TeliaSonera Acquisition of MCT Corp. Coscom in Uzbekistan Indigo and Somoncom in Tajikistan Roshan in Afghanistan

Transcription

1 TeliaSonera Acquisition of MCT Corp. Coscom in Uzbekistan Indigo and Somoncom in Tajikistan Roshan in Afghanistan

2 Strategic Acquisition Rationale TeliaSonera will be the leading operator in Central Asian markets Now: Uzbekistan, Tajikistan and Afghanistan Existing via Fintur: Kazakhstan, Azerbaijan, Georgia and Moldova Existing direct & unconsolidated: Turkey (incl. Ukraine indirectly) and Russia (incl. Tajikistan indirectly) Attractive Growth Opportunity in terms of Addressable Market 10%-20% mobile penetration Less than 10% Fixed Line Penetration à wireless is attractive TeliaSonera (Scandinavia, Baltics) Fintur Megafon MCT Turkcell Yoigo Natural Addition to TeliaSonera s Eurasian Footprint Uzbekistan, Tajikistan and Afghanistan complement current map in Central Asia Significant economic/cultural ties between Kazakhstan, Azerbaijan, Tajikistan and Uzbekistan Company and Shareholders Honoring International Business Practices Company s operations developed by international practices: audited, subject to US rules

3 Acquisition Cost Acquisition of 100% of MCT Corp for a enterprise value of approximately SEK 2.0 billion (USD 300 million) holding interest in four Eurasian mobile operators: 99.97% interest in Uzbek-American Joint Venture Coscom LLC (Coscom) in Uzbekistan 60% interest in CJSC Indigo- Tajikistan (Indigo-Tajikistan) in Tajikistan and 59.4% in CJSC Joint Venture Somoncom (Somoncom) in Tajikistan 12.25% interest in Telecom Development Company Afghanistan Limited (Roshan) in Afghanistan Management and Financing Companies 100% MCT Corp. Delaware Corporation Venture Holdings MCT Dev. Corp. Delaware Corp. 100% Coscom Telecom Dev. Co. Afghanistan B.V % TeliaSonera Sonera Holding BV 100% 100% Local Ventures Indigo-Tajikistan CATD B.V. 100% Netherlands 60% Somoncom 99% Roshan 100% MCT Telecom Corp. Delaware Corp. 100% Coscom 99.97%

4 Acquired Companies Company Standard MCT Interest Subscribers Market Share (E) Market Position (E) Revenues USD m 2006 EBITDA USD m EBITDA Margin Coscom/Uzbekistan GSM 900/ 1800 Mhz (as of May 31, 2007) 99.97% 392,929 11% # % Total Tajikistan 377,192 27% # % Indigo GSM 900 / G-UMTS 60.00% 171,943 12% % Somoncom GSM 900 /1800 3G-UMTS 59.40% 205,249 15% % Roshan/Afghanistan GSM 900 / 1800 Mhz 12.25% 1,300,300 50% # %

5 New Mobile Markets Uzbekistan Tajikistan Afghanistan Mobile market consists of four operators, including three GSM and one CDMA operators. Mobile market consists of nine operators; 5 GSM/UMTS (2 belong to MCT) 4 CDMA Five GSM licenses, two of which were to commence operations in Market Share of Mobile Operators Market Share of Mobile Operators Market Share of Mobile Operators As of May 2007E As of May 2007E As of May 2007E Coscom, ~ 11% Perfectum (CDMA), ~ 4% Unitel (Beeline), ~ 33% Uzdunrobita (MTS), ~ 52% ~ 13% Takom (Beeline), ~ 13% MLT (MegaFon), ~12% Other (CDMA), Babilon Mobile, Indigo*, ~27% ~ 35% AWCC, ~ 38% Areeba, ~ 12% Roshan, ~ 50% * Indigo and Somoncom combined

6 Coscom, Uzbekistan Subscribers (as of May 31, 2007) 392,929 Market Share 11% Position in the Market # 3 Prepaid / Total Subs (approx.) 63% MCT Interest 99.97% Standard GSM 900/1800 Mhz Network Launch 1997 Coverage 20% territory base, 66% population base 2006 ARPU (monthly) USD 7.4 Brand Coscom (Postpaid) Real (Prepaid) First GSM operator in Central Asia Leader in serving Uzbekistan corporate segment High quality customer service Well established distribution network in main cities ISO 2001 quality certification Revenues (2006YE) EBITDA (2006YE) USD 26.3 million USD 5.8 million EBITDA Margin (2006YE) 22%

7 Somoncom,Tajikistan Subscribers (as of May 31, 2007) 205,249 Market Share 15% Position in the Market (Combined with Indigo) # 2 Prepaid / Total Subs (approx.) 58% MCT Interest 59.4% Standard Network Launch GSM 900 / 1800 Mhz 3G-UMTS GSM:1999 in Khujand, center of the noth regions. UMTS: 2006 license received and trial launched First GSM operator in Tajikistan Leader in the North Tajikistan Seamless network with Indigo Strong Coverage Area Strong Distribution Network Coverage All cities in the North regions, (90% of population jointly with Indigo) 2006 ARPU (monthly) USD 9 Indigo (Postpaid) Brand Salom & Real (Prepaid) Revenues (2006YE) USD 13.3 million EBITDA (2006YE) USD 6.8 million EBITDA Margin (2006YE) 51%

8 Indigo,Tajikistan Subscribers (as of May 31, 2007) 171,943 Market Share 12% Position in the Market (Combined with Somoncom) # 2 Prepaid / Total Subs (approx.) 20% MCT Interest 60% Standard GSM 900 / 1800 Mhz 3G-UMTS Seamless network with Somoncom 40% corporate customer share Strong Coverage Area Network Launch Coverage GSM: 2001 in Dushanbe to cover South regions of Tajikistan. UMTS: 2006 All cities in the South regions (90% of population jointly with Somoncom) 2006 ARPU (monthly) USD 12.2 Brand Indigo (Postpaid) Salom & Real (Prepaid) Revenues (2006YE) USD 14.0 million EBITDA (2006YE) USD 6.9 million EBITDA Margin (2006YE) 49%

9 Roshan, Afghanistan Subscribers (as of May 31, 2007) 1,300,300 Market Share 50% Position in the Market # 1 Prepaid / Total Subs 100% MCT Interest 12.25% Standard GSM 900/1800 Mhz Network Launch ARPU (monthly) USD 21.7 The leading mobile operator in Afghanistan Strong network coverage Strong brand Strong management Brand Roshan (Prepaid) Revenues (2006YE) EBITDA (2006YE) USD million USD 66.5 million EBITDA Margin (2006YE) 35%

10 Corporate Social Responsibility TeliaSonera has a transparent way of working in CIS countries We are committed to our Code of Ethics & Conduct We will ensure solid internal control environment TeliaSonera recognizes its corporate social responsibilities and will keep acting as a good citizen in the new markets

11 The MCT acquisition underlines TeliaSonera s strategy in Eurasia To be the leading Eurasian mobile operator Create shareholder value by considering all possible value enhancing alternatives Combine Eastern positions to create stronger platform for growth Evaluate new acquisition opportunities Continue the profitable growth within the current footprint

12 Appendix Country information

13 Appendix 1. Overview of the New Countries Country: Uzbekistan Tajikistan Afghanistan Population: 27.8 million (July 2007) 7.1 million (July 2007) 31.9 million (July 2007) Area: 450,000 sq km 143,100 sq km 647,500 sq km GDP: USD billion (2006 est.) USD 2.1 billion (2006 est.) USD 8.8 billion (2006 est.) Mobile Service Revenues (07E) & ~ as % of GDP: Mobile Subscribers and Penetration Rates (May 07E) Fixed Line Subscribers and Teledensity: Internet Development: USD 460 million / 1.7% USD 170 million / 7% USD 450 million / 4.3% 3.6 million / 13% 1.6 million / 20% 2.6 million / 8% 1.98 million / 7.4% 250,000 / 3.8% 110,000 / 0.4% 425 providers / 1,080,000 internet users # of Operators 4 operators, including 3 GSM and 1 CDMA operators. 12 providers / 6,000 internet users 9 operators; 5 GSM/UMTS (2 belong to MCT) 4 CDMA 8 providers / 30,000 internet users 5 GSM licenses, 2 of which were to commence operations in Source: CIA World Factbook

14 Appendix 2. New Countries-Demographics Country: Uzbekistan Tajikistan Afghanistan Age Distribution: 0-14 years: 32.9% years: 62.3% 65 years and over: 4.8% 0-14 years: 37.9% years: 57.4% 65 years and over: 4.8% 0-14 years: 44.6% years: 53% 65 years and over: 2.4% Median age: 22.7 Median age: 20 Median age: 17.6 Gender Distribution: Ethnic Distribution: 50.4% female, 49.6% male 50% female, 50% male 51% male, 49% female Uzbek 80%, Russian 5.5%, Tajik 5%, Kazakh 3%, Karakalpak 2.5%, Tatar 1.5%, other 2.5% Tajik 79.9%, Uzbek 15.3%, Russian 1.1%, Kyrgyz 1.1%, other 2.6% Pashtun 42%, Tajik 27%, Hazara 9%, Uzbek 9%, Aimak 4%, Turkmen 3%, Baloch 2%, other 4% Religions: Muslim 88%, Eastern Orthodox 9%, other 3% Sunni Muslim 85%, Shi'a Muslim 5%, other 10% Sunni Muslim 80%, Shi'a Muslim 19%, other 1% Working Population: Source: CIA World Factbook 53% 51% 60%

15 Appendix 3. New Countries-Economic Indicators Country: Uzbekistan Tajikistan Afghanistan GDP: GDP/capita (PPP): USD billion (2006 est.) USD 2.1 billion (2006 est.) USD 8.8 billion (2006 est.) USD 2,000 (PPP) USD 1,300 (PPP) USD 800 (PPP) Inflation: 7.6% 7.5% 16.3% GDP by sector: Services: 43.2% Agriculture: 31.1% Industry: 25.7% Services: 48.8% Agriculture: 22.7% Industry: 28.5% Services: 38% Agriculture: 38% Industry: 24% Mobile Service Revenues/GDP: 1.7% 7% 4.3% Major Investors: Potential investment by Russia and China in Uzbekistan's gas and oil industry may boost growth prospects. Continued privatization of medium and large state-owned enterprises could increase productivity. In 2006, substantial infrastructure development credits to improve its roads and electricity transmission network. To help increase north-south trade, the United States is constructing a USD 36 million bridge linking Tajikistan and Afghanistan. The many legislative changes proposed are anticipated to greatly improve the investment climate in Afghanistan. Source: CIA World Factbook