Yoigo ready to launch services in Spain

November 30, 2006

TeliaSonera's Spanish mobile operator, Yoigo, launches its low cost and easy-to-use mobile services on December 1, 2006. The initial commercial offer includes the same prices for both post and prepaid customers.

After only 150 days, Yoigo is ready to launch its first services as the fourth mobile operator to enter the Spanish market. Yoigo will launch mobile operations based on its own 3G network combined with national 2G roaming. The approach will be a benchmark low cost operation with a sharp business focus on targeting mass-market customers. The benchmark low cost is based on a streamlined organization with outsourced functions, including network roll-out, maintenance and operations, customer care, logistics and warehousing.

"We are very pleased to present the Yoigo offering after a record-breaking roll-out. Our offering will be easy-to-use services with attractive and transparent pricing. Our surveys showed that 2 out of 3 customers in Spain are not aware of the tariffs on their mobile calls. We will therefore introduce a straightforward and transparent tariff model in the Spanish mobile market," says Kenneth Karlberg, President of TeliaSonera Norway, Denmark, the Baltic countries and Spain.

The launch offering targets mass-market customers and pricing will be the same for both post and prepaid customers: EUR 0.12 per minute for national calls and a call connection charge of EUR 0.12 (prices excluding VAT). The prices are valid across the entire country, with seamless handover across the 3G and 2G networks. In addition to voice services, Yoigo will also offer its customers SMS, MMS, mobile Internet access, mobile portal services and international roaming.

TeliaSonera's financial goals for Yoigo in Spain Yoigo's total financing need, including investments in network, IP service platforms, start-up costs and spectrum fees (including accrued spectrum fees from 2002), is estimated to be less than SEK 9 billion (EUR 1 billion) for the first five years. The operation is expected to be cash flow positive and earnings accretive within the same time frame.

The goal is to have a market share of less than one percent at the end of next year, with a short-term target of blended average revenue per user of around EUR 30 per month. Customer acquisition costs for postpaid customers are expected to be lower than the Spanish average of approximately EUR 120 and slightly higher than the Spanish average of about EUR 40 for prepaid customers. CAPEX is estimated to be front loaded in the initial period due to a rapid network roll-out.

The long-term ambition is to reach a market share of approximately 10 percent by 2015 and an EBITDA margin of around 30 percent, excluding non-recurring items.