratio (%) 50.3 50.5

Net debt/equity ratio

(%) 32.7 36.5

Shareholders’ equity

per share (SEK) 30.65 29.04









Guarantees and Collateral Pledged





Guarantees at March 31, 2009, totaled SEK 2,278 million, of which SEK

1,996 million referred to credit guarantees on behalf of Svenska UMTS-

nät. Under certain third-party agreements, the credit guarantees on

behalf of Svenska UMTS-nät are capped at SEK 2,400 million. Collateral

pledged totaled SEK 1,136 million, mainly referring to blocked funds in

bank accounts related to Ipse 2000 S.p.A.’s future license payments,

certain court proceedings and deposits from customers.







Contractual Obligations





Contractual obligations at March 31, 2009, totaled SEK 1,890 million, of

which SEK 1,541 million referred to contracted build-out of

TeliaSonera’s mobile networks in Sweden, Finland and Spain as well as

its fixed network in Sweden.







Parent Company







Condensed Income

Statements Jan-Mar Jan-Mar Jan-Dec

(SEK in millions) 2009 2008 2008

Net sales 3,841 4,019 16,132

Gross profit 604 531 2,778

Operating income 128 20,603 21,697

Income after

financial items -104 20,388 18,280

Income before

taxes -22 30,257 30,317

Net income -23 30,260 30,306







Net sales, primarily related to fixed network services and broadband

application services in Sweden, declined due to migration to mobile

services and lower-priced IP-based services. Out of the total net sales

in the period, SEK 3,048 million (3,103) was billed to subsidiaries. In

the first quarter of 2008, operating income was heavily impacted by

capital gains on assets transferred to the subsidiary TeliaSonera

Skanova Access AB (Skanova Access) and income before taxes by a related

reversal of excess depreciation.





Condensed Balance

Sheets Mar 31, Dec 31,

(SEK in millions) 2009 2008

Non-current assets 170,889 170,852

Current assets 46,567 40,246

Total assets 217,456 211,098

Shareholders’ equity 74,994 75,017

Untaxed reserves 7,943 8,024

Provisions 694 708

Liabilities 133,825 127,349

Total equity and

liabilities 217,456 211,098





Total investments in the period were SEK 345 million (35,124), of which

SEK 285 million (293) in property, plant and equipment primarily for the

fixed network. Other investments totaled SEK 60 million (34,831). In

2008, other investments included a capital contribution of SEK 34,000

million provided in kind in exchange for new shares issued by Skanova

Access.







Risks and Uncertainties





TeliaSonera operates in a broad range of geographic product and service

markets in the highly competitive and regulated telecommunications

industry. As a result, TeliaSonera is subject to a variety of risks and

uncertainties. TeliaSonera has defined risk as anything that could have

a material adverse effect on the achievement of TeliaSonera’s goals.



Risks can be threats, uncertainties or lost opportunities relating to

TeliaSonera’s current or future operations or activities. Additionally,

these risks may affect TeliaSonera’s share price from time to time.



TeliaSonera has an established risk management process in place to

regularly identify, analyze and assess, and report business and

financial risks and uncertainties, and to mitigate such risks when

appropriate. Risk management is an integrated part of TeliaSonera’s

business planning process.



See “Report of the Directors – Risks and risk management” in

TeliaSonera’s Annual Report 2008 for a detailed description of some of

the factors that may affect TeliaSonera’s business, financial position

and results of operations. TeliaSonera believes that the risk

environment has not materially changed from the one described in the

Annual Report 2008.





Risks and uncertainties that could specifically impact the quarterly

results of operations during the remainder of 2009 include, but may not

be limited to:



· Current downturn in the world economy. The length of the current

turmoil in the global financial markets and the sharp decline in the

world economy are difficult to predict. TeliaSonera has a strong balance

sheet and operates in a relatively non-cyclical or late-cyclical

industry. However, a long-term recession in the countries in which

TeliaSonera operates would have an impact on its customers and may have

a negative impact on its growth and results of operations through

reduced telecom spending. The maturity schedule of TeliaSonera’s loan

portfolio is evenly distributed over several years, and the refinancing

is expected to be made using uncommitted open-market debt financing pro-

grams and bank loans, alongside the company’s free cash flow. In

addition, TeliaSonera has committed lines of credit with banks that are

deemed to be sufficient and may be utilized if the open-market

refinancing conditions are poor. However, the cost of funding might be

higher, should the financial turmoil and the downturn in the economy

continue for a long time or become even more severe.



· Investments in future growth. TeliaSonera is currently investing in

future growth through, for example, sales and marketing expenditures to

retain and acquire customers in most markets, building up its customer

base in start-up operations and investments in infrastructure in all

markets to improve capacity and access. While TeliaSonera believes that

these investments will improve market position and financial results in

the long term, they may not have the targeted positive effects yet in

the short term and related expenditure may impact the results of

operations between quarters.



· Efficiency programs. TeliaSonera is in the process of adjusting its

cost base to reflect the shift from traditional to new services,

especially from fixed-voice services to mobile and IP-based services. In

the short term, depending on when the related decisions are made and

carried out, these efficiency programs may not yet bring the cost

savings that will be visible in the long term. Additionally, related

amounts of restructuring costs and their timing may increase the

volatility of quarterly results in the short term.



· Non-recurring items. In accordance with their nature, non-recurring

items such as capital gains and losses, restructuring costs, write-

downs, etc. may impact the quarterly results in the short term with

amounts or timing that deviate from those currently expected. Depending

on external factors or internal developments, TeliaSonera might also

experience non-recurring items that are not currently anticipated.



· Associated companies. A significant part of TeliaSonera’s results

derives from MegaFon and Turkcell, which TeliaSonera does not control

and which operate in growth markets but also in more volatile political,

economic and legal environments. Variations in the financial performance

of these associated companies have an impact on TeliaSonera’s results of

operations also in the short term.



· Acquisitions. TeliaSonera has made a number of targeted acquisitions

in accordance with its strategy. The efficient integration of these

acquisitions and the realization of related cost and revenue synergies,

as well as the positive development of the acquired operations, are

significant for the results of operations both in the long and short

term. Integration of acquired companies always includes certain risks,

and the integration process may increase the volatility of quarterly

earnings in the short term.









Forward-Looking Statements





This report contains statements concerning, among other things,

TeliaSonera’s financial condition and results of operations that are

forward-looking in nature. Such statements are not historical facts but,

rather, represent TeliaSonera’s future expectations. TeliaSonera

believes that the expectations reflected in these forward-looking

statements are based on reasonable assumptions; however, forward-looking

statements involve inherent risks and uncertainties, and a number of

important factors could cause actual results or outcomes to differ

materially from those expressed in any forward-looking statement. Such

important factors include, but may not be limited to: TeliaSonera’s

market position; growth in the telecommunications industry; and the

effects of competition and other economic, business, competitive and/or

regulatory factors affecting the business of TeliaSonera, its associated

companies and joint ventures, and the telecommunications industry in

general. Forward-looking statements speak only as of the date they were

made, and, other than as required by applicable law, TeliaSonera

undertakes no obligation to update any of them in light of new

information or future events.