Annual Report 2001

A n n u a l R e p o r t 2 0 0 1

Contents

Tele2 AB, formed in 1993, is the

leading alternative pan-European

telecommunications company offer-

ing fixed and mobile telephony, data

network and Internet services under

the brands Tele2, Tango and Comviq

to 15 million people in 21 countries.

Tele2 operates Datametrix, which

specializes in systems integration,

3C Communications, operating pub-

lic pay telephones and public

Internet services; Transac, providing

billing and transaction processing;

C3, offering co-branded pre-paid call-

ing cards and IntelliNet and Optimal

Telecom, the price-guaranteed resi-

dental router device. The Group

offers cable-TV services under the

Kabelvision brand name and together

with MTG, owns the Internet portal

Everyday.com.

1 Significant events

2 President’s message

4–9 Tele2 in brief

4–5 Historical role

4–11 History

8 Development of mobile communication

9 Continued investment in MVNO services

10 The Tele2 Group

12 The Board of Directors

13 Senior Executives

14 The Tele2 share

16 Nordic

30 Eastern Europe and Russia

35 Central Europe

38 Southern Europe

41 Luxembourg

43 Branded products & services

46 Financial review

47 Report of the directors

51 Income statement

52 Balance sheet

54 Cash flow statement

55 Notes

89 Audit report

90 Addresses

92 Definitions

Annual General Meeting

The Annual General Meeting will be held at 1:30 pm onThursday, May 16, 2002, at Gamla Stans Bryggeri in Stockholm.

Shareholders who wish to attend the Annual General Meetingmust

be entered in the share register maintained by theSecurities Register Center (Värdepapperscentralen VPC)for the Annual General Meeting (registration must becompleted by Monday May 6, 2002).

and notify the Company of their intention to attend no laterthan 1:00 PM on Friday, May 10, 2002.

Notification can be made by phone to +46 33 7241267, or in writing to:

Tele2 AB, Box 2094, SE-103 13 Stockholm, Swedenlabel the envelope “Annual General Meeting” or by emailing to : [email protected]

Financial information

Quarterly report, January–March April 24

Annual General Meeting May 16

Quarterly report, January–June August 5

Quarterly report, January–September October 23

Significant events

• Tele2’s operating revenue for 2001 totaled SEK 25,085 million (2000: 12,440),

an increase of 54% from the pro forma figure of SEK 16,243 million for 2001.

• The total number of customers rose by 29% to 15 million on December 31, 2001,

corresponding to a net intake of 3.4 million customers for the full year 2001.

• The operating profit before depreciation and amortization (EBITDA) was

SEK 1,698 million (2000: 1,820, pro forma 2000: –371), with an EBITDA

margin of 7% (2000: 15%, pro forma 2000: –2%).

• Tele2 Sweden’s operating revenue for full-year 2001 totaled SEK 9,060 million,

up 14% from the previous year. The EBITDA increased by 38% to SEK 3,773

million (2000: 2,728). The EBITDA margin was 42%, as opposed to 34% in

2000. Mobile telephony’s operating revenue rose by 20% to SEK 5,720 million,

while the EBITDA was up by 41% to SEK 3,111 million. As a result, mobile tele-

phony’s EBITDA margin was 54%.

• Operating revenue in Central Europe and Southern Europe amounted to SEK

5,364 million (2000 pro forma: 3,108) and SEK 5,591 million (2000 pro

forma: 2,574), respectively, corresponding to increases of 73% and 117%.

EBITDA were improved to SEK –606 million (pro forma 2000: –1,640) and

SEK –1,331 million (2000 pro forma: –1,276).

Financial summary 2001 2000 2000SEK M pro forma*

Operating revenue 25,085 16,243 12,440

Operating profit/loss before depreciation, EBITDA 1,698 –371 1,820

Operating profit/loss after depreciation, EBIT –1,356 –2,850 420

Operating profit/loss after financial items, EBT –1,944 –3,063 165

Profit/loss for the year 392 –3,618 –396

Profit/loss per share after dilution 2.70 –34.36 –3.47

* The pro forma accounts have not been subject to specific review by the Company’s auditors.

1Tele2 Annual Report 2001

• Tele2 is the only genuine pan-European tele-com operator and therefore the most widelyrecognized brand.

• The company had a customer base of 15 mil-lion at year-end.

• With revenue growth of 56% and in increasein net profit before depreciation and amort-ization of SEK 2.1 billion during 2001, Tele2 isthe most rapidly growing operator in Europe.

The authorities in Europe that establish the terms bywhich telecom companies operate are anxious to seeeffective competition. As a result, they are assisting us inexpanding our potential to operate profitably. As an excel-lent illustration of that trend, a growing number of coun-tries are allowing us to compete in the market for localtraffic. Without requiring any new marketing efforts, suchdevelopments boost the demand to which we have accessby some 50%.

The acquisition of a major Russian mobile telephonybusiness was our biggest new venture for the year. Themarket offers major potential. We have every reason tobelieve that Russian operations will be just as successful asour Baltic businesses. The market area Eastern europe andRussia have now recruited over 1 million mobile customers.

The task before us is to continue to make our fixed-linenetwork even more profitable. Many of our competitorsdeparted from that market in 2001. Their problem wasthat they had not accorded top priority to building up a customer base. They had set their sights on infrastruc-ture investments instead. Tele2 was once criticized forchoosing a customer-oriented strategy. Now we can seejust how wise that decision was.

I have never been one to put my faith in grandiosedreams about the immediate emergence of 3G. On theother hand, I am convinced that Tele2, just as whenComviq launched GSM ten years ago, will become theprice leader with solutions based on simplicity and cus-tomer preferences.

Many telecom operators in Europe have a very highdebt ratio. Keep in mind that Tele2’s has one of the lowestdebt ratios in relation to market market value in theindustry.

Varying assessments of 3G should not obscure the factthat Tele2 possesses other strengths that will evolvedynamically and fortify the entire company. Once again, I would like to underscore our hopes for MVNO arrange-

ments, which provide us with the opportunity to convertsome 10% of our fixed-line customers to mobile userswithin the first year alone.

Tele2 can look back on 2001 with pride. We posted:

• operating revenues for the full year of over SEK 25 billion,

• Group operating profit before amortization and depreciation of SEK 1.7 billion, an increase of SEK 2.1 billion.

From the beginning, Tele2 has cultivated a corporateculture that encourages change and welcomes challenges.We are always crossing new boundaries. The “nomadic”aspect of our corporate culture constantly propels ustoward new opportunities for growth and earnings. A cautious, short-term observer may regard such anapproach as reckless. That was how we were frequentlyperceived before Tele2 was listed in 1996, and even after-wards. But such skepticism is rare these days. Tele2 hasdemonstrated its capacity to successfully take on new chal-lenges and utilize fresh commercial opportunities to forgeprofitable businesses. It normally takes two to three yearsbefore Tele2’s expansion strategy receives the credit itdeserves. When we launched a broad-based effort to enterthe European fixed telephony market, there were observerswho labeled us as excessive risk-takers. Nowadays, theEuropean fixed telephony business is a cornerstone of our operations.

The key to success for a company that operates inTele2’s sectors is to constantly reconsider what it is doing,remain sensitive to the wishes and expectations of con-sumers, and avoid rigidity and bureaucracy.

Tele2’s business concept has unwaveringly been toreduce its rates. That is still at the heart of our mission.For a growing number of customers, we are the companythat offers high-quality services in the markets where weoperate at lower rates than the old monopolies (or evenour infrastructure-oriented competitors).

My first duty is to ensure that Tele2 is an efficient com-pany. Such an approach will benefit our customers whenit comes to price and quality, as well as safeguarding theinterests of our shareholders.

Tele2’s various brands – particularly Tele2, Tele2Mobil,Tango and Comviq – have garnered respect for their abil-ity to combine high quality with low rates. Such recogni-tion is the fruit of a corporate culture that has learned tomanage its assets properly and to invest in a way thatguarantees efficiency and quality at very low costs.

Tele2 operates in 21 countries.

For a growing number of customers, we are thecompany that offers high-quality services in the marketswhere we operate at lower rates than the old monopolies

Tele2 Annual Report 20012

“


President’s message

MVNO – a strategic breakthroughAs an MVNO Mobile Virtual Network Operator), Tele2can be a full-fledged GSM operator without having itsown infrastructure. There is a fundamental differencebetween MVNO status and the service provider agree-ments that were once so common in the industry. A ser-vice provider agreement turns a company into a distribu-tor of another operator’s telephony with the ability tohandle outgoing traffic only. An MVNO agreement givesTele2 its own exchanges and thus the capacity to handleincoming traffic as well.

The reason that GSM operators find an MVNO agree-ment with a company like Tele2 so attractive is the largenumber of customers to which it obtains access.

Tele2’s broad customer base throughout Europe firmlypositions it for similar MVNO agreements in one countryafter another. Given that both parties have something togain from such collaboration, I believe that Tele2 will sub-stantially augment its subscriber base by means of MVNOagreements over the next few years.

We concluded MVNO agreements in Germany and theNetherlands during 2001. MVNO is one of the keys tothe success of Tele2’s aggressive expansion strategy.

The prospect of being able to grow without constructingall too many of our own networks is highly appealing.

But Tele2’s own infrastructure – which will include 3Gmobile telephony networks (UMTS) in Sweden, Norwayand Finland within a few years – makes us a very attract-ive partner.

Our own infrastructure? Having a strong core business in the Nordic countries ishighly important for Tele2. We also have our own infra-structure in those markets – although its actual ownership,construction and operation are only peripheral to ourbusiness concept. But the infrastructure stems from thecommercial realities of the Swedish telecom market at thetime we started our business.

Once mobile telephony has incorporated mobileInternet, demand will in all probability take a big leap for-ward. There is understandable skepticism in that regardtoday – that which is totally unknown is always hard toimagine. Still, the question is not whether it will happen,but when.

I can still remember all the pundits in 1995 who saidthat Comviq’s business concept of mobile telephony for

...Tele2’s debt isamong the lowest of Euro-pean telecom companies...

the common man was totally out of the question. Forthem, mobile telephony was destined to remain a per-manent tool of exclusive business customers. And formany European countries, they were right in the shortterm. But Comviq got to work in Sweden. Today we canboast of Europe’s most profitable mobile operator busi-ness, including an operating margin before write-offs ofbetter than 50%.

3G will revolutionize the availability of personalizedinformation and entertainment. When the services areappealing enough, they will automatically create a vigor-ous, rapidly growing market. What might seem like noth-ing more than a wild fantasy is likely to be everyday farein a few years for those who are GSM users today. We arecurrently working with GPRS technology, the stage pre-ceding 3G. That is the stepping-stone to the services oftomorrow. Our most inquisitive customers will have a lit-tle taste of that which lies before us.

Deregulation is halfway thereThe European telecom market is far from fully deregu-lated. Tele2’s various subsidiaries report mixed results interms of how efficient that deregulation has been. It is ofthe utmost importance that both the European Commis-sion and national deregulation agencies (including thePTS, Swedish Competition Authority and SwedishConsumer Agency) consistently pursue a proactive com-petition policy. A greater sense of urgency is needed.

The change will not take place overnight. It will bemany years before new companies are able to compete onequal terms with the old monopolies. Whether it is thepoliticians, deregulation bodies or antitrust authorities, theestablishment of each country tends to protect the oldmonopolies to the bitter end.

But the European telecom market is entering a wholenew era. Each step in that direction means higher volumesand sales. Tele2 is hard at work to ensure that it makes a major contribution to revolutionizing the availability ofpersonalized information and entertainment – not to theexclusive few, but to the broad European masses.

That is the way of the future!

Lars-Johan Jarnheimer

“

Tele2 ABLars Johan Jarnheimer, CEO

Håkan Zadler, CFO

NordicSwedenNorway

DenmarkFinland

Datametrix

Eastern Europeand Russia

EstoniaLatvia

LithuaniaPoland

Czech RepublicRussia

Central EuropeGermany

NetherlandsSwitzerland

AustriaIreland

SouthernEuropeFranceItalySpain

Portugal

LuxembourgLuxembourgLiechtenstein

Belgium3C

Transac

LuxemburgBelgien

LiechtensteinT2

Tango3C

Transac

Branded products& services

Optimal TelecomIntelliNet

C3Tele2

United KingdomEveryday

Tele2 in brief

4 Tele2 Annual Report 2001

With its mobile telephony, fixed telephony, Internet, datacommunications, cable-TV and broadband capabilities,Tele2 is able to provide the total solutions that customersare increasingly looking for. The Group is continuallyworking to spread know-how among various countriesand product lines in order to broaden its offering andthereby boost profitability.

Tele2’s quality assurance policy is based on guidelinesthat apply to the entire Group. The policy proceeds fromthe insight that one of the keys to achieving the compa-ny’s goals is to maintain high quality in everything that itdoes. The Group’s fundamental principles and collectiveskills are the backbone of that effort. The watchword isconstant improvement.

A customer’s experience of a product or service mustmeet his or her expectations. We always place the cus-tomer at center stage, and our chief gauge of quality is hisor her satisfaction. Twice a year we conduct customer sur-veys, the purpose of which is to ensure steady improve-ment. Tele2’s commitments, actions and products mustbe perceived as quality-oriented. Our customers mustalways be able to trust Tele2 as a service provider.

For those who wish to read more about Tele2 andComviq’s history, the book “Det svenska teleundret”,released by Ekerlids Publishers in June 2000, is an excel-lent history of Tele2 and Comviq. The book chroniclesevents from the very beginnings in the late 19th centurythrough the groundbreaking deregulation of the 1990s.

Tele2, which was established in 1993, is the leading alternative pan-Europeantelecom operator. The company offers GSM, public telecommunications and datacommunications, and Internet services.

Tele2’s corporate culture rests on the fundamental principles of flexibility,informality and cost-consciousness.

Tele2’s business concept is to have the most loyal and satisfied customers in the market by cost-effectively selling and supplying voice, data and image communications solutions while providinghigh-quality service.

The Group’s strong suits are low rates, a large customer base, industry-leading efficiency, access to wellknown brands and the ability to rapidly adapt to new customer requirements and market conditions.

Historical role

“Det svenska teleundret” (The Swedish Telecom Miracle),written by Anders Johnson and published by EkerlidsPublishers in June 2000, illustrates the central role thatTele2 and the businesses that now comprise it have playedin making Sweden a global telecommunications leader.Although much of the book focuses on the collaborationbetween Ericsson and the National Swedish Telecom-munications Administration, that is not the end of thestory. Two parts of the book focus on the innovations thatTele2 has made.

An Internet pioneerIn 1986, Comvik Skyport AB put up a satellite link for transatlanticdata communications. In 1989, Comvik signed agreements with theNational Swedish Rail Administration on a joint fiber optic network.The company changed its name to Tele2 AB in 1990.

According to Johnson, “That prepared the company for thederegulation of the telephony market in 1993 and allowed it toquickly become the second largest fixed-line operator. The infra-structure that Comvik had built also played a key role in theadvances of the Internet in Sweden. In 1991, Tele2 became the firstSwedish company to offer Internet access”.

Sunet, the university data communications network, did not havethe wherewithal to arrange Internet access for all businesses andindividuals outside the academic world. Snus (Swedish NetworkUsers Society) filled that gap:


Tele2 in brief

Operations at year-end 2001At year-end Tele2’s operations consisted of fixed andmobile telephony with the brands Tele2, Tele2Mobil,Comviq and Tango. Tele2 supplied services to some 15million customers in 21 countries.

The Tele2 Group also includes a number of othercompanies with data and telecom services:

• X-Source, active in IT-outsourcing,

• Datametrix, specialized in system integration,

• Optimal Telecom, with the products Linjeväljaren,Internet and Optimal wireless,

• 3C Communications, which sells telephony andInternet services via pay phones and Internet terminals,

• Transac, data processing of card transactions andinvoices,

• C3 offers phone cards for fixed telephony,

• IntelliNet, fixed telephony service with lowest-priceguarantee.

The Group also offers cable-TV services under thebrands Kabelvision and Tele2, as well as broadband ser-vices.

The Everyday.com Internet portal is a company thatis jointly owned by Tele2 and Modern Times Group(MTG).

Tele2 is listed on exchanges in Sweden and the US. It is listed on Stockholmsbörsen’s Attract 40 list withthe symbols TEL2A and TEL2B and on Nasdaq asTLTOA and TLTOB.

Tele2 and Telia to build joint UMTS networkAt the beginning of the year, Tele2 and Teliaannounced that they had established the jointly ownedcompany, Svenska UMTS-Nät AB, to build and oper-ate a network for next-generation UMTS (UniversalMobile Telecommunications System) mobile telephony.

This agreement means that Tele2 and Telia will haveequal access to the license that Tele2 was awarded. It alsomeans that the risks and costs will be shared equally,

resulting in significant savings for Tele2. Similarly, theneed to erect new infrastructures will be reduced, sinceboth parties’ existing infrastructure can be utilize to handletraffic.

Tele2 also has a UMTS license in Finland (throughits part ownership in Suomen Kolegee Oy), Norway andLichtenstein, which creates significant opportunities forcoordination gains. With its large customer base, itstechnical expertise and four licenses, Tele2 is the mostattractive partner for both suppliers and other operators.

Acquisition of FORA TelecomAn agreement was reached at the end of the yearthrough which Tele2 will acquire Millicom InternationalCellular’s Russian mobile telephone company FORATelecom B.V. this is a logical development in light of thesuccess that Tele2 has achieved in the Baltic countries,particularly in the Estonia operations acquired fromMillicom in 1998. Russia is a growth market with sub-stantial potential, and with its eight GSM licenses, Tele2has an excellent base for its operations.

MVNO contracts in Germany and the NetherlandsOn August 30, 2000, Tele2 signed the world’s firstMVNO (Mobile Virtual Network Operator) contractwith the mobile operator Sonofon in Denmark. During2001, Tele2 signed two additional MVNO contracts.

In August, Tele2 announced that it had become theNetherland’s MVNO with the signing of a contract withTelfor, a GSM operator owned by British Telecom.

In Germany, Tele2 signed a MVNO contract withVIAG Interkoms, which means that Tele2 can now alsooffer its customers mobile telephony. Tele2 is alreadyone of Germany’s largest alternative telecom operators.

Both the MVNO and Service Provider (SP) roleshave arisen as a means of further opening the mobilemarket to competition. In both cases, the operator leasescapacity in an existing network and thus does not haveto build its own radio network. The difference betweenMVNO and SP is fundamental. In the first case, one

“Their goal was to start up a commercial Internet access service.When Snus approached the National TelecommunicationsAdministration, it encountered total indifference. A group ofEnglish consultants engaged by the agency had determined thatthe Internet was a fleeting technology without a future. The agencysuggested a mediocre service that it had developed on its own.Snus then turned to Comvik Skyport, which was more interested.”

That led Comviq to establish Swipnet, a special company to pro-vide Internet access. Despite internal resistance, the agency eventu-ally started its own IP network.

Nevertheless, Johnson writes that “as late as the autumn of1995, the manager of Telia Infomedia Interactive (also responsiblefor the Internet) said that the Internet was merely a colorfulgarbage can.”

Tele2 was in the vanguard of the Swedish Internet revolution.

GSM pioneerAccording to Johnson, Comviq “was the most innovative operatorwhen it came to marketing and distribution… Under the leadershipof CEO Lars-Johan Jarnheimer (currently CEO of Tele2), Comviq wasto turn GSM into a mass market”.

“The Swedish GSM networks started up in the autumn of 1992 ata time when the Swedish economic climate was beset by a highlyunusual combination of sky-high interest rates and the collapse ofthe krona. The economy was at a standstill and it was very difficultto launch new products… To jump-start sales, Comviq introducednew features that its competitors subsequently imitated.”

Tele2 breaks new ground – then and now.

Tele2 in brief

company in practice becomes a reseller of another com-pany’s telephony services, since only outgoing traffic ishandled. The MVNO role includes owning telephoneswitches, which are thus able to handle incoming traffic.An MVNO issues its own SIM cards, can invoice thecustomer directly and develop its own services, which isa clear advantage in competitive markets.

For the customer, there is no difference between hav-ing a subscription with a conventional operator or anMVNO. This model opens significant growth opportu-nities for a company like Tele2, which has a large cus-tomer base in many countries but lack infrastructurefor mobile telephony.

Fixed telephony in UKTele2 and the Royal Mail initiated a partnership duringthe year through which Tele2’s phone cards and fixedtelephony services are sold at all post offices in UK.

Advances in Eastern EuropeThe Tele2 brand was launched in Latvia and Estoniaduring 2001. Tele2 is now the largest alternative mobiletelephone operator in the Baltic region. Tele2 is also thelargest alternative operator for fixed telephony in Estonia.

Continental Europe – an overviewIn Germany, Tele2 is the third largest alternative operatorin fixed telephony. In the Netherlands, Tele2 is the coun-try’s next largest alternative operator in fixed telephonyand also established Tele2 as an MVNO during 2001.

Tele2 is also the largest alternative operator in Franceand will probably be able to take additional marketshare, since France introduced number pre-selection for

local calls as of January 1, 2002. In Switzerland, as wellas in Italy, Tele2 is the second largest alternative oper-ator in fixed telephony, Tele2 is that largest alternativeoperator for fixed telephony in the Austrian market.

During 2001, Tele2 began its offensive in theSpanish market. In Luxembourg and Lichtenstein,Tele2 is established as a mobile operator under thebrand name Tango.

Future opportunitiesAn important trend during 2001 was that interconnectcharges were lowered or are scheduled to be lowered inthe near future in several of the markets in which Tele2is active. Interconnect charges are the fees that a telecomoperator pays in order to switch traffic to other net-works, thus enabling calls between customers of variousoperators. Since Tele2 in other respects has low costs forinfrastructure, reduction of interconnect charges willhave a very positive impact.

Another positive trend during the past year was thatseveral countries introduced, or will introduce in thenear future, number portability, which means that acustomer is able to retain a mobile telephone numberwhen changing operators.

Pre-selection for local calls is also gaining ground.This means that profitable local calls are now also avail-able to Tele2, thus creating significant opportunities.Local pre-selection will be introduced in Sweden andFrance in the beginning of 2002. Toward the end of theyear, the Netherlands, Switzerland, Austria andGermany will also introduce local pre-selection.

Tele2 has a well established presence in all majormarkets and is closely monitoring the business oppor-tunities being created as deregulation continues.

– Industriförvaltnings AB Kinnevik

decides to enter the telecommu-

nications market.1980s 1981Late 1970s


– Kinnevik gets ready to provide

traditional voice and data

telecommunications services.

– Comviq launches its own analog

network for mobile telephony.

Development of third-generation mobile telephonyFrom Tele2’s perspective, there are many factors favor-ing UMTS:

• It will be a common standard in the Western worldand Japan. That AT&T in the US is moving towardsGSM and UMTS means that the telecom world ismoving toward a standard with very broad support.

• The Nordic region will have a head start in theEuropean market, since the beauty contests held herefor awarding licenses prescribe rapid deployment.Experience and business concepts can be exploited inemerging markets.

• All data traffic is moving towards higher bandwidthand mobility.

• In Sweden Tele2 will share infrastructure with Telia,which will significantly reduce costs for networkbuild-out.

Environment and personnel

Strict environmental requirementsTele2’s operations have only a limited impact on theenvironment. The company has drawn up an environ-mental policy for the entire group. The policy insiststhat environmentally approved products be used. Inaddition, waste materials generated throughout theoffice network, as well as scrapped materials, should betreated in an environmentally sound manner. Finally,

purchasing decisions must take the environment intoconsideration. Tele2 is particularly conscious of environ-mental safety issues when it comes to mobile telephony.

It is of the utmost importance that we not only com-ply with prevailing environmental standards, but thatwe keep abreast of research both in Sweden and abroad.The group is an active participant in public discussionsabout health, safety and the environment.

Personnel and skills developmentTele2 pursues an ongoing skills development effort toensure that its employees possess the kind of know-howthat will enable us to keep pace with the evolution ofthe market and the needs of customers. The group aver-aged 2,172 employees in 2001, as opposed to 1,747 in2000. Tele2 does business in 21 European countries.Just over half of its employees are in the Nordic area.That is the region in which Tele2 originated and inwhich it still has the largest operations.

All new employees complete a basic course that coversTele2’s operations, goals, principles, and quality assur-ance objectives. A series of new graduates are chosen fora trainee program each year. The program is primarilydevoted to on-the-job training in various countries andparts of the organization.

We also have an 18-month, multi-phase leadershipproject for the group’s managers.

Tele2 in brief

– A satellite link for

data communications

is established.

– Comviq obtains

a GSM license.1986 1988

– Agreement with National

Swedish Rail Administra-

tion on a joint fiber optic

network.1989

– Tele2 AB is formed

(Currently Tele2 Sverige AB).1990


Tele2 is one of the primary sponsors of Victory Challenge, the

Swedish syndicate that is an official challenger in Americas’ Cup, the

world’s oldest and most prestigious sailing trophy. The challenger

race, the Louis Vuitton Cup, begins on October 1. With Tele2’s logo-

type on the spinnaker of one of the Americas’ Cup boats, the media

impact in Tele2’s most important markets will be substantial.

Transfer capacity

GSMGPRS

UMTS

9,6 kbit/s

115 kbit/s

2 Mbit/s

9,6 kbit/s

ca 50 kbit/s

384 kbit/s

InitiallyMaximum speed

Development of mobile communication

Mobile telecommunication is continuously evolv-ing. Today Tele2 is taking part in the build outof third-generation mobile telephony and theUMTS (Universal Mobile TelecommunicationsSystem) in Sweden, Norway and Finland.

With UMTS, higher bandwidth of up to 2 Mbit/s will allowmore information to be transferred, compared with today’sGSM with 9.6 kbit/s. This will allow users to surf theInternet, listen to music, play games and watch video clips.

UMTS is an attempt to create a global standard for 3G.Tele2 has access to UMTS licenses in Sweden, Norwayand Finland (through its part ownership of SuomenKolmegee Oy), as well as in Lichtenstein.

During 2001, Tele2 and the Swedish operator Teliaestablished a joint network company, Svenska UMTS-nätAB. Together, Tele2 and Telia will build and operate a nationwide Swedish UMTS network. On January 1,2002, Tele2 was able to present a functioning networkwith sufficient signal strength to fulfill its promise for thestarting date for UMTS. By the end of 2003, the networkwill cover 99.98% of the Swedish population.

1981 – Comviq introduces analog mobile telephonyThere have been different variants of mobile communica-tion by telephone starting as early as the 1930s. The firstanalog network was launched in Sweeden in 1981 byComviq AB. But it is the NMT (Nordic MobileTelephone) system that is commonly regarded as the firstgeneration of mobile telephony.

NMT is an analog technology that was developed in theNordic countries. NMT was an attempt to create a systemthat worked not just in a single country, but also betweencountries. In Sweden, Telia operated NMT networks ontwo frequency bands: 450 MHz and 900 MHz. Teliaclosed the NMT 900 network on December 31, 2000.


Tele2 in brief

1991 – the first GSM callGSM (Global System for Mobile communication) is thesecond generation of mobile telephony. This digital systemwas introduced in 1991, the year in which the world’s firstGSM call was placed in Finland. During 1992, the firstportable digital mobile phones were launched, and in thesame year, Comviq started its own GSM network.

From the start, the GSM system was able to transfer dataat speed of 9.6 kbit/s. GSM is currently a global standard.

2001 – GPRS taken into operationGPRS (General Packet Radio Service) was implemented toincrease data speeds in GSM networks. GPRS also facili-tates the transition from GSM to UMTS. Tele2 currentlyoffers GPRS services in several application areas, thusenabling users to send email and surf the Internet, forexample. Mobile phones are improving constantly andbeing used by more and more people. Tele2’s ambition isto be the price leader and to be able to offer customersmore value and greater enjoyment for their money.

GPRS allows significantly faster data transmissionspeeds in GSM networks than previous technologies andis expected to support speeds up to 115 kbit/s in thefuture. It will also be possible for mobile telephone usersto be constantly connected to the GSM network, evenwhen they are not making calls. Instead of paying for con-nection time, users will pay for the amount of informationthat is sent.

– NetCom Systems launched the

forerunner to Tele2 Norway.

– Comviq GSM starts its

own GSM network.1992 1993 1993

– The fixed telephony market is deregulated.

– NetCom Systems is formed to hold and develop the

Kinnevik Group’s telcommunication companies in the

Nordic countries.

– Kinnevik and Orkla set up NetCom ASA, Norway.

NetCom Systems owns 25% of the company.


Tele2 in brief

Continued investment inMVNO services

During 2001, Tele2 entered MVNO contractswith mobile operators in the Netherlands andGermany. These contract allow Tele2 to offermobile services as a complement to the fixedtelephony that the company already provides.

This approach is cost-efficient and flexible,while offering customers more services at lowercost. Tele2 was world’s first operator to offerMVNO services through its contract with theDanish operator Sonofon in August 2000. Tele2is currently active as an MNVO is Denmark, theNetherlands and Germany.

A Mobile Virtual Network Operator (MVNO) is anoperator that offers mobile services but does not have itsown frequency licenses and only limited infrastructure.Instead, the MVNO leases capacity from a mobile tele-phone operator with an existing networks and uses itsown switches to handle both incoming and outgoingtelephone traffic (unlike Service Providers, who onlyhandle the outgoing traffic).

An MVNO issues its own SIM cards, invoices cus-tomers directly and can develop its own services, whichprovides clear advantages in competitive markets. For thecustomer, there is no difference between having a sub-scription with a conventional operator or an MVNO.This model creates substantial growth opportunities forTele2, which has a large customer base in many coun-tries, but lacks infrastructure for mobile telephony.MVNO contracts provide more cost-efficient and flex-ible access to mobile telephony services, while customersare offered less expensive access to these services.

– NetCom Systems’ stock is spun off to Kinnevik

shareholders. At the same time, these shares are

listed on Stockholmsbörsen’s O list.

– Through its Tele2 A/S subsidary, NetCom Systems

becomes Tele2 Danmark’s very first rival on the

Danish telecom market, shattering a century-old

monopoly. – NetCom Systems is listed

on Nasdaq.1996 1997

In August 2001, Tele2 became the first MVNO in theNetherlands, when a contract was signed with Telfort, a GSM operator owned by British Telecom. This meansthat customers can now be offered mobile services inaddition to the fixed telephony services already provided.Tele2 is constantly seeking opportunities to refine itsproducts. With the contract in the Netherlands, will fol-low the launch of prepaid calling cards, subscriptions,and international roaming, meaning contracts with otheroperators that make it possible to use a mobile phone inother countries.

Tele2 is one of Germany’s largest alternative telecomoperator, with more than one million private and busi-ness customers in fixed telephony. With the MNVOcontract with VIAG Interkom signed in December 2001,Tele2 can now offer mobile services to its German cus-tomers via VIAG Interkom’s network. Germany isEurope’s largest telecom market and thus an importantmarket for Tele2.

During 2001, the number of mobile phones exceededthe number of fixed subscriptions in Sweden. Having amobile phone has become just as self-evident as having afixed phone. Seven of ten Swedes now have a mobilephone. Sweden and the other Nordic countries havealways been in the lead in the development of mobiletelephony, and it is therefore natural that Tele2 is takingthe lead in the growth of MVNO.

Interest for MVNO is very great. Established operatorsare increasingly eager to load their existing networks withtraffic. Although MVNO is primarily a European phe-nomenon, interest is spreading to the US and the rest ofthe world. MVNO is a clear example of how technologycan be adapted to create greater value for the end cus-tomer. New services are now being created in pace and inharmony with market development. Tele2 will continueits investments to achieve MVNO status in the countrieswhere this is possible.

– The Norwegian telecom

market is deregulated.Year-end

1997/1998


. ...

. .

.....

. .. . ..Central Europe

Total number of subscribers:3,191,000

NordicTotal number of

subscribers:6,274,000

Eastern Europe and Russia

Total number of subscribers:996,000

LuxembourgTotal number of

subscribers:211,000

Southern EuropeTotal number of

subscribers:4,286,000

1998 1999

– Acquisition of a 48% stake in Ritabell(mobile telephony operator), the initialpenetration of the Baltic market.

– NetCom Systems AB changes its name toNetCom AB.

– NetCom AB increases its Ritabell stake to 94.8%.

– Equal access pre-selection reform in Denmark, Norway andSweden.

– NetCom AB divests its NetCom ASA stake to SociétéEuropéenne de Communication S.A. (SEC) in exchange fornewly issued SEC stock. Following the deal, NetCom ABholds 17.8% of SEC’s capital.

The Tele2 Group

The Tele2 Group

Number of customers by business area

15,000

10,000

5,000

0

Fixed telephonyand Internet

Mobiletelephony

Number of customers by market area

0

15,000

10,000

5,000

Nordic

Central Europe

Southern Europe

Eastern Europeand Russia

Luxemburg


The Tele2 Group

The Tele2 Group consists of six market areas:Nordic, Eastern Europe and Russia, CentralEurope, Southern Europe, Luxembourg, and Branded products and services.

Nordic is the largest market area and includes Tele2operations in Sweden, Norway, Denmark, Finland andDatametrix. Operations in Nordic differ from othermarket areas in that they have been running longer, par-ticularly in Sweden, and a broad portfolio of products isoffered.

The market area Eastern Europe and Russia consistsof operations in the Baltic countries Estonia, Latvia andLithuania, as well as Poland, the Czech Republic, Russiaand X-Source.

The market area Central Europe includes Germany,the Netherlands, Switzerland, Austria and Ireland.

The market area Southern Europe includes operationsin France, Italy and Spain and a license in Portugal.

The market area Luxembourg includes Lichtenstein,Luxembourg, 3C and Transac and a license for fixedtelephony in Belgium.

Tele2 is represented in most countries outside theNordic region.

In most of Tele2’s markets, the company is by far thebiggest challenger to the previous monopoly.

Cross-selling – the marketing of additional productsand services to existing customers – is a central strategy,the emphasis being on supplementing fixed with mobiletelephony. There are major opportunities for the cross-selling of new products and services to the existing cus-tomer base.

Tele2 is continually working on spreading know-howamong product lines and countries. Customer offeringsand successful concepts create synergies, since they canalso be copied in other markets. This increases prof-itability by creating economies of scale, thus improvingresource utilization while facilitating market launches.

NetIncrease intake

Number of customers, thousands 12-31-2001 12-31-2000 % 2001

By market areaNordic ...................................................................................................... 6,274 5,472 15 802Eastern Europe and Russia ...................................................... 996 278 258 718Central Europe ................................................................................... 3,191 2,702 18 489Southern Europe .............................................................................. 4,286 2,942 46 1,344Luxembourg ........................................................................................ 211 160 32 51

Total 14,958 11,554 29 3,404By business areaMobile telephony ........................................................................... 3,710 2,559 45 1,151

of which prepaid ................................................................................ 2,179 1,396 56 783Fixed telephony and Internet ................................................ 11,248 8,995 25 2,253

Total 14,958 11,554 29 3,404

2000 2001

– Acquisition of FORA Telecom.

– Joint UMTS company with Telia.

– NetCom changes its name to Tele2.

2000

Q4/01 Q4/00 Q4/01 Q4/00

– NetCom becomes the first mobile virtual network operator (MVNO) inDenmark.

– NetCom acquires Société Européennede Communication S.A.

– NetCom is awardedUMTS licenses in Norwayand Sweden.

– Netcom acquires BaltikomGSM, Latvia’s secondlargest mobile operator.

The Board of Directors


Vigo Carlund (born 1946) has worked forKinnevik companies since1968, including as Presidentof Svenska Motor AB andKorsnäs AB. In 1997, he be-came Vice President ofIndustriförvaltnings ABKinnevik (Kinnevik), and inMay 1999 he took over asPresident. He has been amember of the Board of Tele2since 1995.

Holding: 379 class B shares

Marc J. A. Beuls(born 1956) has a B.S. inEconomics. He has been withMillicom InternationalCelluular S.A. since 1992 andhas been President & CEOsince January 1998. In 1997he was appointed ManagingDirector of Banque Invik S.A.in Luxembourg. Marc Beulspreviously held executive posi-tions at Generale Bank in Bel-gium. He has been member ofthe Board of Tele2 since 1998.

Bruce Grant (born 1959) is president ofXSource Corporation Inc.Board assignments: Kinnevik,Korsnäs AB, Metro Inter-national S.A. and TranscomWorldWide S.A. Member ofthe Board in Tele2 since 2001.

Sven Hagströmer(born 1943) was chairman ofthe board of Hagströmer &Qviberg from its inception in1980 until 1995. He is chair-man of the boards ofInvestment AB Öresund, ABCustos and also Acando since2001. Other board assign-ments: ProtectData, QuartzPro, LGP Telecom HoldingAB, Perbio Science AB andHQ Fonder. Member of theBoard of Tele2 since 1997.

Holding: 30,000 class B shares.

Lars Wohlin

(born 1933) has a D.Econ.and was head of the SwedishIndustrial Institute forEconomic and Social Researchin 1973–76. He served asUndersecretary of State in thenon-Socialist Cabinet from1976 to 1979 and as aGovernor of the Swedish cen-tral bank from 1979 to 1982.From 1983 to 1996, he waschairman of the board of theDrott real estate company andPresident of the UrbanMortgage Bank of Sweden.He has been a member of theBoard of Tele2 since 1996.

Holding: 900 class B shares.

Håkan Ledin(born 1937) has an M.Eng.and an M.B.A. He worked forLM Ericsson for many yearsbefore becoming President(now deputy chairman) ofMillicom in 1987. Between1995 and 1996, he wasPresident of NetCom Systems.He has been a member of theBoard of Tele2 since 1994.


Pelle Törnberg (born 1956), is president ofMetro International since2000. In 1987, he started theTV production companyStrix. Since 1993, he has beenresponsible for all media com-panies in MTG (formerlyKinnevik). Board assignments:MTG, Invik, SEC, Millicomand P4. Member of the Boardof Tele2 since 2001.


Jan Hugo Stenbeck Chairman of the Board

Stenbeck (born 1942) is alsochairman of the boards ofKinnevik, Millicom, Invik andMTG. Member of the Board ofTele2 since 1993.

Holding: 811,332 class Ashares.

Lars-JohanJarnheimerCEO and Managing Director(not a member of the Board).

(Born 1960) has an M.B.A.He has been CEO andManaging Director of Tele2AB since March 1999.Jarnheimer has held variousposts with IKEA, Hennes &Mauritz and SARA Hotels,and was President of ZTV fora short time before coming toComviq as Vice President. Hewas President of Comviq in1993–97. Jarnheimer was partof group management at SaabAutomobiles with responsibili-ty for the Nordic countries,Russia and the Baltic states,and was CEO of Saab OpelSverige AB in 1997–98. Sinceyear-end 1998, he has beenVice President ofIndustriförvaltnings ABKinnevik and President ofInvestment AB Kinnevik.Board assignments: MTG,Arvid Nordquist HAB,Millicomn, Invik AB andSvenska UMTS-Nät AB.

Holding: 2,000 class B sharesand 48,000 options.

Left to right: Lars-Johan Jarnheimer, Bruce Grant, Marc J. A. Beuls, Jan Hugo Stenbeck,

Lars Wohlin, Vigo Carlund, Sven Hagströmer, Pelle Törnberg, Håkan Ledin

Magnus ManderssonBorn 1959Market area director, Branded products & servicesM.B.AEmployed since 1999

Johnny SvedbergBorn 1962Market area director, Eastern Europe and RussiaB.S. in market economicsEmployed since 1990

Holding: 1 class A share, 240 classB shares and 8,000 options

Ib AndersenBorn 1955Director of network operationsM.B.AEmployed since 2000

Jean-Louis ConstanzaBorn 1961Market area director, Southern EuropePresident, Tele2 FranceM.B.AEmployed since 1998

Lars-Erik SveganderBorn 1941Personnel directorEmployed since 1991

Holding: 1,500 options

Jeanette AlmbergBorn 1965Director of customer serviceM.B.A.Employed since 1995


Håkan ZadlerBorn 1960CFOM.B.AEmployed since 2000

Holding: 3,000 class B shares


Senior Executives

Roger MobrinBorn 1968

Director of billing operations andcoordination

Technical college engineerEmployed since 1995

Holding: 50 class B shares and 1,500 options

Karl-Johan NybellBorn 1968

Director of product managementM.Eng.

Employed since 1995


Björn LundströmBorn 1965

Director of network planning and

implementation M. Eng.Employed since 1991


Roman SchwarzBorn 1947

Market area director, Central Europe

President, Tele2 Germany and Switzerland

M.B.AEmployed since 1991

Lars-Johan JarnheimerBorn 1960

President and CEO, Tele2 AB

M.B.A.Employed since 1992

Holding: 2,000 class B sharesand 48,000 options

Fredrik BerglundBorn 1961

Market area director, Nordic

B.S. in market economicsEmployed since 1995


Jean-Claude BintzBorn 1956

Market area director, Luxembourg

President of TangoEmployed since 1989

The Tele2 share


Number of sharesTele2’s A and B series shares were listed on the O-List ofStockholmsbörsen on May 14, 1996 in conjunction withthe distribution of the Company to the shareholders ofIndustriförvaltnings AB Kinnevik. Following the distribu-tion, Kinnevik owned no shares in Tele2 but held a convert-ible debenture corresponding to 25,555,555 shares. During1996, Kinnevik sold portions of the debenture, after con-version to shares, to institutions and Invik & Co. AB.

To promote interest in the Company’s share in the USand to increase its liquidity, the Tele2 share was listed on theNasdaq exchange in the US on January 22, 1997. A fewmonths later, a new issue of two million B shares was imple-mented. With this issue, Tele2 sought to broaden theCompany’s international ownership interest and to supportthe Nasdaq listing. The proceeds for the share issue, whichamounted to SEK 220 million, were primarily used forongoing investment requirements, in particular for thedevelopment of Tele2’s Danish and Norwegian operations.

In conjunction with the new issue, IndustriförvaltningsAB Kinnevik sold the major portion of its remaining con-vertible debenture in Tele2 after conversion to 6,000,000 Bshares.

By the end of the first half of 1997, Invik & Co. AB hadconverted its debenture, corresponding to 6,700,000 Bshares, thus increasing Tele2’s shareholders’ equity by SEK335 M.

During the second quarter of 1998, all outstandingdebentures were converted into 755,555 B shares.

At the Annual General Meeting in May 2000, the Boardof directors was authorized to settle an option commitmentsthrough a new share issue. In October 2000, 200,000 newB series shares were issued, as well as three convertibledebentures with detachable options with rights to new sub-scription of a total of 300,000 B shares.

At an Extraordinary General Meeting of Tele2 AB onAugust 25, 2000, a proposal was approved to issue at most40,901,585 series A and series B shares in Tele2 to share-holders and holders of depository receipts in SociétéEuropéenne de Communication S.A. (SEC) in exchange for

shares and depository receipts in SEC. By the end of theissue period, a total of 40,784,480 shares had been issued.

At the end of 2001, all shares in FOR A Telecom B.V.were acquired in exchange for 2,461,449 newly issued Tele2B shares. As of December 31, 2001, a convertible debenturecorresponding to 100,000 B shares was converted to shares.The new issue was submitted to PRV, the Swedish Patentand Registration Office, for registration.

As of December 31, 2001 there were a total of147,360,175 shares in Tele2 AB plus two convertibledebentures with detachable options corresponding to200,000 B shares.

Series A shares carry 10 votes, while B shares carry onevote.

Ownership structure At year-end 2001, Tele2 had about 64,000 shareholders,compared with about 68,000 one year previously. The pro-portion of institutional owners corresponded to about 88%(2000: 85%) of the share capital and about 81% (2000:88%) of the voting rights on December 31, 2001.

Analysts who followed Tele2 during 2001Michael Andersson Evli SecuritiesJohan Broström Hagströmer & QvibergFredrik Danielsson CarnegieMattias Gredmark Aros MaizelsLena Hansson Julius BaerViking Kjellström HSBCJohan Klevby Alfred BergPeter Kurt Nielsen Deutsche BankRichard Rosenbacke Den Danske BankHenrik Sandell SwedbankJeremy Taylor UBS WarburgTomas Tomasson Schroder Salomon Smith BarneyPer Trygg Enskilda SecuritiesPeter Warléus HandelsbankenHenrik Wikström ABG SecuritiesStefan Wård CAI Cheuvreux Nordic

Ownership structure, December 31, 2001 Current ownership structure

Share of Share ofA shares B shares A+B shares No. of votes capital, % votes, %

Invik group ................................................................................ 9,724,108 3,090,696 12,814,804 100,331,776 8.7 24.0

Kinnevik group ...................................................................... 6,498,880 16,467,678 22,966,558 81,456,478 15.6 19.5

Millicom Telecommunications S.A. .................. 5,384,316 9,331,344 14,715,660 63,174,504 10.0 15.1

Emesco ............................................................................................ 2,209,997 48,400 2,258,397 22,148,370 1.5 5.3

Confidentia Forvaltnings AB .................................... 898,076 — 898,076 8,980,760 0.6 2.2

Stenbeck, Jan-Hugo ......................................................... 811,332 — 811,332 8,113,320 0.6 1.9

Nordea Allemansfond Beta ...................................... 619,850 1,046,500 1,666,350 7,245,000 1.1 1.7

Brotherton N.V. ..................................................................... — 4,039,993 4,039,993 4,039,993 2.7 1.0

AMF Pensionforsakring AB ....................................... — 3,982,000 3,982,000 3,982,000 2.7 1.0

Nordea Bank SA ................................................................... 245,750 189,666 435,416 2,647,166 0.3 0.6

Total, ten largest owners ..................................... 26,392,309 38,196,277 64,588,586 302,119,367 43.9 72.4

Other shareholders ............................................................ 3,614,638 78,559,616 82,671,589 115,203,331 56.1 27.6

Total .................................................................................................. 30,006,947 117,353,228 147,260,175 417,322,698 100.0 100.0


The Tele2 share

5,000

10,000

15,000

20,000

25,000

30,000

100

200

300

400

500

600

900

50

700800

96

Number of shares traded (000s), including after-market trading

Share price trend on Stockholmsbörsen

98 99 00

Tele2’s closing price each week AFGX

97 0201

9710

50

60

80

90100

Number of shares traded (000s), including after-market

Share price trend on Nasdaq

98 99 00

20

30

40

70

Tele2’s closing price each month Nasdaq composite index

100

200

300

400

500

600

700

800

900

01 02


The Nordic market area

includes Sweden, Norway,

Denmark, Finland and

Datametrix.

The number of customers

was 6,274,000 at year-end.

Licenses Fixed Mobile Internet Launch Market position among alternative operators

Sweden • • • • 1981/1993* 1

Norway • • • • 1998 1

Denmark • • • • 1996 1

Finland • • • • 2000 New player

* Mobile telephony was launched in 1981 and fixed telephony in 1993.

Nordic Nordic



Growth continuesThe number of mobile telephony customers, includingprepaid customers, increased in 2001 by 21% to2,532,000 (2,087,000). Prepaid calling cards accountedfor 65% of all customers.

Call minutes per month and user (MoU) rose in thefourth quarter of 2001 by 19% to 117, as opposed to 98in the fourth quarter of 2000.

Despite an accelerated rate of new customers in thethird and fourth quarters, average monthly revenue peruser (ARPU) including prepaid calling cards was SEK206 for all of 2001 and SEK 204 for the fourth quarter.

High brand recognition96% of the Swedish population recognizes the Tele2 andComviq brands.

Tele2 is awarded a UMTS licenseIn December 2000, the Swedish National Post andTelecom Agency (PTS) awarded Tele2 one of the coun-try’s four UMTS licenses to construct and operate thirdgeneration (3G) mobile networks. In March 2001, Tele2and Telia and Telia Mobile AB subsidiary signed anagreement to form a joint (50/50) company to build andrun the network. The collaboration will considerablyreduce the cost of construction. The joint venture wasapproved by the Swedish Competition Authority inMarch 2002.

SwedenWith a complete offering in the areas of

mobile telephony, fixed telephony,

Internet, data communications, cable-TV

and broadband, Tele2 Sverige AB is

Sweden’s leading alternative provider of

telecommunications services.

Among Tele2 Sweden’s strengths are attractive rates, alarge customer base, its own infrastructure and access towell-known brands, as well as the ability to quickly adaptto new customer requirements and market conditions.Tele2 offers a highly advanced range of services. With itsmobile telephony, fixed telephony, Internet, data com-munications, and cable-TV capabilities, Tele2 is able toprovide the total solutions that customers are increasinglylooking for.

Tele2 is widely known for its flexibility, customerfocus and cost awareness and has shown impressivestrength by not only protecting its customer base fromcompetitors, but also by substantially increasing it.

Mobile telephony – the Comviq and Tele2Mobil brandsTele2 markets its mobile services under the Comviq andTele2Mobil brands. Comviq addresses the consumermarket, while Tele2Mobil primarily courts the businessmarket. The services are positioned for price leadership.

Comviq’s advertising spots generate consid-

erable attention, particularly this one, which

in a humoristic manner points out that

Comviq’s customer receive a bonus when

they receive calls.

Marknadsområde Xxx

Tele2 Sverige AB

markets its

mobile services

under the

Comviq and

Tele2Mobil

brands. Comviq

focuses on the consumer market, while

Tele2Mobil primarily courts businesses.

The services are positioned as the price

leaders.

Mobile telephony


High mobile penetration and stiff competitionMobile telephony penetration in Sweden is near the topworldwide. Including prepaid calling card customers,Comviq and Tele2Mobil had 36% of the Swedish mobiletelephony market at the end of the fourth quarter in2001. Their biggest competitors are Telia Mobile (48%of the market) and Europolitan (16%). Comviq has avery strong position in prepaid calling cards, which aregrowing more rapidly than any other segment. Despitethe emergence of many new service providers, betterthan one out of every two first-time mobile telephonysubscribers during the year were with Comviq or Tele2.There are ten mobile telephony providers in Sweden.Tele2’s success reflects the strength of its brand and itsunique position among mobile telephony users. Numberportability, the ability to switch operator while keepingthe same phone number, has spurred competition. Thathas accrued to Tele2’s advantage as well.

ComviqComviq’s business concept is simple: to make mobiletelephony available to as many people as possible at thelowest possible rates. In addition to prepaid calling cards,Comviq offers a number of different subscription plans.The success of prepaid calling cards has contributed toTele2’s rapid growth. The company launched its extreme-ly popular Selfnavigator service during the year.Subscribers can go directly to the website to order sup-plementary services, review their bills, get their accountbalance, and track interest charges. Moreover, prepaidcalling card customers can access WAP services.

Tele2 launched several widely acclaimed marketingventures, including a prizewinning television advertisingcampaign for Comviq Kontant prepaid calling cards.Comviq’s new website included information on numer-ous SMS services. SMS and calling rates were loweredduring the year for both peak and offpeak.

Tele2Mobil – new contractsTele2 continued to score triumphs in the business seg-ment, including a contract with the Region of Scania,during the year. In addition to renewing its mobile con-tract, IBM signed one for fixed telephony as well.Furthermore, Tele2 concluded new mobile and fixedtelephony contracts with the Swedish municipalities ofEskilstuna, Köping, Arboga, Kungsrör and Ekerö. Thecompany also entered into mobile and fixed telephonycontracts with NEA-gruppen and Scribona. SMS andcalling rates were lowered during the year for both day-time and nighttime.

During the year, Volvo, which has been a fixed tel-ephony, Internet and to a certain extent data networkcustomer, decided to integrate mobile telephony fromTele2 into its operations, thus replacing portions of fixedtelephony with mobile telephony.

Service ProvidersTele2 has contracts with two service providers, Dial n’Smile and Optimal Telecom. Whereas Optimal Telecomoffers mobile prepaid calling card services under theTango trademark, Dial n’ Smile markets mobile subscrip-tion services in both the private and business segments.

SMS usage acceleratesSMS usage continued to increase substantially during theyear. Comviq launched a new SMS portal offering a widerange of services. The new SMS Content product pavedthe way for external content providers to sell directly toTele2’s subscribers. Among the most popular offeringsare images, ring tones, stock prices and horoscopes.Community services and the ability to send SMS mes-sages to live television shows also enjoy major potential.The company introduced its popular ComviqCommunity SMS meeting place during the year. Thenew Tele2 directory service, with which employees canrequest an SMS message of any phone number at theirplace of business, is particular useful during non-officehours.

Faster data transfer to mobile phonesThe GPRS service that Tele2 launched in 2001 allows itscustomers to be connected 24 hours a day at greaterbandwidths. Provided free of charge through May 31,2002, the service has been a media splash and served asclear evidence that Tele2 is working hard to offer thelowest rates.

GPRS gives our customers faster connections not onlyto mobile Internet, but also to Tele2’s IQ Menu and T2Menu WAP portals. The portals include everything fromsports results and the latest news to games and entertain-ment. A popular entertainment service during the yearwas Bridget Jones Diary. New functionality was intro-duced on the portal during the year, including email ser-vices that provide users with access to their email fromtheir mobile phones in the same manner as from a PC.

UMTS and MMSDuring 2002, even more acronyms will come into use.The commercial launch of third-generation UMTSmobile telephony is approaching. The rate at which ser-vices are introduced will be determined by customerrequirements and the availability of phones. In addition,the launch of MMS (Multimedia Messaging Service) isapproaching. MMS is an extension of the successful SMSconcept that will allow users to send not only text, butimages and sound to each other.



Due to stiffer

competition,

customers can

now call more

cheaply – regard-

less of the desti-

nation or time of

day. In a market where rates did not

fall as sharply as during previous years,

Tele2 Sweden retained its price leader-

ship throughout 2001.

Fixedtelephony




Tele2 – the leading alternative operatorIn 1993, Tele2 became the first operator to competewith the former Telia monopoly. Tele2 has providedcompetitive telephony solutions ever since. The com-pany is the leading alternative operator in the Swedishfixed telephony market.

Free SaturdaysTele2 introduced free domestic calling to the Swedishmarket in 2001. The offer, which applied to fixed tele-phony calls from home every Saturday, was combinedwith direct debit bill payment. The purpose of the cam-paign was to highlight Tele2’s price leadership in theSwedish telephony market.

Local pre-selection introducedAs of February 2, 2002, local calls are also included inthe pre-selection reform. This is a step in the rightdirection, but the pre-selection reform will not have a full impact until the monopoly is eliminated.

Intelligent traffic solutionsDuring the year, Tele2 maintained its focus on optimiz-ing economies of scale among the various types ofproducts in its networks. The integration of Tele2’sdata, mobile and telecom applications has created anefficient new transport network. By incorporating thefunctionality required for new services, this networkfacilitates the development of intelligent traffic solu-tions. Tele2 is in the forefront when it comes to creat-ing customer-oriented offerings.

New contractsScribona AB signed both mobile and fixed telephonycontracts with Tele2 in 2001.

Meanwhile, ICA Handlarnas AB (grocery chain)picked Tele2 as its new fixed telephony operator. As a result, Tele2 now provides all of the company’s Swedishunits with fixed telephony. The contract also covers ICAMenyföretagen, ICA Förbundet & subsidiaries, andInterblom AB. Individual ICA and Rimi stores can alsotake advantage of the general contract’s terms.

Finnveden is a new customer of Tele2’s fixed teleph-ony and nationwide data communications network.

Tele2 concluded a general contract with the SwedishAgency for Administrative Development (SAFAD).After stiff competition, the contract accorded Tele2 pre-ferred supplier status. Tele2 received the highest pos-sible recommendation in both mobile and fixed teleph-ony. The contract sets the stage for Tele2 to promoteitself among 250 municipalities, 20 county councils,and 30 local insurance offices, as well as 40 other bigbusinesses and institutions.

Alfred Berg, a Tele2 customer since 1995, renewedits contract for all existing services, plus Telefoni Direkt,Frisamtal (toll free numbers), Tele2Mobil, Internet,Lan2Lan, Talk2Lan, SNIX and NLL.

IBM, which has been a Tele2 customer for a longtime, demonstrated its continued confidence by signinga new fixed and mobile telephony contract.

Quality and customer serviceContinual development and enhanced network func-tionality make it increasingly possible for Tele2 to pro-vide intelligent traffic solutions – and thus products andservices that render a customer’s business more prof-itable. The functionality that Tele2 offers represents a key competitive advantage at a time when quality, cus-tomer service and pricing are of growing importance.

Tele2’s Internet

and Data

communications

product area

offers Internet

and in-house

data communica-

tions services, as well as fixed teleph-

ony connections. Such applications

are increasingly vital for Tele2’s busi-

ness customers. During 2001, Tele2

held onto its leadership in the market

for Internet and Data communications

services.


Internet & Data communications



Internet usage continues to growAccording to a Stelacon survey, 56% of Swedish house-holds, or 80% of those that own a computer, use theInternet. The amount of time spent on the Internet isincreasing as well. The regular use of email, informationsearches and Internet banking accounts for most of the trend.

Tele2 – a pioneer in the Internet marketTele2 offers three kinds of dial-up Internet: EverydayFree2Connect – plus Tele2Internet and Tele2InternetISDN subscriptions. In 1991, Tele2 became the firstcompany in Sweden to provide Internet access. The earlylaunch got Tele2 off to a head start over its competitorsin terms of know-how. Tele2 is the biggest alternativeprovider of Internet services in Scandinavia. The brand isa symbol of top-notch quality, high capacity and com-petitive rates.

Premium services provide value-addedAs more and more of the population uses the Internet,the market’s emphasis has shifted from price to the deliv-ery of value-added services. Tele2 offers a series of premi-um services for the purpose of greater security and geo-graphic mobility. The offerings include anti-virusprograms, personalized firewalls and the ability to useyour Internet subscription wherever you are. Tele2 is a price leader among the foremost providers of Internetservices. Many of the new additional services are inde-pendent of the means of access.

Making email available on the WebMore and more customers want access to email awayfrom home. A growing number of users are turning toweb mail, which allows the web browser to be used as anemail client. All that is required is a computer that canaccess the Internet. Tele2 has launched a widelyacclaimed web mail service.

Total solutions marked by quality and securityTele2’s customers are increasingly demanding total solu-tions. Given its product and service offering, along withleading-edge expertise, Tele2 is able to go beyond therequirements of its customers. In addition to stricterquality and security needs, customers were more andmore insistent on greater bandwidth during 2001.

StrengthsTele2’s strong Scandinavian offering consists of flexibleproducts and services. The company’s strategy is to de-velop and market total solutions, services and packagesthat provide value-added to all business segments. Tele2’sdata communications focus is on quality, security andhigh capacity. Among the company’s strong suits arecost-effectiveness, its own infrastructure, access to well-known brands and advanced expertise, along with theability to adapt to changing customer requirements andmarket conditions.

Optimized product portfolioThe product area had an exciting year in 2001. Tele2optimized its offering for profitability, in conjunctionwith a strategy of providing high-quality products andservices at attractive prices.

The company launched Media High Speed, the mar-ket’s first high-speed network with the ability to trans-port 270 Mbps uncompressed video in real time.

Offering unique access options for TV and mediacompanies, this service not only increases cost efficiency,but also delivers significantly higher quality throughoutthe entire production chain.

The company also launched its Tele2Storage service tomeet demands for better data security. As a result, busi-nesses can back up their internal data by Lan2Lan, or byLan2Internet to another site. The security and financialadvantages are numerous.

Sharpening the Nordic focusIn 2001, Tele2 focused on developing and offering add-itional data communications services for the Nordic mar-ket. By using a single technological platform based onuniform monitoring, support and customer servicestandards, the company can treat the entire Nordic areaas a single data communications market. In addition tohigher quality, the solutions generate economies of scalethat lead to lower rates.

The mass media

devoted a great

deal of cover-

age to broad-

band services

and digital TV

in 2001.

Increasing choices for customers and

investments in broadband are receiving

considerable attention. The total number

of broadband customers in Sweden

increased sharply during 2001 to 20%

of all Internet users.

Cable-TV& broadband



Attractive basic packageUnder the Kabelvision brand, Tele2 provides one of thebest basic packages on the market at an attractive price.In addition, Kabelvision offers three highly competitiveexpanded packages (Plus, Silver and Guld), plus premiumand movie channels. Kabelvision offers programs fromchannels such as TV3, ZTV, TV1000, E!, Discovery,Animal Planet, MTV, BBC, CNN and Eurosport.Moreover, the cable-TV network is continually upgradingto offer broadband services. Accessible throughoutSweden, Kabelvision has 310,000 subscribers – making itthe country’s second largest cable-TV operator.

New television channelsKabelvision maintained its focus on providing an attract-ive range of TV channels in 2001. The launch of AnimalPlanet and E! during the year met with a favorableresponse.

Early broadband effortTaking advantage of its cable-TV lines, Tele2 startedoffering broadband to consumers back in 1998. Thecompany’s continued efforts in 2001 resulted in the con-version of a significant percentage of its network to han-dle broadband. Since 1999, Tele2 also offers broadbandover local area networks (LANs). Tele2 utilizes wirelesslocal loop (WLL) technology as well. The company hasaccess to a highly developed backbone network inSwipnet, which was Sweden’s first commercial IP net-work. In addition, Tele2 has good connections withother providers in Sweden and abroad. The deploymentof a UMTS network will set the stage for mobile broad-band solutions.

Not only Internet accessBeyond rapid Internet access, broadband customers arelooking for both information and entertainment services.Tele2 is collaborating with a number of contentproviders to generate value-added in the areas of games,music, news and sports. The company plans to be a leader in the explosive growth of content services.

New broadband contractsDuring the year a number of new contracts regardingmetropolitan area broadband networks were concluded,among others with municipal power companiesSollentuna Energi AB och Härnösand Energi & MiljöAB. These networks will be connected in 2002. Tele2 hasidentified major potential for marketing broadband ser-vices through metropolitan area networks in 2002.



In February 2001, an Internet CD

was distributed to all Norwegian

households.


NorwayCompetition and brand strengthTele2 Norway offers a complete range of telecommunica-tions services for both fixed and mobile telephony.Tele2’s strong suits are its full-service offering, its priceleadership and its status as main challenger to the oldTelenor monopoly. After starting 2001 with more than17 mobile operators, Norway had only four remaining atyear-end: Netcom, Telenor (network owners), Tele2 andSense (service providers). Tele2 is in fourth place but cap-turing share from its competitors.

Thanks to an increased share of the mature dial-upInternet market, the company has achieved growth thereas well. With technologies like ADSL, Tele2 is nowpoised to assume a strong position on the expandingbroadband market. The company’s strategy is to continuetaking advantage of the most attractive offering in thesector: a broad range of quality services at the mostattractive possible rates.

Generally respected for its flexibility, focus on cus-tomers and cost consciousness, Tele2 has demonstrated a remarkable ability to both hold onto its customers andrecruit new ones.

Fixed telephony, acquisitions and free callingTele2 Norway continued to grow in 2001, posting steadygrowth and improved profitability. In September, all pri-vate and some corporate fixed telephony and dial-upInternet customers of Enitel, Norway’s third largest oper-ator, moved over to Tele2. By substantially boosting traf-fic volumes, the profitable acquisition raised Tele2’s rev-enue. In the fall of 2000, Tele2 Norway became the firstNorwegian operator to offer domestic calling free ofcharge. During 2001, an offer to customers to pay a one-time charge for free calls on Saturdays was a major suc-cess. The goal of the widely acclaimed campaign was tocement Tele’s status as Norwegian price leader.

Mobile telephony and UMTS licenseTele2 launched a highly successfully mobile telephonycampaign early in the year, as the result of which revenueremained brisk for all of 2001. The company also bene-fited from the consolidation of the market from 17 to 4competitors.

In November 2000, Tele2 Norway was awarded one ofthe country’s four licenses to build a 3G UMTS net-work. The company decided that it would start up thenetwork and associated services in December 2001.Given that UMTS phones are not yet available to cus-tomers and that there is a lack of standardized networkequipment, Tele2 Norway elected to postpone the buildout of its network in accordance with the license. Tele2Norway is engaged in a continuous dialogue with theNorwegian telecom authorities regarding the build out ofUMTS in Norway.

Price leaderTele2 Norway is holding firmly to its position as priceleader in the Norwegian market. Several independentstudies have concluded that Tele2’s mobile telecom ser-vices give customers the most for their money. The com-pany’s mobile telephony has repeatedly received the high-est ratings. Tele2 will continue to focus on offering itscustomers a discount to Telenor’s standard rates.Although Telenor has beefed up its marketing effort tofend off competitors over the past year, Tele2 is still cap-turing new share of the market.

Sharper focus on business customersTele2 Norway’s emphasis on the business market borefruit in 2001. In particular, the company signed key con-tracts with customers like IBM, the post office,Amersham, Orkla Finans, Total Fina, Elf and Statoil.With a complete range of services, Tele2 specializes instandardized package solutions for both big and smallcompanies. By standardizing its product offering, Tele2’sprofitability in the business market improves with eachnew contract that is signed.


DenmarkCompetition in fixed telephony marketMajor changes were under way in the Danish telecommarket during 2001. Due to intense competition, manyof the big companies that had emerged rather recentlydeparted from the market and stopped selling fixed tel-ephony or Internet to households. They are likely tofocus on the mobile market in the wake of the awardingof four UMTS licenses during September 2001. SinceTele2 is the only appealing alternative to the old TDCmonopoly, it has been a beneficiary of this retreat fromthe private fixed telephony and Internet market.

Tele2 therefore worked hard during 2001 to reinforceits position in Denmark. Tele2 A/S was restructured inApril to bolster its primary business of fixed telephonyand the Internet. The reorganization concentrated onefficiency, product range evaluation and greater outsourc-ing of administrative and technical functions.

Mobile telephonyWhile retaining its share of the fixed telephony andInternet segments, Tele2 has entered the mobile marketas well. The company launched its mobile subscriptionon October 21, the 5th anniversary of its startup inDenmark. Based on an MVNO agreement, the subscrip-tion supplements the prepaid Tele2Mobil Tank Op ser-vice introduced in the autumn of 2000.

Mobile telephony, fixed telephony and the Internetadd up to a complete product offering. As a result, Tele2

can cross-sell to existing customers and carve out newmarket share by packaging its services.

Tele2 Menu – Europe’s largest SMS serviceSMS constitutes a growing market. Tele2 A/S has de-veloped Europe’s most comprehensive and user-friendlySMS offering of more than 6,000 different services.Tele2’s overriding objective has been to design a systemthat is much easier to use than WAP and that gives cus-tomers more value for their money. Tele2 Menu meetsthese requirements and establishes a brand new standardfor content services linked to mobile telephony. By inte-grating each mobile phone with the Internet, Tele2 allowsa customer to choose among an enormous range of SMSservices and put together a personalized menu. It will notbe long before 10,000 different services are available.Tele2 Menu cultivates customer loyalty with Tele2Mobilwhile providing access to products and services fromTele2’s fellow subsidiaries such as MTG and Metro.

UNI2 – focus on web hosting for businessesUNI2, which serves as Tele2’s brand for corporateInternet services and comprises a business area of itsown, remains one of the leading Internet operators in theDanish business market. The business area markets tech-nologically advanced services that zero in on reliability,quality, security and support. Fixed Internet, web hostingand data security solutions are all part of its operations.

Since becoming its own Tele2 A/S business area UNI2has focused its efforts on hosting services. UNI2 sharp-ened its image in the outsourcing, security and hostingsegments during the year. The business area’s Global DialUp service for frequent business travelers is well estab-lished. UNI2 signed additional contracts in 2001 with anumber of large internationals. The business area has alsocontinued to sell its know-how to a number of companieswithin the group. Several thousand websites in Sweden,Norway, Germany and the Netherlands are linked to theUNI2 web hosting service.

UMTS in Denmark by means of MVNOTele2 did not apply for a UMTS license in Denmark.Instead, Tele2 has entered into talks on an MVNOagreement with the operators that set up UMTS net-works. The objective is to offer UMTS services throughTele2Mobil as soon as market conditions so permit.


In October 2001, Tele2Mobil intro-

duced subscriptions in Denmark.

Tele2 has been offering the prepaid

service Tele2Mobil Tank Op since the

autumn of 2000.


Successful year for Data-metrix in Nordic marketsStrategic investments in system integration of cus-tomized business network, telephony and datasolutions and investments in strengthening know-ledge and expertise contributed to strengtheningDatametrix’s market positions in the Nordic region.Recruitment of new customers was very favorable.

Call center technology and integration were jointefforts, which were complemented by national expert-ise. System integration based on Cisco products domi-nates in Norway, while Denmark is the sole supplier ofvoice recording systems for the banking and financesectors in its domestic market. In Sweden, Datametrixis not only the leading system integrator for contactcenters, but also has leading-edge expertise in broad-band technology and data security. In addition, thecompany is a leading supplier of trading systems forbanking and finance.

Important contracts were signed with the shippingcompany Wilh. Wilhelmsen, the transport and logisticscompany Nor-Cargo, Norges Bank and OSL (OsloGardemoen Airport).

Expansion in DenmarkDuring 2001, Europeiske Reiseforsikring and EuroAlarmopened one of the world’s most advanced call centers inCopenhagen, for which Datametrix was responsible fordelivery and implementation. The same applies to newsupport centers opened by Dell and IBM.

Upturn in SwedenIn 2001, Datametrix signed a three-year service andsupport contract with ICA Ahold for service of ICA’sentire telephone system plus its new banking service.Systems were delivered to such customers as Preem, Sitel,Stockholmsmässan, Lärarhögskolan and Sydkraft.Within the banking and finance sector, contracts weresigned with the brokerages Carnegie AB and Alfred Berg.

In 2001, Datametrix was certified as a gold partnerto Avaya. The product portfolio was expanded with theOké Communicator fro the Dutch company Connect-IT Communications B.V. In 2002, the product port-folio will be further expanded with Cisco’s communica-tion systems.


FinlandTele2 continued to market its fixed telephony products inFinland during 2001. Prepaid calling cards and fixed tel-ephony are the two basic services. Although Tele2 offerslong-distance and international calling, the continuedexistence of the monopoly has prevented the companyfrom entering the local calling market. Tele2Internet doesbusiness in the Helsinki area.

In the autumn of 2001, Tele2 constructed a WirelessLocal Loop for broadband access in Jyväskylä. The com-pany launched the service for local businesses in Dec-ember. Tele2 Bredband uses its own exclusive frequency.The company will offer broadband to Jyväskylä house-holds early in 2002 and to other cities later on in the year.

Tele2 has a UMTS license through its part ownershipof Suomen Kolmegee Oy.

In Finland, Tele2 offers attractive

prices on international calls.



Tele2 iTypeTele2 iType is a terminal that is

designed for sending and receiving

SMS messages via the fixed telephone

network. If the caller ID service is

available, Tele2 iType also functions as

a caller ID display. SMS can be sent

from the iType terminal both to mobile

phones and to other iType terminals.

iHear Dect IIITele2’s iHear Dect III is a cordless

digital telephone with a prefix

function.


The Eastern Europe and Russia

market area consists of Estonia,

Latvia, Lithuania, Poland, the

Czech Republic and Russia,

along with X-Source.

Licenses Fixed Mobile Internet Launch Market position amongalternative operators

Estonia • • • • 1998 1

Latvia • • 1999 1

Lithuania • • 1999 2

Russia • • 6

Poland • • • 2000

Czech Republic • • 2000




The Eastern Europe and Russia market area

Joint network in the Baltic countriesTele2 set up a joint network in the three Baltic countriesduring 2001. The idea is to enable considerable long-term cost savings. In addition, the resulting flexibilityand economies of scale when developing new serviceswill bolster Tele2’s competitiveness in the region.

LithuaniaTele2 strengthened its market position in Lithuaniaduring 2001. Mobile penetration grew from 14% to29% in 2001.

In a highly competitive market, Tele2 closed much of thegap with its two competitors, both of which have beenoperating for five years longer. Tele2 consolidated itsposition as price leader and attained stable, satisfactorymargins.

Substantially higher revenueThanks to a considerable increase in call minutes peruser and a larger number of subscriptions, Tele2Lithuania’s revenue per subscriber doubled in 2001. Thecompany designed product offerings with lower fixedmonthly rates and a simpler price schedule than its com-petitors. A key incentive for new customers to subscribeand for existing subscribers to use the network more wasthe fact that Tele2 lowered its nighttime and weekendrates. Tele2’s customers in Lithuania are among the mostactive SMS users in Europe.

Successful investment in GSM900After receiving its license in December 2000, Tele2 hassteadily upgraded its network for GSM900. Thanks tothe existing network and its two bands, the transition tothe new frequency was highly cost-effective. Tele2expanded the GSM900 network in 2001 to cover some80% of the population.

LatviaWith its GSM900 and GSM1800 licenses, Tele2 isthe leading alternative mobile operator in Latvia.Since its acquisition in October 2000, the companyhas grown considerably.

Thanks to such well-known products as the Zelta Zivitna(Goldfish) prepaid calling card, Tele2 is spurring thegrowth of the market. The company’s position stemsfrom its price leadership, innovative voice and SMS ser-vices, and superior distribution capability. Seventy per-cent of Latvians are familiar with the Tele2 brand. Sincethe company changed its name to Tele2 in March 2001,it has become the seventh most widely recognized brandin the country. Tele2 has a brand recognition of 70%.

The company also spent the year getting its networkready for new customers. The company replaced itsLatvian transmission equipment and switches. The newnetwork entails advantages in the areas of planning, purchasing and support. Furthermore, Tele2has expanded its capacity in order to provide servicessuch as GPRS in the future.

OutlookLatvian and Lithuanian legislation that will take effect atthe beginning of 2003 allows for a competitive fixed tel-ephony market. Tele2 already has a license for Internetservices, as well as broadband and radio network author-ization.

Now Tele2 is paying, not you!

A Christmas campaign for

Tele2Mobile in Lithuania features

a well known artist as Santa.



EstoniaTele2 Estonia provides a wide range of tele-

communications services under the Tele2 brand:

mobile telephony (subscriptions and prepaid

calling cards), fixed telephony, Internet, content

services and cable-TV.

A single brand for all servicesFollowing its merger with Levicom Broadband OÜ inJune, Tele2 is a full-service telecom provider. Theexpanded marketing opportunities represent a majorcompetitive advantage. In October 2001, Tele2 launchedits brand for the full range of telecommunications,including mobile services previously marketed under theQ-GSM brand. As a result, brand recognition has risento 78% and allowed the company to package its mobileand fixed telephony services.

Strong market positionTele2 has taken significant market share and is currentlyEstonia’s fastest growing operator. The company launchednew mobile telephony services for small and medium-sized companies during the year. The brand switch forSmart prepaid calling cards yielded excellent results. Tele2is the second largest mobile operator in the country.

The company launched international and long-distancecalling in January, as well as calls to mobile phones. Localcalling began in March. Tele2 is currently the clearly lead-ing alternative fixed network operator after Eesti Telecom.

Internet servicesTele2 is now the second largest supplier of dial-upInternet services after Eesti Telecom and also offersbroadband services over its cable-TV network. Tele2Estonia offers cable-TV in 12 cities to more than102,000 households. Although new deregulation led tostiffer competition in 2001, Tele2 increased its penetra-tion and recruited new customers. Everyday.com turnedinto Estonia’s leading Internet company during the year.According to surveys, it is the country’s most popularwebsite among the 15–35 age group.

Efficient administrationTele2 launched a web service for electronic invoicing andarchiving. The company outsourced customer manage-ment to Transcom. The five new Tele2 stores and threenew dealers represent better than a one-third enlarge-ment of the company’s distribution network.

The successful launch of fixed

calls has been supported by

stylish iHear phones.



RussiaTele2 acquired FORA Telekom from Millicom

International SA (MIC) in the end of November

2001. Reaching a total population of 48 million

people, FORA consists of MIC’s 12 businesses in

Russia: Belgorod, Chelyabinsk, Irkutsk, Kemerovo,

Kursk, Moscow, Nizhny Novgorod, Omsk, Rostov,

Smolensk, St. Petersburg (including Oblcom, which

covers the surrounding region) – and the Republic

of Udmurtiya.

Position in the mobile marketExcluding Moscow, FORA’s subscriber growth was 49%in 2001 (24% including Moscow). Taking the lead wereIrkutsk (+146%), Oblcom (+147%), Kemerovo (+101%)and Chelyabinsk (+70%). Prepaid calling cards were themain catalyst of growth. The proportion of calling cardcustomers rose from 44% to 53% during the year.

By such measures as regional rate cuts and various loy-alty programs, Tele2 worked up a marketing strategy dur-ing the year to reduce initial costs for customers andthereby sustain its competitiveness in a increasingly fiercemarket. The objective is to forge long-term relationshipsand reduce the churn rate. For example, the Rostov busi-ness introduced calling cards that offer 25 extra minutesfor every six months that a customer has been withTele2. Other FORA companies also successfully adoptedthe strategy in order to safeguard monthly revenue andminimize the churn rate among calling card customers.

SMS and InternetTele2 launched SMS and SMS-based services for most ofthe companies early in 2001, as well as a nationwide webportal (www.tele2portal.nu). The portal allows anyonewith Internet access to send text messages to a FORAcustomer. Messages, news, weather reports and so on canarrive directly to a mobile phone from almost anyplace inthe world.

LicensesEight of FORA businesses received GSM1800 licenses in2001. In early 2002, GSM licenses were also received inNizhny Novgorod and Chelyabinsk. In St. Petersburg,where Tele2 has not yet been awarded a license, a deci-sion is likely in 2002. Construction of the GSM net-works is planned for this year.

Data communications servicesThe launch of wireless data communications services inRostov and Kemerovo during 2001 was highly success-ful. The Irkutsk business opened an Internet café inApril.

Outlook for 2002Expecting growth to remain robust in Russia, Tele2 isfocusing on ensuring continued subscriber growth andon constructing new GSM networks to take advantage ofmobile telephony’s potential throughout the variousregions. In order to strengthen its position in the market,the company is concentrating its efforts on offering cost-effective telecom services.



PolandTele2 has a nationwide data communications fran-

chise and a license for wireless broadband access

over radio networks (wireless local loop – WLL) in

eight cities. The company offers wireless broad-

band in Warsaw, Krakow, Gdansk, Poznan and

Wroclaw, thereby covering more than five million

inhabitants and 500,000 businesses. Tele2 plans to

expand to two new cities in 2002.

Tele2 began operations in Poland during 1999 by offer-ing prepaid calling cards for international fixed-line calls.The company launched several new services via Voiceover IP in 2000. With an explicit focus on price leader-ship, Tele2 offers services for both businesses and house-holds. Air2Net (wireless broadband) is intended for smalland medium-sized businesses. Since only 15% ofPoland’s 40 million inhabitants and 40% of its 1.5 mil-lion businesses currently have Internet access, Tele2 fore-sees major potential in the country.

Deregulation of fixed telephony in 2002Fixed telephony was still regulated in 2001. Domesticcalling was deregulated in January 2002 and internationalcalls are slated for January 2003. Tele2 plans to takeadvantage of these developments to achieve rapid growth.

Czech RepublicTele2 introduced wireless broadband in two Czech

cities during October 2000. By the end of 2001,

six cities totaling more than three million inhab-

itants had access to the service.

Wireless broadband marketAlthough Internet penetration in the Czech Republicincreased in 2001 from 7–8% to around 20%, the mar-ket remains underdeveloped. While the vast majority ofusers still have modems, demand for broadband hasmounted in the past year. Furthermore, Tele2 willupgrade its network in 2002 and expand to new cities.All in all, 2002 looks to be a successful year.

TelephonyTele2 was awarded a fixed telephony license in June2001. Although the market will be deregulated as ofJuly 1, 2002, customers will initially have to dial a prefixto use alternative operators. At present there are opera-tors that offer their services to businesses only. Tele2 isready to be among the first alternative operators that pro-vide the Czech Republic’s 10 million inhabitants withfixed telephony.

X-SourceX-Source, which works with outsourcing, is a companystarted by Tele2 to support IT operations throughout theGroup. The company currently employs some 65 per-sons at its offices in Stockholm. X-Source has also startedoperations in London and plans to open offices inDenmark and Luxembourg during the spring of 2002.

Competitive servicesX-Source offers services in the areas of operation of PCworkplaces, operating and maintenance of servers, datacommunication and data security. X-Source helps cus-tomer companies to create a secure and controlled ITinfrastructure, while reducing IT costs.

X-Source’s services are competitive even for externalcustomers. Customers include Datscha.com, Metro,MTG Sweden, Viasat in London, ZoomOn, Eim,M2Invest, Nack Energi and 4T solutions. External cus-tomers account for about 60% of the company’s sales.

Poland deregulated domestic

calling in January 2002.


The Central Europe market

area includes Germany, the

Netherlands, Switzerland,

Austria and Ireland.


Germany • • • 1998 3

Netherlands • • • 1997 2

Switzerland • • • • 1998 2

Austria • • • 1999 1

Ireland •

CentralEurope

CentralEurope


The Central Europe market area

GermanyHaving joined the German fixed telephony market

in March 1998, Tele2 is now the third largest

alternative operator.

The German market for fixed telephony began consoli-dating in 2001 and a number of big competitors haveeither been integrated into larger groups or disappearedfrom the market. With a focus on reinforcing its marketposition, Tele2 continued to offer attractive rates with aneven more simplified, easy-to-understand price schedule.

More and more Germans know about Tele2In 2001 Tele2 passed a number of its competitors interms of brand recognition. The figure rose to 50%.

Mobile services – MVNO agreement with VIAG InterkomIn December 2001, Tele2 concluded an MVNO agree-ment with mobile operator VIAG Interkom, a BritishTelecom subsidiary. The company plans to launchmobile services in Germany during the second quarter of2002. In order to establish a mobile telephony businessin Europe’s biggest potential market at low marginalcosts, Tele2 will direct its primary marketing at its exist-ing customers. The new mobile service enables the com-pany to package mobile telephony, fixed telephony andthe Internet.

Traffic growthThe increase in the number of pre-selection customers,along with the sale of 300,000 iHear phones in 2001,boosted traffic by 30%.

The NetherlandsTele2, which began offering services in the

Netherlands during October 1997, is now the

country’s second largest alternative fixed telephony

operator. At the end of 2001, 83% of the popula-

tion was familiar with the Tele2 brand.

Fixed telephonyTele2’s pre-selection customers, with either iHear phonesor other selectors, accounted for 50% of the total inDecember 2001. The result was greater loyalty and rev-enue per customer.

Tele2 has aimed its marketing efforts at households, aswell as small and medium-sized businesses. The com-pany’s share of the private market rose from 11% to 15%during the year. Since the former KPN monopoly stillhas a clearly dominant market share, there is latitude foradditional growth.

Tele2Mobile – MVNOThe launch of Tele2Mobile in 2001 represented a mile-stone for Tele2 in the Netherlands. Tele2 operates as anMobile Virtual Network Operator, MVNO. The startupof the MVNO arrangement made Tele2 the sixth largestmobile operator in the country. The foundation forTele2Mobile’s future success is its ability to provide exist-ing fixed telephony customers with the new services inaccordance with the tried-and-true formula of moreattractive rates along with straightforward, easy-to-under-stand pricing. The services involve low marginal costs.

In Germany, Tele2 points out that

the company is more efficient

than the incumbent monopoly.


The Central Europe market area

AustriaTele2 is the largest alternative fixed telephony

operator in Austria.

Robust growthThe aggressive implementation of Tele2’s growth strategyin 2001 generated substantially higher revenue. The busi-ness is now large enough to enjoy economies of scale inits various markets. Thanks to pre-selection and the suc-cess of Tele2’s ISP Internet services, call minutes per cus-tomer increased during the year. More than 65% availthemselves of pre-selection.

Price leaderThe market perceives Tele2 as price leader. According toa January 2001 survey, 67% of the population nowknows about the brand.

More deregulationDespite major attempts by the former monopoly to delayderegulation, Tele2 anticipates additional reductions ofinterconnect charges and greater access to its network.The various initiatives that Tele2 has taken in the area areset to bear fruit in 2002.

Outlook for the futureTele2’s strength in the market and rapidly expanding cus-tomer base make it one of Austria’s most attractiveMVNO partners. Economies of scale are essential toobtaining a solid return on an investment in the Austrianmarket. Tele2 Austria will continue to emphasize therecruitment of new customers among its target groups ofhouseholds, small businesses and medium-sized business.The company’s margins remain high.

IrelandTele2 has a fixed telephony license in Ireland.

With Tele2 you call cheaper

everywhere, or almost everywhere.

SwitzerlandTele2 launched fixed telephony in Switzerland as

soon as the market was deregulated in October

1998. Tele2 is the second largest alternative oper-

ator in the country. Tele2Mobile, which is now

challenging the other three mobile operators,

started up in May 2000.

Tele2’s positioning and recognitionAccording to a recent independent survey, 75% of theSwiss population recognizes the Tele2 brand. The com-pany is known for its competitive rates, easy-to-under-stand pricing and excellent customer service.

Pre-selection and iHear phonesAt the end of 2001, more than 70% of all customersused pre-selection. Tele2 was the first Swiss operator toimplement Third Part Verification (TPV), by which cus-tomers can orally sign up for pre-selection without sign-ing a written contract.

Tele2 sold a significant number of iHear phones in2001. In addition to their colorful and fashionabledesign, they come with built-in selectors that lead tohigher traffic volumes. Awareness of iHear is increasing.The number of Swiss recognizing the brand rose to 30%during the year.


The Southern Europe

market area includes

France, Italy, Spain and

Portugal.


France • • • 1999 1

Italy • • • 1999 2

Spain • • 2001 4

Portugal •

Southern Europe

Southern Europe


The Southern Europe market area

FranceAfter starting up in the French market during

March 1999, Tele2 grew to be the largest alterna-

tive fixed telephony operator in 2000. The com-

pany shored up its position as leading alternative

fixed telephony operator in 2001. At present,

Tele2 is taking more than 50% of customers that

leave the incumbent PTT.

Competition and brand positioningIn 2001, Tele2 France began reaping the benefits of mar-ket consolidation. The former monopoly, Tele2 andCegetel, in that order, are currently the three main oper-ators. Thus, Tele2 can utilize the strength of its brand toreinforce its position as price leader. In addition, thecompany is thereby able to continue recruiting customersat affordable costs.

ART, the French regulatory agency, published its firstofficial survey of the fixed telephony market in February.With a market share of 50%, Tele2 came in as the bestnewcomer. Tele2 placed ahead of France Telecom as thecompany most able to take care of its customers and pro-ject a favorable image.

Price leaderDue to its simple, straightforward pricing and a round-the-clock rate for long-distance calls, Tele2 will retain itsposition as price leader in the French market. Thedecline for companies like OneTel makes Tele2 theundisputed price leader in its chosen segments of house-holds and small businesses. Since Tele2 has 10% of thosesegments, while France Telecom is still holding onto75%, there is major growth potential.

Local callsLocal calling will be opened to competition in Francebetween February and April 2002. Call minutes per cus-tomer are expected to double, while revenues willincrease without additional operating or marketing costs.

Prepaid fixed telephony growing in popularityOver 300,000 of Tele2’s customers chose a system forprepayment copied from Tele2 Spain and now availablein every country. Prepayment has helped reduce thechurn rate, improve cash flow, avoid bad debt and mini-mize total billing expense.

Pre-selectionAs many as half of Tele2 customers have automatic accessto the company’s network, either with iHear phones orpre-selection. ARPU is also rising steadily.

Focus on revenues and profitabilityThanks to a strong brand and price leadership, Tele2France will continue to steadily recruit new customers.The company is focusing on profitability, as well asongoing improvements in the quality of customer careand billing.

Opportunities in the mobile marketTele2’s large customer base provides a strong position innegotiating MVNO agreements with French mobileoperators which see an opportunity to increase traffic intheir networks while making major investments in thebuild-out of 3G. Long-term negotiations are now beingsupported by intense activity on the part of regulatoryagencies.

Tele2 is the leading alternative

provider, which is re-enforced by

advertising. At least choosing an

operator is simple.

ItalyTele2 Italy’s customer base grew by more than

50% in 2001, making it the second largest alter-

native fixed telephony operator in the country.

Customer recruitment has been excellent since Tele2started in Italy during April 1999. At the end of 2001,the company had a very strong customer base. Publicrecognition of the Tele2 brand has risen sharply. InJanuary 2001, 72% of the population was familiar withit. In the wake of Tele2’s emergence as price leader during2001, customer loyalty steadily improved and the churnrate declined.

Generating high average revenueA large percentage of calls in Italy are from fixed-line tomobile phones. Total call minutes nearly doubled in2001, so that Tele2 Italy continued to enjoy high averagerevenue per subscriber.

The company successfully launched a prepaid productin December based on the same concept that has beenimplemented in Spain and France. The number of cus-tomers who chose that option in the first few monthswas encouraging.

Greater functionalityTele2 successfully introduced local calling in 2001 – byDecember every customer in the country had access to it.During the year, iHear phones were increasingly popular,and a significant number were sold to customers. Onekey factor was the telemarketing effort that began in July.

Focus on higher revenuesTele2 Italy will continue focusing on expanding its sub-scriber base and cultivating loyalty by means of a greaterpercentage of pre-selection and iHear customers. As theTele2 brand becomes more established, the company’simage as price leader sharpens. In order to improve itsproduct offering and spur revenue, Tele2 will offer add-itional services such as Internet access to its existing cus-tomers. With a view toward cultivating customer loyalty,the company will zero in on enhancing processes thatcan boost efficiency and provide greater satisfaction.

SpainTele2 entered the Spanish market in February

2001 with an offer of the new VOIP (Voice Over

the Internet Protocol) technology. Tele2 Spain has

prepaid fixed telephony only.

Tele2 Spain offers fixed telephony services for long-distance and international calling, as well as calls fromfixed-line to mobile networks. Customers can decide touse Tele2 for individual calls, either by means of pre-selection or with iHear phones and their built-in selectors.

Following a positive reception, the company attracteda large number of customers within the first year, thanksto an aggressive marketing and pricing effort. Tele2 isalready ranked among the four best operators.

Prepaid fixed telephonyPrepaid services are a highly effective means of minimiz-ing billing expense, bad credit and the churn rate. Theseservices create a potential for subscriber growth and havea positive effect on cash flow. Tele2 has positioned itselfas the price leader, and the largest consumer group rec-ommends the company as the most attractively pricedamong eleven competitors in the Spanish market.

VOIPIP technology, which uses Cisco equipment, has beensuccessful with respect to both quality and flexibility.Thanks to the enhanced capacity that VOIP permits, ithas begun to generate lower traffic costs.

Focus on growthTele2 will continue to expand its customer base and pro-mote its brand. The launch of local calling (66% of alltraffic in the country) and the increased popularity ofiHear phones will lead to higher ARPU. Tele2 is review-ing its options for concluding an MVNO agreement in Spain.

PortugalTele2 Portugal obtained a fixed telephony license inFebruary 2001.

The Southern Europe market area

40 Tele2 Årsredovisning 2001



Luxembourg • • • • 1998 1

Lichtenstein • • • • 2000 1

Belgium •

The Luxembourg market area

includes Lichtenstein,

Luxembourg, 3C and Transac,

as well as a fixed telephony

license in Belgium.

LuxembourgLuxembourg


LiechtensteinTele2 has provided mobile telephony services in

Liechtenstein since March 2000 under the Tango

brand and fixed telephony since June 2000 under

its own brand. The company holds a license for

GSM and for all types of fixed-line communica-

tions services, including the Internet. The

Liechtenstein government awarded Tele2 a UMTS

license for 2002.

Tele2 is the largest alternative operator in

Liechtenstein.

3C3C has been active in public telecommunications for morethan 15 years. Currently the company specializes in tran-saction services, interactive advertising and pay phones.

In collaboration with leading international banks, 3Cprovides a pan-European credit card transaction process-ing service.

Transaction services are one of 3C’s top-priority areas.In 2001, the company established closer relations withfinancial institutions and customers, hotels and restau-rants, and parking operators. 3C anticipates substantiallyhigher sales for its Parking service and for Transac’s products.

The Parking service is a total concept for parking lotoperators. The concept was developed in Britain, where3C has 95% of the market for parking spaces at airportsand in metropolitan areas.

A large number of public Everday.com Internet ter-minals allow 3C to provide international brands with anetwork for interactive advertising. The free terminals arelocated where large numbers of people gather, includingairport concourses, airline lounges, hotels and restaurantsthroughout Europe. The second generation of Internetterminals that 3C introduced in 2001 permits not onlyinteractive advertising, but prominent on-site promotion.The combination of contemporary design, convenientlocations, advertising options and free access is unique.

3C has credit card phones in a large number of loca-tions throughout Europe under the Tele2 brand. Butsince the increased usage of mobile phones has madepublic phones less popular, 3C is now focusing on main-taining existing installations and adding new services. In2001, the company placed phones in the concourses ofthe Oslo and Vienna airports, as well as British Airways,Lufthansa and One World Alliance lounges.

LuxembourgTele2 Luxembourg provides all types of fixed-line

telecommunications services. The company has

offered fixed telephony since October 1999. Tele2

launched Internet services in June 2000.

At the end of 2001, the company had a considerableshare of the market for Internet services. Traffic volumeshave increased substantially since December 2000.Tele2’s Internet rates are the lowest on the market, withtraffic volumes which are always increasing. The compa-ny is now the leading alternative to the former monopoly.

TangoWith a GSM 900 and GSM 1800 license inLuxembourg, Tango is the biggest provider of mobile ser-vices. This position was strengthened during 2001through significant subscriber growth. One reason forthe rapid customer recruitment is that prepaid callingcard users have had roaming privileges to call over thenetworks of other operators since March 2001.Following substantial volume growth during the year,Tango now has close to half of the market. The compa-ny’s customers sent almost twice as many SMS messageas the year before. The new services introduced duringthe year boosted the number of subscribers and the vol-ume of traffic. Such services include GPRS (launched inearly March), SMS games and voice-controlled services.

Everyday MediaThe youth-oriented Tango Sunshine pop music radio station that started up in February can be heard on FM,cable or the Internet. Tele2 markets its products and ser-vices on the station. Tele2 established an Everyday Mediasubsidiary called Tango TV. The channel is licensed tobroadcast 24 hours a day over the Luxembourg cablenetwork and via the Astra satellite.

Transac Based in Luxembourg, Transac provides back-office pro-cessing services to businesses that handle large quantitiesof data. MACH, 3C, Banque Invik and Inlux are amongTransac’s customers.

BelgiumTele2 has a license for fixed telephony in Belgium.

The Luxembourg market area


The Branded products & services

market area includes Optimal

Telecom, IntelliNet, Calling Card

Company (C3) and Tele2 UK.

Brandedproducts &

services

Brandedproducts &

services


Optimal Telecom

Optimal Telecom provides consumers with fixed teleph-ony and Internet access. The company was established inthe autumn of 1998. During 2001, the mobile prepaidcalling card Tango was launched in Sweden.

Launches and expansion in the consumer marketOptimal Telecom continued to expand rapidly in theSwedish consumer market during 2001. Successful mar-keting efforts and attractive services generated new growthin both fixed and mobile telephony. Tango was launchedin the Swedish market during June. To make the saleseffort more successful, it was coordinated with IntelliNet,as well as operations in France, the Netherlands andGermany. This collaboration was intensified during 2001.

Rates held steady during the year and rose for certainkinds of calls. Rates for Internet access did not changesignificantly. In January 2001, Optimal Telecom andEveryday.com launched a prepaid calling card forInternet use.

Optimal SelectorBy connecting the Optimal Selector device to a tele-phone jack, a customer can be assured of automaticallyobtaining the lowest ordinary rates from among Telia,Tele2 or Telenordia, the three operators that dominatethe Swedish market. The selector also has the ability tokeep up with changes in the various rates. As of January2002, the operators Rix Telecom, Glocalnet and Utforsare also included.

Optimal Wireless, iHearThe Optimal Cordless phone has a built-in selector. Via Optimal Telecom, it automatically identifies thelowest standard rate. The product appeals to customerswho do not want to install their own Optimal Selector.An added benefit is the reduced churn rate that results.

Optimal InternetThe Optimal Internet subscription carries no monthlyfee. Customers in Sweden can connect through OptimalTelecom’s modem pool at the lowest standard rate amongTelia, Tele2 and Telenordia. The subscription alwaysreflects the latest rates. The company offers value-addedservices such as email and free SMS in collaboration withEveryday.com.

TangoThe Tango mobile prepaid calling card offers highlyappealing terms for longer use. The card always choosesthe lowest standard rate within Sweden among TeliaRefill, Europolitan Easy and Comviq Kontant. Customersreceive interest, refunds and a complete overview of theirmobile phone fees. They do not have to take out sub-scriptions or decide ahead of time how much calling theyare going to do.

InfrastructureOptimal Telecom is a service provider, i.e. a companythat does not have its own infrastructure in Sweden.

New services and ongoing expansionThe focus in 2002 will be on generating growth for Tangoand boosting sales of iHear products like iType cordlessphones. In addition, the company will be activelyengaged in convincing more customers to choose theprepaid option.

Cross-selling and product development are key tocreating increased sales, long-term customer relationshipsand improved profitability.

The Branded products & services market area

Once again, the focus is on Tele2

as the price leader. Why continue

making expensive calls?


The Branded products & services market area

IntelliNet

IntelliNet is Optimal Telecom’s counterpart in continentalEurope. The company offers its customers in France, theNetherlands, and Germany the lowest rates from amonga large number of major fixed telephony operators.

IntelliNet BoxLike Optimal Telecom, IntelliNet guarantees the lowestlong-distance and international rates, as well as the lowestrates to mobile networks, by means of a device attachedto the telephone jack. Depending on the particularmarket, the device chooses among 5–10 operators. Theselector also has the ability to keep up with changes in thevarious rates to ensure the lowest rate at any given time.

Calling Card Company (C3)

C3 (Calling Card Company) sells prepaid fixed telephonycards in seven European countries: Austria, Britain, France,Germany, Italy, the Netherlands and Spain. In 2001 thecompany launched a refillable calling card under theTele2 brand. The card may be used in more than 40countries. The company has attained profitability inevery market, and growth remains solid.

Close cooperation with Tele2C3 works closely with Tele2, the provider of its networkcapacity. The key to C3’s success is a stable distributionnetwork and a flexible pricing strategy. With over 140European brands at the moment, the company soldmore than 20 million prepaid calling cards during thepast year. The prepaid calling card market in the coun-tries where C3 does business is worth a total of some SEK 10 billion.

Taking the next step with prepaid calling cardsAlthough prepaid calling cards are sold mostly in storesand newsstands, C3 is now launching a card for the busi-ness market – where it is encountering little competition.The company has reached agreement with a French retailchain that offers the potential of 300,000 card sales permonth through airlines, travel agencies and Europe’sbiggest post offices. C3 is marketing the card in collab-oration with Nestlé in Italy. Among its customers areDeutsche Bank and Dresdner Bank.

The company has also designed a card with a magneticstrip for its public phones.

European expansionC3 plans to expand further in Central Europe,Scandinavia and the Baltic states.

Post Office – Tele2 UK Communications

Tele2 UK, a leading alternative fixed telephony provider,started in November 2001. In collaboration with the PostOffice, the company offers fixed telephony services on apar with those in other countries where it does business.

Tele2 markets its services – which may be purchasedonly at post offices, joint call centers or at the PostOffice’s website – under the Post Office brand. The brandis one of the strongest in UK and all of Europe. The PostOffice employs 40,000 tellers at 17,500 sales outlets.

ProductsTo supplement its fixed telephony business, Tele2 mar-kets a number of prepaid calling cards through the Post Office’s sales outlets. The cards carry the Post Officebrand and are highly competitive in the British market.

FocusTele2 UK will focus in 2002 on building up its customerbase by taking advantage of the Post Office’s existing dis-tribution network and by evolving further as the leadingalternative telephony provider.

In the UK, Tele2 offers prepaid

calling cards under the brand

of its partner, the Post Office.


Financial review

Five-year overview 2001 2000 1999 1998 1997

Income statement and balance sheet items, SEK million

Operating revenues 25,085 12,440 8,171 5,918 4,030

EBITDA* 1,699 1,820 2,060 1,165 1,026

EBIT** – 1,356 420 1,152 506 507

Profit/loss after financial items – 1,944 165 4,184 219 78

Profit/loss for the year 392 – 396 3,768 53 130

Shareholders’ equity 29,517 26,539 6,659 2,926 2,903

Shareholders’ equity after dilution 29,547 26,584 6,659 2,926 2,940

Total assets 49,156 42,345 14,401 9,995 8,435

Cash flow from operating activities 413 883 1,753 971 441

Liquidity 1,378 1,304 1,123 821 1,499

Net borrowing 9,286 7,095 4,605 4,600 3,579

Net borrowing after dilution 9,256 7,050 4,605 4,600 3,542

Investments, including financial leases 1,485 774 1,475 1,941 1,147

Key figures

Solidity 60% 63% 46% 29% 34%

Solidity after dilution 60% 63% 46% 29% 35%

Debt/equity ratio 0.31 0.27 0.69 1.57 1.23

EBITDA margin 6.8% 14.6% 25.2% 19.7% 25.5%

EBIT margin – 5.4% 3.4% 14.1% 8.6% 12.6%

Return on shareholders’ equity 1.4% – 2.4% 78.6% 1.8% 6.9%

Return on shareholders’ equity after dilution 1.4% – 2.4% 78.6% 1.8% 6.4%

Return on capital employed – 3.3% 1.9% 45.2% 6.8% 6.8%

Average interest rate 6.3% 4.8% 4.8% 6.6% 7.1%

Average interest rate after dilution 6.3% 4.8% 4.8% 6.6% 7.1%

Value per share (SEK)

Profit/loss after tax 2.70 – 3.47 36.28 0.51 1.32

Profit/loss after tax, after dilution 2.70 – 3.47 36.28 0.51 1.36

Shareholders’ equity 203.56 232.62 64.12 28.24 29.60

Shareholders’ equity after dilution 203.46 232.74 64.12 28.17 28.42

Cash flow 2.85 7.74 16.88 9.38 4.50

Cash flow after dilution 2.85 7.73 16.88 9.35 4.26

Dividends — — — — —

Share price on closing date 378.00 392.00 598.00 330.00 170.50

P/E ratio 139.81 – 112.89 16.48 642.68 128.82

P/E ratio after dilution 140.02 – 113.02 16.48 644.24 125.61

* EBITDA: Operating profit/loss before depreciation/amortization.

** EBIT: Operating profit/loss after depreciation/amortization.


Number of customers totaled Number of customers Net intake(Thousands) Dec. 31, 2001 Dec. 31, 2000 Change 2001

By market area

Nordic ............................................................................................................. 6,274 5,472 15% 802

Eastern Europe and Russia ................................................................. 996 278 258% 718

Central Europe ........................................................................................... 3,191 2,702 18% 489

Southern Europe ...................................................................................... 4,286 2,942 46% 1,344

Luxembourg ................................................................................................ 211 160 32% 51

Total ................................................................................................................ 14,958 11,554 29% 3,404

By business area

Mobile telephony .................................................................................... 3,710 2,559 45% 1,151

of which, prepaid ................................................................................. 2,179 1,396 56% 783

Fixed telephony and Internet ........................................................... 11,248 8,995 25% 2,253

Total ................................................................................................................ 14,958 11,554 29% 3,404

As a result of corporate acquisitions in 2001, 166,000 and 130,000 customers, respectively, are attributable to the Fora Group and LevicomBroadband Group, respectively, of which 66,000 are cable-TV customers.

Report of the directors

Tele2 AB’s share is listed on the Stockholmsbörsen (StockholmExchange) under the abbreviation TEL2A and TEL2B and onNasdaq under the abbreviation TLTOA and TLTOB.

The ten largest shareholders hold shares at December 31,2001 corresponding to 44% (2000: 42%) of the capital and72% (2000: 72%) of the voting rights, of which the InvikGroup, Kinnevik Group and Millicom Telecommunications S.Aowns 9%, 16% and 10%, respectively, of the capital, and24%, 20% and 15%, respectively, of the voting rights.

OperationsFormed in 1993, Tele2 AB is the leading alternative pan-European telecommunications company, offering fixed andmobile telephony and data network and Internet servicesunder the Tele2, Tango and Comviq brands to 15 million cus-tomers in 21 countries. Tele2 operates Datametrix, which spe-cializes in system integration; 3C Communications, which isactive in public pay phones and public Internet terminals;Transac, which is engaged in data processing of card transac-tions and invoices, for example; C3, which provides cash cardsfor fixed telephony, as well as IntellNet and Optimal Telecom,with “lowest-price guarantee” for households. The Group alsooffers cable-TV under the Kabelvision brand and, togetherwith MTG, owns the Everyday.com Internet portal.

During 2001, the Tele2 Group invested SEK 2,129 million(2000: SEK 1,285 million) in tangible fixed assets. Investmentsin companies amounted to SEK 1,376 million and sales ofparticipations amounted to SEK 236 million. At the end of2000, Société Européenne de Communication SA wasacquired, which means that SEC is included in the precedingyear’s earnings for only one quarter. To facilitate comparison

among the years, certain income statement items are reportedpro form as if Tele2 AB had owned Société Européenne deCommunication SA during all of 2000 (see notes 1–2). Proforma accounts have not been subject to specific review by theauditors.

Tele2 had a total of 15.0 million customers at December 31,2001, an increase of 29%, and a customer net intake of 3.4million for full-year 2001. Tele2’s operating revenue in 2001amounted to SEK 25,085 million (2000: SEK 12,440 million),up 54% compared with SEK 16,243 million, pro forma for allof 2000.

Operating profit/loss before depreciation and amortization(EBITDA) amounted to SEK 1,698 million (2000: SEK 1,820million, pro forma 2000: SEK –371 million), with an EBITDAmargin of 7% (2000: 15%, pro forma 2000: –2%). The oper-ating profit/loss after depreciation and amortization (EBIT) wasSEK –1,356 million (2000: SEK 420 million, pro forma 2000:SEK –2,850 million), with a EBIT margin of –5% (2000: 3%,pro forma 2000: –18%).

Net interest expense and other financial items totaled SEK–621 million (2000: SEK –211 million). The average interestrate on outstanding liabilities was 6.3% in 2001. The profit/lossafter financial items amounted to SEK –1,944 million (2000:SEK 165 million).

Tax on net profit/loss for the year amounted to SEK 2,335million (2000: SEK –561 million), which reflects the tax effectsof Swedish operations and a tax effect of SEK 3,082 million inconnection with the restructuring of SEC. Profit/loss after taxwas SEK 392 million (2000: SEK –396 million). Earnings/lossper share were SEK 2.70 (2000: SEK –3.47) after full dilution.

Growth and profitability trend in recent years:

SEK millions 2001 2000 1999 1998 1997

Operating revenue .................................................................. 25,085 12,440 8,171 5,918 4,030

EBITDA ........................................................................................... 1,698 1,820 2,060 1,165 1,026

EBIT .................................................................................................. –1,356 420 1,152 506 507

Profit/loss after financial items ........................................ –1,944 165 4,184 219 78

Profit in 2000 was affected by the acquisition of the SEC Group on October 2, 2000. Profit after financial items for 1999 includes a non-recurring item of SEK 3,228 million attributable to a capital gain from the sale of the associated company NetCom ASA.

The Board of Directors and President present the Annual Report for Tele2 AB (publ) company registration number 556410-8917, for fiscal 2001.



Nordic Operating revenue: SEK 12,366 million (2000: SEK 10,481million), +18%. EBITDA: SEK 3,768 million (2000: SEK 2,943million) +28%.

The Nordic market area comprises Tele2 operations inSweden, Norway, Denmark and Finland, as well as Datametrix.

SwedenTele2 Sweden is the largest operation in the Nordic marketarea. Tele2 Sweden’s operating revenue amounted to SEK9,060 million in 2001, an increase of 14% compared withthe preceding year. EBITDA totaled SEK 3,773 million (2000:SEK 2,728 million), corresponding to an increase of 38%.EBITDA margin was 42% in 2001, compared with 34% in2000. Operating revenue in mobile telephony rose 20% toSEK 5,720 million and EBITDA rose 41% to SEK 3,111 mil-lion, yielding a EBITDA margin of 54% in mobile telephony.

During 2001, growth in the number of mobile telephonycustomers continued, primarily as a result of Tele2’s positionas the price-leading operator. Comviq reported 2,532,000customers, an increase of 21% compared with the precedingyear. The average monthly revenue per customer (ARPU),including prepaid customer, was SEK 206 throughout 2001and SEK 204 during the fourth quarter, despite an increase inthe net intake of customers during the last two quarters.Minutes per user and month (MoU) rose during the fourthquarter by 19% to 117 minutes, compared with 98 minutesin the fourth quarter of 2000. Prepaid customers accountedfor 65% of the total customer base. In March 2001, Tele2Sweden signed an agreement to form a joint UMTS networkcompany with Telia. The cooperation is going well and theextension of the network complys to the plan in the licensapplication. In October, Tele2 GPRS was launched in Sweden.

Customer net intake in fixed telephony and Internet wasstrong, with the customer base increasing 17% on an annualbasis to SEK 2.1 million, at the same time as EBITDA marginreached 21% for all of 2001, compared with 17% in the pre-ceding year.

In September, Tele2 Sweden presented a plan for cost-savings programs involving the streamlining of the productrange and a reduction in the Swedish workforce of some 7%.The plan offers estimated savings of SEK 80 million annually.

Denmark, Finland and NorwayCombined, Denmark, Finland and Norway have 1.7 millioncustomers. All business areas reported growth and market con-ditions improved during the year. In September, Tele2 Norwaytook over Entitel AS’ customers in fixed (pre-selection) anddial-up Internet at a low cost per customer.

The mobile market in Norway underwent consolidation in2001. At the beginning of the year, there were 17 mobiletelephony providers, but by the end of the year only fourremained. Consolidation considerably strengthened Tele2’sposition in Norway. Tele2 has a UMTS license in Norway andis currently negotiating conditions for the extension of the net-work with the Norwegian telecommunication authority, at thesame time as Tele2 is reviewing various courses of action.

In Denmark, during the course of 2001, Tele2 was the solealternative in fixed telephony and Internet to compete withthe former monopoly TDC (former name Tele Danmark).Several competitors ceased to sell fixed telephony and Internetservices to households, thus marking the end of an intensivelycompetitive period.

Eastern Europe and RussiaOperating revenue: SEK 1,181 million (2000: SEK 261 million),+352%. EBITDA: SEK 272 million (2000: SEK –29 million).

Eastern Europe and Russia comprise operations in Estonia,Latvia, Lithuania, Poland, the Czech Republic and Russia.

Revenue derives primarily from mobile telephony oper-ations, which expanded sharply in 2001. In December 2001,Tele2 acquired the Fora Group in Russia. Fora operates twelvemobile telephony units and reaches a population of 48 mil-lion. Prepaid cards were the major growth generator during2001. Prepaid cards now account for 53% of the customerbase. In December, Tele2 also acquired the OU LevicomBroadband Group, with cable-TV and fixed telephony in theBaltic States. Tele2 is the leading alternative mobile telephonyoperator in the Baltic States.

Central EuropeOperating revenue: SEK 5,364 million (pro forma 2000: SEK3,108 million), +73%. EBITDA: SEK –606 million (2000 proforma: SEK –1,640 million).

Central Europe comprises operations in Germany, theNetherlands, Switzerland and Austria.

EBITDA improved considerably during the past five quarters.This is due to the fact that operations have now matured andare moving towards a positive EBITDA within three years fromthe start of operations. ARPU was strong during the year andamounted to SEK 158 during the fourth quarter, comparedwith SEK 130 for the corresponding period in 2000.

Tele2 is the largest alternative operator in the Netherlands.In August Tele2 became the first MVNO (Mobile VirtualNetwork Operator) in the Netherlands.

Fixed telephony operations in Germany benefited from con-solidation in the market, as a result of which a number ofcompetitors were either integrated into larger units or fadedfrom the market. Call traffic increased substantially. Tele2 hasa distinct position in the market and the brand is known tomore that 50% of all Germans. In December Tele2 signed anMVNO agreement in Germany, which permits the sale ofmobile telephony services to more than a million of the com-pany’s private and corporate customers in fixed telephony. Asa result, Tele2 can build a mobile telephony operations at lowmarginal cost in the largest market in Europe.

Tele2 is the second largest alternative operator inSwitzerland. In Austria, Tele2 is the largest alternative operatorin fixed telephony. As a result of the large percentage of pre-selection customers, traffic volume per customer rose sharplyin both countries during 2001.

Southern EuropeOperating revenue: SEK 5,591 million (pro forma 2000: SEK2,574 million), +117%. EBITDA: SEK –1,331 million (proforma 2000: SEK –1,276 million).

Southern Europe comprises operations in France, Italy andSpain as well as a license in Portugal.

Southern Europe reported a very good year in 2001, asincreased marketing contributed to attracting many new cus-tomers to Tele2, notably during the two final quarters of theyear. ARPU in Southern Europe was strong and amounted toSEK 125 for the year as a whole, and to SEK 127 for thefourth quarter, compared with SEK 113 for the correspondingperiod in 2000.



Tele2 in France is the largest alternative fixed telephonyoperator nationwide. Consolidation in the French market in2001 entailed that France Telecom, Tele2 and Cegetel are theonly major operators remaining in the market. Local calls willbe opened to competition in all regions in France betweenFebruary and April 2002. This means that revenue per cus-tomer will increase without any cost increases for Tele2. OnJanuary 1, 2002, interconnection charges were reduced,which will also contribute to improving gross margins.

Tele2 is Italy’s second largest alternative operator in fixedtelephony. A sharp increase in the customer base contributedto raising brand recognition to more than 70%. During 2001,Tele2 established a position as the price-leading operator.

In February 2001, Tele2 launched fixed telephony in Spain.The network in Spain is IP-based with CISCO switches. Theservices consist exclusively of pre-paid fixed telephony. Tele2’sfirst year was successful and the company is already one ofthe four largest operators.

LuxembourgOperating revenue: SEK 786 million (pro forma 2000: SEK573 million), +37%. EBITDA: SEK 5 million (pro forma 2000:SEK –110 million).

The Luxembourg market area comprises operations inLiechtenstein, Luxembourg and Belgium, as well as all of 3C’soperations in the various countries.

Tango is the largest mobile supplier in Luxembourg. During2001, traffic rose sharply. SMS traffic almost doubled. InFebruary 2001, Everyday Media launched the Tango Sunshineradio station in Luxembourg. This focuses on a young targetgroup and offer the possibility for cross-selling by TangoSunshine assisting in marketing Tele2’s products and services,especially SMS services. Tango TV was launched in December.Radio and TV operations are primarily designed to strengthenthe brand and act as a supplier of content services for theUMTS network.

Branded products & servicesOperating revenue: SEK 1,576 million (pro forma 2000: SEK789 million), +100%. EBITDA: SEK –410 million (pro forma2000: SEK –259 million).

Branded products &services comprise Optimal Telecom,Tele2 UK and C3, Everyday.com and IntelliNet in all countriesin which these companies pursue operations.

Optimal Telecom and C3 account for most of the revenue. InNovember, Tele2 commenced cooperation with the Post Officein the UK, which means that Tele2’s telephone card and fixedtelephony services will be sold in the UK.

Acquisitions and salesOn December 2001, Tele2 acquired all the shares in ForaTelecom BV in exchange for newly issued shares in Tele2 AB,corresponding to a value of SEK 849 million. The acquisitionresulted in goodwill of SEK 86 million. Fora Telecom BV hastwelve mobile telephony operations in Russia and reaches a population of 48 million.

On December 31, 2001, a subsidiary in the Tele2 Groupacquired the remaining 81% of OU Levicom Broadband forSEK 153 million, resulting in goodwill of SEK 167 million. OULevicom Broadband is a cable-TV and broadband company, aswell as a fixed telephony operator in the Baltic States.

In January 2001, Tele2 AB sold its 37.5% shareholding inTranscom Worldwide S.A., an associated company in SociétéEuropéene Communication S.A. Group, which was acquiredduring 2000, to Industriförvaltnings AB Kinnevik at a value ofSEK 235 million and with a capital gain of SEK 91 million.The purchase price was based on the share price 60 tradingdays after Transcom was listed on the Stockholmsbörsen(Stockholm Exchange).

New bank financingDuring the second half of 2001, Tele2 signed a five-year newamortizing senior debt facility of EUR 1.2 billion, guaranteedby ABN Amro, CIBC World Markets, ING Bank, Nordea, TheRoyal Bank of Scotland and West LB. The five-year bank-financing program with amortization replaces two previouscredit facilities in Tele2 Sweden and SEC.

Future prospectsA significant development in 2001 was that interconnectioncharges were reduced or are planned to be reduced in theimmediate future in several of the markets in which Tele2 isactive. Interconnection charges are the fees paid by a telecomoperator for gaining access to copper wire connecting theexchanges with households. Since Tele2 has otherwise lowinfrastructure costs, reductions in interconnection charges willhave highly positive effects.

Another positive trend during the past year was that severalcountries introduced number portability – or plan to do so inthe near future. Number portability means that customers canretain their mobile telephone number although they switchoperator, which simplifies the change of operator. Numberportability has already been introduced in Sweden and is dueto be introduced in Switzerland, Germany and the Netherlands.

Pre-selection for local calls is also spreading. This meansthat Tele2 can now also reach the attractive local call market,marking the opening up of major potential. At the beginningof 2002, local pre-selection was introduced in Sweden andtowards the close of the year, the Netherlands, Switzerland,Austria and Germany will introduce local pre-selection.

Significant events after the end of the financial yearNo events occurred after the end of the financial year thathave a significant impact on the company’s earnings or finan-cial position or lead executive management to expect any-thing other than continuing favorable growth in market areas.

Work of the Board of DirectorsThe work of the Board of Directors follows an annual plan,designed to secure the Board’s need for information and inother respects is affected by the specific work procedure thathas been adopted for the Board’s work. Matters placed beforethe Board are dealt with by the entire Board. In 2001, Tele2’sBoard of Directors held nine meetings at which minutes weretaken. Specific instructions governing the President’s responsi-bilities and authority were adopted. Each year, the company’sauditors report to the Board the result of their examinationand provide their assessment of internal control.



Parent CompanyThe Parent Company performs functions and conducts certaindevelopment projects common to the Group.

Earnings in the preceding year included liquidation of anoption provision of SEK 201 million. A liquidation loss arose inTele2 AB during the fourth quarter amounting to SEK –13,964million in conjunction with the restructuring of SEC SA, whichresulted in a positive tax effect of SEK 3,082 million. Duringthe fourth quarter, Tele2 AB acquired the Fora Group througha new issue of 2,461,449 B shares, which affected sharehold-ers’ equity by SEK 849 million. Tele2 AB also newly issued100,000 B shares at December 31, 2001, pertaining to a con-vertible debenture. The effect on shareholders’ equity was SEK15 million. The latter issue is being registered with the SwedishPatent and Registration Board (PRV).

Proposed appropriation of lossThe Group’s non-restricted reserves amount to a deficit of SEK–6,961 million. No allocation to restricted reserves is pro-posed for companies within the Group.

The Board of Directors and President propose that the acku-mulated loss of SEK –7,386,856,726, be covered by a with-drawal of the same amount from the share premium reserve.


Income statement

R Group Parent Company

SEK M Note 2001 2000 2001 2000

Operating revenue ..................................................................................... 1 25,085 12,440 12 8Cost of services sold ............................................................................ – 17,715 – 8,078 — —Gross profit .............................................................................................. 7,370 4,362 12 8

Selling expenses ..................................................................................... – 6,652 – 3,499 — —Administrative expenses ................................................................... – 2,188 – 797 – 73 – 54Executive options ................................................................................... — 229 — 201Other operating revenue ................................................................. 3 189 212 4 —Other operating expenses .............................................................. 4 – 75 – 87 — —

Operating profit/loss ...................................................................... 2 – 1,356 420 – 57 155

Profit/loss on associated companies:Result from participations

in associated companies ........................................................... 5 – 58 – 44 — 2Sale of associated companies ...................................................... 6 91 — — —

Profit/loss on financial investments:Result from participations in Group companies .......... 7 – 13,964 103Result from other securities

and receivables classed as fixed assets .......................... 8 4 6 64 62Other interest revenue and similar income ..................... 9 65 57 14 —Interest expenses and similar costs ......................................... 10 – 690 – 274 – 15 – 2

Profit/loss after financial items .......................................... – 1,944 165 – 13,958 320

Tax on profit for the year ................................................................ 11 2,335 – 561 3,076 – 69Minority interest ..................................................................................... 1 —

Profit/loss for the year .............................................................. 392 – 396 – 10,882 251

Earnings/loss per share ..................................................................... 25 SEK 2.70 SEK – 3.47Earnings/loss per share after full dilution ......................... 25 SEK 2.70 SEK – 3.47

Number of shares ................................................................................. 25 147,360,175 144,798,726Average number of shares ............................................................. 25 145,003,847 114,087,366Number of shares after dilution ............................................... 25 147,560,175 145,098,726Average number of shares after dilution ........................... 25 145,223,466 114,224,866


Balance sheet

B Group Parent Company

SEK M Note Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

ASSETSFixed assetsIntangible assetsLicenses and right of use ................................................................ 12 736 607 — —Goodwill ........................................................................................................ 12 27,033 26,745 — —Total intangible assets ............................................................................ 27,769 27,352 — —

Tangible assetsBuildings and land ............................................................................... 13 124 99 — —Machinery and other technical plant ................................... 13 8,270 7,226 — —Equipment, tools and installations .......................................... 13 687 564 — —Fixed plant under construction .................................................. 13 350 142 — 1Total tangible assets ................................................................................ 9,431 8,031 — 1

Long-term financial assetsParticipations in Group companies ......................................... 14 1,987 24,488Receivables from Group companies ....................................... 15 12,526 1,028Shares and participations

in associated companies ........................................................... 16 224 88 — —Receivables from associated companies ............................. 17 115 105 115 67Other long-term holdings of securities ............................... 18 202 146 5 23Other long-term receivables ....................................................... 19 85 106 — 46Deferred tax receivable .................................................................... 11 1,764 — 2,656 168Total long-term financial assets ....................................................... 2,390 445 17,289 25,820

Total fixed assets ............................................................................... 39,590 35,828 17,289 25,821

Current assetsMaterials and suppliesFinished goods and merchandise ............................................ 362 246 — —Total materials and supplies .............................................................. 362 246 — —

Current receivablesAccounts receivable ............................................................................. 20 3,624 2,454 — —Current tax receivables ...................................................................... 6 5 — —Receivables from Group companies ....................................... 2 1Other receivables ................................................................................... 21 530 298 2 —Prepaid expenses and accrued revenues ........................... 22 2,769 2,003 1 1Total current receivables ................................................................... 6,929 4,760 5 2

Cash and cash equivalents .................................................................. 23 2,275 1,511 8 7

Total current assets .......................................................................... 9,566 6,517 13 9

Total assets ............................................................................................... 49,156 42,345 17,302 25,830


Balance sheet


SEK M Note Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

EQUITY AND LIABILITIESShareholders’ equity 24Restricted equityShare capital .............................................................................................. 25 737 724 737 724Restricted reserves ................................................................................ 35,741 25,098 23,935 23,083Total restricted equity ............................................................................ 36,478 25,822 24,672 23,807

Non-restricted reserves/accumulated lossesNon-restricted reserves/accumulated losses ..................... – 7,353 1,113 3,495 1,732Profit/loss of the year ......................................................................... 392 – 396 – 10,882 251Total non-restricted reserves/accumulated losses ................. – 6,961 717 – 7,387 1,983

Total shareholders’ equity ........................................................ 29,517 26,539 17,285 25,790

Untaxed reservesForeign exchange reserve ............................................................... — 1Total untaxed reserves ................................................................. — 1

Minority interest ................................................................................ 28 8

ProvisionsDeferred tax liability ........................................................................... 11 — 571 — —Total provisions .................................................................................... — 571 — —

Long-term liabilities Interest-bearingLiabilities to financial institutions ............................................ 26 10,843 5,490 — —Liabilities to Group companies ................................................... — —Bank overdraft facility ........................................................................ 23 14 14 — —Other liabilities ........................................................................................ 27 115 86 — —Total interest-bearing liabilities ........................................................ 10,972 5,590 — —

Non-interest-bearingOther liabilities ........................................................................................ 8 25 — —Total non-interest-bearing liabilities .............................................. 8 25 — —

Total long-term liabilities .......................................................... 10,980 5,615 — —

Current liabilitiesInterest-bearingLiabilities to financial institutions ............................................ 26 731 2,682 — 21Other liabilities ........................................................................................ 27 151 546 — 3Total interest-bearing liabilities ........................................................ 882 3,228 — 24

Non-interest-bearingAccounts payable ................................................................................... 3,344 2,546 10 6Current tax liabilities ........................................................................... 16 27 — —Liabilities to associated companies ......................................... — 60 — —Other liabilities ........................................................................................ 28 375 322 — 1Accrued expenses and prepaid revenues ........................... 29 4,014 3,429 7 8Total non-interest bearing liabilities .............................................. 7,749 6,384 17 15

Total current liabilities .................................................................. 8,631 9,612 17 39

Total shareholders’ equity and liabilities .................. 49,156 42,345 17,302 25,830

PLEDGED ASSETS AND CONTINGENT LIABILITIESPledged assets ...................................................................................... 30 24,139 1,195 None NoneContingent liabilities ...................................................................... 31 None None 15,133 334


Cash flow statement


SEK M Note 2001 2000 2001 2000

Operating activitiesOperating profit/loss ........................................................................... – 1,356 420 – 57 155Adjustments of income/expense items that do not generate cash flow from operating activities:

Depreciation and amortization ............................................ 3,054 1,400 — 1Capital losses/gains on sale of

machinery, other technical plant ................................. 40 16 — —Financial leases ................................................................................. – 14 – 13 — —

Exchange rate differences ............................................................... — – 5 — 2Interest received ..................................................................................... 54 61 4 —Interest paid ............................................................................................... – 569 – 280 – 14 – 2Financial expenses paid ................................................................... – 55 – 16 – 1 3Tax refund .................................................................................................... 7 – 9 — —

1,161 1,574 – 68 159Change in working capitalMaterials and supplies ...................................................................... – 66 – 25 — —Accounts receivable ............................................................................. – 837 – 79 — 1Other current receivables ................................................................ – 69 – 51 – 2 —Prepaid expenses and accrued revenues ........................... – 851 – 448 — —Intra-Group transactions, current .............................................. – 2 3Accounts payable ................................................................................... 566 105 3 5Other current liabilities ..................................................................... 112 100 — —Accrued expenses and prepaid revenues ........................... 397 – 57 – 1 – 17Provisions ..................................................................................................... — – 236 — – 236

– 748 – 691 – 2 – 244

Cash flow provided by operating activities 413 883 – 70 – 85

Investing activitiesAcquisition of intangible fixed assets .................................... – 17 – 228 — —Sale of intangible fixed assets ..................................................... — 3 — —Acquisition of tangible fixed assets ........................................ – 2,167 – 1,386 — – 1Sale of tangible fixed assets ......................................................... 38 101 1 —Acquisition of shares in Group companies, exc. cash ... 14 831 843 – 36 – 61Acquisition of other long-term securities ............................. – 334 – 1 – 75 —Sale of other long-term securities ......................................... 236 — — —Lending to Group companies ...................................................... – 52 – 137Payment received from Group companies ....................... 313 461Other long-term lending ................................................................. – 103 – 103 – 71 – 94Payment received from other long-term lending ....... 49 1 — 1Cash flow from investing activities ................................. 32 – 1,467 – 770 80 169

Financing activitiesRaising of loans from credit institutions ............................ 12,139 2,446 1,285 —Amortization of loans from credit institutions ............... – 9,861 – 787 – 1,306 – 116Raising of other interest-bearing liabilities ...................... 342 — 203 —Amortization of other interest-bearing liabilities ........ – 842 – 575 – 206 – 3Amortization of loans from Group companies .............. — – 2New share issue ...................................................................................... 15 37 15 37Cash flow from financing activities ................................ 1,793 1,121 – 9 – 84

Net change in cash ......................................................................... 739 1,234 1 —

Liquid funds at beginning of year .......................................... 23 1,511 421 7 7Adjustment for exchange rate

differences in liquid funds ...................................................... 23 25 – 144 — —Liquid funds at end of year* ............................................... 23 2,275 1,511 8 7

* Of which, blocked funds ............................................................ 23 897 434 — —

For additional cash flow information, refer to Note 32.


General accounting principles and changes in 2001The annual report has been prepared in accordance with theAnnual Accounts Act and recommendations of the SwedishFinancial Accounting Standards Council. In 2001, Tele2 modi-fied its accounting principles to conform to recommendationRR18 “Earnings per share” and RR20 “Interim reports”. Thenew recommendations have no significant impact on Tele2’sfinancial reporting. This means that Tele2 conforms to recom-mendations RR1:00–RR21.

During 2001, Tele2 changed its accounting principles forcall “pots” in mobile telephony (IQ Spar). IQ Spar has beenreclassified from having been regarded as revenue for sub-scription charges, which are accrued over the subscriptionperiod, to being viewed as traffic revenue and thus accrued inpace with customer calls. Figures for prior years have beenrecalculated in accordance with the new accounting principle(see also note 24). Overall, the change has not had a signifi-cant effect for the Group.

Assets and liabilities in subsidiaries are valued based on theaccounting principles applied by the Parent Company.

Consolidated accounts The consolidated financial statements include the accounts ofthe Parent Company and all companies in which the ParentCompany, directly or indirectly, controls more than 50% of thevotes, or in some other respect has a determining influence.

The consolidated accounts were prepared based on the pur-chase method, which means that the Parent Company’s pur-chase cost of shares in each subsidiary is charged against thatsubsidiary’s acquisition value, that is, the subsidiary’s share-holders’ equity (including the equity component of untaxedreserves) at the time of acquisition based on a marketappraisal of the subsidiary’s net assets. Consequently, theGroup’s shareholders’ equity includes only that part of eachsubsidiary’s equity that has been earned after the acquisition.

The difference between the purchase cost of shares in a subsidiary and the market value of that subsidiary’s netassets at the time of acquisition is allocated to the subsidiary’sidentifiable assets if the book values were less than the marketvalues. Any amounts in book value exceeding market valueare reported as goodwill.

The current method is used to translate the accounts of for-eign subsidiaries. Consequently, the exchange rate on the clos-ing date (year-end rate) is used to translate items in the bal-ance sheet, while items in the income statement are translatedusing the average exchange rate for the year (average rate).

All non-Swedish companies in the Tele2 Group are regardedas independent foreign operations since they conduct inde-pendent operations and operations that are pursued withtransactions in local currency, so that exchange rate differ-ences arising from translation are charged directly to share-holders’ equity.

When an independent foreign operation is divested, theaccumulated exchange rate differences attributable to thedivested operation are reported in “Net assets in Group com-panies divested” in the income statement.

Accounting for associated companiesCompanies in which the shareholding is regarded as long-term and in which the Group’s voting rights amount to a min-imum of 20% and a maximum of 50%, or in which the man-agement believes that the shareholders have equal control,are treated as associated companies.

Associated companies are reported in accordance with theequity method. This means that the book value of the sharesin the associated company that is reported in the consolidatedfinancial statements corresponds to the Group’s share in theequity of the associated company and any residual value ofconsolidated surplus values after adjustment to the consoli-dated accounting principles. Participation in earnings after netfinancial items of the associated company are reported in theincome statement in the item “Result from participations inassociated companies” along with amortization of acquiredsurplus values. The share of associated companies’ tax expenseand deferred tax expense/income is reported in the incomestatement in the item “Tax on profit for the year” and in thebalance sheet as “Participations in associated companies”.Earnings accrued in associated companies arising after theacquisition date, and which have not yet materialized throughdividends, are allocated to the equity method reserve, whichcomprises part of restricted shareholders’ equity in the Group.The equity share reduces unrestricted shareholders’ equity inthe event of losses.

In the event of an increase or decrease in the Group’s equity share in associated companies through share issues, theloss or gain is reported in the consolidated income statementin the item “Profit/loss from participations in associated com-panies”. If the non-recurring effect is significant, the amount isreported in the item “Items affecting comparability”.

Group surplus values relating to foreign associated com-panies are reported as assets in foreign currencies. These valuesare translated in accordance with the same principles as theincome statements and balance sheets for associated companies.

Minority interestsThe minorities’ share in net earnings and shareholders’ equityis reported as minority interest.

Receivables and liabilities of Swedish and non-Swedishsubsidiaries denominated in foreign currenciesThe receivables and liabilities of Group companies denomin-ated in foreign currencies have been translated into Swedishkronor applying the year-end rate.

Gains or losses on foreign exchange in international transac-tions related to regular operations are included in the incomestatement under “Other operating revenues” and “Other oper-ating expenses”, respectively, while differences in financialreceivables and liabilities are reported among financial items.Note 24 summarizes the exchange rate differences chargeddirectly to shareholders’ equity and the differences that affect-ed profit/loss for the year.

Long-term lending to/borrowing from Tele2’s foreign oper-ations is regarded as a permanent part of the Parent Company’sfinancing of/borrowing from foreign operations, and thus as anexpansion/reduction of the Parent Company’s investment in theindependent foreign operation, the lending/borrowing is trans-lated at the historical rate of exchange if the borrowing isdenominated in the foreign company’s currency.

Valuation principlesAssets and liabilities have been valued at their purchase costunless otherwise specified.

Fixed assetsIntangible and tangible fixed assets are reported net afterdeductions for accumulated amortization and depreciation

Notes(SEK M)


Notes

according to plan. Depreciation and amortization according toplan are based on the acquisition value of the assets and theestimated utilization period.

Note 2 presents depreciation and amortization schedulesfor fixed assets and reasons for amortizing certain intangiblefixed assets over utilization period longer than five years.

Intangible assetsCapitalized license fees and right of useThe Company holds a number of licenses issued by theSwedish National Post and Telecom Agency and the equivalentlicensing authority in other countries. Capitalized expenses forthese rights are amortized over the duration of the contract.

GoodwillGoodwill is defined as the difference between the purchase costof shares or assets acquired and the market value of net assets.Goodwill is amortized on a straight-line basis over 5–20 years.

Tangible assetsMachinery and technical plantMachinery and technical plant includes equipment andmachines intended for use in operations, such as networkinstallations. The asset is written off on a straight-line basisover the utilization period. The acquisition value includesdirect expenses attributable to the construction and installa-tion of networks. Interest directly relating to acquisition, con-struction or production of an asset that necessarily requiresconsiderable time to complete for the intended application isincluded in the acquisition value of the asset.

Additional expenses for extensions and improvements thatincrease value are capitalized, while additional expenses forrepairs and maintenance are charged continually to incomeduring the period in which they arise.

Equipment, tools and installationsEquipment comprises assets used in administration, sales andoperations.

Proprietary software for internal useTele2 capitalizes certain direct development costs attributableto software for internal use. These are written off over theperiod of use, which commences when the asset is ready forapplication. Costs attributable to the project phase in planningstage as well as costs for maintenance and training areexpensed as they arise.

LeasingLeases are classified as either financial or operating leases. A lease is considered financial if all economic risks and benefitsassociated with ownership of the asset have been transferred,to a material degree, to the lessee; otherwise, the lease is anoperating lease. In the case of financial leases as reported inthe consolidated financial statements, each asset is entered as a tangible fixed asset, and a corresponding amount is enteredas a loan on the liability side of the balance sheet. In theincome statement, the cost of the lease is divided into a depre-ciation portion and an item in interest expense. The asset iswritten off on a straight-line basis over the utilization period.

Materials and suppliesInventories of materials and supplies are valued at the lowerof purchase cost and market value.

ReceivablesReceivables are reported in the amount expected to be paid.

Liquid fundsLiquid funds consists of cash and bank balances as well as cur-rent investments with a maturity of a maximum three months.Liquid funds according to the cash flow statement and balancesheet include blocked bank accounts.

Revenue recognitionRevenue from telephony, cable-TV and other services andproducts is recognized at the time the service/product is sup-plied to the customer.

Marketing expensesExpenditure for advertising and other marketing activities ischarged on an ongoing basis.

Estimates and approximationsSome items in the consolidated accounts are based on esti-mates and approximations. Actual results could differ fromthose estimates.

Corporate income taxConsolidated profit or loss for the year is charged with the taxon taxable income for the year (“Current tax”) and with esti-mated tax charges or credits for temporary differences(“Deferred tax”). A temporary difference is a provision toappropriations made by an individual company or any otheritem that merely alters the time when an item is consideredtaxable or entitling the company to a deduction.

The calculation of deferred tax receivables (assets) in theGroup has taken into account the Group’s loss carry-forwardsto the extent that it is expected they can be used in the fore-seeable future. Deferred tax receivables and deferred tax lia-bilities are netted only among units with the same domicilefor tax purposes.

The tax effects of Group contributions paid and receivedare reported in the individual companies as a tax expense ortax revenue in the income statement (“Current tax”) andcharged to retained losses or earnings.

Earnings/loss per shareEarnings/loss per share after dilution is calculated according to a method in which the present value of the exercise price ofthe convertibles is assumed to be used to acquire shares at theaverage market value during the accounting period. If theresult for the year is negative, the calculation is not affectedby this, since the dilution may not affect the loss per share.


Notes

2001 2000

Salaries and Social security of which pen- Salaries and Social security of which pen- remuneration expenses sion expenses remuneration expenses sion expenses

Group:

Board and President .................... 52 13 3 18 9 2

Other employees ............................. 870 254 50 563 215 36

Total Group ....................................... 922 267 53 581 224 38

Parent Company:

Board and President .................... 11 4 2 7 3 1

Other employees ............................. 2 1 — 2 1 —

Total Parent Company ............. 13 5 2 9 4 1

Salaries and remuneration in companies acquired during the year are reported in relation to how long the subsidiary was includedin the Group. Société Européene de Communication S.A. Group was acquired on October 2, 2000.

Defined-contribution pension commitments in which the company does not assume risk on the pay-out date for the pensionapply in Sweden, Norway, Austria, Italy, Luxembourg and UK. Pension costs for this amounted to SEK 50 million in 2001 (2000:SEK 37 million). Defined-benefit pensions in which the company assumes the risk and liability for the pension commitment on thepension pay-out-date apply in Denmark, Finland and Switzerland. The pension cost in this respect amounted to SEK 5 million in2001 (2000: SEK 1 million).

2001 2000

Average number of employees

Group: total of whom men total of whom men

Nordic .................................................................................................................................................. 1,126 70% 1,192 72%

Eastern Europe and Russia ...................................................................................................... 602 49% 460 43%

Central Europe ................................................................................................................................ 122 61% 29 59%

Southern Europe ........................................................................................................................... 81 65% 16 63%

Luxembourg .................................................................................................................................... 189 83% 40 50%

Branded products & services ................................................................................................. 52 73% 10 80%

Total per market ........................................................................................................................ 2,172 65% 1,747 64%

The average number of employees in the Parent Company is two persons (2000: 2). Both are men.The average number of employees in companies acquired during the year is reported in relation to how long the subsidiary

was included in the Group. Société Européene de Communication S.A. Group was acquired on October 2, 2000.

Number of employees

Personnel costs


Notes

Group Parent Company

2001 2000 2001 2000

PricewaterhouseCoopers:

Audit assignments ............................................................................... 18 3 1 —

Other assignments ............................................................................... 13 6 8 6

31 9 9 6

Other auditors:

Audit assignments ............................................................................... 1 — — —

Other assignments ............................................................................... 3 1 2 —

4 1 2 —

Total fees and reimbursement ............................................... 35 10 11 6

Audit assignments refer to the evaluation of the annual report and bookkeeping records as well as the administration by the President and Boardof Directors. All other work is other assignments.

U.S. generally accepted accounting principles (US GAAP)The consolidated balance sheet and income statements have been updated in accordance with Swedish accounting principles. These differ in certain respects from U.S. accounting principles (US GAAP). Note 33 shows the adjustments required for compliance with US GAAP.

Auditors

During the year, and in addition to the above remuneration, provision of SEK 15 million (2000: SEK 12 million) was made for bonuses tosenior executives in the Group as well as social security expenses of SEK 5 million (2000: SEK 4 million). The distribution of the amountwill be set in 2002.

The Chairman of the Board of Tele2 AB, Jan Hugo Stenbeck, received remuneration in 2001 from the Group in the form of Board feesof SEK 0.3 million (2000: SEK 0.3 million). Remuneration for other Board members was paid in the amount of SEK 1.8 million (2000: SEK1.5 million).

The President of Tele2 AB, Lars-Johan Jarnheimer, received salary and remuneration from Tele2 AB amounting to SEK 7.6 million (2000: SEK 5.1 million), as well as a bonus of SEK 1.6 million.

Pension premiums were paid for the President in Tele2 AB in an amount corresponding to 20% of the total salary and remunerationreceived. In the case of other senior executives, pension is based on the public pension plan.

In the event of dismissal by the Group, the period of notice is a minimum six months and a maximum 18 months in the case of thePresident of Tele2 AB and a minimum of six months and a maximum of 18 months for other senior executives. No other redundancy payments are paid on the termination of employment to Group executives other than salary compensation as above.

In 1997, it was decided to conduct an incentive program for senior executives at Tele2 Group. Of the original option of 500,000 Series B shares in Tele2 AB, convertible debentures pertain to 48,000 Series B shares for the President, Lars-Johan Jarnheimer.

2001 2000

Salaries and remuneration Salaries and remuneration

Board and of which, other Board and of which, other Group: President bonuses employees President bonuses employees

Nordic .............................................................................. 22 2 539 14 1 472

Eastern Europe and Russia .................................. 5 — 78 1 — 45

Central Europe ............................................................. 6 — 63 1 — 14

Southern Europe ........................................................ 3 1 50 1 1 8

Luxembourg ................................................................. 9 — 104 — — 18

Branded products & services .............................. 7 1 36 1 — 6

Total per market ..................................................... 52 4 870 18 2 563


Notes

During 2001, the change in accounting principles for “IQ Spar” – a prepaid call-time program – resulted in a back-dated reduction ofoperating revenue of SEK 30 million, and a decline of SEK 21 million in EBIT for the 2000 financial year, which is attributable to mobiletelephony in the Nordic market area.

Operating revenue in the Parent Company relates entirely to sales to other Group companies.

Operating revenueNote 1

Market area split by business areas:Operating revenue

Group: 2001 Pro forma 2000 2000

Nordic:

Mobile telephony .................................................................................................................................... 6,029 4,800 4,800

Fixed telephony and Internet ............................................................................................................. 5,886 5,294 5,294

Cable-TV ....................................................................................................................................................... 171 190 190

Data processing.......................................................................................................................................... 280 197 197

Total, Nordic ............................................................................................................................................ 12,366 10,481 10,481

Eastern Europe and Russia:

Mobile telephony .................................................................................................................................... 1,094 222 222

Fixed telephony and Internet ............................................................................................................. 34 5 5

Data processing ........................................................................................................................................ 53 34 34

Total, Eastern Europe and Russia .............................................................................................. 1,181 261 261

Central Europe:

Mobile telephony...................................................................................................................................... 25 8 4


Total Central Europe ............................................................................................................................. 5,364 3,108 1,018

Southern Europe:

Fixed telephony and Internet ............................................................................................................. 5,591 2,574 882

Total, Southern Europe ..................................................................................................................... 5,591 2,574 882

Luxembourg:

Mobile telephony .................................................................................................................................... 471 315 74

Fixed telephony and Internet ............................................................................................................. 211 181 50

Data processing ........................................................................................................................................ 104 77 37

Total, Luxembourg .............................................................................................................................. 786 573 161

Branded products & services:

Mobile telephony .................................................................................................................................... 17 — —

Fixed telephony and Internet ............................................................................................................. 1,559 789 496

Total, Branded products & services .......................................................................................... 1,576 789 496

Intra-Group sales ...................................................................................................................................... – 1,779 – 1,543 – 859

Total by market ..................................................................................................................................... 25,085 16,243 12,440

Operating revenue

Group: 2001 Pro forma 2000 2000

Mobile telephony .................................................................................................................................... 7,636 5,345 5,100


Cabel-TV ....................................................................................................................................................... 171 190 190

Data processing ........................................................................................................................................ 437 308 268

Intra-Group sales ...................................................................................................................................... – 1,779 – 1,543 – 859

Total by business area ....................................................................................................................... 25,085 16,243 12,440


Notes

Depreciation/amortization for the year and operating profitNote 2

Market area split by business areas:EBITDA* Depreciation/Amortization EBIT**

2001 2000 2000 2001 2000 2001 2000Group: Pro forma

Nordic:

Mobile telephony ........................................ 2,917 2,237 2,237 – 354 – 287 2,563 1,950

Fixed telephony and Internet ................. 847 667 667 – 484 – 501 363 166

Cabel-TV ........................................................... – 11 26 26 – 72 – 63 – 83 – 37

Data processing ............................................ 15 13 13 – 3 – 14 12 – 1

Total, Nordic ................................................ 3,768 2,943 2,943 – 913 – 865 2,855 2,078

Eastern Europe and Russia:

Mobile telephony ........................................ 320 – 14 – 14 – 244 – 47 76 – 61

Fixed telephony and Internet ................. – 56 – 24 – 24 – 23 – 6 – 79 – 30

Data processing ............................................ 8 9 9 – 11 – 6 – 3 3

Total, Eastern Europe and Russia .. 272 – 29 – 29 – 278 – 59 – 6 – 88

Central Europe:

Mobile telephony ........................................ – 21 1 1 – 3 – 1 – 24 —

Fixed telephony and Internet ................. – 585 –,1 641 – 501 – 98 – 10 – 683 – 511

Total Central Europe ............................... – 606 – 1,640 – 500 – 101 – 11 – 707 – 511

Southern Europe:

Fixed telephony and Internet ................. – 1,331 – 1,276 – 331 – 96 – 5 – 1,427 – 336

Total, Southern Europe ......................... – 1,331 – 1,276 – 331 – 96 – 5 – 1,427 – 336

Luxembourg:

Mobile telephony ........................................ 101 88 6 – 65 – 14 36 – 8


Data processing ............................................ – 35 – 6 1 – 5 — – 40 1

Total, Luxembourg .................................. 5 – 110 – 91 – 118 – 19 – 113 – 110

Branded products & services:

Mobile telephony ........................................ – 22 — — — – 2 – 22 – 2


Total, Branded products & services – 410 – 259 – 172 – 36 – 18 – 446 – 190

Group depreciation ..................................... – 1,512 – 423 – 1,512 – 423

Total by market ......................................... 1,698 – 371 1,820 – 3,054 – 1,400 – 1,356 420

EBITDA* Depreciation/Amortization EBIT**

2001 2000 2000 2001 2000 2001 2000Group: Pro forma

Mobile telephony ........................................ 3,295 2,312 2,230 – 666 – 351 2,629 1,879

Fixed telephony and Internet ................. – 1,574 – 2,725 – 459 – 785 – 543 – 2,359 – 1,002

Cabel-TV ........................................................... – 11 26 26 – 72 – 63 – 83 – 37

Data processing ............................................ – 12 16 23 – 19 – 20 – 31 3

Group depreciation ..................................... – 1,512 – 423 – 1,512 – 423

Total by business area ........................... 1,698 – 371 1,820 – 3,054 – 1,400 – 1,356 420

* EBITDA: Operating profit/loss before depreciation and amortization.** EBIT: Operating profit/loss after depreciation and amortization.

Other operating revenue


Notes

Estimated utilization period:


Intangible fixed assets:

Licenses and right of use ............................................................................................... 1–25 year 5 year

Goodwill ................................................................................................................................. 5–20 year —

Tangible fixed assets:

Land improvements .......................................................................................................... 3–25 year —

Machinery and other technical plant ......................................................................... 2–25 year —

Equipment, tools and installations .............................................................................. 2–10 year 3–5 year

Depreciation/amortization according to plan is based on the acquisition value of each fixed asset and its estimated utilization period. Alldepreciation/amortization is applied on a straight-line basis over the utilization period.

Goodwill arising from the original acquisition of Comviq GSM AB and Tele2 Sverige AB and other acquisitions before 1996 are amortizedover ten years. The goodwill arising in 1996 in conjunction with the acquisition of outstanding minority shareholding in Tele2 Sverige ABand outstanding options in Comviq GSM AB, is amortized over 20 years. Goodwill arising from the acquisition of Datametrix, Ritabell, SIATele2, SEC, Fora and Levicom Broadband is amortized over a period of 20 years. The amortization periods are set on the basis of the esti-mated long-term and strategic significance of each acquisition on the acquisition date. In the case of corporate acquisitions in new markets,an amortization period of 20 years is applied.

Goodwill arising from the acquisition of customers in mobile telephony and the acquisition of the UNI-C Internet operations is amortizedover 10 years, which is based on the estimated strategic value of the customer base and operations, respectively. Other goodwill is amort-ized over five years.

By function:Depreciation/Amortization


2001 2000 2001 2000

Cost of services sold ........................................................................................................... – 2,782 – 1,275 — —

Selling expenses .................................................................................................................. – 75 – 35 — —

Administrative expenses ................................................................................................... – 197 – 90 — – 1

Total depreciation/amortization for the year by function ..................... – 3,054 – 1,400 — – 1

By type of asset:Depreciation/Amortization


2001 2000 2001 2000

Licenses and right of use ................................................................................................. – 46 – 16 — —

Goodwill .................................................................................................................................. – 1,506 – 426 — —

Buildings ................................................................................................................................. – 19 – 3 — —

Machinery and other technical plant ......................................................................... – 1,276 – 875 — —

Equipment, tools and installations .............................................................................. – 207 – 80 — – 1

Total depreciation/amortization for the year by type of asset .......... – 3,054 – 1,400 — – 1

Note 3


2001 2000 2001 2000

Rental of capacity and antenna installations .......................................................... 64 105 — —

Exchange gains in business operations ..................................................................... 33 — — —

Divestment of fixed assets ............................................................................................... 2 4 — —

Sales of mobile telephone equipment ...................................................................... 5 17 — —

Administrative services ...................................................................................................... 40 56 — —

Other revenue ....................................................................................................................... 45 30 4 —

Total other operating revenue ................................................................................ 189 212 4 —

Profit/loss on shares in associated companies


Notes

Additional shares in associated companies during the year were OJSC Moscow Cellular Communications, which is part of Fora Telecom BVGroup, which was acquired during the year, and a newly established company, Svenska UMTS Nät AB, which is owned together with Telia.

During the year, shares in Transcom Worldwide S.A., an associated company in Société Européene de Communication S.A. Group,acquired in 2000, was divested to Industriförvaltnings AB Kinnevik.

Other operating expenses


2001 2000 2001 2000

Exchange loss from operations ..................................................................................... – 20 – 57 — —

Sale/scrapping of other fixed assets ............................................................................ – 46 – 5 — —

Sale of shares in 4T Solutions AB ................................................................................ — – 17 — —

Other costs ............................................................................................................................. – 9 – 8 — —

Total other operating expenses ............................................................................. – 75 – 87 — —

Note 5


2001 2000 2001 2000

Participation in profit/loss of associated companies ............................................ – 58 – 44 — 2

Total profit/loss in associated companies ......................................................... – 58 – 44 — 2

Shareholding Group Parent Company

Dec. 31, 2001 Dec. 31, 2000 2001 2000 2001 2000

Svenska UMTS nät AB ........................................................ 50% — –1 — — —

Everyday Webguide AB ..................................................... 50% 50% – 57 – 48 — —

Gamla Stans Millennium ................................................... 25% 25% — 2 — 2

Transcom Worldwide S.A. ................................................. — 37,5% — 2 — —

Total profit/loss on shares in associated companies – 58 – 44 — 2

Net profit/loss for the year in associated companies:

2001

Sv UMTS nät Everyday Moscow Cell.(9 months) (1 month)

Profit/loss in each company ............................................................................................................... – 2 – 113 —

Shareholding ............................................................................................................................................. 50% 50% 20%

Share of profit/loss .................................................................................................................................. – 1 – 57 —

Total net profit/loss from associated companies ............................................................. – 1 – 57 —

2000

Everyday Gamla Stans TranscomMillennium (3 months)

Profit/loss in each associated company ......................................................................................... – 14 — 5

Shareholding ............................................................................................................................................. 50% 25% 38%

Share of profit/loss .................................................................................................................................. – 7 — 2

Change in accounting principles, start-up costs ........................................................................ – 41 — —

Reversal to selling expenses ............................................................................................................... — – 18 —

Transfer of revenue from 1999 ........................................................................................................ — 20 —

Total net profit/loss from associated companies ............................................................. – 48 2 2

Note 4

Sales of associated companies


Notes

Note 6


2001 2000 2001 2000

Sale of Transcom Worldwide S.A. .................................................................................................... 91 — — —

Total sales of associated companies ........................................................................................ 91 — — —

In January 2001, Tele2 AB sold its 37.5% shareholding in Transcom Worldwide S.A., an associated company in Société Européene deCommunication S.A. Group, acquired in 2000, to Industriförvaltnings AB Kinnevik. The purchase price was based on the share price 60 trading days after Transcom was listed on the Stockholmsbörsen (Stockholm Exchange).

Extracts from the balance sheets and income statements of each associated company:2001

Sv UMTS nät Everyday Moscow Cell.(9 months) (1 month)

Income statement:

Revenue ....................................................................................................................................................... — 13 —

Operating profit after depreciation ................................................................................................. – 11 – 103 —

Net profit/loss for the year ........................................................................................................... 2 – 113 —

Balance sheet:

Tangible assets .......................................................................................................................................... 12 — 432

Intangible and financial assets .......................................................................................................... — 40 67

Current assets ............................................................................................................................................. 492 17 124

Total assets ............................................................................................................................................... 504 57 623

Shareholders’ equity .............................................................................................................................. 498 – 204 334

Long-term liabilities ............................................................................................................................... — 229 120

Current liabilities ...................................................................................................................................... 6 32 169

Total shareholders’ equity and liabilities .............................................................................. 504 57 623

2000

Everyday Gamla Stans TranscomMillennium (3 months)

Income statement:

Revenue ....................................................................................................................................................... 29 2 393

Operating profit after depreciation ................................................................................................. – 39 — 9

Net profit/loss for the year ........................................................................................................... – 14 — 5

Balance sheet:

Tangible assets .......................................................................................................................................... — — 183

Intangible and financial assets .......................................................................................................... 137 — 4

Current assets ............................................................................................................................................. 47 1 446

Total assets ............................................................................................................................................... 184 1 633

Shareholders’ equity .............................................................................................................................. – 14 — 248

Long-term liabilities ............................................................................................................................... 133 — 95

Current liabilities ...................................................................................................................................... 65 1 290

Total shareholders’ equity and liabilities .............................................................................. 184 1 633

Translation of shares in OJSC Moscow Cellular Communications was done in USD at exchange rate shown in Note 24.

Interest expense and similar profit/loss items

Other interest income

Profit/loss on other securities and receivables constituting fixed assets

Profit/loss on shares in Group companies


Notes

Note 8


2001 2000 2001 2000

Interest, Group ........................................................................................................................................ 61 57

Interest, external receivables ............................................................................................................ 5 3 3 3

Exchange rate difference ................................................................................................................... – 1 3 — 2

Total profit/loss on other securities

and receivables classified as fixed assets ..................................................................... 4 6 64 62

Note 9


2001 2000 2001 2000

Interest, Group ........................................................................................................................................ 14 —

Interest, bank balances, etc. ............................................................................................................. 66 58 — —

Exchange rate difference on financial fixed assets ................................................................. – 1 – 1 — —

Total other interest income ......................................................................................................... 65 57 14 —

Note 10


2001 2000 2001 2000

Interest, loans .......................................................................................................................................... – 557 – 205 – 14 – 2

Interest, financial leasing ................................................................................................................... – 11 – 11 — —

Interest, penalty interest rate and other liabilities .................................................................. – 53 – 34 — —

Exchange rate difference on financial liabilities ...................................................................... 2 – 6 — —

Other financial expense ...................................................................................................................... – 71 – 18 – 1 —

Total interest expense and similar profit/loss items .................................................... – 690 – 274 – 15 – 2

Note 7

Parent Company: 2001 2000

Liquidation loss in Société Européene de Communication S.A. ........................................................................................... – 13,964 —

Capital gain on sale of Belmus BV ..................................................................................................................................................... — 103

Total profit/loss on shares in Group companies .............................................................................................................. – 13,964 103

In November 2001, the subsidiary Société Européene de Communication S.A., was liquidated, resulting in a liquidation loss of SEK –13,964.

Tax on profit/loss for the year and deferred tax liability/receivable


Notes

Calculation of effective tax rate

Group: 2001 2000

Profit/loss before tax and minority share ........................................................................... – 1,944 165

Tax according to prevailing tax rate in:

Tax effect according to tax rates in Sweden ...................................................................... 544 28.0% – 46 28.0%

Difference between tax rate in Sweden for foreign subsidiaries ............................. 326 49

870 3

Tax effect of:

Non-tax affecting items (Group adjustments) .................................................................. – 382 – 19.7% 119 – 72.1%

Liquidation of SEC and taxation of postponement ........................................................ 3,082 158.5% — —

Permanent differences ................................................................................................................ – 35 – 1.8% 22 – 13.3%

Loss carry-forwards:

Non-utilization of loss for the year ........................................................................................ – 1,200 – 61.7% – 708 429.1%

From profit of preceding year, not included in profit for 2001 .............................. — — 3 – 1.8%

Tax expense/income and effective tax rate ............................................................. 2,335 120.1% – 561 340.0%

The consolidated profit in 2001 includes tax effects in a net amount of SEK 3,082 million from the liquidation of Société Européene deCommunication S.A., after having previously received a tax postponement of SEK 828 million, in conjunction with the divestment in 1999of NetCom ASA, was reversed to taxation.

The item for the non-utilization of losses for the year pertains primarily to foreign operations.

Tax on profit/loss for the year, geographic breakdown


2001 2000 2001 2000

Current tax expense:

Luxembourg ................................................................................................................................... 4 – 9 — —

France ................................................................................................................................................. – 1 — — —

Russia ................................................................................................................................................. – 2 — — —

Netherlands .................................................................................................................................... — – 3 — —

1 – 12 — —

Deferred tax expense, as a result of temporary differences:

Sweden .............................................................................................................................................. 2,334 – 549 3,076 – 69

2,334 – 549 3,076 – 69

Total tax expense (–)/tax income (+) on profit for the year ................. 2,335 – 561 3,076 – 69

In the case of the Group, the change in the accounting principles “IQ Spar” (pre-paid call time) resulted in a back-dated decrease in thedeferred tax expense in 2000 of SEK 6 million and a reduction in the deferred tax liability of SEK 44 million.

Note 11

Profit before tax and minority share, geographic breakdown

Group: 2001 2000

Sweden ..................................................................................................................................................................................................................... 2,072 1,904

Other countries ..................................................................................................................................................................................................... – 4,016 – 1,739

Total profit/loss and minority share .................................................................................................................................................. – 1,944 165

The difference between the booked tax expense for the Group and the tax expense based on prevailing tax rates in each country consistsof the following components:

Intangible assets


Notes


Dec. 31, 2001 Dec. 31, 2001Licenses & Licenses &

right of use Goodwill Total right of use

Acquisition value:

Acquisition value at Jan. 1 ........................................................................................................ 736 27,889 28,625 1

Acquisition value at Jan. 1 in acquired companies ....................................................... 187 2 189 —

Investments for the year ............................................................................................................ 17 108 125 —

Reclassifications .............................................................................................................................. 8 — 8 —

Translation difference for the year ......................................................................................... 48 1,756 1,804 —

Acquisition value .............................................................................................................................. 996 29,755 30,751 1

Accumulated depreciation/amortization:

Accumulated depreciation/amortization at Jan. 1 .......................................................... – 129 – 1,144 – 1,273 – 1

Accumulated depreciation/amortization in acquired companies ............................ – 75 — – 75 —

Depreciation/amortization for the year ............................................................................... – 46 – 1,506 – 1,552 —

Reclassifications .............................................................................................................................. – 2 — – 2 —

Translation difference for the year ......................................................................................... – 8 – 72 – 80 —

Accumulated depreciation/amortization .................................................................................. – 260 – 2,722 – 2,982 – 1

Total intangible assets ............................................................................................................ 736 27,033 27,769 —

Note 12

Deferred tax receivable attributable to

Group: Dec. 31, 2001 Dec. 31, 2000

Long-term receivables ............................................................................................................................................................................... – 5 – 8

Machinery and technical plant .............................................................................................................................................................. – 928 – 806

Value of unutilized loss carry-forwards ............................................................................................................................................. 2,697 243

Total deferred tax receivable (+)/tax liability (–) ............................................................................................................. 1,764 – 571

Deferred tax receivable, geographic distribution

Group: Dec. 31, 2001 Dec. 31, 2000

Deferred tax receivable:

Sweden ........................................................................................................................................................................................................... 2,697 243

Deferred tax liability:

Sweden ........................................................................................................................................................................................................... – 933 – 814

Total deferred tax receivable (+)/tax liability (–) ............................................................................................................. 1,764 – 571

Loss carry-forwards:At December 31, 2001, the Tele2 Group has loss carry-forwards totaling SEK 19,871 million (2000: SEK 7.229 million), of which SEK3,300 million (2000: SEK 2,757 million) expire within five years and the remaining amount, SEK 16,571 million (2000: SEK 4,472 mil-lion), expire in 2006 or later, or they continue to apply in perpetuity.

A deferred tax receivable for in the case of loss carry-forwards is reported only to the extent that it is estimated that they can be utilizedin the near future. A prudent valuation has been made of the deferred tax receivables in which only the Swedish operations have beenvalued at their full value (28%), while foreign operations at December 31, 2001 have not been reported in any value. Overall, loss carry-forwards in foreign operations amount to SEK 10,243 million (2000: SEK 6,570 million) and in Swedish operations to SEK 9,628 million(SEK 659 million).

The Swedish tax authorities have queried a loss carry-forward in Tele2 AB corresponding to a tax effect of SEK 176 million (2000; SEK176 million). The loss carry-forward in this case has been valued at its full value.

The acquisition value and accumulated depreciation/amortization in acquired companies is attributable to the OU Levicom BroadbandGroup and Fora Telecom BV Group, which were acquired during the year. Of the investment in goodwill during the year, SEK 167 millionand SEK 86 million, respectively, pertain to these two acquisitions and an adjustment of goodwill for SEC in the amount of SEK 154 million.

Tangible assets


Notes

Note 13

Dec. 31, 2001Buildings Machinery, Fixed plant under

Group: & land technical plant Equipment construction Total

Acquisition value:

Acquisition value at Jan. 1 ............................................................... 127 11,408 921 142 12,598

Acquisition value in acquired companies .................................. 29 860 151 50 1,090

Investment for the year ..................................................................... 22 1,604 323 260 2,209

Sale and scrapping .............................................................................. – 20 – 206 – 13 – 21 – 260

Reclassifications ..................................................................................... 10 202 – 124 – 96 – 8

Translation difference for the year ................................................ 9 201 62 15 287

Acquisition value ..................................................................................... 177 14,069 1,320 350 15,916

Accumulated depreciation/amortization:

Accumulated depreciation/amortization at Jan. 1 ................. – 28 – 4,182 – 357 — – 4,567Accumulated depreciation/amortization

in acquired companies ................................................................. – 9 – 349 – 105 — – 463

Depreciation/amortization for the year ...................................... – 19 – 1,276 – 207 — –1,502Sale and scrapping .............................................................................. 2 130 8 — 140

Reclassifications ..................................................................................... 4 – 47 45 — 2

Translation difference for the year ................................................ – 3 – 75 – 17 — – 95

Accumulated depreciation/amortization .......................................... – 53 – 5,799 – 633 — – 6,485

Total tangible assets ........................................................................ 124 8,270 687 350 9,431

Acquisition value and accumulated depreciation/amortization in acquired companies is attributable to the to OU Levicom BroadbandGroup and Fora Telecom BV Group, which were acquired during the year.

Dec. 31,2001Fixed plant under

Parent Company: Equipment construction Total

Acquisition value:

Acquisition value at Jan. 1 ..................................................................................................... .................... 1 1 2

Reclassifications ........................................................................................................................... .................... — – 1 – 1

Acquisition value ........................................................................................................................... .................... 1 — 1

Depreciation for the year:

Accumulated depreciation at Jan. 1 .................................................................................. .................... – 1 — – 1

Depreciation for the year ........................................................................................................... .................... – 1 — – 1

Total tangible assets .............................................................................................................. .................... — — —


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Total capitalized interest expenses in fixed assets ....................................... 193 193 — —

Financial leases:All fixed assets utilized through financial leasing have been included in the consolidated accounts as fixed assets and loan liabilities, withthe exception, however, of contracts signed before 1997. The effects of these being included in the consolidated balance sheet are shownbelow and in Note 26.

Book value assets Assets not booked

Group: Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Machinery and other technical plant:

Acquisition value ....................................................................................................... 300 278 155 155

Accumulated depreciation/amortization ......................................................... – 87 – 62 – 42 – 36

Book value ................................................................................................................. 213 216 113 119

Financial leasing pertains primarily to the extension for transmission capacity in Sweden through Svenska Kraftnät, Vattenfall and agree-ments signed in Denmark and the Baltic States.

Tax-assessed value:The tax-assessed value of the Group’s land in Sweden is SEK 1 million (2000: SEK 1 million).

Shares in Group companies


Notes

Note 14

Parent Company: Dec. 31, 2001 Dec. 31, 2000

Acquisition value:

Acquisition value at Jan 1 .................................................................................................................................................................... 24,488 1,481

Investments .................................................................................................................................................................................................. 885 23,352

Sales ................................................................................................................................................................................................................. — – 345

Liquidation of Société Européene de Communication S.A. ............................................................................................... – 23,386 —

Acquisition value ......................................................................................................................................................................................... 1,987 24,488

Accumulated write-ups:

Accumulated write-ups at Jan 1 ....................................................................................................................................................... — —

Accumulated write-ups .............................................................................................................................................................................. — —

Total shares in Group companies ............................................................................................................................................... 1,987 24,488

In December 2001, the Parent Company acquired all shares in Fora Telecom BV in exchange for 2,461,449 newly issued shares in Tele2 AB,corresponding to a value of SEK 849 million.

On December 31, 2001 a subsidiary in the Tele2 Group acquired the remaining 81% in OU Levicom Broadband. OU LevicomBroadband is a cable-TV and broadband company as well as a fixed telephony operator in the Baltic States.

In addition to the above investments, the subsidiary Société Européene de Communication S.A. was liquidated at year-end 2001 andthe Parent Company, via an intra-Group sale, divested In2Loop Polska Sp zo, Web Communication BV Group and NetCom LuxembourgHolding AB to the wholly owned Group company, Tele2 Sverige AB at their book value.

Effect on cash of corporate acquisitions and divestments during the year:

The Group’s book value of acquired assets and liabilities in acquired companies and assets and liabilities in divested companies amounted to:

Acquired Divested

Group: 2001 2000 2001 2000

Intangible fixed assets ................................................................................................................. – 394 – 24,764 — —

Tangible fixed assets .................................................................................................................... – 614 – 1,540 — —

Financial fixed assets .................................................................................................................... – 469 – 135 — —

Inventories ........................................................................................................................................ – 21 – 131 — —

Current receivables ....................................................................................................................... – 238 – 1,876 — —

Current investments and liquid funds .................................................................................. – 890 – 3,050 — —

Long-term liabilities ..................................................................................................................... 1,166 2,458 — —

Current liabilities ............................................................................................................................ 428 3,686 — —

Exchange rate difference ........................................................................................................... – 11 – 145 — —

Purchase sum .................................................................................................................................. – 1,043 – 25,497 — —

Paid with own shares ................................................................................................................... 849 23,290 — —

Paid through loans from the seller ....................................................................................... 135 — — —

Paid/received purchase sums ................................................................................................... – 59 – 2,207 — —

Cash in acquired/divested companies .................................................................................. 890 3,050 — —

Affect on Group cash .............................................................................................................. 831 843 — —


Notes

Société Européenne de Communication S.A., (“SEC”), RCB46698, Luxembourg — — 23,352Fora Telecom BV, 33287334, Rotterdam, Netherlands 400 pcs NLG 40,000 100% 851 —

Millicom EKA Holding GmbH, FN 131600 f, Vienna, Austria 100%Fora Telecom M, no P-12721.17, Moscow, Russia 100%

Millicom VOL Holding GmbH, FN 131602 h, Vienna, Austria 100%Corporation Severnaya Korona, no P-6117.16, Irkutsk, Russia 97.78%Kemerovo Mobile Communications, no P-13742.17, Kemerovo, Russia 100%Kursk Cellular Communications, no P-16792.17, Kursk, Russia 100%Rostov Cellular Communications, no P-1790.16, Rostov, Russia 75%St Petersburg Telecom, no AO-3177, St Petersburg, Russia 60.6%Smolensk Cellular Communications, no P-2581.16, Smolensk, Russia 60%Udmurtiya Cellular Communications, no P-5818.16, Izhevsk, Russia 55%Belgorod Cellular Communications, no P-2586.16, Belgorod, Russia 65%Siberian Cellular Communications, no P-4458.16, Omsk, Russia 60%Oblcom, no P-7180.16, St Petersburg, Russia 60.6%Chelyabinsk Cellular Network, no P-3656.15, Chelyabinsk, Russia 51%

Millicom MAC Holding GmbH, FN 132666 y, Vienna, Austria 100%CISC Cellarer, no P-8068.17, Moscow, Russia 100%Millicom New Tech. in Communications, no P-9894.17, Moscow, Russia 100%

Millicom International Holding BV, Nr 33221654, Amsterdam, Netherlands 100%Moscow Cellular Communications, no P-7696.16, Moscow, Russia 20%Fora Telecom Services BV, 33.287.334, Amsterdam, Netherlands 100%Millicom International Cellular BV, Nr 33227655, Amsterdam, Netherlands 100%

NetCom Luxembourg SA, RC B73.796, Luxembourg 1,000 pcs tEURO 35 100% 1,136 1,136Tele2 Holding AB, 556579-7700, Stockholm, Sweden 100%Tele2 Sverige AB, 556267-5164, Stockholm, Sweden 100%

Datametrix Norway AS, 975993108, Oslo, Norway 100%Datametrix Danmark A/S, 39419, Copenhagen, Denmark 100%Datametrix OY AS, 378548, Helsinki, Finland 100%OY Finland Tele2 AB, 1482343-8, Helsinki, Finland 100%Interloop AB, 556284-7565, Stockholm, Sweden 100%NetCom GSM Sverige AB, 556304-7025, Stockholm, Sweden 100%Åkersberga KV AB, 556326-3192, Österåker, Sweden 100%Halmstads KV AB, 556380-6115, Halmstad, Sweden 100%Skaraborgs Kabel-TV AB, 556483-6467, Mariestad, Sweden 60%Hallstahammar KV KB, 916580-7912, Västerås, Sweden 90%Kopparstaden KV KB, 916583-0564, Västerås, Sweden 80%Nelab KV KB, 916597-8983, Västerås, Sweden 80%Kabelvision KB, 916836-8828, dormant 100%KB Haninge Kabelvision, 916633-3485, dormant 80%Härnösand Kabelvision KB, 916589-2481, dormant 80%KB June Kabelvision, 916702-4836, dormant 65%KB Lidingö Kabelvision, 916631-3289, dormant 80%Älmhults Kabelvison KB, 916525-1043, dormant 80%Trade2 (Sweden) AB, 556469-7836, Stockholm, Sweden 100%Comviq Broadband AB, 556405-6678, dormant company 100%SCD AB, 556353-6829, dormant company 100%Call2Web AB, 556403-7983, dormant company 100%NIU Nätteknik, Installation och Underhåll AB, 556041-1307, dormant company 100%Kalmar Kabelvision AB, 556244-2466, dormant company 100%Comviq GSM AB, 556450-2606, dormant company 100%Swipnet AB, 556411-9401, dormant company 100%NetCom Luxembourg Holding AB, 556580-7905, Stockholm, Sweden 100%In2loop Polska Sp. So.o, 54380, Warsaw, Poland 49%Web Communication BV, 34112460, Amsterdam, Netherlands 100%

Tele2 Polska Sp, 57496, Warsaw, Poland 100%Belmus BV,33261289, Amsterdam, Netherlands 100%

Tele2 Eesti AS, 10069046, Tallinn, Estonia 48%Tele2 Holding AS, 10262238, Tallinn, Estonia 90%

Tele2 Eesti AS, 10069046, Tallinn, Estonia 52%UAB Tele2, 1147164, Vilnius, Lithuania 100%UAB Levi & Kuto Kaunas, 1149679, Kaunas, Lithuania 100%UAB Levi & Kuto Klaipeda, 1150061, Klaipeda, Lithuania 100%

Tele2 Holding SIA, 000351206, Latvia 100%SIA Tele2, 000327285, Latvia 100%

1,987 24,488

Shares in Group companies:

Parent Company: Number Total Book value

(Company, reg. No, reg’d. Office) of shares par value Holding Dec. 31, 01 Dec. 31, 00


Notes

Shares in Group companies (contd.):

Number Total Book value


trsp 1,987 24,488OU Levicom BroadBand, 10309744, Tallinn, Estonia 100%

UAB KRT, 2304688, Vilnius, Lithuania 100%UAB C-Gates, 2424016, Vilnius, Lithuania 100%UAB Trigeris, 2123967, Vilnius, Lithuania 100%

AS Levi Kaabel, 10417072, Tallinn, Estonia 100%AS Telset Telecommunications Group, 10673906,Tallinn, Estonia 100%

Tallinna Kaabeltelevisiooni AS, 10375439,Tallinn, Estonia 65%OU Trigger Software, 10687966, Tallinn, Estonia 100%AS Eesti Telag AS, 10310799, Tallinn, Estonia 100%SIA Levicom Broadband, 40003535973, Riga, Latvia 100%Montalto Investments BV, 33135957, Amsterdam, Netherlands 100%

Tele2 Sweden SA, RC B73.802, Luxembourg 100%4 T Solutions Holding AB, 556580-2690, Stockholm, Sweden 100%XSource Corporation, USA 11.88%

X-Source Holding AB, 556580-2682, Stockholm, Sweden 100%X-Source AB, 556290-2238, Stockholm, Sweden 100%

Optimal Telecom Holding AB, 556580-7855, Stockholm, Sweden 100%Optimal Telecom Sverige AB, 556440-1924, Stockholm, Sweden 100%

Datametrix Sverige Holding AB, 556580-7871, Stockholm, Sweden 100%Datametrix AB, 556539-4870, Stockholm, Sweden 100%

Everyday Holding AB, 556579-7718, Stockholm, Sweden 100%Stenblocket i Fruängen AB, 556058-8500, Stockholm, Sweden 100%

Everyday Webguide AB, 556182-6016, Stockholm, Sweden 50%Svenska UMTS-nät Holding AB, 556606-7988, Stockholm, Sweden 100%

Svenska UMTS-nät AB, 556606-7996, Stockholm, Sweden 50%Svenska UMTS-licens Holding AB, 556606-7764, Stockholm, Sweden 100%

Svenska UMTS-licens AB, 556606-7772, Stockholm, Sweden 100%Tele2 Norge Holding AB, 556580-8143, Stockholm, Sweden 100%Tele2 AS Norge, 974534703, Oslo, Norway 100%

Tele2 Norge UMTS AS, 982795761, Oslo, Norway 100%Tele3 Norge AS, 932100975, dormant company 100%

Tele2 Danmark Holding AB, 556580-8028, Stockholm, Sweden 100%Tele2 A/S, 221234, Copenhagen, Denmark 100%

Optimal Telecom A/S, 25 52 96 34, Copenhagen, Denmark 100%In2Loop A/S, 25 48 43 47, Copenhagen, Denmark 100%

Tele1 A/S, 955780132, Oslo, Norway 100%S.E.C. Luxembourg S.A., R.C. B-84.649, Luxembourg 100%

Societe Europeenne de Communication (Irland) Ltd, 316848, Dublin, Ireland 100%Tele2 s.r.o., 25650009, Prague, Czech Republic 100%

Tele2 /Slovakia/ s.r.o., 35806486, Slovakia 100%Tele2 Magyarorszag Kft., 0109695967, Hungary 100%

SEC Services Luxembourg SA, RC B 70203, Luxembourg 100%3C Communications (Irland) Ltd, 164025, Ireland, dormant 100%SEC Holding BV, 33141829, Rotterdam, Netherlands 100%

Tele2 Marketing Dynamics AS, 932100975, Norway, dormant 100%Tele2 BLR, 429569486, Velizy, France, dormant 100%TANGO SA, RC 59560, Luxembourg 100%Transac SA, B49487, Luxembourg 100%Everyday Media SA, R.C. B 78.227, Luxembourg 100%Everyday Prod. SA, 69802, Luxembourg 100%Fagersta AB, 556238-4171, Stockholm, Sweden 100%Transcom Holding AB, 556468-0857, Sweden, dormant company 100%3C Holding AB, 556491-9503, Sweden, dormant company 100%

Kinnevik Telecommunications In SA, RC B 52976, Luxembourg 100%Tele2 Europe SA, B 56944, Luxembourg 100%

Télé2 France SA, FR48-409914058, Velizy, France 100%Tele2 Telecommunication Services GmbH, FN 178222t, Vienna, Austria 100%Tele2 Belgium SA, 609 392, Zellik, Belgium 100%Tele2 Telecommunication Services GmbH, 36232, Düsseldorf, Germany 100%Tele2 Italia Spa, Ml-1998-247322, Segrate, Italy 100%Tele2 AG, H.1045/80, Liechstenstein 100%Tele2 Luxembourg SA, B 65774, Luxembourg 100%Tele2 (Netherlands) BV, BV 291906, Amsterdam, Netherlands 100%Tele2 Telecommunication Services S.L, B82051913, Madrid, Spain 100%Tele2 Telecommunication Services AG, CH-020390 55 969, Zürich, Switzerland 100%

1,987 24,488


Notes

trsp 1,987 24,488Tele2 Communications Serv. Ltd, 3565220, Reading-Berkshire, UK 100%Telemilenio, Telecomunicacoes, Sociedade Unipessoal, 10468, Lissabon, Portugal 100%Tele2 Telecommunications Services Ltd, 292887, Dublin, Ireland, dormant 100%

3C Communications International SA, RC B 29697, Luxembourg 100%3C Communications Equipment SA, B 25465, Luxembourg 100%

3C Communications Ltd, 2343138, UK 4%3C Communications BVBA, 514 274, Brussels, Belgium 1%3C Communications SPA Italy, 28894/7359/14, Segrate, Italy 9%3C Communications SA, 345 343 396 00023 Orleans, France 1%3C Communications GmbH, HRB 24104, Germany 1%3C Kommunikacios Szolgaltato Kft, Budapest, Hungary 10%3C Communications BV, Amsterdam, 14630454, Netherlands 1%3Communicacoes Ltda, Domingos de Rana, Portugal 5%3C Communications Espana SA, Madrid, Spain 1%3C Communications AB, 556332-6346, Stockholm, Sweden 3%

3C Communications Ltd, 2343138, UK 96%3C Communications BVBA, 514 274, Brussels, Belgium 99%3C Communications SPA Italy, 28894/7359/14, Segrate, Italy 91%3C Communications SA, 345 343 396 00023 Orleans, France 99%3C Communications GmbH, HRB 24104, Germany 99%3C Kommunikacios Szolgaltato Kft, Budapest, Hungary 90%3C Communications BV, Amsterdam, 14630454, Netherlands 99%3Communicacoes Ltda, Domingos de Rana, Portugal 95%3C Communications Espana SA, Madrid, Spain 99%3C Communications AB, 556332-6346, Stockholm, Sweden 97%3C Communications GmbH, FN695021, Vienna, Austria 100%3C Communications Czech s-r-s, Czech Republic 100%3C Communications A/S,184462, Ballerup, Denmark 100%3C Communications OY, 585632, Finland 100%3C Communications Luxembourg SA, B39690, Luxembourg 100%3C Communications A/S, Oslo, Norway 100%3C Transac A/S, Norway 100%3C Transac AB Sweden,556057-2116, Stockhom, Sweden 100%3C Transac Ltd, Kingston-upon-Thames, UK 100%Comviq Holding BV, 14630454, Amsterdam, Netherlands 100%3C Communications (Ireland) Ltd, 164029, Survey, UK 100%

CCC Holding BV, 33 269 398, Amsterdam, Netherlands 100%Calling Card Company Limited, 3794813, UK 100%CCC Calling Card Company Germany GmbH, HRB 40498, Germany 100%C3 Calling Card Company (Ireland) Limited, 309745, Ireland 100%Calling Card Company SA, B 424 906 618, Paris, France 95%Calling Card Company Italy SpA, 233372, Milan, Italy 100%Tele2 International Card Company S.A., RC 64 902, Luxembourg 100%Calling Card Company Netherlands BV, BV 82334, Amsterdam, Netherlands 100%Calling Card Company Spain, S.A. A-62426457, Spain 100%Calling Card Company Telecommunication Services GmbH, FN 215362i, Austria 100%

IntelliNet Holding BV, 34126307, Amsterdam, Netherlands 100%Intellinet Telecommunications GmbH, FN 190268 g, Vienna, Austria 100%Intellinet SAS, B429 508 583, Velizy, France 100%Intellinet Telecommunication GmbH, HRB 48344, Frankfurt, Germany 100%IntelliNet S.p.A, R.C. 1615155, Segrate, Italy 99%IntelliNet BV, 34120156, Amsterdam, Netherlands 100%IntelliNet Telecommunication Services AG, CH-020.3.021.518-8, Zürich, Switzerland 100%

SEC Everyday Europe BV, 341124357, Amsterdam, Netherlands 100%Everyday.com Internet Services GmbH, Austria 100%Everyday.com Switzerland AG, CHF-0203023164-4, Zürich, Switzerland 97%Everyday.com Germany GmbH, HR B 36232, Germany 100%Everyday.com France SAS, B-430291898, Velizy, France 100%Everyday.com Italia S.R.L, R.C. 1605497, Italia Srl, Italy 100%Everyday Luxembourg SA, B 64 902, Luxembourg 100%Everyday.com Netherlands BV, 34125168, Amsterdam, Netherlands 100%

Total shares in Group companies 1,987 24,488

Shares in Group companies (contd.):



Shares in associated companies

Receivables from Group companies


Notes

2000

Everyday Gamla Stans Transcom. SNPACMillennium (1 month)

Goodwill:

Goodwill, book value, Dec. 31 ............................................................................. — — — —

Equity share:

Equity share, Jan, 1 .............................................................................................. – 4 – 2 — —

Acquired companies, opening balance ..................................................... — — 137 —

Share of capital contributions and new share issues .......................... — — — 1

Share of profit/loss ................................................................................................ – 48 20 2 —

Reclassifications ........................................................................................................ — – 18 — —

Equity share, Dec. 31 .............................................................................................. – 52 — 139 1

Total shares in associated companies ..................................................... – 52 — 139 1

Parent Company: Dec. 31, 01 Dec. 31, 00

Acquisition value at Jan. 1 .......................................................................................................................................................................................... 1,028 847

Lending .................................................................................................................................................................................................................................. 11,904 639

Amortization and additions granted ...................................................................................................................................................................... – 406 – 458Total receivables form Group companies ....................................................................................................................................................... 12,526 1,028

Note 15



Parent Company:

Gamla Stans Millennium Evenemang KB, 969653-5997, Stockholm 25% — —

Group (additional):

Svenska UMTS nät AB, 556606-7996, Stockholm .................................. 502,000 pcs tSEK 50,200 50% 249 —

Everyday Webguide AB, 556182-6016, Stockholm .............................. 1,750 pcs tSEK 175 50% – 102 – 52

OJSC Moscow Cellular Com., P7696.16, Moscow, Russia ................... 1,250,000 pcs tRUBEL 1,250 20% 75 —

Transcom Worldwide S.A., RC B 59 528, Luxembourg ........................ — — — — 139

SNPAC Swedish Number Portability Administrative

Centre AB, 556595-2925, Stockholm ........................................................... 200 pcs tSEK 20 20% 2 1

Total shares in associated companies, Group .................................... 224 88

During 2001, a subsidiary of Tele2 AB acquired 20% of the shares in OJSC Moscow Cellular Communications, which is part of Fora TelecomBV Group, which was acquired during the year, and also established a new company, Svenska UMTS Nät AB, which is owned with Telia.

During the year, shares in Transcom Worldwide S.A., an associated company in Société Européene de Communication S.A. Group,acquired in 2000, were divested to Industriförvaltnings AB Kinnevik.

Note 16

In connection with the liquidation of Société Européene de Communication S.A., Tele2 AB took over a promissory note receivable onTele2 Holding AB amounting to SEK 9,421 million.

Contribution of each associated company to Group profit/loss:2001

Sv UMTS nät Everyday Moscow Cell. Transcom SNPAC(9 months) (1 month) (1 month)

Goodwill:

Goodwill, book value, Dec. 31 .............................................................................. — — — — —

Equity share:

Equity share, Jan, 1 .............................................................................................. — – 52 — 139 1

Acquired companies, opening balance ..................................................... — — 75 — —

Share of capital contributions and new share issues .......................... 250 7 — — 1

Share of profit/loss ................................................................................................ – 1 – 57 — — —

Divestments during the year ............................................................................. — — — – 139 —

Equity share, Dec. 31................................................................................................ 249 – 102 75 — 2

Total shares in associated companies ..................................................... 249 – 102 75 — 2

Other long-term receivables

Other long-term holdings of securities

Receivables from associated companies


Notes

Number Total % Holding Book value

Company, reg. No, reg’d. Office of shares par value Capital Votes Dec. 31, 01 Dec. 31, 00

Parent Company:

AS Levicom Broadband, Estonia .................................................... 1 pcs tEEK 8 19.0% 19.0% — 18

Suomen Kolmegee, Helsinki, Finland ......................................... 1,924 pcs tFIM 1,924 20.1% 15.0% 5 5

5 23

Group (additional):

XSource Corporation, U.S. ................................................................ 1,806,575 pcs tUSD 18 11.88% 11.88% 122 122

Travellink AB, 556596-2650, Stockholm, Sweden ............... 15,000 pcs tSEK 1,500 15.00% 15.00% 75 —

Brf Sundsvallshus, Sweden ............................................................... — — — — — 1

Total long-term holdings of securities ................................. 202 146


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Acquisition value:

Acquisition value at Jan 1 ............................................................................................................. 489 3,885 366 3,884

Invest for the year ............................................................................................................................. 74 122 — —Sales for the year ............................................................................................................................... — — – 18 —Reclassification .................................................................................................................................... – 18 – 3,518 — – 3,518

Acquisition value .................................................................................................................................. 545 489 348 366

Write-downs:

Accumulated write-downs at Jan 1 ........................................................................................ – 343 – 343 – 343 – 343

Accumulated write-downs ............................................................................................................... – 343 – 343 – 343 – 343

Total other long-term holdings of securities ................................................................ 202 146 5 23

During 2001, additional shares were acquired in OU Levicom Broadband, which meant that book value of SEK 18 million was transferred toshares in Group companies. During 2000, a similar transfer of shares in Société Européene de Communication S.A. Group was conducted.

By means of an intra-Group sale during the year, the Parent Company sold its 19% shareholding in OU Levicom Broadband to its whol-ly owned Group company Tele2 Sverige AB.

Note 18

Note 17


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Acquisition value at Jan 1 .......................................................................................................... 105 6 67 6

Acquired companies, opening receivables ......................................................................... — 21 — —

Shareholder contribution ............................................................................................................ – 7 — – 7 —

Lending ............................................................................................................................................... 17 78 55 61

Total receivables from associated companies .............................................................. 115 105 115 67


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Acquisition value at Jan. 1 ............................................................................................................ 106 58 46 14

Lending .................................................................................................................................................. 23 43 12 30

Amortization ........................................................................................................................................ – 5 — — —

Reclassification .................................................................................................................................... – 41 3 – 58 —

Translation difference ...................................................................................................................... 2 2 — 2

Total other long-term receivables ....................................................................................... 85 106 — 46

During the year, the receivable from Levicom Broadband was reclassified as a receivable from the subsidiary in the amount of SEK 58 mil-lion and the receivable from XSource Corporation was reclassified from having been a current receivable.

Note 19

Prepaid expenses and accrued revenues

Other current receivables

Accounts receivable


Notes

Receivables

Group: Dec. 31, 01 Dec. 31, 00

Accounts receivable ....................................................................................................................................................................................................... 4,542 3,012

Reserve for doubtful receivables ............................................................................................................................................................................ – 918 – 558

Book value ...................................................................................................................................................................................................................... 3,624 2,454

Reserve for doubtful receivables

Group: Dec. 31, 01 Dec. 31, 00

Reserve for doubtful receivables at Jan 1 .......................................................................................................................................................... 558 172

Reserve in companies acquired during the year ............................................................................................................................................ 15 111

Recording ........................................................................................................................................................................................................................... 349 273

Recovery of previous write-downs ......................................................................................................................................................................... – 36 —

Translation difference in opening balance ......................................................................................................................................................... 32 2

Total reserve for doubtful receivables ........................................................................................................................................................... 918 558

Note 20

Credit risk entails that book losses that should be reported as of the closing date if the counterparties have completely neglected to fulfilltheir payment liability in accordance with agreements. The Group has limited its credit risk in respect of receivables by continually con-ducting credit assessments of the customer stock. Since the Group has a highly varied customer stock that covers individuals as well ascompanies, this entails that the credit risk is limited. The Group makes provisions for any credit losses, and these have remained withinmanagement’s expectations.

Note 21


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

VAT receivables ................................................................................................................................... 262 230 2 —

Receivable from Kinnevik .............................................................................................................. 78 — — —

Receivable from Millicom International BV .......................................................................... 113 — — —

Receivable from XSource Corporation ..................................................................................... — 15 — —

Receivable from suppliers ............................................................................................................. — 15 — —

Miscellaneous ...................................................................................................................................... 77 38 —

Total other current receivables .............................................................................................. 530 298 2 —

Note 22


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Accrued telephony revenue, other telecom operators ..................................................... 544 218 — —

Accrued telephony revenue, customers ................................................................................... 1,511 1,510 — —

Prepaid leasing and rental costs ................................................................................................. 12 43 — —

Prepaid financing charges ............................................................................................................. 209 — — —

Miscellaneous ...................................................................................................................................... 493 232 1 1

Total prepaid expenses and accrued revenues ........................................................... 2,769 2,003 1 1

Shareholders’ equity

Liquid funds and overdraft facilities


Notes

Share Restricted Unrestricted Total share-Group: capital reserves reserves holders’ equity

Opening shareholders’ equity, Jan 1, 2001 ...................................................................... 724 25,098 829 26,651

Effect of changes in accounting principles ........................................................................ — — – 112 – 112

Opening adjusted shareholders’ equity .............................................................................. 724 25,098 717 26,539

New share issue, acquisition of Fora ..................................................................................... 12 837 — 849

New share issue, convertibles ................................................................................................... 1 14 — 15

Gradual acquisitions ....................................................................................................................... — — – 12 – 12

Exchange-rate difference ............................................................................................................. — 1,844 – 110 1,734

Transfers among shareholders’ equity .................................................................................. — 7,948 – 7,948 —

Net profit/loss for the year ......................................................................................................... — — 392 392

Closing adjusted shareholders’ equity ............................................................................. 737 35,741 – 6,961 29,517

As a result of the gradual acquisition of shares in OU Levicom Broadband as of December 31, 2001, a back-dated adjustment has beenmade of the original investments of 19% in January 1999 so that shareholders’ equity has been recalculated as if it had been a subsidiaryon this date. This means that an adjustment arises in shareholders’ equity corresponding to Tele2’s equity in OU Levicom Broadband dur-ing the period January 1999–December 2001.

Note 24

Note 23

Cash


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Cash and bank balances ................................................................................................................ 2,275 1,511 8 7

Current investments .......................................................................................................................... — — — —

Total cash ............................................................................................................................................ 2,275 1,511 8 7

Of the Group’s total cash, SEK 897 million was submitted as collateral for loans in Fora Telecom BV Group and is thus blocked.

Overdraft facilities


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Overdraft facilities granted ........................................................................................................... 26 267 — —

Overdraft facilities utilized ............................................................................................................. – 14 – 14 — —

Total unutilized overdraft facilities ...................................................................................... 12 253 — —

In addition the Group has EUR 25 million in unutilized credit lines at December 31, 2001 (2000: SEK 200 million).

Collateral pledged for overdraft facilities


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Materials and supplies .................................................................................................................... 18 11 — —

Receivables ........................................................................................................................................... 18 11 — —

Other assets .......................................................................................................................................... 9 11 — —

Total collateral pledged for overdraft facilities ........................................................... 45 33 — —

Exchange-rate difference in liquid funds

Group: Dec. 31, 01 Dec. 31, 00

Liquid funds at Jan. 1 ............................................................................................................................................................................ 83 – 36

Cash flow for the year ............................................................................................................................................................................ – 58 – 108

Total exchange-rate difference in cash ................................................................................................................................... 25 – 144


Notes

Exchange-rate differences in shareholders’ equity

Other restricted UnrestrictedGroup: reserves reserves Total

Opening shareholders’ equity, Jan 1, 2001 ................................................................................................. 1,049 – 320 729

Other changes during the year .......................................................................................................................... 1,844 – 110 1,734

Year-end, Dec. 31, 2001 .................................................................................................................................. 2,893 – 430 2,463

Restricted Unrestrictedshareholders’ equity shareholders’ equity

Share capital (SEK million) Share Share Profit loss/ Total share-Parent Company: A shares B shares capital premium brought forward holders’ equity

Opening shareholders’ equity, Jan 1, 2001 ............................ 150 574 724 23,083 1,983 25,790

New share issue, acquisition of Fora ............................................ — 12 12 837 — 849

New shares issue, convertibles ....................................................... — 1 1 14 — 15

Group contribution, received .......................................................... — — — — 2,100 2,100

Group contribution, tax effects ...................................................... — — — — – 588 – 588

Profit/loss for the year ........................................................................ — — — — – 10,882 – 10,882

Round-off ................................................................................................. — — — 1 — 1

Closing shareholders’ equity, 31 Dec. 2001 .................... 150 587 737 23,935 – 7,387 17,285

Effect of changes in accounting principles:During 20001, Tele2 changed its accounting principles governing “IQ Spar” – pre-paid call time in mobile telephony. IQ Spar has beenreclassified from having been regarded as revenue from subscription charges which is accrued throughout the subscription period tobeing regarded as traffic revenue and thus accrues in pace with customer calls. The following back-dated changes have been made of theincome statements and balance sheets for previous periods.

Group: 2000 1999 1998

Income statement:

Operating revenues .................................................................................................................... – 30 – 4 – 39

Cost per service sold .................................................................................................................. 9 2 12

Gross profit/loss ............................................................................................................................. – 21 – 2 – 27

Deferred tax expense .................................................................................................................. 6 1 7

Profit/loss for the year ........................................................................................................... – 15 – 1 – 20

Group: Dec. 31, 00 Dec. 31, 99 Dec. 31, 98

Balance sheet:

Profit loss/brought forward ..................................................................................................... – 97 – 96 – 76

Net profit/loss for the year ..................................................................................................... – 15 – 1 – 20

Total shareholders’ equity ....................................................................................................... – 112 – 97 – 96

Provisions, deferred tax ............................................................................................................ – 44 – 38 –37

Accrued expenses .......................................................................................................................... – 67 – 58 – 56

Prepaid revenue ............................................................................................................................ 223 193 189

Total shareholders’ equity and liabilities .................................................................... — — —

Exchange-rate differences in the consolidated income statement:Exchange-rate differences that arise in operations are reported across the income statements and amount to:


2001 2000 2001 2000

Other operating revenue ............................................................................................................... 33 — — —

Other operating expenses ............................................................................................................. – 20 – 57 — —

Result from other securities

and receivables that are fixed assets .................................................................................. – 1 3 — 2

Other interest income and similar profit/loss items ........................................................... – 1 – 1 — —

Interest expense and similar profit/loss items ...................................................................... 2 – 6 — —

Exchange-rate difference in the income statement ................................................... 13 – 61 — 2


Notes

Profit/loss beforeNet sales Sensitivity depreciation Sensitivity

SEK M % analysis ±1% SEK M % analysis ±1%

SEK ................................................................................................................................... 9,236 37% — 3,690 217% —

EUR and EUR-linked currencies .......................................................................... 9,848 39% 98 – 2,165 – 127% – 22

NOK ................................................................................................................................. 1,770 7% 18 29 2% 0

DDK ................................................................................................................................. 1,351 5% 14 62 4% 1

LVL .................................................................................................................................... 618 3% 6 272 16% 3

EEK ................................................................................................................................... 325 1% 3 109 6% 1

LTL .................................................................................................................................... 112 1% 1 – 67 – 4% – 1

Other currencies ......................................................................................................... 1,825 7% 18 – 232 – 14% – 2

Total, Dec. 31, 2001 ............................................................................................ 25,085 100% 158 1,698 100% – 20

During the first two months of 2002, the EUR exchange rate and LVL rate declined 0.5%. NOK rose by 2% and DDK declined 0.2%,which would correspond to an exchange-rate effect on operating revenues in 2001 and EBITDA of a net SEK –17 million and SEK 10 mil-lion, respectively.

The exchange rates used in the Group for translating the income statements and balance sheets to SEK are presented below:

Income statement Balance sheet

2001 2000 Dec. 31, 01 Dec. 31, 00

EURO ....................................................................................................................................................... 9.2519 8.4463 9.4190 8.8570

DEM ........................................................................................................................................................ 4.7304 4.3185 4.8159 4.5285

FRF ........................................................................................................................................................... 1.4104 1.2876 1.4359 1.3502

GBP .......................................................................................................................................................... 14.8725 13.8579 15.4750 14.2200

LUF ........................................................................................................................................................... 0.2293 0.2094 0.2335 0.2196

CHF .......................................................................................................................................................... 6.1280 5.4250 6.3600 5.8135

NLG .......................................................................................................................................................... 4.1983 3.8328 4.2742 4.0191

DKK .......................................................................................................................................................... 1.2415 1.1332 1.2665 1.1870

NOK ......................................................................................................................................................... 1.1499 1.0411 1.1835 1.0715

FIM ........................................................................................................................................................... 1.5561 1.4206 1.5842 1.4896

ITL ............................................................................................................................................................ 0.0048 0.0044 0.0049 0.0046

ATS ............................................................................................................................................................ 0.6724 0.6138 0.6845 0.6437

ESP ........................................................................................................................................................... 0.0561 0.0508 0.0566 0.0532

EEK ........................................................................................................................................................... 0.5913 0.5398 0.6020 0.5660

LVL ............................................................................................................................................................ 16.5171 15.1085 16.9000 15.3900

LTL ............................................................................................................................................................ 2.5819 2.2869 2.6700 2.3800

PTE ........................................................................................................................................................... 0.0461 0.0421 0.0470 0.0442

PLN .......................................................................................................................................................... 2.5239 2.1073 2.6900 2.3000

CZK ........................................................................................................................................................... 0.2718 0.2371 0.2936 0.2550

HUF ......................................................................................................................................................... 0.0361 0.0325 0.0382 0.0339

USD .......................................................................................................................................................... 10.33080 9.16080 10.6675 9.535

The consolidated balance sheets and income statements are affected by exchange-rate fluctuations in subsidiaries’ currencies. The Group’snet sales and profit/loss before depreciation at December 31, 2001 consisted primarily of the following currencies. A one-percent changecurrency fluctuation affects the Group on an annual basis as follows:

Other currency risks:In fixed telephony operations and in mobile telephony operations, a currency risk arises in connection with international call traffic, whichmeans that a liability or a receivable arises between Tele2 companies and foreign operators. In mobile telephony, these transactions arecalculated in SDRs (Special Drawing Rights) but are invoiced and paid in USD.

The five-year loan facility is denominated partly in EUR. The exchange-rate difference that continually arises in translating the loan li-ability is offset against the exchange-rate differences that arise on the corresponding receivables from the subsidiaries, which are bookeddirectly against shareholders’ equity and which arise through Tele2 Sverige AB forwarding the loan liability to subsidiaries in EUR-linkedcurrencies.

Liabilities to financial institutions

Number of shares


Notes

A shares B shares Total Par value per Par value perChange Total Change Total number share (SEK) share (SEK M)

Jan 1. 1999 ........................... 18,095,632 85,754,614 103,850,246 5 519

Dec. 31, 1999 .................... 18,095,632 85,754,614 103,850,246 5 519

New share issue,

acquisition of SEC ......... 11,911,315 30,006,947 28,837,165 114,591,779 144,598,726 5 723

New share issue, options .. 30,006,947 200,000 114,791,779 144,798,726 5 724

Dec. 31, 2000 ................... 30,006,947 114,791,779 144,798,726 5 724

New share issues,

acquisition of Fora ............. 30,006,947 2,461,449 117,253,228 147,260,175 5 736

New share issue,

convertibles ........................... 30,006,947 100,000 117,353,228 147,360,175 5 737

December 31, 2001 ...... 30,006,947 117,353,228 147,360,175 5 737

At Dec. 31, 2001, the shares converted in 2001 100,000 B shares were being registered by the Swedish Patent and Registration Office.

Note 25

The share capital in Tele2 AB is divided into two share classes, namely, Series A and B shares. Both types of shares have a par value of SEK 5 per share and offer equal participation in the company’s net assets and earnings. Series A shares, however, entitle the holder to 10 voting rights and Series B shares to one voting right.

Earnings/loss per share:Earnings/loss per share

Earnings/loss per share after full dilution

Group: 2001 2000 2001 2000

Net profit/loss for the year ........................................................................................................... 392 – 396 392 – 396

Reversal: interest for the year after tax on outstanding convertibles ...................... — —

Adjusted profit/loss for the year after full dilution ........................................................... 392 – 396

Weighted average number of shares ...................................................................................... 145,003,847 114,087,366

Weighted average number of outstanding shares after full dilution ...................... 145,223,466 114,224,866

Earnings/loss per share ............................................................................................................. SEK 2.70 SEK – 3.47 SEK 2.70 SEK – 3.47

Convertibles:In October 2000, three convertible debenture loans were issued at a par value of SEK 1, each with preference rights to subscribe for100,000 B shares in Tele2 AB at a subscription price of SEK 150 per share, and maturing in 2001, 2002 and 2003.

The outstanding convertibles at Dec. 31, 2001 correspond to 200,000 B shares and the total number of shares after full dilution willamount to 147,560,175.

Note 26

Short-term liabilities to financial institutions


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Nordbanken ............................................................................................................................................... — 21 — 21

Five-year loan facility ............................................................................................................................. 707 — — —

CIBC ............................................................................................................................................................... — 2,266 — —

Nordiska Investeringsbanken ............................................................................................................. — 125 — —

ABN Amro Swedish Bankers Association ...................................................................................... — 114 — —

Dexia ............................................................................................................................................................. — 98 — —

BCEE .............................................................................................................................................................. — 7 — —

Financial leases ......................................................................................................................................... 24 51 — —

Total short-term interest-bearing loans ................................................................................. 731 2,682 — 21


Notes

Long-term liabilities to financial institutions

Interest-rate terms Maturity Dec. 31, 01 Dec. 31, 00

Parent Company: .......................................................................................................... — —

Other group companies:

Five-year loan facility .............................................................................................. EURIBOR/LIBOR +0.75–2.25% 2003–2006 9,834 —

(Collateral: shares in Tele2 Sverige and SEC SA and certain shares in Group companies, which they in turn own, guarantees

from Tele2 AB and cross-guarantees between certain Group companies, collateral provided in the form of receivables from

certain Group companies and limitation in repayment potential of internal loans from Tele2 AB)

CIBC ................................................................................................................................. — 3,847

Banque Invik ............................................................................................................... Fixed interest rate: 13.75% 2004 881 —

(Collateral: Blocked bank funds in Fora Telecom BV)

Merita-Nordbanken ................................................................................................. Floating rate 2003 3 8

(Collateral: guarantees from Tele2)

CIBC World Markets and ING Barings ............................................................. — 1,134

Nordbanken ................................................................................................................ — 270

Banque International à Luxembourg .............................................................. — 54

Dexia ............................................................................................................................... — 1

BCEE ................................................................................................................................ — 23

Svenska Handelsbanken ........................................................................................ — 22

Financial leases for machinery and technical plant .................................. 125 131

Total long-term interest-bearing loans, Group ................................... 10,843 5,490

During the second half of 2001, Tele2 Sverige AB and SEC S.A. jointly signed a new five-year bank finance facility for EURO 1.2 billion,guaranteed by ABN Amro, CIBC World Markets, ING Bank, Nordea, The Royal Bank of Scotland and West LB. The five-year bank financingfacility with amortization replaces two previous credit facilities in Tele2 Sweden and Société Européene de Communication S.A.

The five-year loan facility is based on requirements involving the fulfillment of certain financial key ratios. Tele2 Sverige AB Group andSEC SA Group expect to fulfill the requirements. The loan liability carries a rate of interest corresponding to Euribor and Libor, respective-ly, plus an interest margin. The interest margin, which is based on indebtedness in relation to operating profit before depreciation, startsat 2.25% and is reduced in line with the improvement in operating profit before depreciation. At December 31, 2001, the interest mar-gin was 2%.

In the Group, pledged assets are reported in an amount corresponding to the book value of the net assets that each subsidiary repre-sents in the consolidated balance sheet.

The average rate of interest on loan liabilities was 6.3% (2000: 4.8%).

Collateral pledged for liabilities to financial institutions


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Shares in subsidiaries ....................................................................................................................... — —

Net assets in subsidiaries ............................................................................................................... 23,197 37

Buildings ................................................................................................................................................ — 14 — —

Machinery and technical plant ................................................................................................... — 112 — —

Bank bills ............................................................................................................................................... 897 — — —

Total collateral pledged for own loan liabilities to financial institutions ..... 24,094 163 — —


Notes

Loan maturity schedule


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Within 1 year ...................................................................................................................................... 731 2,682 — 21

1–2 years .............................................................................................................................................. 2,375 2,166 — —

2–3 years .............................................................................................................................................. 3,254 963 — —

3–4 years .............................................................................................................................................. 2,601 2,262 — —

4–5 years .............................................................................................................................................. 2,553 18 — —

5–10 years ............................................................................................................................................ 60 81 — —

Total loans to financial institutions .................................................................................... 11,574 8,172 — 21

Interest rate risk:The Group’s interest-rate on borrowing is currently variable with fixed-interest periods of up to 12 months. However, Tele2 is monitoringtrends on interest-rate markets and decisions regarding the interest-rate fixing strategy are assessed continually.

Financial leases:All fixed assets utilized through financial leasing have been included in the consolidated accounts as fixed assets and loan liabilities, withthe exception, however, of contracts signed before 1997. The effects of these being included in the consolidated balance sheet are shownbelow and in Note 13.

Financial leasing

Booked loan liability Booked loan liability

Group: Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Short-term component ................................................................................................................... 24 51 9 9

Long-term component .................................................................................................................... 125 131 91 99

Total loans for financial leases .............................................................................................. 149 182 100 108

Loan liability matures

Booked Not booked

Group: Dec. 31, 01 Dec. 31, 01

Within 1 year ......................................................................................................................................................................................................... 35 13

1–2 years ................................................................................................................................................................................................................. 41 13

2–3 years ................................................................................................................................................................................................................. 36 13

3–4 years ................................................................................................................................................................................................................. 19 13

4–5 years ................................................................................................................................................................................................................. 13 48

5–10 years ............................................................................................................................................................................................................... 40 18

Total loan liability and interest ....................................................................................................................................................................... 184 118

Less: interest portion ........................................................................................................................................................................................... – 35 – 18

Total loans for financial leasing objects ............................................................................................................................................. 149 100

Financial leasing pertains primarily to the extension of transmission capacity in Sweden through Svenska Kraftnät Vattenfall and agree-ments signed in Denmark and the Baltic States.


Notes

Other current liabilities

Other interest-bearing liabilitiesNote 27

Current interest-bearing liabilities


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Levicom International ...................................................................................................................... 134 77 — 3

Ericsson .................................................................................................................................................. 17 469 — —

Total other current interest-bearing liabilities ............................................................. 151 546 — 3

Long-term interest-bearing liabilities


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Ericsson .................................................................................................................................................. 2 — — —

(50% guaranteed by MIC)

Motorola ................................................................................................................................................ 55 — — —

Kinnevik S.A. ....................................................................................................................................... 14 49 — —

Millicom International BV .............................................................................................................. 44 37 — —

Total other long-term interest-bearing liabilities ........................................................ 115 86 — —

Collateral pledged for liabilities to financial institutions


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00


Materials and supplies .................................................................................................................... — 6 — —

Receivables ........................................................................................................................................... — 115 — —

Bank bills ............................................................................................................................................... — 13 — —

Other assets .......................................................................................................................................... — 57 — —

Total collateral pledged for other interest-bearing liabilities ............................ — 565 — —

Loan maturity schedule


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Within 1 year ...................................................................................................................................... 151 546 — 3

1–2 years .............................................................................................................................................. 115 86 — —

Total other interest-bearing liabilities ............................................................................... 266 632 — 3

Note 28


Total other interest-bearing liabilities: Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

VAT liability ........................................................................................................................................... 218 154 — 1

Tax-at-source, personnel ................................................................................................................. 37 24 — —

Other taxes ........................................................................................................................................... 34 — — —

Liability to SCD Finans AB ............................................................................................................. 30 20 — —

Liability to Motorola ........................................................................................................................ 26 — — —

Customer deposits ............................................................................................................................. 17 15 — —

Program expenses and subscription revenue, cable-TV ................................................... — 18 — —

Other ....................................................................................................................................................... 13 91 — —

Total other current liabilities ................................................................................................... 375 322 — 1


Notes

Pledged assets

Accrued expenses and prepaid revenues

Note 30


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Net assets in Group companies .................................................................................................. 23,197 37

Buildings ................................................................................................................................................ — 14 — —


Materials and supplies .................................................................................................................... 18 17 — —

Receivables ........................................................................................................................................... 18 126 — —

Bank bills ............................................................................................................................................... 897 447 — —

Other assets .......................................................................................................................................... 9 68 — —

Total assets pledged for own liabilities ........................................................................... 24,139 1,195 — —

The above information shows the book value of assets pledged as collateral for external loans (as into Note 26), overdraft facilities and blockedbank funds (as in to Note 23) and other liabilities (as in to Note 27). In the Group, pledged shares are reported in an amount corresponding to thebook value of the net assets that each subsidiary represents in the consolidated balance sheet.

Note 29


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Accrued personnel-related costs ................................................................................................. 734 891 3 1

Accrued interest expenses ............................................................................................................. 150 13 — 1

Accrued telephony expenses to other telecom operators ............................................... 1,476 1,316 — —

Accrued expenses for vendors ..................................................................................................... 12 45 — —

Accrued leasing and rental expenses ....................................................................................... 29 2 — —

Accrued program costs ................................................................................................................... 33 — — —

Accrued expenses – external services ...................................................................................... 790 586 4 6

Prepaid income .................................................................................................................................. 541 456 — —

Other ....................................................................................................................................................... 249 120 — —

Total accrued expenses and prepaid revenues ........................................................... 4,014 3,429 7 8

The change in the consolidated accounting principles for “IQ Spar” – a prepaid call-time program in mobile telephony – resulted in a back-dated increase in the preceding year’s reserve for accrued expenses in the amount of SEK 223 million and a reduction in prepaid revenue ofSEK 67 million.


Notes

Supplementary cash-flow information

Contingent liabilities and other commitments

Operational leases:Future fees due for payment


Dec. 31, 01 Dec. 31, 01

2002 ....................................................................................................................................................... 471 —

2003 ....................................................................................................................................................... 238 —

2004 ....................................................................................................................................................... 189 —

2005 ....................................................................................................................................................... 123 —

2006 ....................................................................................................................................................... 112 —

2007 or later ....................................................................................................................................... 727 —

Total future fees for operating leases due for payment ..................................... 1,860 —

Leasing fees for the yearGroup Parent Company2001 2001

Fees for operating leases for the year 782 —

Note 31


Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Surety bonds benefiting Group companies ......................................................................... — — 15,133 334

Total contingent liabilities ........................................................................................................ — — 15,133 334

SEK 10,541 million of the contingent liabilities in the Parent Company relates to a guarantee for the five-year loan facility (Note 25).

Note 32

Transactions not affecting cash are as follows:In addition to the reported investing and financing operations, as shown in the cash flow analyses, the following transactions occurred that didnot affect cash.

In the Parent Company, the acquisition of shares in Fora Telecom BV was conducted through a limited share issue of SEK 849 million and is notincluded in cash flow as investing or financing. On the acquisition date, Fora Telecom BV had cash of SEK 884 million, which is reported in thecash flow as a reduced investment.

The acquisition of shares in OU Levicom Broadband was undertaken through loan financing from the seller in the amount of SEK 134 millionand is not included in cash flow as investing or financing. On the acquisition date, OU Levicom Broadband had cash of SEK 5 million, which isreported in the cash flow as a reduced investment.

During 2000, the Parent Company acquired shares in Société Européene de Communications S.A. for SEK 19,772 million through a limitedshare issue and is not included in cash flow as investing or financing. Only the cash on the acquisition date, amounting to SEK 3,008 million isreported in the cash flow as a reduced investment.

In addition to the reported investing and loan liability in the cash flow, investing and the raising of loans trough financial leasing in the Groupamounted to SEK 17 million (2000: SEK 0) and amortization of loans through financial leasing to SEK –22 million (2000: SEK –13 million).

During 2001, the Parent Company received a Group contribution from Tele2 Sverige AB of SEK 2,100 million, which has not been reported asfinancial activities.

In addition to the reported sales of shares in subsidiaries in the cash flow during 2001, the Parent Company divested shares in OU LevicomBroadband and Travellink AB for SEK 93 million to the subsidiary Tele2 Sverige AB.

In addition to the reported sales of shares in the subsidiaries, Tele2 AB’s subsidiary Société Européene de Communications S.A. was liquidated.The net reduction in investments was SEK 9,421 million since the shares were booked at SEK 23,385 million and the liquidation loss amountedto SEK 13,964 million.


Notes

Investments

Group: 2001 2000

Mobile telephony ................................................................................................................................................................................................ 789 773

Fixed telephony and Internet ......................................................................................................................................................................... 1,272 658

Cable-TV ................................................................................................................................................................................................................... 52 40

Data-processing ..................................................................................................................................................................................................... 32 47

2,145 1,518

Change in long-term receivable ................................................................................................................................................................... 87 95

Acquisition/sale of companies ....................................................................................................................................................................... –765 –843

Total by business area ................................................................................................................................................................................... 1,467 770

Cash flow statement based on net profit/loss:

Group: 2001 2000

Current operations

Net profit/loss for the year .............................................................................................................................................................................. 392 – 396

Adjustment of items in profit/loss for the year

that do not generate cash flow from current operations:

Depreciation/amortization .......................................................................................................................................................................... 3,054 1,400

Minority interest ............................................................................................................................................................................................. – 1 —

Profit/loss from shares in associated companies ............................................................................................................................. 58 44

Deferred tax expense ................................................................................................................................................................................... – 2,335 561

Financial leases ................................................................................................................................................................................................ – 5 – 6

Unpaid interest ................................................................................................................................................................................................ – 2 – 31

Other .................................................................................................................................................................................................................... — 2

1,161 1,574

Change in working capital .............................................................................................................................................................................. – 748 – 691

Cash flow from current operations ....................................................................................................................................................... 413 883

Investments according to the cash flow statement by market and business area:

Investments

Group: 2001 2000

Nordic ........................................................................................................................................................................................................................ 1,029 1,266

Eastern Europe and Russia .............................................................................................................................................................................. 328 174

Central Europe ....................................................................................................................................................................................................... 149 19

Southern Europe .................................................................................................................................................................................................. 454 11

Luxembourg ........................................................................................................................................................................................................... 122 8

Branded products & services .......................................................................................................................................................................... 63 40

2,145 1,518

Change in long-term receivable ................................................................................................................................................................... 87 95

Acquisition/sale of companies ....................................................................................................................................................................... – 765 – 843

Total by market ................................................................................................................................................................................................. 1,467 770

U.S. accounting principles (US GAAP)


Notes

Note 33

The consolidated balance sheets and income statements have been prepared in accordance with Swedish accounting principles. These differ incertain respects from U.S. accounting principles (US GAAP).

The presentation below shows the adjustments required for compliance with US GAAP.

Profit/loss for the year: Group

2001 2000 1999

Profit/loss for the year according to Swedish accounting principles: ........................................ 392 – 396 3 768

Adjustments required for compliance with US GAAP.

a) Transactions between jointly owned companies ........................................................................... 21 24 20

b) Accounting for associated companies ................................................................................................. — — 134

c) Lease agreements.......................................................................................................................................... 2 3 3

d) Tangible fixed assets.................................................................................................................................. 9 31 29

e) Options............................................................................................................................................................... 5 – 196 9

f) Proprietary software..................................................................................................................................... — 80 – 81

g) Accounting for gradual acquisitions .................................................................................................. – 8 – 317 – 61

h) Accounting for acquisitions ...................................................................................................................... – 367 – 104 —

i) Deferred tax liability.................................................................................................................................... 828 — – 828

j) SPP insurance refund................................................................................................................................... — – 8 —

k) Changes in accounting principles.......................................................................................................... – 156 21 2

l) Accounting for contingencies.................................................................................................................. – 2 — —

Net adjustment.................................................................................................................................................... 332 – 466 – 773

Tax effect on above US GAAP adjustments............................................................................................ 39 – 38 8

Profit/loss for the year according to US GAAP ........................................................................... 763 – 900 3 003

Adjusted earnings/loss per share ................................................................................................................ SEK 5.26 SEK – 7.89 SEK 28.99

Weighted average number of outstanding shares ............................................................................. 145,003,847 114,087,366 103,598,394

Adjusted earnings/loss per share after full dilution........................................................................... SEK 5.25 SEK – 7.89 SEK 28.92

Weighted average number of outstanding shares after full dilution ....................................... 145,215,999 114,087,366 103,850,246

Shareholders’ equity: Group

Dec. 31, 01 Dec. 31, 00 Dec. 31, 99

Shareholders equity according to Swedish accounting principles ............................................. 29,517 26,539 6,660

Adjustments required for compliance with US GAAP:

a) Transactions between jointly owned companies ........................................................................... – 27 – 47 – 72

c) Lease agreements.......................................................................................................................................... 13 11 9

d) Tangible fixed assets.................................................................................................................................. 60 51 20

e) Options............................................................................................................................................................... – 25 – 30 9

f) Proprietary software..................................................................................................................................... — — – 80

g) Accounting for gradual acquisitions .................................................................................................. – 102 – 94 – 61

h) Accounting for acquisitions ...................................................................................................................... 6,630 6,592 —

i) Deferred tax liability .................................................................................................................................. — – 828 – 828

j) SPP insurance refund................................................................................................................................... – 7 – 7 —

k) Changes in accounting principles.......................................................................................................... — 156 135

l) Accounting for contingencies.................................................................................................................. – 2 — —

Net adjustment.................................................................................................................................................... 6,540 5,804 – 868

Tax effect on above US GAAP adjustments............................................................................................ – 16 – 54 – 20

Shareholders’ equity according to US GAAP .............................................................................. 36,041 32,289 5,772


Notes

Explanation of the current differences between Swedish accounting principles and US GAAP:The account below presents a description of the adjustments that must be made to report Tele2 Group’s profit/loss for 1999, 2000 and 2001and shareholders’ equity as of December 31 1999, 2000 and 2001 in accordance with US GAAP.

a) Transactions between jointly owned companiesIn 1993 and 1994, the company acquired Tele2 and Comviq from the Industriförvaltnings AB Kinnevik Group. The acquisition method was usedto report the transactions. Accordingly, the difference between the acquisition value and market value of net assets was reported as goodwill.According to US GAAP, acquisitions of operations from “jointly owned companies” should be conducted at historical values. Thus, as a US GAAPadjustment, all re-evaluations of plants, materials and supplies, goodwill, etc. that arise on the transaction date are eliminated and the resultingdepreciation/amortization is reversed.

b) Accounting for associated companiesIn 1993, the company acquired shares in the Norwegian associated company NetCom ASA from a company in the Industriförvaltnings ABKinnevik Group. The investment was reported in accordance with the equity method. A surplus value was reported in connection with theinvestment. According to US GAAP, this surplus value and the resulting amortization have been reversed since it arose as a result of a trans-action between “jointly owned companies”. During 1999, the company divested the shares, and thus there was no longer any differencecompared with US GAAP.

c) Leasing agreementsThe Group has certain leasing transactions which, according to generally accepted accounting principles in Sweden, have been treated asoperational leases, bit which according to US GAAP are viewed as financial leasing.

d) Tangible fixed assetsCertain costs have been capitalized in accordance with Swedish accounting principles should be expensed according to US GAAP. Accordingto US GAAP, certain costs attributable to installations of networks are capitalized and not expensed.

e) OptionsAccording to US GAAP, as a result of the terms and conditions of options programs, a liability is calculated based on the market value of theunderlying shares. The valuation of the options was conducted in accordance with the Black-Scholes model. As a result of the fact that theAnnual General Meeting in May 2000 authorized the Board to settle the option commitments through a new share issue, the previously bookprovision for liability was dissolved via the income statement. According to US GAAP, the commitments to employees should not be dissolved.Commitments to others should be valued at the value of the option on the date on which the decision was made to settle it through a newshare issue and report it directly against shareholders’ equity.

Extract from the consolidated balance sheet:Official US GAAP

Dec. 31, 01 Dec. 31, 00 Dec. 31, 01 Dec. 31, 00

Balance sheet:

Current assets ...................................................................................................................................... 9,566 6,517 9,566 6,517

Fixed assets ........................................................................................................................................... 39,590 35,828 46,304 42,462

Total assets ............................................................................................................................................ 49,156 42,345 55,870 48,979

Current liabilities ................................................................................................................................ 8,631 9,612 8,639 9,476

Long-term liabilities ......................................................................................................................... 10,980 6,186 11,162 7,206

Minority interest ................................................................................................................................ 28 8 28 8

Total liabilities ..................................................................................................................................... 19,639 15,806 19,829 16,690

Shareholders’ equity ........................................................................................................................ 29,517 26,539 36,041 32,289

Back-dated adjustments in conjunction with gradual acquisitions:As a result of a gradual acquisition of the shares in OU Levicom Broadband in December 2001, a back-dated adjustment has been madeof the original investment of 19% as if accounting had been undertaken in accordance with the equity method for associated companiesinstead of historical acquisition value.

This means that an adjustment arises in shareholders’ equity corresponding to Tele2’s share in the profit/loss of OU Levicom Broadbandduring the period February 1999–December 2001 and amortization of the resulting goodwill. The back-dated adjustment for profit/loss in1999 and 2000 according to US GAAP amounts to SEK –5 million and SEK –7 million, respectively, with an effect on earnings per sharebefore and after full dilution of SEK –0.05 and SEK –0.06. The backdated adjustment of shareholders’ equity as of December 31, 1999and 2000, respectively thus amounts to SEK –5 million and SEK –12 million, respectively.

In October 2000, there was a gradual acquisition of the shares in Société Européene de Communication S.A. A back-dated adjustmentwas made as in the case of Levicom, in which the back-dated adjustment of the 1999 profit/loss according to US GAAP amounted to SEK–79 million, with an effect on earnings per share before and after full dilution of SEK 0.77. The back-dated adjustment of shareholders’equity at December 31, 1999 amounted to a reduction in shareholders’ equity of SEK 1,856 million, which derives manly from a reversalof unrealized profit in respect of a market evaluation of the SEC shares at December 31, 1999.


Notes

Options:Parent Company:At the Annual General Meeting of the Parent Company in May 1997, it was decided to undertake an incentive program for key personnel inthe Tele2 Group. The incentive program meant that a number of managers in the Group, through a limited liability company – NetComIntressenter AB, were given the opportunity to acquire 100,000 B shares, in a maximum total amount of 500,000 shares during the period1999–2003. In October 2000, the Board decided to issue 200,000 new shares and issue three convertible debenture notes, corresponding to300,000 shares, as stated in Note 25.

The premium for the option amounted to SEK 7 million in 1997. The valuation was conducted in accordance with the Black-Schollesoptions model, based on the share’s market price and the exercise price of SEK 150. The share price of the shares at the date of signing of theagreement in May 1997 was SEK 107.50 and was SEK 378 on December 31, 2001. The Board was of the opinion that the above conditionswere market based.

On December 31 2001 and December 31 2000, Invik & CO AB owned respectively 42% and 47% of the shares in NetCom IntressenterAB. Invik & Co AB is not entitled to sell or transfer the shares without the permission of Tele2 AB. The company plans to transfer these shares toemployees in the future.

In accordance with Swedish accounting principles, the option liability as a result of the above was dissolved in its entirety in 2000.According to US GAAP, depending on the conditions of the option program, a liability should be calculated based on the difference betweenthe market value of the underlying shares and the exercise price.

Pro forma:A valuation in accordance with the Black-Scholes options model would give the following effect on earnings according to US GAAP:

2001 2000 1999

Profit/loss for the year, reported as above ............................................................................................... 763 – 900 3,003

Adjusted earnings per share after full dilution ...................................................................................... SEK 5.25 SEK – 7.89 SEK 28.92

Profit/loss for the year, pro forma................................................................................................................. 760 – 904 2,996

Adjusted earnings per share after full dilution ...................................................................................... SEK 5.23 SEK – 7.92 SEK 28.85

The calculation is based on a risk-free rate of interest of 5.0% (2000: 5.3%), no dividend, volatility of 45.5% (2000: 40%) and that the optionmatures on April 20, 2003.

f) Proprietary softwareThrough 1999, Tele2 has capitalized development costs for software for external sales. According to US GAAP, this should be expensed anddepreciation attributable to capitalization be reversed until the product is technically finalized. As a result of the sale of 4T Solutions AB in2000, there is currently no difference vis-a-vis US GAAP.

g) Accounting for gradual acquisitionsThe gradual acquisitions of OU Levicom and Société Européene de Communications S.A. during 1999–2001 has, according to Swedish account-ing principles, resulted in a back-dated adjustment of shareholders’ equity corresponding to shares in profit of the holdings from the originalacquisition date based on the equity method rather than historical acquisition values. According to US GAAP, not only should shareholders’ equity be adjusted against the share in profit/loss but also goodwill and depreciation be taken into account from the original acquisition date.

h) Accounting for acquisitionsThe acquisition of Société Européene de Communications S.A. in 2000 was conducted via a non-cash share issue, in which newly issued sharesin Tele2 were offered in exchange for the outstanding shares in Société Européene de Communications S.A. According to Swedish accountingprinciples, the acquisition price is calculated at a value corresponding to the share price of Tele2 on the transaction date. According to USGAAP, the acquisition price should be set at the share price on the date at which the offer was announced. There are also certain differencesbetween acquired net assets according to US GAAP and Swedish accounting principles. As a result of these differences, the goodwill valuereported, including depreciation according to US GAAP has been adjusted.

i) Deferred tax liabilityAccording to US GAAP, deferred taxes should be reported for all temporary differences apart from certain exceptions. The reversal of deferredtax liabilities as a result of changes in circumstances is done restrictively. According to Swedish accounting principles, changes in circumstancescan be taken into account in the assessment. In conjunction with the liquidation of Société Européene de Communications S.A. in 2001, therewas no longer any differences vis-a-vis US GAAP.

j) SPP insurance refundAccording to Swedish accounting principles, the value of the refund received by Tele2 from SPP should be reported via the income statementin 2000. According to US GAAP, only the cash portion received should be reported as income.

k) Changes in accounting principlesAccording to Swedish accounting principles, changes in accounting principles are reported through a recalculation of the opening sharehold-ers’ equity as if the new principles had been applied already when the transaction arose. According to US GAAP, the change is reported acrossthe income statement when changes in principles are made.

l) Accounting for contingenciesThe application of accounting for contingencies according to US GAAP requires that the company have very stringent requirements that applyin terms of the documentation of contingency planning and proof of its effectiveness. Swedish accounting principles do not apply similarlyrestrictive requirements for accounting for contingencies.


Notes

Subsidiaries:In the acquisition of Société Européene de Communications S.A, there were a number of options programs for senior executives in SEC S.A. Theprograms were not covered by Tele2’s offer to acquire SEC. The terms and conditions of the options are shown below:

Options program Earning period Number of options Exercise price Expiry date

17 May, 1998 3 years to Aug. 1, 2000 8,424,000 1) 2002-07-31

17 May, 1998 3 years to May 19, 2003 4,500,000 DEM 3.50 2004-05-19

17 May, 1999 3 years to May 19, 2004 3,386,000 SEK 30.50 2005-05-19

14 september 1999 3 years to Sept. 14, 2004 100,000 SEK 26.80 2005-09-14

31 May, 2000 3 years to May 31, 2005 3,768,000 SEK 44.90 2006-05-31

1) The exercise price for 2,411,000 options is USD 0.99. the exercise price for 2,410,000 options is USD 1.57 and the exercise price for3,603,000 options is USD 1.09.

Cash flow statement:According to US GAAP, cash flow from current operations should be reported on the basis of the net profit/loss for the year. Swedishaccounting principles permit a cash flow to be drawn up on the basis of other results. See Note 32.

According to US GAAP, blocked funds are reported separately from cash and bank balances in both the balance sheet and in the cashflow statement. See Note 23.

Earnings/loss per share:As opposed to Swedish accounting principles, earnings/loss per share are calculated after dilution, in accordance with US GAAP, and not atthe present value of the exercise price for convertibles.

2001 2000 1999

Profit/loss for the year ............................................................................................................................................ 763 – 900 3,003

Number of shares, weighted average ....................................................................................................... 145,003,847 114,087,366 103,598,394

Earnings/loss per share ................................................................................................................................ SEK 5.26 SEK – 7.89 SEK 28.99

Profit/loss for the year ........................................................................................................................................ 763 – 900 3,003

Reversal, interest for the year after tax on outstanding convertibles ........................................ — — —

Adjusted profit/loss for the year after full dilution ............................................................................. 763 – 900 3,003

Number of outstanding shares after full dilution, weighted average ........................................... 145,223,466 114,224,866 103,850,246

Earnings/loss per share after full dilution ...................................................................................... SEK 5.25 SEK – 7.88 SEK 28.92

Deferred tax:The estimated tax effect in respect of temporary differences reported as deferred tax receivables in reconciliation against accountingaccording to US GAAP is shown below.

2001 2000

Deferred tax liability (–)/-receivable (+) according to Swedish accounting principles ........ 1,764 – 571

Adjustment item .................................................................................................................................................. – 16 – 882

Total deferred tax liability (–)/-receivable (+) according to US GAAP ......................... 1,748 – 1,453

Real value of financial items:Financial items for the Group such as cash and bank balances, current investments, receivables and liabilities, prepaid revenue and currentliabilities to financial institutions are regarded as corresponding to the real value since they are of a short-term nature. The book value oflong-term liabilities to financial institutions and options issued are also regarded as corresponding to the real value.

Comprehensive Income:Comprehensive Income encompasses the profit/loss for the year and changes in translation differences.

2001 2000 1999

Comprehensive Income:

Profit/loss according to US GAAP ................................................................................................................ 763 – 900 3,003

Changes in translation differences according to US GAAP ............................................................. 2,149 – 73 21

Comprehensive income according to US GAAP ........................................................................... 2,912 – 973 3,024

Accumulated comprehensive income

Accumulated comprehensive income according to US GAAP, Jan. 1 ........................................ – 21 52 31

Changes in translation differences according to US GAAP ............................................................. 2,149 – 73 21

Accumulated comprehensive income according to US GAAP. Dec. 31 ....................... 2,128 – 21 52

Advertising expenses:Total advertising costs for the year amounted to SEK 1,031 million (2000: SEK 630 million; 1999: SEK 168 million).


Stockholm, March 26, 2002

Pål Wingren Hans KarlssonAuthorized Public Accountant Authorized Public Accountant

Audit report

To the General Meeting of the shareholders of Tele2 AB (publ)Corporate identity number 556410-8917

We have audited the annual accounts, the consolidated accounts, the accounting records and the administration of the board ofdirectors and the managing director of Tele2 AB ( publ) for the year 2001. These accounts and the administration of the companyare the responsibility of the board of directors and the managing director. Our responsibility is to express an opinion on the an-nual accounts, the consolidated accounts and the administration based on our audit.

We conducted our audit in accordance with generally accepted auditing standards in Sweden. Those standards require that weplan and perform the audit to obtain reasonable assurance that the annual accounts and the consolidated accounts are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in theaccounts. An audit also includes assessing the accounting principles used and their application by the board of directors and themanaging director, as well as evaluating the overall presentation of information in the annual accounts and the consolidatedaccounts. As a basis for our opinion concerning discharge from liability, we examined significant decisions, actions taken and cir-cumstances of the company in order to be able to determine the liability, if any, to the company of any board member or themanaging director. We also examined whether any board member or the managing director has, in any other way, acted in con-travention of the Companies Act, the Annual Accounts Act or the Articles of Association. We believe that our audit provides a rea-sonable basis for our opinion set out below.

The annual accounts and the consolidated accounts have been prepared in accordance with the Annual Accounts Act and,thereby, give a true and fair view of the company’s and the group’s financial position and results of operations in accordance withgenerally accepted accounting principles in Sweden.

We recommend to the general meeting of shareholders that the income statements and balance sheets of the parent companyand the group be adopted, that the loss in the parent company be dealt with in accordance with the proposal in the administrationreport and that the members of the board of directors and the managing director be discharged from liability for the financial year.

Stockholm March 20, 2002

Jan Hugo StenbeckChairman

Lars-Johan Jarnheimer Marc BeulsPresident

Vigo Carlund Bruce Grant Sven Hagströmer

Håkan Ledin Per Törnberg Lars Wohlin

Our auditors’ report was submitted on March 26, 2002

Pål Wingren Hans KarlssonAuthorized Public Accountant Authorized Public Accountant


Addresses

Tele2 ABSkeppsbron 18 P.O. Box 2094103 13 Stockholm, SwedenPhone:+46 8 5620 0060Fax: +46 8 5620 0040

Investor Relations30 St James’ SquareGB-SW1Y 4JH, London, UKPhone:+44 20 7321 5010Fax: +44 20 7321 5020

NordicSwedenTele2 Sverige ABBorgarfjordsgatan 16P.O. Box 62SE-164 94 Kista, SwedenPhone:+46 8 5626 4000Fax: +46 8 5626 4200Customer services: (only for customers in Sweden)0200-25 25 25 (Internet)0200-25 25 25 (fixed telephony)0200-22 20 40 (mobile telephony)

Comviq P.O. Box 62164 94 Kista, SwedenPhone:+46 8 5626 4000Fax: +46 8 5865 3444Customer services: (only for customers in Sweden)0200-22 20 40 (households)0200-22 40 50 (businesses)

KabelvisionP.O. Box 62SE-164 94 Kista, SwedenPhone:+46 8 5626 4352Fax: +46 8 5865 4840

Datametrix ABP.O. Box 20078SE-161 02 Bromma, SwedenPhone:+46 8 5220 0200Fax: +46 8 5220 0290

NorwayTele2 Norge ASUlvenveien 75ANO-0581 Oslo, NorwayPhone:+47 21 31 90 00Fax: +47 21 31 91 00

Datametrix ASGrenseveien 95NO-0663 Oslo, NorwayPhone:+47 23 03 59 00Fax: +47 23 03 59 01

DenmarkTele2 A/S Gammel Køge Landevej 55 DK-2500 Valby, DenmarkPhone:+45 77 30 10 01Fax: +45 77 30 10 00

Datametrix A/SGammel Køge Landevej 55–57DK-2500 Valby, DenmarkPhone:+45 77 30 10 60Fax: +45 77 30 10 61

FinlandTele2 FinlandSentnerikuja 3 FIN-00440 Helsinki, FinlandPhone:+358 9 74 22 12 45Fax: +358 9 74 22 12 46

Datametrix OyP.O. Box 5FIN-01301 Vanda, FinlandPhone:+358 9 47 64 82 00Fax: +358 9 47 64 82 10

Eastern Europe and RussiaEstoniaOÜ Levicom BroadBandAhtri 12, EE-10151 Tallinn, EstoniaPhone:+372 6105 780Fax: +372 6105 781

LatviaSIA Tele2Kurzemes Prospectus 13Riga LV-1067, LatviaPhone:+371 960 99 99Fax: +371 709 01 76

LithuaniaUAB Tele2Sporto g. 7aLT-20 51 Vilnius, LithuaniaPhone:+370 2 366 300Fax: +370 2 366 301

PolandTele2 Polskaul. Poste-pu 15PL-02-676 Warsaw, PolandPhone:+48 (22) 549 50 60Fax: +48 (22) 549 50 61

Czech RepublicTele2 s. r. o. Vinohradská 184, Praha 3, CZ-130 00, Czech RepublicPhone:+420 267 13 22 38Fax: +420 274 77 82 40

RussiaFORA Telecom B.V. (Tele2)B. Gnezdnikovsky Per., 1str.2, 7 floorRU-103 009, Moscow, RussiaPhone:+7 095 797 21 61Fax: +7 095 797 21 62

SwedenX-Source ABP.O. Box 416129 44, 129 04 Hägersten, SwedenPhone:+46 8 5222 3500Fax: +46 8 5222 3552


Central EuropeGermanyTele2 Telecom Services GmbHIn der Steele 39a, DE-40599 Düsseldorf, GermanyPhone:+49 211 7600 4600Fax: +49 211 7400 448

NetherlandsTele2 Nederland B.V.Ellermanstraat 19NL-1099BX Amsterdam, NetherlandsPhone:+31 207 020 202Fax: +31 207 020 222

SchweizTELE2 Telecommunication Services AGPostfach 49CH-8037 Zürich, SchweizPhone:+41 1 524 24 24Fax: +41 1 524 47 78

AustriaTele2 Telecommunication Services GmbHSchönbrunnerstr. 213–215, 4 floorAT-1120 Vienna, AustriaPhone:+43 181 101 300Fax: +43 181 101 100

IrelandTele2 Telecommunication Services LtdOffice 4, O’Duffy Centre, Main Street, Carrickmacross, Co Monaghan, IrelandPhone:+353 42 969 2946Fax: +353 42 969 2947

Southern EuropeFranceTele2 (France) S.A.14 Rue des Frères Caudron FR-78143 Vélizy cedex, FrancePhone:+33 1 39 45 44 44Fax: +33 1 39 45 44 00

ItalyTele2 Italia SpAVia Cassanese 210IT-20090 Segrate Milan, ItalyPhone:+39 02 269 571Fax: +39 02 269 204 37

SpainTele2 Telecommunication Services S.L.Francisco de Ricci,3, ES-28015 Madrid, SpainPhone:+34 91 540 28 00Fax: +34 91 540 28 01

LuxembourgLuxembourgTango S.A.177, rue de Luxembourg, LU-8077 Bertrange, LuxembourgPhone:+352 27 777 101Fax: +352 27 777 888

3C Communications S.A.75 route de LongwyLU-8080 Bertrange, LuxembourgPhone:+352 27 750 101Fax: +352 27 750 250

Transac S.A.3, rue de l’AbattoirLU-3409 Dudelange, LuxembourgPhone:+352 27 754 101Fax: +352 27 754 300

LiechtensteinTele2 AG75 route de Longwy, LU-8080 Bertrange, LuxembourgPhone:+352 27 750 101Fax: +352 27 750 250

BelgiumTele2 Belgium N.V.75 route de Longwy, LU-8080 Bertrange, LuxembourgPhone:+352 27 750 101Fax: +352 27 750 250

Branded products & servicesOptimal Telecom ABP.O. Box 62 SE-164 94 Kista, SwedenPhone:+46 8 5626 2500Fax: +46 8 5626 2525

Optimal Telecom A/SKarl Jacobsen vej 20DK-2500 Valby, DenmarkPhone:+45 77 30 12 90Fax: +45 77 30 00 56

IntelliNet France S.A.75, route de LongwyLU-8080 Bertrange, LuxembourgPhone:+352 459 54 51 Fax: +352 459 551

IntelliNet Telecom.Serv.GmbHSchmidtstrasse, 51D-60326 Frankfurt, GermanyPhone:+49 697 500 140Fax: +49 697 500 14 29

Everyday.comP.O. Box 17041SE-104 62 Stockholm, SwedenPhone:+46 8 5889 8400Fax: +46 8 5889 8401

C3 Calling Card Company1 Mill StreetGB-London SE1 2DE, UKPhone:+44 207 232 4949

Tele2 UK Communications LtdKingstons House 15,Coombe RoadGB-London RG2 OSY, UKPhone:+44 208 957 1900Fax: +44 208 957 1901

Adresser


Definitions

D E F I N I T I O N S

Text in parentheses refers to financial ratios after full conversion.

LiquidityCash and cash equivalents, including unutilized credit facilitiesgranted.

Net borrowingInterest-bearing liabilities (less convertible debentures) less inter-est-bearing assets.

InvestmentsAcquisition and divestment of fixed assets, including investmentsthrough financial leases, and investments not qualifying as cashequivalents.

SolidityShareholders’ equity (including convertible debentures) divided bytotal assets.

Debt-equity ratioInterest-bearing net debt divided by shareholders’ equity at theend of the period.

Return on shareholders’ equityProfit/loss after tax less items affecting comparability, minorityinterests after tax deductions (and interest expense for convert-ible debentures after tax deductions) divided by average equity(including convertible debentures).

Capital employedTotal assets less provisions, minority interests and non-interest-bearing liabilities.

Return on capital employedProfit/loss after financial items less items affecting comparabilityand financial costs (less interest expense for convertible deben-tures) divided by average capital employed.

Average interest rateInterest expense (less interest expense for convertible deben-tures) divided by average interest-bearing liabilities (less convert-ible debentures).

Profit/loss per shareProfit/loss for the period (less interest expense on convertibledebentures, and less tax deductions) divided by the weightedaverage number of shares outstanding during the fiscal year (thatwould result from full conversion of convertible debentures).

Shareholders’ equity per shareShareholders’ equity (including convertible debentures) less minori-ty interests, divided by the weighted average number of shares out-standing during the fiscal year (that would result from full conver-sion of convertible debentures).

Cash flow per shareBased on cash flow from operating activities before investmentand financing activities.

Dividend per share Based on the dividend distributed or proposed each year.

P/E ratioShare price divided by profit/loss per share.

ARPU Average monthly revenue per customer.

MoUMinutes of monthly usage per customer.

G L O S S A R Y

CRM – Customer Relationship Management – often uses com-puter-based systems.

DSL – Digital Subscriber Line.Generic name covering several different technologies for datatransmission over fixed phone lines.

GPRS – General Packet Radio Service.A technology that permits high-capacity data transmission usingmobile phones.

GSM – Global System of Mobile Communications or GroupeSpécial Mobile. 2nd-generation mobile telephony system. Digital,as opposed to analog NMT.

HSCSD – High Speed Circuit Switched Data.A technology fordata transmission over mobile networks. Uses the GSM system asa base.

IP – Internet Protocol.A series of rules for communication among computers over theInternet.

LAN – Local Area Network.Local network of computers, often in the same room or building.

MVNO – Mobile Virtual Network Operator.MVNO’s have greater network resources than Service Providerswith which to offer their own telecom services to subscribers.But they do not have radio access network capacity, which mustbe purchased from a network operator.

NMT – Nordic Mobile Telephone.Ordinarily identified as the 1st-generation mobile telephony.Ananalog technology developed in the Nordic region.

SMS – Short Message Service.Enables the transmission of short text messages between mobilephones or between a computer that is connected to the Internetand a mobile phone.

SP – Service Provider.A company that purchases capacity from network operators withwhich it can sell telecom services to its subscribers.

UMTS – Universal Mobile Telecommunications System.A technology for 3rd-generation mobile telephony intended tohandle, text, images, and video. UMTS is based on GSM technolo-gy but has much greater capacity.

VOIP – Voice Over Internet Protocol.Telephony that uses Internet Protocol.

VPN – Virtual Private Network.A service that links a company’s local and telecom networks withthe computers and phones of employees who work remotely,forming a telecom or data communications network that looks tousers like a single business network.

WAN – Wide Area Network.A network of computers on different locations. Often consists ofseveral LANs linked together.

WAP – Wireless Application Protocol.An industrial standard for Internet-based data communicationsover mobile networks. Developed by the WAP Forum, consistingof big corporations like Ericsson, IBM, Motorola and Nokia.

WLL – Wireless Local Loop.Wireless broadband access via radio networks.

Sources: Computer Sweden, Mobiltelebranschen, SvenskaDatatermgruppen, and Tele2.

TELE2 ABSkeppsbron 18P.O. Box 2094SE-103 13 StockholmPhone +46 8 5620 0060 Fax +46 8 5620 0040E-mail [email protected] identificationNo.: 556410-8917

” A company that knows where it is goingViking Kjellström, HSBC

” Lean, Mean Growth MachineLena Hansson, Julius Bär

” The IKEA of TelecomsTómas Tómasson, Schroder Salomon Smith Barney

Solberg. Print: On Paper.

Tele2 A

nnual Rep

ort 2001

Date post:	16-Nov-2014
Category:	Investor Relations
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