Telio – Q2 – 05 presentation “They [Telio] have no baggage – it’s just pure VoIP built by sharp people who really understand the technology. Jon Arnold,

Telio – Q2 – 05 presentation

“They [Telio] have no baggage – it’s just pure VoIP built by sharp people who really understand the technology.

Jon Arnold, industry analyst

“We believe the Norwegian market to be the home of the most advanced and successful of the access-independent VoIP operators we have encountered in Europe - Telio”

James Enck, telecom analyst

Agenda today`s presentation

Highlights New Management Q2-05 Telio Structure Market and competition Outlook Q&A

Telio highlights

Norways first, largest and fastest growing ITSP (Internet Telephony Service Provider)

Offices in Norway, Sweden, Denmark, Holland and Switzerland Telio technical management and advisory board include many of the worlds pre-

eminent SIP and VoIP experts New top management in place from mid-August 60 employees and more than 65 000 subscribers (Norway + Denmark) Over the summer approx 8.000 customers added Q2 revenues of 42,7 MNOKs and H1 revenues of 77,7 MNOKs Q2-05 pre tax profit of 5,7 MNOK and H1 pre tax profit of 11,9 MNOKs Offering technology platform on OEM basis to ISPs/carriers

Enables rapid, low risk, low cost entry into VoIP for anyone with an installed customer base.

Agenda today`s presentation

Highlights New Management Q2-05 Telio Structure Market and competition Outlook Q&A

New Managment

New CEO – Arild Nilsen Prev. Experience:

1992-1995 McKinsey – Senior Consultant 1995-2000 NetCom - Operations and Technical Director, Business Market Director and Product Market

Director 2001-2005 Glastad Invest - CEO

New CFO - Kyrre Grinde-Andersen Prev experience

1987-1989 Deloitte management consultants 1989-1995 Schlumberger Ltd. 1995-2001 Kodak Norge as 2001-2005 Sense Communiactions Int. AS

The founders recognize the need to include execution resources as the company grows.

Founders will still play a significant role in the development of the company

Agenda today`s presentation

Highlights New Management Q2-05 Telio Structure Market and competition Outlook Q&A

Sales/quarter

0

5

10

15

20

25

30

35

40

45

Q1-04 Q2-04 Q3-04 Q4-04 Q1-05 Q2-05

Financials – Group- Profit & Loss Statement

Group

2005 unaudited Q2 2005 Ytd Q2 2005 FY 2004

Sales revenue 42 650 77 726 42 096Other operating revenues 0 0 705Total operating revenues 42 650 77 726 42 801

Cost of goods sold 11 477 23 451 15 443Personnel costs 4 079 8 797 6 313Depreciations 1 964 3 589 2 375Other operating expenses 19 446 30 000 15 844Total operating expenses 36 966 65 837 39 974

Operating profit 5 684 11 889 2 826

Financial income 248 258 125Financial expenses 220 272 515

Profit before taxes 5 712 11 874 2 436

Financials – Group- Balance sheet - Assets

2005 unaudited Jun 30, 2005 Mar 31, 2005 Dec 31, 2004Assets

Fixed AssetsIntangible assetsIT platform and other intangible rights 8 748 7 317 6 775Total intangible assets 8 748 7 317 6 775

Tangible fixed assetsPlant, machinery, operating equipment, fixtures etc 20 544 18 888 16 397Total tangible fixed assets 20 544 18 888 16 397

Fixed assets investmentsInvestments in subsidiary 0 0 0Total fixed assets investments 0 0 0

Total non-current assets 29 292 26 206 23 172

Currents assetsDebtorsAccounts receivables 28 707 20 486 9 729Other receivables 1 523 3 525 5 358Total debtors 30 230 24 010 15 087

Cash and bank deposits 24 995 7 138 5 987

Total current assets 55 225 31 148 21 074

TOTAL ASSETS 84 517 57 354 44 247

Financials – Group- Balance sheet – Equity & Liabilities

2005 unaudited Jun 30, 2005 Mar 31, 2005 Dec 31, 2004

EQUITY AND LIABILITIES

EQUITY

Called-up and fully paid share capital

Share capital 179 171 171

Share premium reserve 43 695 28 468 28 368

Total capital and reserve 43 874 28 639 28 539

Retained earnings

Other equity 12 076 7 035 1 928

Total retained earnings 12 076 7 035 1 928

Total equity 55 950 35 674 30 467

LIABILITIES

Provisions for liabilities and charges

Deferred tax liabilities 412 294 262

Total provisions for liabilities 412 294 262

Other long-term liabilities

Financial lease liability 5 798 3 399 3 548

Total other long-term liabilities 5 798 3 399 3 548

Current liabilities

Accounts payable 16 496 8 168 6 377

Current tax 2 183 1 190 313

Unpaid government charges and special taxes 56 1 708 1 204

Other current liabilities 3 622 6 922 2 076

Total current liabilities 22 357 17 988 9 970

Total liabilities 28 567 21 681 13 780

TOTAL EQUITY AND LIABILITIES 84 517 57 354 44 247

Financials contd

Q2 2005 22 % revenue growth quarter on quarter (42% growth on a comparable

basis as Q1 included one-of revenue) Nearly 1000 % revenue growth year on year Sales&marketing costs reflect high activity in the distribution channels

and somewhat higher customer acquisition costs. Equity Management Associates (EMA) og Kinderhook Partners

acquired 1.340.000 shares out of which 670.000 were through a direct placement. This represents approx. 7,5% of the company.

UNAUDITED

Agenda today`s presentation

Highlights New Management Q2-05 Telio Structure Market and competition Outlook Q&A

Telio structure – final result of work in progress

Svenska Telio AB

Telio BvNetherlands

TelioTelecom AS

Telio Aps(Denmark)

Telio SA

TelioHolding AS

- Hub for tech devt and network operations (ca 60 empl)

- Commercial team for OEM business- Key developers

-Hub for consumer IP-comm. offering-Offering IP-comms in Norway

- OEM contract with InterNL.net.- Offered to consumers as Obtibel (www.optibel.nl)

- Musimi offering to danish consumers - Preparing Telio brand offering

Agenda today`s presentation

Highlights New Management Q2-05 Telio Structure Market and competition Outlook Q&A

Telio is undisputably No.1 VoIP player in Norway

More than 65,000 total customers (Norway + Denmark) 8,000 new customers over the summer Telio maintains its momentum and leading position in Norway

Many small players will not survive much longer due to capital contrains

Compared to next largest competitor (Nextgentel), Telio’s growth during summer is larger than Nextgentel’s total VoDSL customer base

2004 results MNOK

Telio IP24 Tele VoIP

Briiz One Call AS Phonect AS

Omsetning 42,1 2,4 1,2 1,4 0,1 0,1

Res. f.skatt 2,4 -3,6 -0,27 -2,9 -0,9 -0,7

EK 30,5 -1 -,016 -2,1 -0,03 -1

Telio no. 1 position will be further enhanced through expansion in distribution and whitelabel in Norway…

Norway Key focus going forward is primary line replacement with high value add

mobile integration services Telio target market segment is and will still be high volume callers Other customer segments in Norway can be served by white label Distribution channels need to be added (e.g. Netthandelen), but TM and

www.telio.no will continue to be important in the near to mid-term Important to strengthen Sales and Market and Customer Service

departments in order to continue the growth (temps in CS)

… and international

International Musimi in Denmark still going strong, but Telio will launch the Telio brand

name and services this year Sweden and Holland so far on white-label. Holland in operation, Sweden in

operations Q1-06 Early stage white-label discussions going on in other countries, but long lead

time to close deal Other countries are being investigated as part of the development of an

international expansion strategy

New services will play an important role in building value add to the customers

New services will continue to be rolled out – launched in H1: Conference Bridge with international dial in numbers (8 countries so far, more

countries will be added) PC centric soft phone with video capabilities:

””TidTid: 28. august 2005, 01:30 AM lokal tid . august 2005, 01:30 AM lokal tid Sted: SAS Business class, Bangkok-Copenhagen, SK972 Sted: SAS Business class, Bangkok-Copenhagen, SK972 Posisjon: Et sted over diktaturstaten Myanmar, 9500 moh, 950km/h Posisjon: Et sted over diktaturstaten Myanmar, 9500 moh, 950km/h Samtale: til norsk mobilnummer Samtale: til norsk mobilnummer Utstyr: Laptop med wireless card og Softphone, SAS inflight WLAN Utstyr: Laptop med wireless card og Softphone, SAS inflight WLAN Provider: Boeing Connexions high speed satellite internet (på alle SK interkontinentale Provider: Boeing Connexions high speed satellite internet (på alle SK interkontinentale flyvinger) flyvinger) Resultat: Noe ekko på mottakerside, ellers utmerket samtalekvalitet”Resultat: Noe ekko på mottakerside, ellers utmerket samtalekvalitet”

Many new value added services are either in development or being researched. Many new value added services are either in development or being researched. Focus on sales promoting and mobile integration featuresFocus on sales promoting and mobile integration features

Agenda today`s presentation

Highlights New Management Q2-05 Telio Structure Market and competition Outlook Q&A

Telio outlook

Top and bottom line growth will continue into Q3 Customer growth somewhat lower in Q3 than Q2 due to summer (but growth

Q3 still nearly 300 % higher than Q3 last year) Reduced SG&A spending due to lower customer growth New distribution channels will be brought online New very high value service features will be launched in Q3 and Q4

Agenda today`s presentation

Highlights New Management Q2-05 Telio Structure Market and competition Outlook Q&A