CMD2012 - Niklas Sonkin - Market Area Central Europe and Eurasia

Capital Markets Day Niklas Sonkin, Market Area Director Central Europe and Eurasia

December 12, 2012

91 Tele2 Capital Markets Day 2012

Kazakhstan EBITDA CapEx Net sales

2% -4% 13%

• Continued rapid market share growth

* Figures represent contribution to group; YTD Q3 2012


More than 3 mln subscribers Customers ’000

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Strong customer intake

leading to doubling of

customer market share YoY

New agreement on MTR

reductions MTR development

Highlights since last Capital Markets Day

Customer market share

Q3 2011

Q3 2012


Kazakhstan macro overview

0%

5%

10%

15%

20%

Inflation

0%

2%

4%

6%

8%

10%

GDP development

0%

2%

4%

6%

8%

Unemployment rate

14,500

15,000

15,500

16,000

16,500

17,000

Population (’000)

Source: International Monetary Fund


-20%

0%

20%

40%

60%

80%

100%

Share of net subscriber additions

Tele2

Kcell/Activ

Beeline

Dalacom/Pathword

Competitive environment

0%

20%

40%

60%

80%

100%

Customer market share

1.8% 3.5% 5.5% 6.4% 7.7% 10.5% 12.1% -3% 23% 34% 21% 54% 56% 35%*

* Q3 ’12 including customer base adjustment


Revenue growth

30%

35%

40%

45%

3%

4%

5%

45%

50%

55%

60%

0%

5%

10%

15%

Customer

market share

Revenue market

share


Customer base, MOU and ARPU

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Number of customers (’000)

0

10

20

30

40

50

60

70

80

90

0

200

400

600

800

1,000

1,200

Customer MOU and ARPU (KZT)

ARPU

MOU


Market has seen sharp fall in average price per

minute

Note: Average price per minute calculated by using officially reported MOU, ARPU and customer

market share (including data, handset and interconnect revenue)

Kazakhstan telecom market

pricing development since

Tele2’s market entry

0

0.01

0.02

0.03

0.04

0.05

0.06

0.07

0.08

0.09

Average price per minute (USD cents)


On target for EBITDA break-even

Tele2 expects to reach EBITDA break-even by 2H 2013

• GM1 margin at all-

time high

• Positive EBITDA

margin development

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

GM1 and EBITDA margin development

GM1%

EBITDA%


Distribution strategy

32 monobrand stores

678 dealers

5,999 points of sale

Online store


Highly satisfied customers

0

20

40

60

80

100

120

140

Q1 2012 Q2 2012 Q3 2012

Customer service KPIs (seconds)

Average handlingtime

Average speed ofanswer

Target

Target

88%

90%

92%

94%

96%

98%

Q1 2012 Q2 2012 Q3 2012

Customer satisfaction

Phone

Shops

Target

Customer satisfaction

second only to Russia in

the Tele2 Group

Further improvements

through introduction of

social media monitoring,

new staff learning

concepts and feedback

pages


0%

5%

10%

15%

20%

25%

Customer market share per region Almaty

Astana, Kokshetau and Akmolinsk region

Pavlodar

Taraz, Zhambyl

Petropavlovsk and North Kazakhstan

Aktau and Mangistau Region

Oskemen, Semipallatinsk and EastKazakhstanKostanay

Aktobe

Shymkent and South Kazakhstan

Uralsk and Western Kazakhstan

Kyzylorda

Karaganda

Strong presence in largest regions

Almaty Strong price and

quality perception

Six regions equal

47% of total population

20

.2%

8.9

%

6.3

%

4.4

%

3.3

%

3.4

%

15

.8%

4.7

%

8.3

%

5.2

%

3.7

%

4.3

%

8.1

%

3.3

%

Regional population as

proportion of country total


Further differentiation in price and packaging

Pricing

On-net offerings, friends package,

volume-based data pricing

Different offers for different

target groups


Mobile internet growth

Volume-based pricing

Profiting from rapid increase in

data traffic and high margins

Data revenue as % of

Total revenue: 12.2%

Service revenue: 18.4%

”Best value for

money” Profit.kz, May 2012

0

400

800

1,200

1,600

2,000

Data revenue development (USD ’000)


Licenses – spectrum comparison

900 MHz

1800 MHz

2100 MHz

11 MHz

GSM/UMTS

5 MHz

GSM

20 MHz

UMTS

LTE

CDMA

6 MHz

GSM

10 MHz

GSM

20 MHz

UMTS

7 MHz

GSM

5 MHz

GSM

20 MHz

UMTS

10 MHz

20 MHz

in 1800 MHz


0

500

1,000

1,500

2,000

2,500

3,000

Number of activated base stations

Rapid network rollout

80% population coverage

Target 92% in 2015

Almaty

Taldykorgan

Karagandy Aktobe

Oral

Aktau

Kyzyl-Orda

Kokshetau

Astana

Petropavl

Kostanay Pavlodar

Shymkent

Taraz

Semey

Oskemen

Atyrau

2,517 base stations


Regulatory environment

New MTR agreement signed

MTRs will continue to go down

according to new agreement for

2012 to 2015

20.0

16.5 15.3

13.0 11.1

9.4

0.0

5.0

10.0

15.0

20.0

25.0

MTR development (KZT)

50.8%

44%

46%

48%

50%

52%

Incoming vs. outgoing traffic


Engaged employees

Best-in-class employee

engagement

Yearly survey ”MyVoice” shows

record high engagement levels

and employee satisfaction

617 employees

17 regional offices

0%

10%

20%

30%

40%

50%

60%

Employee engagement index

Tele2 KZ

Global Benchmark


Solid governance structure

Local partner

Supervisory Board

Advisory Board

Tele2 Group best practices

Tele2

51% Asianet Holding

49%

Tele2 Kazakhstan


Summary • Tele2 has made an impact on the

market

• On path towards profitability

• Improving customer and revenue

market share

CMD2012 - Niklas Sonkin - Market Area Central Europe and Eurasia

Investor Relations