Tele2 — Earnings Release 2007

Feb 12, 2008

FOR IMMEDIATE RELEASE, Tuesday, February 12, 2008 Stockholm – Tuesday, February 12, 2008 – Tele2 AB ("Tele2") (OMX Nordic Exchange: TEL2 A and TEL2 B), today announced its consolidated results for the fourth quarter and full year 2007.

full year report 2007

In Q4 2007, Tele2's ebitda less divested operations1) increased by 4 percent to sek 1,564 million. Mobile telephony EBITDA less divested operations increased by 30 percent to SEK 1,305 (1,001) million.

• › Operating revenue less divested operations in Q4 2007 amounted to SEK 10,447 (9,731) million, an increase of 7 percent
• › EBITDA less divested operations in Q4 2007 increased by 4 percent to SEK 1,564 (1,506) million
• › EBIT less divested operations in Q4 2007 amounted to SEK 247 (708) million including one-off items of SEK –328 (50) million (see note 1 and 2)
• › Operating revenue less divested operations for the full year 2007 grew by 9 percent to SEK 40,313 (37,113) million. Operating revenue from continuing operations 2) for the full year 2007 grew by 1 percent to SEK 43,420 (43,098) million
• › Net profit/loss from continuing operations for the full year 2007 amounted to SEK –302 (–1,003) million
• › Earnings per share from continuing operations after dilution for the full year 2007 amounted to SEK –0.45 (–1.98)
• › Tele2's net debt amounted to SEK 5,198 (15,311) million at the end of 2007, a decrease by 66 percent
• › The Board of Directors proposes an ordinary dividend of SEK 3.15 (1.83) per share. The Board of Directors also proposes a special dividend of SEK 4.70 per share together with the authorisation to purchase up to 10 percent of shares in the company

¹⁾ The figures presented correspond to Q4 2007 unless else stated. The figures shown in parentheses correspond to the comparable periods in 2006. All figures relate to Tele2's operations less discontinued operations and other divested operations including operations held for sale. Discontinued operations comprise operations in Italy and Spain, and the fixed and broadband operations in France (see note 9). Other divested operations are Hungary, Belgium, Portugal, Irkutsk, Denmark, 3C, UNI2 Denmark, Alpha/ C3 , Datametrix Norway/Denmark and Czech. Operations held for sale comprises MVNO operations in Austria (see Note 8).

²⁾ Discontinued operations include the operations in Italy and Spain, and the fixed and broadband operations in France (see note 9). Other divested operations are included in historical figures up until the date of disposal.

President's message

"2007 was an exciting year dominated by the successful realignment of Tele2 and the strong operational development in our core mobile businesses. Eastern Europe and Sweden have continuously been highlighted as superior performers and we are pleased to notice that Tele2's operations in these countries have ended the year on a high note.

Looking into 2008, we see more of the same positive development. The realignment process is set to continue. There is still a need to further align the scale and scope of our organization to support the areas where we have the best profitability.

Looking into 2008, we see more of the same positive development.

In Q4 2007, Tele2 was awarded 17 new regional GSM 1800 licenses in Russia. With progress comes challenge – we need to find qualified personnel, establish a local presence in all regions and expand commercially viable mobile networks. On the other hand our historic performance in mobile operations proves we have a successful business model in place.

We have said it before, but it is important to emphasize that our core business is mobile services on our own infrastructure. At the end of 2007 mobile services represented 56 percent of revenue and 84 percent of EBITDA. We know that we are world class in operating cost efficient mobile networks and we will continue to focus our management and financial resources in this area. Hence, it is important that we continue to develop mobile services, through investing and expanding in areas where we see extraordinary opportunities, so that we can stay best in class.

In earlier reports we mentioned the promising development of mobile broadband. The Q4 2007 performance strengthens our belief that mobile broadband is the long awaited blockbuster data service. In 2008, we will make sure that we lead this new market and based on the strong acceleration in new customers, we believe that the coming years will be key for our success.

Mobile telephony revenue and profitability continued to grow strongly in the quarter. Revenues less divested operations grew by 19 percent and EBITDA improved by 30 percent

compared to Q4 2006 with a net customer intake of 706,000. Russia continued to be the main growth driver and Tele2 is now the largest operator in 6 of the regions where we operate. The Swedish operations dominated the mobile broadband market in the quarter, adding 48,000 new customers. At the end of Q4 2007 we had 93,000 mobile broadband customers in Sweden.

Tele2 offers Broadband services in nine countries. Our broadband operations less divested operations generated a revenue growth of 18 percent, driven mainly by our services on our own infrastructure. We see the broadband product as a good complement to our core mobile operations and it is important that profitability in this area improves in 2008 and contributes to the operations as a whole.

fixed telephony operations less divested operations, continued to deliver robust results and we strove to maximise value by being costs conscious. Our EBITDA margin within fixed telephony was a strong 18 percent in the quarter, despite a revenue decline of 17 percent year-on-year as the market is in a structural decline."

Lars-Johan Jarnheimer President and CEO of Tele2 AB

Financial overview

The following definitions have been used in the full year 2007 report:

Continuing operations – less discontinued operations (see note 9)

Discontinued operations – operations in Italy and Spain as well as fixed and broadband operations in France (see note 9)

Less divested operations – less discontinued operations (see note 9) and other divested operations including operations held for sale (see note 8)

The Group's financial performance continued to reflect the ongoing realignment process and focus on mobile and broadband services. Mobile and broadband sales continued to grow, compared with the previous year. The decline in fixed line services is expected to continue.

FINANCIAL OVERVIEW, LESS DIVESTED operations

Customer net intake amounted to 579,000 (972,000) in Q4 2007. Tele2 experienced robust growth in mobile telephony and continued customer outflow from fixed telephony. Fixed telephony services continued to be affected negatively by increased competition from mobile services as well as alternative services such as VoIP (Voice over IP). In the full year of 2007, the customer base increased by 6 percent to 24,605,000 (23,198,000).

Operating revenue in Q4 2007 amounted to SEK 10,447 (9,731) million, an increase by 7 percent. For the full year of 2007, operating revenue increased by 9 percent to SEK 40,313 (37,113) million.

EBITDA in Q4 2007 amounted to SEK 1,564 (1,506) million, equivalent to an EBITDA margin of 15 (15) percent. The EBITDA development was influenced by an improved revenue mix, with a larger contribution from mobile telephony on own infrastructure. In the full year of 2007, EBITDA amounted to SEK 6,636 (5,782) million, an increase by 15 percent.

EBIT in Q4 2007 amounted to SEK 247 (708) million including one-off items of SEK –328 (50) million (see note 1 and 2).

FINANCIAL OVERVIEW, Continuing operations

Profit/loss before tax in Q4 2007 amounted to SEK -25 (515) million including one-off items. In the full year of 2007 profit before tax amounted to SEK 759 (–668) million including one-off items.

Net profit/loss for Q4 2007 amounted to SEK –168 (250) million. In the full year 2007 net profit/loss amounted to SEK -302 (–1,003) million affected by a write-down of tax assets and reduced corporate tax rate in Germany, which amounted to SEK -793 million.

Cash flow after Capex amounted to SEK –373 (–314) million in Q4 2007. In the full year 2007, cash flow after CAPEX amounted to SEK 263 (–508) million.

CAPEX amounted to SEK 1,220 (1,210) million for Q4 2007 and SEK 4,269 (4,316) million for the full year of 2007.

financial comments

Tele2's net debt decreased during 2007 and amounted to SEK 5,198 (15,311) million at year end, or 0.8 times full year 2007 EBITDA.

As a step in aligning the capital structure, the Board of Directors has proposed an ordinary dividend of SEK 3.15 (1.83), a special dividend of SEK 4.70 and the authorisation to purchase up to 10 percent of Tele2's own shares. It is important to emphasise that Tele2 will evaluate the total shareholder remuneration on a continued basis to make sure that the financial position of the company is being utilized in the most efficient way.

financial overview cont.

		Less divested operations					Continuing operations
SEK million	2007 full year	2006 full year	2007 Q4	2006 Q4	2007 full year	2006 full year	2007 Q4	2006 Q4
Mobile Telephony
Net customer intake (thousands)	3,202	3,723	714	1,081	3,249	4,017	706	1,146
ARPU							116	120
Operating revenue	22,503	18,159	5,981	5,022	22,982	19,052	5,966	5,245
EBITDA	5,260	3,829	1,305	1,001	5,225	3,856	1,256	1,009
Direct Access & LLUB
Net customer intake (thousands)	234	119	77	47	292	186	77	70
ARPU							529	609
Operating revenue	4,459	3,714	1,266	1,027	5,043	4,313	1,267	1,201
EBITDA	–179	191	–134	53	–260	44	–134	11
Broadband resale
Net customer intake (thousands)	46	160	–8	53	23	126	–8	41
ARPU							223	253
Operating revenue	1,344	1,139	324	316	1,479	1,465	325	385
EBITDA	–460	–565	–80	–159	–460	–546	–81	–148
Fixed telephony
Net customer intake (thousands)	–1,419	–1,009	–204	–209	–1,707	–1,372	–214	–292
ARPU							132	133
Operating revenue	10,365	12,751	2,472	2,971	11,997	16,357	2,491	3,782
EBITDA	1,725	2,037	457	552	1,823	2,107	442	601
All segments
Net customer intake (thousands)	2,063	2,993	579	972	1,857	2,957	561	965
Operating revenue	40,313	37,113	10,447	9,731	43,420	43,098	10,453	11,152
EBITDA	6,636	5,782	1,564	1,506	6,647	5,776	1,500	1,556
EBIT	1,285	299	247	708	1,485	–106	78	675
EBT					759	–668	-25	515
Net profit/loss					–302	–1,003	–168	250
Cash flow from operating activities					4,491	3,964	805	795
Cash flow after Capex					263	–508	–373	–314

Significant events in the quarter

• › Tele2 increased its ownership in Tele2 Netherlands Holding N.V. (former Versatel) to 99 percent
• › Tele2 Croatia was awarded 900 MHz EGSM frequency
• › 3G license allocated to Tele2's network company in Norway
• › Tele2 completed the divestment of Tele2 Italy and Tele2 Spain to Vodafone
• › Tele2 Russia was awarded an additional 17 new regional licenses
• › Tele2 Croatia signed a national roaming agreement with T-Mobile
• › Tele2 completed the divestment of its operations in Hungary to HTCC
• › Tele2 announced the divestment of its Austrian MVNO operations to Telekom Austria Group
• › Tele2 Russia completed the acquisition of Telecom Eurasia in Krasnodar from ZAO SMARTS
• › Tele2´s subsidiary Tele2 Netherlands Holding N.V. (former Versatel) completed the divestment of its Belgian operations to KPN

Financial overview BY market area

Comments below relate to Tele2's operations less divested companies

Nordic

(Sweden and Norway)

SEK Million	Q4 2007	Q4 2006	Change
Operating revenue*	3,745	3,484	7%
EBITDA	682	726	–6%
EBIT**	388	461	–16%

*Excluding one-off item of SEK -200 (-) million (see note 1) **Excluding one-off item of SEK -200 (50) million (see note 1-2)

Mobile telephony The Swedish and Norwegian operations continued to show a good development and added 93,000 (39,000) new mobile customers in Q4 2007, an increase in net intake of 138 percent compared to the same period last year.

Mobile telephony in Sweden increased sales by 10 percent to SEK 1,914 (1,745) million and added 92,000 new customers. The growth was driven by a solid intake of post-paid, pre-paid and mobile broadband subscriptions as well as handset sales. The high customer intake in Sweden in combination with more customers choosing postpaid subscription, had a slight negative impact on profitability during the quarter.

Mobile broadband subscriptions in the Swedish market continued to develop well and the demand from the consumer segment is promising. The customer base grew by 48,000 new customers. The total mobile broadband customer base was 93,000 in Q4 2007 and ARPU was SEK 167 in the quarter, boosted by revenue from start-up and administrative fees. In 2008, we expect to see continued growth of mobile broadband subscriptions driven mainly by a strong demand from the consumer segment. The increased intake of mobile broadband customers will however be associated with higher acqusition costs and also higher fees to the Svenska UMTS Nät AB joint venture (see note 10), which will impact margins in 2008.

The mobile operations in Sweden reported an ARPU of SEK 207 (200) in Q4 2007, including pre-paid, post-paid and mobile broadband subscriptions. Minutes of use for the Swedish operations were 194 (180) in Q4 2007. EBITDA was SEK 669 (672) million with an EBITDA margin of 35 percent.

Tele2 Norway Mobile experienced a slower quarter, adding 1,000 (28,000) new mobile customers mainly affected by higher churn caused by the migration process to the new Netcom MVNO agreement. In Q4 2007, Tele2 Norway had a market share of 8,0 percent in terms of subscriptions and 8.6 percent in terms of mobile revenue, according to the national regulator.

Mobile revenue for the operation in Norway grew by 19 percent to SEK 684 (576) million during Q4 2007 and EBITDA amounted to SEK 41 (44) million. The EBITDA margin was 6 (8) percent. The decreasing profitability in Norway was mainly an effect of price increases in the current Telenor MVNO agreement due to volume hurdles being passed by Tele2. However, the new MVNO agreement with Netcom ASA will have a significant positive effect on profitability from Q2 2008 onwards. The Joint Venture (JV) between Tele2 and Network Norway, Mobile

Norway, was allocated a new 3G licence in the quarter. The new 3G license will enable Mobile Norway to increase the efficiency of the network expansion by rolling out both GSM and 3G already in phase one.

Broadband resale and Direct access & LLUB Broadband resale and Direct access & LLUB added 17,000 (30,000) new customers in the Nordic market. Sales increased by 16 percent to SEK 437 (378) million. EBITDA added up to SEK -69 (-48) million. Tele2 continued its efforts during the quarter to migrate customers from resold services to services based on own infrastructure.

Tele2 Sweden added 21,000 (25,000) broadband customers of which 1,500 (300) Cable-TV in the quarter. Broadband revenue increased by 16 percent to SEK 325 (281) million. The broadband operations saw an EBITDA result of SEK –55 (–29) million.

Tele2 Sweden continued to strengthen its position in Cable-TV in the quarter, adding approximately 16,000 new households (in the cities of Norrköping and Växjö). In Q4 2007, Tele2 had 166,500 digital TV customers.

Tele2 Norway relaxed its marketing efforts for resold broadband during the quarter and continued to migrate customers onto its own infrastructure. The broadband customer base decreased by -4,000 (5,000) customers in Q4 2007. Tele2 Norway will continue to focus its marketing efforts where Tele2 owns infrastructure on LLUB. Tele2's population coverage with own infrastructure was 55 percent in the quarter. Broadband revenue in Norway increased by 15 percent to SEK 112 (97) million and EBITDA amounted to SEK –14 (–19) million in Q4 2007.

Fixed telephony resale Both the Swedish and the Norwegian operations continued to gain market shares, despite an overall declining fixed telephony market. Tele2 Sweden experienced good demand for bundled fixed and mobile services within the SME segment. Fixed telephony sales in the Nordic operations declined by 16 percent to SEK 701 (835) million in Q4 2007, due to a deteriorating market. Combined, Sweden and Norway lost net 55,000 customers in Q4 2007.

Tele2 Sweden fixed line telephony saw a decline of -45,000 (–22,000) customers in the quarter and revenue dropped by 16 percent to SEK 528 (631) million, to some extent helped by a more stabilizing trend in fixed line pricing. EBITDA contribution in Tele2 Sweden stayed flat at SEK 60 (60) million, corresponding to an EBITDA margin of 11 percent.

The declining revenue trend in fixed telephony affected Tele2 Norway's profitability and EBITDA declined to SEK 27 (40) million in Q4 2007. Tele2 Norway continued to experience a volume shift from fixed to mobile services and revenue declined by 19 percent to SEK 168 (207) million in the quarter. Tele2 Norway lost -10,000 (–7,000) customers during the quarter.

Baltic & Russia

(Russia, Estonia, Latvia, Lithuania and Croatia)

SEK Million	Q4 2007	Q4 2006	Change
Operating revenue	2,614	1,956	34%
EBITDA	679	462	47%
EBIT	453	287	58%

Mobile telephony Tele2 Russia continued to combine solid customer intake with good profitability in Q4 2007. The customer base grew by 554,000 (859,000) and operating revenue reached SEK 1,418 (920) million, an increase of 54 percent. ARPU was SEK 58 (55) in Q4 2007. EBITDA reached SEK 440 (243) million, which corresponds to an EBITDA margin of 31 (26) percent.

In Q4 2007, Tele2 Russia was awarded 17 new regional GSM 1800 licenses. The population in the new regions added up to 19.1 million. However the licence process has been challenged in court. Tele2's ambition, going forward, is to develop the existing footprint, but also to opportunistically expand into new regions in Russia, both through licences and through acquisitions.

Of the three Baltic countries, Lithuania continued to outperform the others by adding 43,000 (82,000) customers followed by Estonia gaining 3,000 (2,000) customers and Latvia shedding –6,000

(16,000) customers.

Estonia saw mobile revenue increase by 16 percent to SEK 282 (244) million. Lithuania revenue increased by 15 percent to SEK 336 (292) million and Latvia by 8 percent to SEK 420 (390) million. Tele2 Estonia's EBITDA increased by 35 percent to SEK 96 (71) million. Tele2 Lithuania saw EBITDA decrease by 23 percent to SEK 66 (86) million mainly due to a high intake of corporate customers. Latvia decreased EBITDA by 8 percent to SEK 157 (170) million.

During Q4 2007 the economic development in the Baltic region started to slow, which impacted the development of Tele2's operations.

Tele2 Croatia added 15,000 customers in Q4 2007, compared with 39,000 in Q4 2006. The total customer base amounted to 470,000 at the end of the quarter. Revenue increased by 56 percent to SEK 156 (100) million. EBITDA amounted to SEK –83 (–114) million in Q4 2007.

In Q4 2007 Tele2 Croatia announced a new roaming agreement with T-Mobile, that will be effective as of 1 of June, 2008. Tele2 Croatia was also awarded a 900 MHz EGSM frequency during the quarter. The new frequency will enable the company to enhance its network coverage and reduce capital expenditure.

Going forward, Tele2 will continue its push into the corporate field in the Baltic region as well as in Russia. The focus will be on the SME segment.

Central europe

(Germany, Austria and Poland)

SEK Million	Q4 2007	Q4 2006	Change
Operating revenue	1,689	1,841	–8%
EBITDA	–6	194
EBIT*	–139	141

*Excluding one-off item of SEK –3 (–) million (see note 2)

Mobile telephony The MVNO operation in Austria continued to experience tough competition from the network operators in the country, leading to overall lower mobile tariffs. The Austrian operations lost -8,000 (–10,000) customers during the quarter and reported a revenue of SEK –12 (40) million, due to a correction charge of SEK -33 million. EBITDA was SEK –50 (–4) million in Q4 2007, including a correction charge of SEK –36 million. The sale of the MVNO operations in Austria is still pending approval from the local competition authority.

Broadband resale and Direct access & LLUB In Germany, Tele2 relaxed its marketing and sales activities on broadband services. The market conditions are still difficult with tough competition from both cable and telecom operators, leading to deteriorating prices on broadband services. Tele2 Germany increased broadband resale revenue by 11 percent to SEK 84 (76) million shedding 2,000 (43,000) customers. Direct access & LLUB revenue amounted to SEK 13 (0) million with 15,000 (0) new customers in Q4 2007. Due to the shift in marketing, Broadband resale EBITDA improved to SEK –6 (–75) million while Direct access & LLUB EBITDA decreased to SEK –159 (–30) million. The loss in the quarter was a result of higher subscriber intake together with fixed fees associated with the Plusnet Joint Venture (see note 10).

Tele2 Austria continued to deliver stable customer growth in Direct access & LLUB, adding 13,000 (13,000) new users in the quarter. The customer development in Broadband resale was –2,000 (2,000) in the quarter. Broadband resale revenue decreased by 9 percent to SEK 30 (33) million in Q4 2007. Direct access & LLUB revenue increased by

11 percent to SEK 248 (223) million. Broadband resale EBITDA was stable at SEK –13 (–12) million, hampered by a correction charge of SEK 2 million. Direct access & LLUB EBITDA fell to SEK –60 (–5) million in the quarter, negatively affected by a correction charge of SEK 10 million.

Tele2 Poland continued to push its new resold ADSL offer with full national coverage. The customer base grew by 7,000 (0) new customers in the quarter and revenue amounted to SEK 2 (0) million. EBITDA amounted to SEK –13 million, a sequential improvement by SEK 12 million.

Fixed telephony resale The fixed telephony market in Germany and Austria continued to be a challenge in Q4 2007, with lower mobile prices leading to fixed-to-mobile substitution. However, Tele2 was better at managing its existing customer base, leading to lower churn compared to Q3 2007. Consequently, the number of Tele2's fixed telephony customers in the market area fell by -87,000 (–56,000) compared to -277,000 in Q3 2007. Revenue continued to decline by 17 percent to SEK 1,102 (1,329) million. Due to a combination of lower marketing spend and better churn management, the EBITDA margin stayed fairly flat at 21 (22) percent.

Germany lost 36,000 (71,000) customers in the quarter with a revenue decline of 22 percent to SEK 668 (855) million. EBITDA contribution was SEK 169 (200) million in Q4 2007. Tele2 Austria lost a net of –34,000 (–56,000) customers in the quarter and reported a 33 percent decline in revenue to SEK 180 (268) million, impacted by a correction charge of SEK 9 million. EBITDA decreased by 70 percent to SEK 26 (88) million in Q4 2007 affected by a correction charge of SEK 21 million.

Tele2 Poland has continued to successfully cross-sell the wholesale line rental product to its customer base. Together with reduced costs this has had a positive effect on both sales and profitability during the quarter. Customer loss in the quarter recovered to –17,000 (–71,000) and fixed telephony revenue increased by 23 percent to SEK 254 (206) million as an effect of successful cross-selling. EBITDA contribution amounted to SEK 42 (7) million, corresponding to an EBITDA margin of 17 percent.

Southern Europe

(France and Switzerland)

Q4 2007	Q4 2006	Change
626	751	–17%
–90	–159
–105	–171

Mobile telephony Tele2 France increased its marketing activities in Q4 2007. Consequently, the operation had once again a positive customer intake of 26,000 (41,000) in the quarter. Tele2 France saw a negative revenue development at SEK 275 (289) million due to lower prices, while EBITDA continued to improve to SEK –72 (–202) million in the quarter. Sequentially EBITDA fell as an effect of higher marketing spend related to customer intake and acquisition cost. Tele2 has renegotiated its existing MVNO agreement in France, implying improved underlying profitability as of Q1 2008.

Benelux

(Netherlands, Luxembourg and Liechtenstein)

SEK Million	Q4 2007	Q4 2006	Change
Operating revenue	1,909	1,666	15%
EBITDA	312	279	12%
EBIT*	–2	–60

*Excluding one-off item of SEK -125 (-) million (see note 2)

In Q4 2007, Tele2 increased its ownership in Tele2 Netherlands Holding N.V. (former Versatel) to 99 percent.

Mobile telephony Within the mobile segment, Tele2 Netherlands continued marketing efforts towards high value postpaid subscriptions in the fourth quarter of 2007. Overall mobile revenues benefited from higher postpaid usage and increasing terminating minutes. However, the total base of postpaid subscriptions declined slightly due to an increase in churn.

In Luxemburg, mobile telephony net intake in Q4 2007 was 1,000 (1,000) customers. Revenue declined by 6 percent to SEK 201 (213) million. The EBITDA margin was 37 (38) percent, negatively affected by new roaming tariffs in September and a larger focus on post-paid net additions.

Broadband resale and Direct Access & LLUB In the residential market Tele2 Netherlands continued to experience strong broadband customer growth. The broadband customer base increased

services

(Datametrix, Procure IT right and Radio Components)

SEK Million	Q4 2007	Q4 2006	Change
Operating revenue	64	33	94%
EBITDA	–13	4
EBIT	–20	-

Tele2 Switzerland continued to roll-out its GSM network during the quarter and the operation saw continued market traction for its products. However, during the quarter the mobile operations was negatively effected by higher marketing costs following the expansion of Tele2's GSM network, which led to lower EBITDA. Net additions during the quarter amounted to 7,000 (3,000) new customers. Revenue increased by 58 percent to SEK 38 (24) million and EBITDA dropped to SEK –80 (–23) million.

Broadband resale and Direct access & LLUB Net intake of Broadband resale customers in Switzerland was –3,000 (0). Revenue amounted to SEK 59 (62) million and EBITDA contribution was SEK –11 (–11) million during Q4 2007.

Fixed telephony resale Tele2 Switzerland had a customer decline of 21,000 (–21,000) in Q4 2007. Fixed telephony revenue dropped by 30 percent to SEK 227 (326) million. EBITDA contribution was SEK 73 (76) million in Q4 2007,

by 22,000 (9,000) subscribers in Q4 2007. Following the success of the first dual play offering, including a free laptop in Q3 2007, Tele2 launched a second offering in Q4 2007, which provided an order intake of approximately 15,000 subscribers. These customers will be provisioned during Q1 2008. On the business side Tele2 continued closing corporate deals. Tele2 has been selected as preferred partner for the delivery of voice services to the Dutch police, and signed the agreement at the beginning of December. In addition, Tele2 renewed its IP VPN contract with DHL, providing data services for 150 locations.

Tele2 Luxemburg added approximately 1,000 (1,000) new broadband resale customer in Q4 2007. Revenue amounted to SEK 6 (2) million and EBITDA contribution was SEK 1 (–4) million.

Fixed telephony resale The carrier preselect (CPS) subscriber base in the Netherlands declined with approximately 35,000 customers, to a total of approximately 465,000 subscribers at Q4 2007. The intake of the wholesale line rental product continued in Q4 2007, enabling higher ARPU and extended customer lifetime of the residential CPS customer base

Tele2 Luxemburg fixed telephony revenue amounted to SEK 22 (23) million and EBITDA contribution was SEK 1 (1) million in Q4 2007.

OTHER ITEMS

Risks and uncertainty factors

Tele2's operations are affected by a number of external factors. The risk factors considered to be most significant to Tele2's future development are operating risks such as changes in regulatory legislation in telecommunication services, increased competition, introduction of new services, ability to attract and retain customers and legal proceedings, and financial risks such as currency risk, interest risk, liquidity risk and credit risk. In addition to the risks described in Tele2's annual report (see Directors' report and Note 38 of the report for a detailed description of the Group's risk exposure and risk management), no additional significant risks are estimated to have developed.

Company disclosure

Dividend

The Board of Directors will propose to the Annual General Meeting that the dividend is increased to SEK 3.15 (1.83) per share. The Board of Directors also proposes an extra dividend of SEK 4.70 per share together with the authorisation to purchase up to 10 percent of shares in the company.

Tele2 Annual General Meeting 2008

The 2008 Annual General Meeting will be held on 14 May 2008 in Stockholm.

Shareholders wishing to have a matter considered at the Annual General Meeting should submit their proposals in writing to agm@tele2.se or to The Company Secretary, Tele2 AB, Box 2094, SE-103 13 Stockholm, Sweden, at least seven weeks before the Annual General Meeting in order to guarantee that the proposal may be included in the notice to the meeting.

Further details on how and when to register will be published in advance of the Annual General Meeting.

Nomination committee for the 2008 Annual General Meeting

A Nomination Committee of major shareholders in Tele2 has been convened in accordance with the resolution of the 2007 Annual General Meeting. The Nomination Committee is comprised of Cristina Stenbeck on behalf of Investment AB Kinnevik and Emesco AB, Åsa Nisell on behalf of Swedbank Robur, Ramsay Brufer on behalf of Alecta and Björn Lind on behalf of SEB Fonder and SEB Trygg Liv, who together represent more than 50% of the voting rights in Tele2. The composition of the Nomination Committee may be changed to reflect any changes in the shareholding of the major shareholders during the nomination process. Information about the work of the Nomination Committee can be found on Tele2's corporate website at www.tele2.com.

The Nomination Committee will submit a proposal for the composition of the Board of Directors, remuneration for the Board of Directors and the auditor and proposal for the Chairman of the Annual General Meeting 2008 that will be presented to the 2008 Annual General Meeting for approval.

Shareholders wishing to propose candidates for election to the Board of Directors of Tele2 should submit their proposal in writing to agm@tele2.se or to the Company Secretary, Tele2 AB, Box 2094, SE 103 13, Stockholm, Sweden.

Other

Tele2 will release the financial and operating results for the period ending March 31, 2008 on April 23, 2008.

Stockholm, February 12, 2008

Vigo Carlund Mia Brunell Livfors John Hepburn Chairman Mike Parton John Shakeshaft Cristina Stenbeck Pelle Törnberg Lars-Johan Jarnheimer President and CEO

Report REview

Introduction

We have reviewed the year-end report (interim report) for the period January 1, 2007 to December 31, 2007, for Tele2 AB (publ). The Board of Directors and the President are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Scope of Review

We conducted our review in accordance with the Standard on Review Engagements (SÖG) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity." A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with Standards on Auditing in Sweden RS and other generally accepted auditing practices in Sweden. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company, in accordance with the Annual Accounts Act.

Stockholm, February 12, 2008 Deloitte AB

Jan Berntsson Authorized Public Accountant

Conference call details

A conference call, with an interactive presentation, to discuss the results will be held at 08.00 (CET) / 07.00 (UK time) / 02.00 am (New York time), on February 12, 2008. The dial-in numbers are:

UK: +44 (0)20 7162 0025, US: +1 334 323 6201, France: +33 (0)1 7099 3208, Germany: +49 (0)695 8999 0507, The Netherlands: +31 (0)20 7965 008 and Sweden: +46 (0)8 5052 0110

Please dial in 10 minutes prior to the start of the conference call to allow time for registration. The conference call will also be available as a link on the Tele2 corporate website www.tele2.com, both live and as an archived version.

contacts

Lars-Johan Jarnheimer President and CEO, Tele2 AB Telephone: +46 (0)8 5626 4000

Lars Nilsson CFO, Tele2 AB Telephone: +46 (0)8 5626 4000

Lars Torstensson Investor Relations Telephone: +46 (0)8 5620 0042

Tele2 AB

Company registration nr: 556410-8917 Skeppsbron 18 P.O. Box 2094 SE-103 13 Stockholm Sweden Tel +46 8 5620 0060 www.tele2.com

APPENDICES

Income statement Balance sheet Cash flow statement Change in shareholders' equity Number of customers Operating revenue EBITDA EBIT Investments, CAPEX Sweden Russia Key Ratios Parent Company Notes

Tele2 is one of Europe's leading telecom operator. Tele2's mission is to provide cheap and simple telecoms. Tele2 always strives to offer the market's best prices. We have 25 million customers in 15 countries. Tele2 offers fixed and mobile telephony, broadband, data network services, cable TV and content services. Ever since Jan Stenbeck founded the company in 1993, it has been a tough challenger to the former government monopolies and other established providers. Tele2 has been listed on the OMX Nordic Exchange since 1996. In 2007, we had an operating revenue of SEK 43.4 billion and reported an operating profit (EBITDA) of SEK 6.6 billion.

INCOME STATEMENT

SEK million	Note	2007 Full year	2006 Full year	2007 Q4	2006 Q 4
CONTINUING OPERATIONS
Operating revenue	1	43,420	43,098	10,453	11,152
Operating expenses	2	–41,150	–40,636	–10,229	–10,418
Impairment of goodwill	2	–1,315	–2,457	–5	–
Sale of operations, profit	3	1,562	50	40	–
Sale of operations, loss	4	–823	–20	–128	–17
Result from shares in associated companies and joint ventures	10	–234	–135	–60	–42
Other operating revenues		125	42	67	8
Other operating expenses		–100	-48	–60	–8
Operating profit/loss, EBIT		1,485	–106	78	675
Net interest expenses		–760	–598	–186	–192
Other financial items		34	36	83	32
Profit/loss after financial items, EBT		759	–668	–25	515
Tax on profit/loss	5	–1,061	-335	–143	–265
NET PROFIT/LOSS FROM CONTINUING OPERATIONS		–302	–1,003	–168	250
DISCONTINUED OPERATIONS
Net profit/loss from discontinued operations	9	–1,467	–2,737	139	–310
NET PROFIT/LOSS		–1,769	–3,740	–29	–60
ATTRIBUTABLE TO:
Equity holders of the parent company		–1,669	–3,615	–31	–42
Minority interest		–100	–125	2	–18
NET PROFIT/LOSS		–1,769	–3,740	–29	–60
Earnings per share (SEK)		–3.75	–8.14	–0.07	–0.09
Earnings per share, after dilution (SEK)		–3.75	–8.14	–0.07	–0.10
FROM CONTINUING OPERATIONS	9
Earnings per share (SEK)		–0.45	–1.98	–0.38	0.60
Earnings per share, after dilution (SEK)		–0.45	–1.98	–0.38	0.60
Number of outstanding shares, basic	7	444,851,339	444,489,593
Number of shares in own custody	7	4,098,000	–
Number of shares, weighted average	7	444,727,119	444,129,836
Number of shares after dilution	7	445,235,120	444,614,065
Number of shares after dilution, weighted average	7	445,220,904	444,353,295

BALANCE SHEET

SEK million	Note	Dec 31, 2007	Dec 31, 2006
Assets
FIXED ASSETS
Goodwill	2-4	12,603	18,491
Other intangible assets		2,089	3,353
Intangible assets		14,692	21,844
Tangible assets		14,388	16,059
Financial assets		1,007	876
Deferred tax assets		3,258	4,986
FIXED ASSETS		33,345	43,765
CURRENT ASSETS
Materials and supplies		435	424
Current receivables		9,816	12,980
Short-term investments		2,593	1,988
Cash and cash equivalents		2,459	2,619
CURRENT ASSETS		15,303	18,011
ASSETS CLASSIFIED AS HELD FOR SALE	9	–	4,388
ASSETS		48,648	66,164
Equity and liabilities
SHAREHOLDERS' EQUITY
Attributable to equity holders of the parent company		26,821	28,800
Minority interests		28	323
SHAREHOLDERS' EQUITY		26,849	29,123
LONG-TERM LIABILITIES
Interest-bearing liabilities		5,670	13,050
Non-interest-bearing liabilities		927	1,343
LONG-TERM LIABILITIES		6,597	14,393
SHORT-TERM LIABILITIES
Interest-bearing liabilities		4,602	6,907
Non-interest-bearing liabilities		10,600	14,224
SHORT-TERM LIABILITIES		15,202	21,131
LIABILITIES DIRECTLY ASSOCIATED WITH ASSETS CLASSIFIED AS HELD FOR SALE	9	–	1,517
EQUITY AND LIABILITIES		48,648	66,164

CASH FLOW STATEMENT*

Note	2007 Full year	2006 Full year	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
	4,488	4,979	1,339	1,208	1,289	652	1,048	1,511
	–138	–1,132	–367	615	–136	–250	–452	67
	4,350	3,847	972	1,823	1,153	402	596	1,578
								–1,420
								158
8	–1,438	–1,346	–1,225	–27	–166	–20	–44	–1,181
8	13,215	31	7,576	5,505	26	108	–5	–
	–6	–101	161	–356	122	67	–260	17
	6,602	–6,936	5,197	3,934	–1,511	–1,018	–1,731	–2,584
	10,952	–3,089	6,169	5,757	–358	–616	–1,135	–1,006
	–10,798	3,775	–6,729	–5,518	1,065	384	1,083	1,380
7	–814	–777	–	–	–814	–	–	–
7	27	58	5	5	5	12	17	–
7	–5	–	–5	–	–	–	–	–
	351	–	–	1	–2	352	–	–
	–11,239	3,056	–6,729	–5,512	254	748	1,100	1,380
	–287	–33	–560	245	–104	132	–35	374
	2,619	2,773	2,931	2,668	2,769	2,619	2,705	2,277
	127	–121	88	18	3	18	–51	54
	2,459	2,619	2,459	2,931	2,668	2,769	2,619	2,705
								–149
	9	–5,169 –819 –1,570	–5,520 –1,673 –562	–1,315 –343 –189	–1,188 635 –489	–1,493 –340 –210	–1,173 –771 –682	–1,422 –826 –231

CHANGE IN SHAREHOLDERS´ EQUITY

			Dec 31, 2007			Dec 31, 2006
		Attributable to			Attributable to
SEK million	Note	equity holders of the parent company	minority interests	Total shareholders' equity	equity holders of the parent company	minority interests	Total shareholders' equity
Shareholders' equity, January 1		28,800	323	29,123	34,965	403	35,368
ITEMS RECOGNIZED DIRECTLY IN SHAREHOLDERS' EQUITY
Exchange rate differences		1,478	9	1,487	–1,829	–2	–1,831
Reversed cumulative exchange rate differences from divested companies		–1,053	–	–1,053	–	–	–
Cash flow hedges		49	–	49	–5	–	–5
Items recognized directly in shareholders' equity		474	9	483	–1,834	–2	–1,836
Net profit/loss for the period		–1,669	–100	–1,769	–3,615	–125	–3,740
Total for the period		–1,195	–91	–1,286	–5,449	–127	–5,576
OTHER CHANGES IN SHAREHOLDERS' EQUITY
Issue of warrants Costs for stock options		– 8	– –	– 8	7 4	– –	7 4
New share issue	7	27	–	27	51	–	51
Dividend	7	–814	–4	–818	–777	–	–777
Repurchase of own shares	7	–5	–	–5	–	–	–
Minority's share in acquired companies		–	–	–	–	61	61
Shareholders contribution from minority		–	395	395	–	–	–
Purchase of minority		–	–595	–595	–	–14	–14
Round off		–	–	–	–1	–	–1
SHAREHOLDERS' EQUITY, END OF PERIOD		26,821	28	26,849	28,800	323	29,123

NUMBER OF CUSTOMERS

			Number of customers					Net intake
Thousands		2007 Dec 31	2006 Dec31	Change	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
	Note
Nordic
Mobile telephony	6	3,547	4,249	–17%	93	120	36	19	41	51
Indirect access of which fixed telephony resale		1,214 1,081	1,694 1,534	–28% –30%	–62 –55	–31 –29	–63 –67	–84 –95	–37 –42	–60 –62
of which broadband resale		133	160	–17%	–7	–2	4	11	5	2
Direct access & LLUB		365	311	17%	24	24	18	21	25	19
		5,126	6,254	–18%	55	113	–9	–44	29	10
Baltic & Russia
Mobile telephony		12,440	10,032	24%	609	751	909	716	1,072	876
Indirect access		30	41	–27%	–2	–2	–3	–4	–4	–5
of which fixed telephony resale		30	41	–27%	–2	–2	–3	–4	–4	–5
Direct access & LLUB		36	32	13%	1	1	1	1	2	1
		12,506	10,105	24%	608	750	907	713	1,070	872
Central Europe
Mobile telephony		116	174	–33%	–8	–7	–13	–30	–10	–1
Indirect access		4,221	5,544	–24%	–93	–299	–271	–208	–38	–43
of which fixed telephony resale		4,019	5,383	–25%	–96	–299	–285	–232	–83	–67
of which broadband resale		202	161	25%	3	–	14	24	45	24
Direct access & LLUB		150	70	114%	28	19	15	18	13	11
		4,487	5,788	–22%	–73	–287	–269	–220	–35	–33
Southern Europe
Mobile telephony		518	444	17%	33	–	–3	44	44	69
Indirect access		425	887	–52%	–25	–41	–73	–43	–39	–59
of which fixed telephony resale		340	799	–57%	–22	–40	–73	–44	–39	–61
of which broadband resale		85	88	–3%	–3	–1	–	1	–	2
Direct access & LLUB		–	–	–	–	8	12	4	–	–
		943	1,331	–29%	8	–33	–64	5	5	10
Benelux
Mobile telephony		806	827	–3%	–21	1	2	–2	–1	–19
Indirect access		574	1,170	–51%	–40	–78	–118	–144	–133	–161
of which fixed telephony resale		520	1,063	–51%	–39	–71	–115	–134	–124	–153
of which broadband resale Direct access & LLUB		54 279	107 276	–50% 1%	–1 24	–7 25	–3 21	–10 27	–9 30	–8 23
		1,659	2,273	–27%	–37	–52	–95	–119	–104	–157
NET CUSTOMER INTAKE					561	491	470	335	965	702
Acquired companies					10	–	–	–	–	182
Divested companies					–762	–1,376	–	–	–	–
Changed method of calculation TOTAL CONTINUING OPERATIONS	6	24,721	25,751	–4%	– –191	– –885	–759 –289	– 335	– 965	– 884
Discontinued operations	9	–	6,352	–	–47	–141	–239	–238	–213	–267
Divested companies					–2,969	–2,718	–	–	–	–
TOTAL OPERATIONS		24,721	32,103	–23%	–3,207	–3,744	–528	97	752	617
Mobile telephony	6	17,427	15,726	11%	706	865	931	747	1,146	976
of which prepaid		13,633	12,261	11%	571	664	857	615	991	809
Indirect access		6,464	9,336	–31%	–222	–451	–528	–483	–251	–328
of which fixed telephony resale		5,990	8,820	–32%	–214	–441	–543	–509	–292	–348
of which broadband resale		474	516	–8%	–8	–10	15	26	41	20
Direct access & LLUB		830	689	20%	77	77	67	71	70	54
Acquired companies					10	–	–	–	–	182
Divested companies					–762	–1,376	–	–	–	–
Changed method of calculation	6				–	–	–759	–	–	–
Total continuing operations		24,721	25,751	–4%	–191	–885	–289	335	965	884

OPERATING REVENUE

SEK million	2007 Full year Note	2006 Full year	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
Nordic
Mobile telephony	10,105	9,342	2,580	2,582	2,576	2,367	2,404	2,426
Indirect access	4,131	5,083	819	913	1,172	1,227	1,202	1,247
of which fixed telephony resale	3,570	4,497	702	786	1,014	1,068	1,054	1,100
of which broadband resale	561	586	117	127	158	159	148	147
Direct access & LLUB	1,240	1,084	320	289	316	315	305	287
Other operations	740	691	187	195	183	175	178	180
One-off items	1 –200	–	–200	–	–	–	–	–
Adjustments for internal sales	–751 15,265	–798 15,402	–160 3,546	–196 3,783	–185 4,062	–210 3,874	–208 3,881	–179 3,961
Baltic & Russia
Mobile telephony	9,639	6,725	2,608	2,550	2,417	2,064	2,014	1,875
Indirect access	27	37	6	6	7	8	8	8
of which fixed telephony resale	27	37	6	6	7	8	8	8
Direct access & LLUB	19	17	5	5	5	4	5	4
Other operations	48	40	13	13	12	10	10	11
Adjustments for internal sales	–77	–50	–22	–23	–18	–14	–13	–14
	9,656	6,769	2,610	2,551	2,423	2,072	2,024	1,884
Central Europe
Mobile telephony	45	168	–12	20	22	15	40	39
Indirect access of which fixed telephony resale	5,197 4,720	6,520 6,179	1,231 1,115	1,271 1,151	1,295 1,170	1,400 1,284	1,518 1,409	1,532 1,438
of which broadband resale	477	341	116	120	125	116	109	94
Direct access & LLUB	936	849	261	230	223	222	223	234
Other operations	1,132	1,090	289	308	262	273	311	246
Adjustments for internal sales	–422	–506	–78	–127	–110	–107	–131	–118
	6,888	8,121	1,691	1,702	1,692	1,803	1,961	1,933
Southern Europe
Mobile telephony	1,249	930	313	306	322	308	313	292
Indirect access	1,569	2,001	287	371	438	473	505	477
of which fixed telephony resale	1,324	1,754	228	310	376	410	443	414
of which broadband resale Direct access & LLUB	245 21	247 –	59 –	61 10	62 9	63 2	62 –	63 –
Other operations	179	325	34	41	50	54	76	83
Adjustments for internal sales	–67	–112	–8	–16	–22	–21	–25	–26
	2,951	3,144	626	712	797	816	869	826
Benelux
Mobile telephony	1,944	1,887	477	513	489	465	474	493
Indirect access	2,552	4,174	473	560	694	825	933	994
of which fixed telephony resale	1 2,356	3,883	440	507	643	766	867	923
of which broadband resale	196	291	33	53	51	59	66	71
Direct access & LLUB	2,827	2,363	681	741	696	709	668	611
Other operations Adjustments for internal sales	1 1,428 1 –484	1,469 –838	339 –54	394 –109	349 –146	346 –175	361 –166	364 –210
	8,267	9,055	1,916	2,099	2,082	2,170	2,270	2,252
Services
Indirect access	–	7	–	–	–	–	1	–
of which fixed telephony resale	–	7	–	–	–	–	1	–
Other operations	760	961	147	127	161	325	288	226
Adjustments for internal sales	–367	–361	–83	–65	–85	–134	–142	–68
	393	607	64	62	76	191	147	158
OPERATING REVENUE FROM	43,420	43,098	10,453	10,909	11,132	10,926	11,152	11,014
CONTINUING OPERATIONS
Discontinued operations	9 9,213	11,533	1,369	1,918	3,023	2,903	2,795	2,735
TOTAL OPERATIONS	52,633	54,631	11,822	12,827	14,155	13,829	13,947	13,749
Mobile telephony	22,982	19,052	5,966	5,971	5,826	5,219	5,245	5,125
Indirect access	13,476	17,822	2,816	3,121	3,606	3,933	4,167	4,258
of which fixed telephony resale	1 11,997	16,357	2,491	2,760	3,210	3,536	3,782	3,883
of which broadband resale	1,479	1,465	325	361	396	397	385	375
Direct access & LLUB Other operations	5,043 1	4,313	1,267	1,275	1,249	1,252	1,201	1,136
One-off items	4,287 1 –200	4,576 –	1,009 –200	1,078 –	1,017 –	1,183 –	1,224 –	1,110 –
Adjustments for internal sales	1 –2,168	–2,665	–405	–536	–566	–661	–685	–615
Operating revenue from continuing operations	43,420	43,098	10,453	10,909	11,132	10,926	11,152	11,014

EBITDA

SEK million Note	2007 Full year	2006 Full year	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
Nordic
Mobile telephony	2,681	2,912	673	695	695	618	674	771
Indirect access	437	454	42	101	138	156	102	102
of which fixed telephony resale	554	556	74	120	170	190	130	131
of which broadband resale	–117	–102	–32	–19	–32	–34	–28	–29
Direct access & LLUB Other operations	–59 44	36 28	–37 4	–16 24	–25 6	19 10	–12 –4	19 5
	3,103	3,430	682	804	814	803	760	897
Baltic & Russia
Mobile telephony	2,732	1,488	675	768	726	563	479	478
Indirect access	4	13	13	–15	3	3	5	3
of which fixed telephony resale	4	13	13	–15	3	3	5	3
Direct access & LLUB Other operations	4 3	3 2	1 –11	1 16	1 –2	1 –	1 –	1 –
	2,743	1,506	678	770	728	567	485	482
Central Europe
Mobile telephony	–94	–28	–50	–14	–13	–17	–4	1
Indirect access	576	693	206	137	89	144	195	154
of which fixed telephony resale	823	1,013	238	183	188	214	282	255
of which broadband resale Direct access & LLUB	–247 –569	–320 –57	–32 –220	–46 –173	–99 –115	–70 –61	–87 –33	–101 –11
Other operations	93	103	11	28	29	25	19	19
	6	711	–53	–22	–10	91	177	163
Southern Europe
Mobile telephony	–483	–848	–152	–63	–98	–170	–225	–205
Indirect access	247	148	61	74	49	63	62	34
of which fixed telephony resale of which broadband resale	299 –52	182 –34	72 –11	87 –13	61 –12	79 –16	73 –11	30 4
Direct access & LLUB	–70	–21	–	–10	–29	–31	–14	–4
Other operations	11	18	–	2	5	4	3	6
	–295	–703	–91	3	–73	–134	–174	–169
Benelux
Mobile telephony	389	332	110	94	91	94	85	103
Indirect access	102	263	39	–7	32	38	96	101
of which fixed telephony resale of which broadband resale	146 –44	353 –90	45 –6	2 –9	47 –15	52 –14	118 –22	127 –26
Direct access & LLUB	434	83	122	150	72	90	69	49
Other operations	133	111	26	45	35	27	48	9
	1,058	789	297	282	230	249	298	262
Services
Indirect access	–3	–10	–	–1	–1	–1	–7	3
of which fixed telephony resale Other operations	–3 35	–10 53	– –13	–1 8	–1 24	–1 16	–7 17	3 19
	32	43	–13	7	23	15	10	22
EBITDA FROM CONTINUING OPERATIONS	6,647	5,776	1,500	1,844	1,712	1,591	1,556	1,657
Discontinued operations	9 302 6,949	169 5,945	304 1,804	148 1,992	–11 1,701	–139 1,452	–77 1,479	86 1,743
TOTAL OPERATIONS
Mobile telephony	5,225	3,856	1,256	1,480	1,401	1,088	1,009	1,148
Indirect access	1,363	1,561	361	289	310	403	453	397
of which fixed telephony resale	1,823	2,107	442	376	468	537	601	549
of which broadband resale Direct access & LLUB	–460 –260	–546 44	–81 –134	–87 –48	–158 –96	–134 18	–148 11	–152 54
Other operations	319	315	17	123	97	82	83	58
EBITDA from continuing operations	6,647	5,776	1,500	1,844	1,712	1,591	1,556	1,657
EBITDA MARGIN Nordic	20%	22%	18%	21%	20%	21%	20%	23%
Baltic & Russia	28%	22%	26%	30%	30%	27%	24%	26%
Central Europe	0%	9%	–3%	–1%	–1%	5%	9%	8%
Southern Europe	–10%	–22%	–15%	0%	–9%	–16%	–20%	–20%
Benelux	13%	9%	16%	13%	11%	11%	13%	12%
Services EBITDA margin from continuing operations	8% 15%	7% 13%	–20% 14%	11% 17%	30% 15%	8% 15%	7% 14%	14% 15%
Mobile telephony	23%	20%	21%	25%	24%	21%	19%	22%
Indirect access	10%	9%	13%	9%	9%	10%	11%	9%
of which fixed telephony resale of which broadband resale	15% –31%	13% –37%	18% –25%	14% –24%	15% –40%	15% –34%	16% –38%	14% –41%
Direct access & LLUB	–5%	1%	–11%	–4%	–8%	1%	1%	5%
Other operations	7%	7%	2%	11%	10%	7%	7%	5%
EBITDA margin from continuing operations	15%	13%	14%	17%	15%	15%	14%	15%

EBIT

SEK million	Note	2007 Full year	2006 Full year	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
Nordic Mobile telephony		2,004	2,305	504	531	521	448	507	632
Indirect access		317	306	13	74	107	123	75	68
of which fixed telephony resale		457	418	50	97	146	164	105	97
of which broadband resale		–140	–112	–37	–23	–39	–41	–30	–29
Direct access & LLUB		–334	–167	–111	–84	–94	–45	–79	–38
Other operations		–28	–33	–17	7	–11	–7	–22	–10
One-off items	1–3	–166	50	–191	25	–	–	50	–
		1,793	2,461	198	553	523	519	531	652
Baltic & Russia
Mobile telephony		1,893	900	451	550	524	368	297	321
Indirect access		3	12	13	–16	3	3	7	–
of which fixed telephony resale		3	12	13	–16	3	3	7	–
Direct access & LLUB		1	1	–	1	–	–	–	1
Other operations		2	2	–12	16	–2	–	–	–
One-off items	3	1,179	–	11	1,168	–	–	–	–
		3,078	915	463	1,719	525	371	304	322
Central Europe
Mobile telephony		–105	–40	–53	–16	–18	–18	–6	–3
Indirect access		368	514	146	85	41	96	159	102
of which fixed telephony resale		641	844	185	138	147	171	247	206
of which broadband resale		–273	–330	–39	–53	–106	–75	–88	–104
Direct access & LLUB		–794	–222	–286	–231	–165	–112	–56	–53
Other operations		57	78	2	19	20	16	23	10
One-off items	2–4	–862	–1,813	–2	–860	–	–	–	–1,865
		–1,336	–1,483	–193	–1,003	–122	–18	120	–1,809
Southern Europe
Mobile telephony		–492	–852	–155	–66	–99	–172	–227	–205
Indirect access		198	102	49	62	35	52	52	22
of which fixed telephony resale		258	141	62	78	49	69	64	20
of which broadband resale		–60	–39	–13	–16	–14	–17	–12	2
Direct access & LLUB		–74	–21	–	–11	–31	–32	–14	–4
Other operations		11	14	1	1	5	4	3	6
One-off items	2–3	3	–94	–3	6	–	–	–	–94
		–354	–851	–108	–8	–90	–148	–186	–275
Benelux
Mobile telephony		273	211	80	65	63	65	56	73
Indirect access		–137	–41	–6	–59	–36	–36	3	25
of which fixed telephony resale		–	155	7	–20	7	6	58	84
of which broadband resale		–137	–196	–13	–39	–43	–42	–55	–59
Direct access & LLUB		–525	–864	–112	–94	–169	–150	–173	–182
Other operations		45	15	5	23	13	4	20	–15
One-off items	2,4	–1,231	–457	–231	–480	–520	–	–	–457
		–1,575	–1,136	–264	–545	–649	–117	–94	–556
Services
Indirect access		–3	–10	–	–1	–1	–1	–6	2
of which fixed telephony resale		–3	–10	–	–1	–1	–1	–6	2
Other operations		–11	–2	–17	–5	10	1	6	4
One-off items	3–4	–107	–	–1	–101	–	–5	–	–
		–121	–12	–18	–107	9	–5	–	6
EBIT FROM CONTINUING OPERATIONS		1,485	–106	78	609	196	602	675	–1,660
Discontinued operations	9	–1,092	–2,786	477	–1,004	–222	–343	–307	–2,395
TOTAL OPERATIONS		393	–2,892	555	–395	–26	259	368	–4,055

EBIT, cont.

SEK million	Note	2007 Full year	2006 Full year	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
Mobile telephony		3,573	2,524	827	1,064	991	691	627	818
Indirect access		746	883	215	145	149	237	290	219
of which fixed telephony resale		1,356	1,560	317	276	351	412	475	409
of which broadband resale		–610	–677	–102	–131	–202	–175	–185	–190
Direct access & LLUB		–1,726	–1,273	–509	–419	–459	–339	–322	–276
Other operations		76	74	–38	61	35	18	30	–5
One-off items	1–4	–1,184	–2,314	–417	–242	–520	–5	50	–2,416
EBIT from continuing operations		1,485	–106	78	609	196	602	675	–1,660
EBIT MARGIN Nordic	1–3	12%	16%	6%	15%	13%	13%	14%	16%
Baltic & Russia	3	32%	14%	18%	67%	22%	18%	15%	17%
Central Europe	2–4	–19%	–18%	–11%	–59%	–7%	–1%	6%	–94%
Southern Europe	2–3	–12%	–27%	–17%	–1%	–11%	–18%	–21%	–33%
Benelux	2,4	–19%	–13%	–14%	–26%	–31%	–5%	–4%	–25%
Services	3–4	–31%	–2%	–28%	–173%	12%	–3%	0%	4%
EBIT margin from continuing operations		3%	0%	1%	6%	2%	6%	6%	–15%
Mobile telephony		16%	13%	14%	18%	17%	13%	12%	16%
Indirect access		6%	5%	8%	5%	4%	6%	7%	5%
of which fixed telephony resale		11%	10%	13%	10%	11%	12%	13%	11%
of which broadband resale		–41%	–46%	–31%	–36%	–51%	–44%	–48%	–51%
Direct access & LLUB		–34%	–30%	–40%	–33%	–37%	–27%	–27%	–24%
Other operations		2%	2%	–4%	6%	3%	2%	2%	0%
EBIT margin from continuing operations		3%	0%	1%	6%	2%	6%	6%	–15%
SPECIFICATION OF ITEMS BETWEEN EBITDA AND EBIT
EBITDA		6,647	5,776	1,500	1,844	1,712	1,591	1,556	1,657
Impairment of goodwill	2	–1,315	–2,457	–5	–1,310	–	–	–	–2,457
Depreciation/amortization and
other write-down	2	–4,028	–3,413	–945	–1,222	–934	–927	–872	–879
Sale of operations	3–4	739	30	–88	1,352	–520	–5	–17	–2
Other one-off items	1-2	–324	93	–324	–	–	–	50	43
Result from shares in associated
companies and joint ventures	10	–234	–135	–60	–55	–62	–57	–42	–22
EBIT from continuing operations		1,485	–106	78	609	196	602	675	–1,660

INVESTMENTS, CAPEX

SEK million Note	2007 Full year	2006 Full year	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
Nordic	1,058	957	339	224	276	219	399	175
Baltic & Russia	2,169	2,355	575	485	591	518	522	594
Central Europe	261	228	101	65	47	48	104	53
Southern Europe	93	77	33	22	20	18	21	18
Benelux	639	644	157	142	167	173	148	114
Services	49	55	15	5	11	18	16	10
CAPEX for continuing operations	4,269	4,316	1,220	943	1,112	994	1,210	964
Discontinued operations 9	929	1,049	210	252	249	218	354	238
INVESTMENTS IN INTANGIBLE
AND TANGIBLE ASSETS, CAPEX	5,198	5,365	1,430	1,195	1,361	1,212	1,564	1,202
Mobile telephony	2,799	2,893	783	615	758	643	760	688
Indirect access	313	439	73	57	93	90	157	65
of which fixed telephony resale	215	278	60	32	70	53	95	44
of which broadband resale	98	161	13	25	23	37	62	21
Direct access & LLUB	960	830	285	232	219	224	227	189
Other operations	197	154	79	39	42	37	66	22
CAPEX for continuing operations	4,269	4,316	1,220	943	1,112	994	1,210	964
ADDITIONAL CASH FLOW INFORMATION CAPEX according to cash flow statement	5,169	5,520	1,315	1,188	1,493	1,173	1,422	1,420
Unpaid CAPEX for the period and paid CAPEX from previous year:
Continuing operations	23	–188	40	–1	–54	38	73	–82
Discontinued operations 9	–12	1	73	4	–80	–9	41	–138
Sales price in cash flow statement	18	32	2	4	2	10	28	2
CAPEX according to balance sheet, including discontinued operations	5,198	5,365	1,430	1,195	1,361	1,212	1,564	1,202

SWEDEN*

Number of customers				Net intake
Thousands		2007 Dec 31	2006 Dec31	Change	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
	Note
Mobile telephony		3,099	3,508	–12%	92	100	46	17	11	3
Indirect access		977	1,125	–13%	-42	–19	–37	–50	–19	–37
of which fixed telephony resale		918	1,080	–15%	-45	–20	–41	–56	–22	–36
of which broadband resale		59	45	31%	3	1	4	6	3	–1
Direct access & LLUB		327	264	24%	18	19	14	12	22	13
Net customer intake					68	100	23	–21	14	–21
Changed method of calculation TOTAL OPERATIONS	6	4,403	4,897	–10%	– 68	– 100	–664 –641	– –21	– 14	– –21
SEK million		Note	2007 Full year	2006 Full year	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
OPERATING REVENUE
Mobile telephony	1		7,386	6,843	1,914	1,922	1,863	1,687	1,745	1,770
Indirect access of which fixed telephony resale			2,581 2,436	2,751 2,625	566 529	640 603	672 637	703 667	662 631	680 648
of which broadband resale			145	126	37	37	35	36	31	32
Direct access & LLUB			1,074	864	288	266	259	261	250	227
Other operations			740	691	187	195	183	175	178	180
One-off items	1		–200	–	–200	–	–	–	–	–
Operating revenue			11,581	11,149	2,755	3,023	2,977	2,826	2,835	2,857
EBITDA
Mobile telephony Indirect access			2,696 318	2,899 306	669 28	724 85	702 81	601 124	672 40	759 68
of which fixed telephony resale			402	352	60	106	99	137	60	88
of which broadband resale			–84	–46	–32	–21	–18	–13	–20	–20
Direct access & LLUB			–27	20	–23	–	–24	20	–9	9
Other operations			44	27	4	24	6	10	–5	5
EBITDA			3,031	3,252	678	833	765	755	698	841
EBITDA MARGIN
Mobile telephony			37%	42%	35%	38%	38%	36%	39%	43%
Indirect access of which fixed telephony resale			12% 17%	11% 13%	5% 11%	13% 18%	12% 16%	18% 21%	6% 10%	10% 14%
of which broadband resale			–58%	–37%	–86%	–57%	–51%	–36%	–65%	–63%
Direct access & LLUB			–3%	2%	–8%	0%	–9%	8%	–4%	4%
Other operations			6%	4%	2%	12%	3%	6%	–3%	3%
EBITDA margin			26%	29%	23%	28%	26%	27%	25%	29%
EBIT
Mobile telephony			2,032	2,302	505	561	532	434	509	621
Indirect access			228	205	3	64	60	101	20	42
of which fixed telephony resale			321	253	38	87	80	116	41	63
of which broadband resale Direct access & LLUB			–93 –278	–48 –155	–35 –93	–23 –63	–20 –85	–15 –37	–21 –69	–21 –32
Other operations			–28	–33	–17	7	–11	–7	–22	–11
One-off items	1–2		–484	50	–200	–284	–	–	50	–
EBIT			1,470	2,369	198	285	496	491	488	620
EBIT MARGIN
Mobile telephony			28%	34%	26%	29%	29%	26%	29%	35%
Indirect access			9%	7%	1%	10%	9%	14%	3%	6%
of which fixed telephony resale			13%	10%	7%	14%	13%	17%	6%	10%
of which broadband resale			–64%	–38%	–95%	–62%	–57%	–42%	–68%	–66%
Direct access & LLUB Other operations			–26% –4%	–18% –5%	–32% –9%	–24% 4%	–33% –6%	–14% –4%	–28% –12%	–14% –6%
EBIT margin			13%	21%	7%	9%	17%	17%	17%	22%

*Tele2 Sverige AB, Optimal Telecom AB, Tele2 Syd AB and results from shares in the joint ventures Svenska UMTS-nät AB and Spring Mobil AB.

RUSSIA

Thousands	Note	2007 Dec 31	2006 Dec31	Change	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
Net customer intake					554	647	839	644	933	711
Acquired companies					10	–	–	–	–	182
Divested companies					–	–587	–	–	–	–
Total number of customers		8,560	6,453	33%	564	60	839	644	933	893
SEK million		Note	2007 Full year	2006 Full year	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
Operating revenue EBITDA			5,051 1,590	2,819 566	1,414 439	1,324 440	1,261 414	1,052 297	988 266	815 205
EBITDA-margin			31%	20%	31%	33%	33%	28%	27%	25%
EBIT			2,209	244	300	1,459	280	170	153	112

KEY RATIOS

SEK million	2007	2006	2005	2004
CONTINUING OPERATIONS
Operating revenue	43,420	43,098	37,870	30,570
Number of customers, in thousand	24,721	25,751	23,023	19,998
EBITDA	6,647	5,776	5,293	4,996
EBIT	1,485	–106	2,607	2,858
EBT	759	–668	2,170	2,686
Net profit/loss	–302	–1,003	1,665	2,030
KEY RATIO
EBITDA margin, %	15.2	13.4	14.0	16.3
EBIT margin, %	3.4	–0.2	6.9	9.3
PER SHARE DATA (SEK)
Earnings	–0.45	–1.98	3.77	4.59
Earnings after dilution	–0.45	–1.98	3.77	4.57
TOTAL (INCLUDING DISCONTINUED OPERATIONS)
Shareholders' equity	26,849	29,123	35,368	32,900
Shareholders' equity after dilution	26,893	29,137	35,401	32,965
Total assets	48,648	66,164	68,291	49,873
Cash flow from operating activities	4,350	3,847	5,487	5,876
Cash flow after CAPEX	–819	–1,673	1,847	4,314
Available liquidity	25,901	5,963	8,627	5,113
Net borrowing	5,198	15,311	11,839	2,831
Investments in intangible and tangible assets, CAPEX	5,198	5,365	3,750	1,585
Investments in shares and long-term receivables, net	–11,444	1,616	7,953	1,653
KEY RATIO
Equity/assets ratio, %	55	44	52	66
Debt/equity ratio, multiple	0.19	0.53	0.33	0.09
Return on shareholders' equity, %	–6.0	–11.3	6.9	10.8
Return on shareholders' equity after dilution, %	–6.0	–11.3	6.9	10.8
Return on capital employed, %	1.5	–5.4	8.2	11.4
Average interest rate, %	5.2	4.2	3.7	4.4
PER SHARE DATA (SEK)
Earnings	–3.75	–8.14	5.30	7.74
Earnings after dilution	–3.75	–8.14	5.29	7.73
Shareholders' equity	60.31	64.85	78.96	74.32
Shareholders' equity after dilution	60.34	64.84	78.93	74.29
Cash flow from operating activities	9.78	8.66	12.39	13.27
Dividend	7.85 1)	1.83	1.75	1.67
Redemption	–	–	–	3.33
Market value at closing day	129.50	100.00	85.25	87.00

1) Proposed dividend

PARENT COMPANY

INCOME STATEMENT

SEK million	Note	2007 Full year	2006 Full year
Operating revenue		30	20
Administrative expenses	12	–167	–84
Other operating revenues		–	1
Operating profit/loss, EBIT		–137	–63
Dividend	12	13,000	–
Exchange rate difference on financial items		–396	547
Net interest expenses and other financial items		265	299
Profit/loss after financial items, EBT		12,732	783
Tax on profit/loss for the year		100	–219
NET PROFIT/LOSS		12,832	564

BALANCE SHEET

SEK million	Note	2007 Dec 31	2006 Dec 31
Assets
FIXED ASSETS
Financial assets		27,192	38,571
FIXED ASSETS		27,192	38,571
CURRENT ASSETS
Current receivables		13,139	54
Short-term investments		250	–
Cash and cash equivalents		15	7
CURRENT ASSETS		13,404	61
ASSETS		40,596	38,632
Equity and liabilities
SHAREHOLDERS' EQUITY
Restricted equity	7	17,459	17,432
Unrestricted equity	7	15,689	3,627
SHAREHOLDERS' EQUITY		33,148	21,059
LONG-TERM LIABILITIES
Interest-bearing liabilities		5,152	12,417
LONG-TERM LIABILITIES		5,152	12,417
SHORT-TERM LIABILITIES
Interest-bearing liabilities		2,154	4,688
Non-interest-bearing liabilities		142	468
SHORT-TERM LIABILITIES		2,296	5,156
EQUITY AND LIABILITIES		40,596	38,632

NOTEs

ACCOUNTING PRINCIPLES AND DEFINITIONS

For the Group, the interim report has been prepared in accordance with IAS 34 and the Swedish Annual Accounts Act, and for the Parent Company in accordance with the Swedish Annual Accounts Act.

From January 1, 2007, IFRS 7, amendments to IAS 1 and IFRIC 7, 8, 9 and 10 are applied. These have had no effect on the reported income statement.

The definition for EBITDA has during 2007 been changed to exclude profit and loss from sale of operations and one off items. Previous periods have been adjusted retrospectively.

In connection with the acquisition of operations, goodwill is allocated to the cash generating units that expect to achieve future financial benefits and synergies as a result of the acquired operations. In the event that separate cash generating units cannot be identified, goodwill is allocated to the lowest level at which the operation and its assets is controlled and monitored internally. Tele2 has in Q3 2007, as a result of the changed strategic focus and divestments of a number of operations, changed allocation of goodwill from market area level to country level. Please refer to Note 2.

In Q2 2007, the definition for inactive mobile prepaid customers has been changed, please refer to Note 6.

Tele2 has, in all other respects presented its interim report in accordance with the accounting principles and calculation methods used in the 2006 Annual Report. Definitions are found in the 2006 Annual Report.

NOTE 1 Operating revenue

In Q4 2007, the operating revenue in Tele2 Sweden was reduced by SEK 200 million which is related to a dispute with Telia Sonera. The negative one off item is related to the interconnect dispute between year 2000-2004. While awaiting decision on appeal from the Swedish Supreme Administrative Court, Tele2 has decided to book this as reduced revenue in Q4 2007.

From Q4 2007 onwards, the two operations in the Netherlands, i.e. Tele2 Netherlands and Versatel Netherlands, is reported as one operation. Internal sales between the companies have been eliminated in market area Benelux and previous periods have been adjusted retrospectively.

Operating revenue from Q4 2004 and onwards for Tele2 in Sweden includes SEK 24 million per quarter relating to mobile telephony according to the MVNO agreement with Telenor. The capacity swap in the agreement is viewed upon as exchange of capacity between Tele2 and Telenor on a group level, where revenues from the swap are offset against costs. The agreement runs up to and including Q1 2008.

NOTE 2 Operating expenses

The Supreme Court in The Hague has ruled negatively on Tele2 Netherlands Holding N.V.'s, formerly Versatel, appeal regarding a dispute with the tax authorities about the valuation of stock options for tax purposes. As a result the costs for market area Benelux were increased by SEK 124 million in Q4 2007.

Tele2 continuously conducts price negotiations in all markets and retroactive adjustments are a natural part of Tele2's business. The adjustments in Q3 and Q4 2006 were nevertheless out of the ordinary and concentrated to certain market areas. In Q4 2006, the costs were reduced by SEK 50 million for the market area Nordic as a result of price negotiations with another operator. In Q3 2006 the costs were reduced by SEK 43 million for the market area Benelux as a result of a settlement with another operator of SEK 95 million and estimated future unused part of leased premises of SEK 52 million.

DEPRECIATION/AMORTIZATION AND IMPAIRMENT

In Q3 2007 Tele2 recognized goodwill impairment losses of SEK 1,310 million, related to operations stated below, and SEK 284 million attributable to Tele2's IT-systems.

SEK million	2007	Q3 2007
Germany, Central Europe	572	570
Austria, Central Europe	291	290
Belgium, Benelux	276	275
Netherlands, Benelux	176	175
Total impairment of goodwill	1,315	1,310

In connection with the changed strategic focus, the business and financial performance has started to be monitored to a larger extent on each country rather than on each market area. Tele2 has in line with its adjusted strategic focus divested a number of businesses that did not meet Tele2's long-term financial goals. In Q3 2007 Tele2 has consequently changed its allocation of goodwill from being allocated to each market area to be allocated to each country. The allocation of goodwill has been based on each country's relative value.

The impairment of the operation in Germany and Austria is related to declining volumes and prices. An agreement to sell Belgium was signed in Q3 2007 and the impairment reflects the difference between sales price and assets sold. The impairment in the Netherlands is an effect of allocating goodwill to each country in Q3 2007.

The impairment of IT-systems is related to that the utilization of common billing systems will be lower than planed due to the sales of a number of businesses.

In Q3 2006, Tele2 recognized goodwill impairment losses of SEK 2,457 million, of which SEK 1,863 million related to Central Europe, SEK 94 million to Southern Europe and SEK 500 million to Benelux.

NOTE 3 Sales of operations, profit

In 2007, Tele2 has reported the following capital gains from the divestment of operations.

SEK million	Q4 2007	Q3 2007
Irkutsk, Baltic & Russia	11	1,168
Denmark, Nordic	9	309
Uni2 Denmark, Services	6	39
Hungary, Central Europe	17	–
Portugal, Southern Europe	–3	6
Total capital gain, divested operations	40	1,522

In Q2 2006, market area Central Europe reported a capital gain from the divestment of Tele2's operations in the Czech Republic, corresponding to SEK 50 million, after a minor adjustment in Q3 2006.

NOTE 4 Sales of operations, loss

In 2007, Tele2 has reported the following capital losses from the divestment of operations.

SEK million	Q4 2007	Q3 2007	Q2 2007	Q1 2007
Alpha Telecom/Calling Card company, Benelux	–99	–10	–520	–
3C Communications, Services	–3	–133	–	–
Belgium, Southern Europe	–	–20	–	–
Datametrix Norway, Services	–	–7	–	–5
Other	–26	–	–	–
Total capital loss, divested operations	–128	–170	–520	–5

During the fourth quarter 2006 a capital loss of SEK –20 million was reported.

NOTE 5 Taxes

In Q3 2007 an additional write-down of tax assets has been reported, in connection with the impairment of goodwill according to Note 2, for Tele2 Germany affecting the income statement with SEK –599 million.

In Q2 2007, a one-off adjustment has been reported of the deferred tax assets which has affected the income statement with SEK –228 million, mainly related to reduced income tax rate in Germany.

NOTE 6 Number of customers

As a way of standardizing reporting both internally and externally, Tele2 has decided to change its principles for calculating the number of inactive customers in its Nordic mobile prepaid base. As of Q2 2007, Tele2 considers a customer inactive if the customer has not used its mobile service in 6 months, instead of earlier 13 months. However, the customer will still be able to use their SIM card within the 13 months period, as before. In Q2 2007, the one-time effect was a decrease of 759,000 in the reported customer base in the market area Nordic.

NOTE 7 Shares and convertibles

Tele2 has, in Q2 2007, paid a dividend of SEK 1.83 per share, corresponding to a total of SEK 814 million.

As a result of 361,746 warrants being exercised during 2007, Tele2 has issued new shares resulting in an increase of shareholders' equity of SEK 22 million.

Tele2 has, in Q4 2007, issued 4,098,000 Class C shares through a directed placement at a subscription price corresponding to a quota value of SEK 1.25 per share, a total of SEK 5 million. The Class C shares do not entitle to dividends and represent one vote each. Tele2 has immediately after the issue repurchased all Class C shares at a price corresponding to the subscription price.

INCENTIVE PROGRAM 2007–2012

The Extraordinary General Meeting on August 28, 2007 decided to adopt a performance based incentive programme for approximately 80 senior executives and other key employees within the Tele2 group. The incentive programme entails that the participants shall be granted stock options free of charge. Each option entitles the holder to purchase one Class B share at an exercise price of SEK 130.20 corresponding to 110 percent of the average closing price of the company's Class B share 10 trading days prior to the date of grant. The scope of the incentive programme amounts to a maximum of 4,098,000 options.

The options may only be exercised three to five years from the time of grant, provided that the holder is still employed within the Tele2 group and that certain performance conditions are fulfilled. Based on the outcome of these performance conditions, the employees will be able to exercise 0–100 percent of granted options, i.e. there will be no guaranteed exercise. The performance conditions for the options will be measured from 1 July 2007 until 30 June 2010 and are based on the company's average normalised return on capital employed and total shareholders return compared to a peer group.

The purpose with the incentive programme is to strengthen the employees' loyalty, improve the conditions for the company's continued demands on profitability and create an opportunity for the employees to take part in the group's development. The incentive programme will constitute a competitive incentive and a motivating offer for senior executives and other key employees within the group.

The total costs after tax of the incentive programme are expensed as they arise, over a three-year period. These costs are expected to amount to SEK 46 million, of which SEK 5 million has been expensed during 2007.

Number of options	Aug 2007 – Dec 31, 2007
Allocated August 2007	3,552,000
Forfeited	–63,000
Total outstanding stock options	3,489,000

INCENTIVE PROGRAM 2006–2011

	Stock options		Warrants
Number of options	Full year, 2007	Feb 2006– Dec 31, 2007	Full year, 2007	Feb 2006– Dec 31, 2007
Allocated February 2006		1,504,000		752,000
Outstanding as of January 1	1,504,000		752,000
Forfeited	–340,000	–340,000	–35,000	–35,000
Total outstanding	1,164,000	1,164,000	717,000	717,000

INCENTIVE PROGRAM 2002–2007

		Outstanding
Number of options	Full year, 2007	2002– Dec 31, 2007	Full year, 2007	2002– Dec 31, 2007
Allocated 2002		2,147,760		482,618
Outstanding as of January 1	273,180		166,620
Forfeited	–	–381,510	–78,054	–78,054
Exercised	–273,180	–1,766,250	–88,566	–404,564
Total	–	–	–	–

The Incentive program 2002–2007 ended in Q3 2007 and as of December 31, 2007, there are no outstanding stock options or held warrants.

NOTE 8 Business acquisitions and divestments

Acquisitions and divestments of shares and participations affecting cash flow are the following.

SEK million	2007
Acquisitions
Versatel, minority interest	–871
Telecom Eurasia, Russia	–105
Mobile Norway, joint venture	–203
Tele2 Syd (formerly E.ON Bredband), minority interest	–135
Radio Components, minority interest	–7
	–1,321
Divestments
Italy/Spain	6,739
Belgium	862
Portugal	125
Irkutsk, Russia	1,570
France	2,874
Denmark	743
Hungary	36
3C Communications	75
UNI2 Denmark	65
Alpha Telecom och Calling Card Company 1)	15
Datametrix Norway	100
Other divestments	2
	13,206
Other
Other cash flow changes in shares and participations	–108
Cash flow effect of acquisitions and divestments in shares and participations	11,777

1) The divestment of the operations in Calling Card Company refers to specific assets and liabilities.

ACQUISITIONS

Netherlands and Belgium

During December 2007 Tele2 increased its shares in Versatel with an additional 17.16 percent and is now holding 98.81 percent of the shares. The purchase price amounted to SEK 1,213 million, of which SEK 871 million affected the cash-flow for Q4 2007

On March 6, 2007 Tele2 sold the shares in Tele2 Netherlands and Tele2 Belgium to Versatel Telecom International N.V. The reorganization has been carried out as a part of the integration process of Tele2's and Versatel's operations in the Netherlands and Belgium. Versatel has financed the acquisition by an issue of new shares. As a result of the issue Tele2 has increased its share holdings in Versatel by 1.36 percent.

Telecom Eurasia, Russia

On October 5, 2007, Tele2 acquired all shares in Telecom Eurasia, with an 1800 MHz GSM-license in the Russian region Krasnodar and a customer base of 20,000, for SEK 129 million. The acquisition has affected Tele2's operating revenue in the market area Baltic & Russia year-to-date by SEK 3 million, EBITDA by SEK –5 million and net profit/loss by SEK –6 million.

Krasnodar is the third biggest region in Russia as well as the second biggest roaming region. Goodwill in connection with the acquisition is related to Tele2's expectations of a positive economic development in the region as well as economies of scale and synergies through integration in Tele2 Russia's existing operation with a successful brand and product strategies in the Russian market. Goodwill also arises from a deferred tax asset included in the acquisition that was not judged to meet the criteria for recognition.

Croatia

On October 3, 2007, Tele2 acquired 42 percent of the shares in Tele2 Croatia, for SEK 150 million. The holding in the company represents 93 percent. The acquisition, by an issue of new shares, has not effected Tele2s result, cash-flow or financial position. Continuing note 8

Mobile Norway

On October 1, 2007, Tele2 acquired 50 percent of the shares in Mobile Norway AS (formerly AMI AS), the owner of a GSM 900 license, for SEK 161 million. At the same time Tele2 and Network Norway AS have entered into an agreement to build the third mobile network in Norway. Phase one of the joint venture build-out is ongoing and the new 3G-license that the company was awarded in December 2007 will further enhance the network. Tele2's total investment, after capital contribution, amounts to SEK 209 million at the balance sheet date.

Other acquisitions

On June 1, 2007 Tele2 acquired the remaining 24.9 percent in Tele2 Syd AB, former E.ON Bredband, for SEK 135 million. In June 2007, Tele2 also acquired 10.7 percent in Radio Components Sweden AB. The holding in the company represents 80.3 percent.

On February 1, 2007 Tele2 acquired the remaining 0.03 percent in Comunitel, Spain by issuing new share. During 2007 Tele2 has also contributed capital to its joint ventures Plusnet and Spring Mobil.

The assets, liabilities and contingent liabilities included in the acquisition are stated below:

		Telecom Eurasia
SEK million	Reported value at the time of acquisition	Adjustment to fair value	Fair value
Customer contracts	–	1	1
Tangible assets	4	–	4
Materials and supplies	3	–	3
Current receivables	46	–	46
Cash and cash equivalents	24	–	24
Deferred tax liabilities	–	–1	–1
Short-term liabilites	–209	–	–209
Acquired net assets	–132	0	–132
Goodwill			154
Purchase price for shares in subsidiary			22
Payment of debts in acquired operations			107
Acquisition value			129
Less: cash in acquired operation			–24
Effect on group cas h and cas h equivalents			105

The information above and the pro forma below are to be viewed as preliminary.

DIVESTMENTS

Italy/Spain

On October 6, 2007 Tele2 announced the sale of its operations in Italy and Spain. The sale was completed on December 3, 2007 after approval from the European Commission. The divested operation has been reported as discontinued operations; please refer to Note 9 for additional information.

Belgium

On October 1, 2007, Tele2 divested its Belgium operation for SEK 927 million. An impairment of goodwill regarding the Belgium operations has been reported during Q3 2007 amounting to SEK 275 million (please refer to Note 2). The operation has affected Tele2's operating revenue in the market area Benelux year-to-date by SEK 901 (1,381) million, EBITDA by SEK –40 (–56) million and net profit/loss by SEK –156 (–242) million in addition to a capital loss of SEK 20 million.

Portugal

On September 11, 2007, Tele2 divested its operation in Tele2 Portugal for SEK 133 million. Tele2 Portugal has affected Tele2's operating revenue in the market area Southern Europe year-to-date by SEK 349 (415) million, EBITDA by SEK –59 (–74) million and net profit/loss by SEK –67 (–77) million in addition to a recorded capital gain of SEK 3 million.

Irkutsk

On August 13, 2007, Tele2 divested its operation in Tele2 Irkutsk in Russia for SEK 1,595 million. Tele2 Irkutsk has affected Tele2's operating revenue in the market area Baltic & Russia year-to-date by SEK 214 (237) million, EBITDA by SEK 64 (79) million and net profit/loss by SEK 35 (44) million in addition to a recorded capital gain of SEK 1,179 million.

The disposal was done in connection with signing of a 10-year national roaming agreement in Russia with Vimpelcom, which enables Tele2 customers seamless roaming at low prices across Vimpelcom's network in Russia, where Tele2 has no mobile network presence. Both transactions are on commercial terms.

France fixed and broadband business

On October 3, 2006 Tele2 announced the sale of its fixed and broadband business in France. The divestment was finalized on July 18, 2007, after receiving approval from the EU competition authorities. The divested operation has been reported as discontinued operations; please refer to Note 9 for additional information.

Denmark

On July 12, 2007, Tele2 divested its operation in Tele2 Denmark for SEK 776 million. Tele2 Denmark has affected Tele2's operating revenue in the market area Nordic year-to-date by SEK 736 (1,668) million, EBITDA by SEK 89 (68) million and net profit/loss by SEK 44 (–14) million in addition to a recorded capital gain of SEK 318 million.

Other divestments

On July 9, 2007, Tele2 announced the divestment of its Hungarian operations for SEK 87 million. The divestment was finalized on October 18, 2007, after receiving approval from the Hungarian Competition Authorities. The operation has affected Tele2's operating revenue in the market area Central Europe year-to-date by SEK 223 (353) million, EBITDA by SEK 50 (–31) million and net profit/loss by SEK 46 (–38) million in addition to a capital gain of SEK 17 million.

On September 19, 2007, Tele2 divested its operation 3C Communications for SEK 46 million. 3C has affected Tele2's operating revenue in the market area Services year-to-date by SEK 45 (73) million, EBITDA by SEK –14 (–6) million and net profit/loss by SEK –28 (–13) million in addition to a recorded capital loss of SEK 136 million.

On August 31, 2007, Tele2 divested its operation UNI2 Denmark for SEK 70 million. UNI2 Denmark has affected Tele2's operating revenue in the market area Services year-to-date by SEK 38 (53) million, EBITDA by SEK 12 (6) million and net profit/loss by SEK 3 (–8) million in addition to a recorded capital gain of SEK 45 million.

In May 2007, Tele2 divested its Alpha Telecom and Calling Card Company operation for SEK 82 million. The operation has affected Tele2's operating revenue in the market area Benelux year-to-date by SEK 379 (1,166) million, EBITDA by SEK 36 (40) million and net profit/loss by SEK 9 (–98) million in addition to a recorded capital loss of SEK 629 million.

On March 31, 2007, Tele2 divested its operation Datametrix Norway for SEK 128 million. Datametrix AS has affected Tele2's operating revenue in the market area Services year-to-date by SEK 119 (323) million, EBITDA by SEK 4 (5) million and net profit/loss by SEK 2 (2) million in addition to a recorded capital loss of SEK 12 million.

Net assets at the time of divestment

Assets, liabilities and contingent liabilities included in the divested operations at the time of divestment are stated below.

SEK million	Italy/Spain	Belgium	Portugal	Irkutsk	France	Denmark	Other	Total
Goodwill	4,079	216	119	99	2,737	–	396	7,646
Other intangible assets	389	130	1	1	468	28	83	1,100
Tangible assets	2,083	700	65	211	247	87	100	3,493
Deferred tax receivables	910	3	–	–	9	264	172	1,358
Long-term receivables	3	–	–	–	1	6	30	40
Material and supplies	3	–	1	2	80	–	26	112
Current receivables	1,787	309	119	36	610	362	549	3,772
Cash and cash equivalents	73	60	–	1	386	3	102	625
Exchange rate differences	–602	–28	–76	82	–428	9	–17	–1,060
Deferred tax liabilities	–153	–33	–	–	–	–	–16	–202
Provisions	–30	–22	–4	–	–	–18	–10	–84
Long-term liabilities	–253	–1	–	–	–1	–	–46	–301
Short-term liabilities	–1,971	–447	–131	–40	–1,186	–515	–375	–4,665
Divested net assets	6,318	887	94	392	2,923	226	994	11,834
Capital profit/loss	261	–20	3	1,179	281	318	–741	1,281
Sales price, net sales costs	6,579	867	97	1,571	3,204	544	253	13,115
Sales costs etc, non-cash	232	55	28	–	56	27	100	498
Payment for receivable in divested operation	–	–	–	–	–	175	43	218
Less: cash in divested operation	–72	–60	–	–1	–386	–3	–103	–625
Effect on group cas h and cas h equivalents	6,739	862	125	1,570	2,874	743	293	13,206

The divested operations in Tele2 Italy/Spain and Tele2 France have been reported as discontinued operations according to IFRS 5 Non-current assets held for sale and discontinued operations. Since the remaining divested operations above, were not a significant part of Tele2's result and financial position, separate reporting in the income statement according to IFRS 5 has not been made.

Ongoing divestments

On October 8, 2007, Tele2 divested its mobile telephony operations in Tele2 Austria for approximately SEK 65 million. The capital gain is estimated at SEK 0 million. The operation has affected Tele2's operating revenue in the market area Central Europe year-to-date by SEK 45 (168) million, EBITDA by SEK –94 (–28) million and net profit/loss by SEK –104 (–40) million. Completion is expected following approval from the relevant regulatory authorities.

Since divested operation above, was not a significant part of Tele2's result and financial position, separate reporting in the income statement and balance sheet has not been made according to IFRS 5.

PRO FORMA

The table below shows the effect of the acquired and divested companies and operations at December 31, 2007 on Tele2's operating revenue and result, had they been acquired or divested at January 1, 2007.

	2007
SEK million	Tele2 Group1)	Acquired companies before the time of the acquisition	Excluding divested companies and operations	Tele2 Group pro forma
Operating revenue	43,420	20	–3,009	40,431
EBITDA	6,679	19	–134	6,564
Net profit/loss	–270	2	–622	–890

1) less Tele2 Italy/Spain and the fixed and broadband business in France since these are reported as discontinued operations.

NOTE 9 Discontinued operations and assets classified as held for sale

THE OPERATION IN ITALY AND SPAIN

On October 6, 2007 Tele2 announced the sale of its operations in Italy and Spain for SEK 6,973 million. The sale was completed on December 3, 2007 after approval from the European Commission.

An impairment of goodwill amounting to SEK 1,295 million has been reported 2007 regarding the Italian and Spanish operations, whereof SEK 1,290 million was reported during Q3 2007. The impairment reflects the difference between sales price and assets sold. In Q3 2006 an impairment of goodwill on market area level was reported, of which SEK 843 million is estimated to be attributable to the operation in Italy and Spain. During the fourth quarter 2007, a capital gain of SEK 261 million has been reported as discontinued operations, whereof SEK 580 million is related to a reversal of exchange rate differences previously reported directly in equity.

The divestment has been reported separately under discontinued operations in the income statement, with a retrospective effect on previous periods, and in the balance sheet from September 30, 2007 according to IFRS 5 Non-current assets held for sale and discontinued operations.

FRANCE FIXED AND BROADBAND BUSINESS

On October 3, 2006 Tele2 announced the sale of its fixed and broadband operations in France for SEK 3,301 million. Tele2's French mobile business is retained by Tele2. On July 18, 2007, Tele2 announced it has received approval from the EU competition authorities on the sale. The divestment was finalized in Q3 2007.

In Q3 2006, a goodwill impairment loss of SEK 1,500 million affected the results from the discontinued operations. This was attributable to the estimated capital loss due to the sale, excluding a reversal of exchange rate differences associated with the French operation recognized directly in equity. The first six months of 2007 includes additional goodwill impairment of SEK 75 million. A capital gain of total SEK 281 million has been reported in discontinued operations 2007, of which SEK 269 million in the third quarter. The capital gain includes SEK 443 million related to a reversal of exchange rate differences, previously reported directly in equity.

The divestment has been reported separately under discontinued operations in the income statement, with a retrospective effect on previous periods, and in the balance sheet from September 30, 2006 according to IFRS 5-Non-current assets held for sale and discontinued operations.

INCOME STATEMENT

Income Statement for discontinued operations in Italy, Spain and France, formerly reported in market area Southern Europe, is stated below.

SEK million	2007 Full year	2006 Full year	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
Operating revenue	9,213	11,533	1,369	1,918	3,023	2,903	2,795	2,735
Operating expenses	–9,485	–11,981	–1,164	–1,903	–3,210	–3,208	–3,103	–2,791
Impairment of goodwill	–1,370	–2,343	–5	–1,290	–35	–40	–	–2,343
Sale of operations, profit	542	–	273	269	–	–	–	–
Other operating revenues	11	8	3	3	2	3	2	4
Other operating expenses	–3	–3	1	–1	–2	–1	–1	–
EBIT	–1,092	–2,786	477	–1,004	–222	–343	–307	–2,395
Net interest expenses	1	39	–2	1	–4	6	10	5
Other financial items	–1	–1	–	–1	–	–	–1	–
EBT	–1,092	–2,748	475	–1,004	–226	–337	–298	–2,390
Tax on profit/loss	–375	11	–336	–91	22	30	–12	3
NET PROFIT/LOSS, TOTAL IMPACT	–1,467	–2,737	139	–1,095	–204	–307	–310	–2,387
Earnings per share (SEK)	–3.30	–6.16
Earnings per share, after dilution (SEK)	–3.30	–6.16

CASH FLOW STATEMENT

	2007	2006	2007	2007	2007	2007	2006	2006
SEK million	Full year	Full year	Q4	Q3	Q2	Q1	Q4	Q3
Cash flow from operating activities	–141	–117	167	–8	–3	–297	–199	124
Cash flow from investing activities	8,749	–1,103	6,592	2,714	–330	–227	–327	–361
of which sale of shares and participations	9,678	–	6,741	2,937	–	–	–	–
of which other investing activities	–929	–1,103	–149	–223	–330	–227	–327	–361
Cash flow from financing activities	989	1,195	–8	173	222	602	553	239
Net change in cash and cash equivalents	9,597	–25	6,751	2,879	–111	78	27	2

NUMBER OF CUSTOMERS

	Number of customers		Net intake
Thousands	2007 Full year	2006 Full year	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
Indirect access of which fixed telephony resale	– –	6,051 5,442	–135 –134	–222 –225	–373 –389	–377 –415	–354 –380	–326 –350
of which broadband resale	–	609	–1	3	16	38	26	24
Direct access & LLUB	–	301	88	81	134	139	141	59
Number of customers	–	6,352	–47	–141	–239	–238	–213	–267

Continuing note 9

SEK million	2007 Full year	2006 Full year	2007 Q4	2007 Q3	2007 Q2	2007 Q1	2006 Q4	2006 Q3
OPERATING REVENUE
Indirect access	6,245	10,241	694	1,054	2,184	2,313	2,339	2,406
of which fixed telephony resale	5,188	8,975	592	894	1,792	1,910	1,992	2,089
of which broadband resale	1,057	1,266	102	160	392	403	347	317
Direct access & LLUB	2,368	836	549	705	672	442	345	197
Other operations	987	1,134	148	225	314	300	311	315
Adjustments for internal sales	–387	–678	–22	–66	–147	–152	–200	–183
Operating revenue	9,213	11,533	1,369	1,918	3,023	2,903	2,795	2,735
EBITDA
Indirect access	275	302	210	87	6	–28	–11	113
of which fixed telephony resale	839	1,108	243	125	224	247	246	308
of which broadband resale	–564	–806	–33	–38	–218	–275	–257	–195
Direct access & LLUB	–64	–219	77	39	–43	–137	–85	–58
Other operations	91	86	17	22	26	26	19	31
EBITDA	302	169	304	148	–11	–139	–77	86
EBIT
Indirect access	26	6	172	36	–78	–104	–118	51
of which fixed telephony resale	623	838	208	78	153	184	154	251
of which broadband resale	–597	–832	–36	–42	–231	–288	–272	–200
Direct access & LLUB	–381	–488	21	–42	–135	–225	–160	–134
Other operations	91	86	16	23	26	26	18	31
One-off items	–828	–2,390	268	–1,021	–35	–40	–47	–2,343
of which impairment of goodwill	–1,370	–2,343	–5	–1,290	–35	–40	–	–2,343
of which capital gain	542	–	273	269	–	–	–	–
of which settlements of disputes	–	–47	–	–	–	–	–47	–
EBIT	–1,092	–2,786	477	–1,004	–222	–343	–307	–2,395
INVESTMENTS, CAPEX
Indirect access	170	351	30	23	66	51	123	82
of which fixed telephony resale	98	234	27	19	31	21	54	43
of which broadband resale	72	117	3	4	35	30	69	39
Direct access & LLUB	759	698	180	229	183	167	231	156
CAPEX	929	1,049	210	252	249	218	354	238
of which period's unpaid CAPEX	–12	1	73	4	–80	–9	41	–138
of which CAPEX according to cash flow	941	1,048	137	248	329	227	313	376

NOTE 10 Contingent liabilities and joint ventures

SEK million	Dec 31, 2007	Dec 31, 2006
Guarantee related to joint ventures	1,885	1,730
Future commitments	1	32
Total contingent liabilities	1,886	1,762

3G COMPANY IN SWEDEN

Tele2 and TeliaSonera each own 50 percent of Svenska UMTS-nät AB, which holds a 3G license in Sweden. Both companies have contributed capital to the 3G company. In addition to this, the build out has external financing through a loan facility of SEK 4.8 billion, which is 50 percent guaranteed by each party. Tele2 and TeliaSonera are technically MVNOs with the 3G company and hence act as capacity purchasers. The size of the fee is based on used capacity. At December 31, 2007 Tele2's guarantee amounted to SEK 1,838 million (December 31, 2006: SEK 1,685 million).

PLUSNET IN GERMANY

Tele2 owns 32.5 percent of Plusnet GmbH & Co KG and QSC owns 67.5 percent, although both parties have joint control. Tele2 has paid in approximately SEK 0.5 billion and QSC has contributed Unbundled Local Loop (ULL) networks in Germany. Tele2 has provided a bank guarantee of SEK 47 million as security for Plusnet. Both companies act as purchasers of capacity. As the company is not a profit-seeking entity, its fixed costs are shared between Tele2 and QSC, and its variable costs are distributed proportionately in relation to use.

BALANCE SHEET

An abbreviated version of the company's balance sheet is presented below and hence the level of investment at that time.

	Dec 31, 2007		Dec 31, 2006
SEK million	Svenska UMTS-nät	Plusnet GmbH	Svenska UMTS-nät	Plusnet GmbH
Fixed assets	3,740	906	3,688	213
Current assets	326	512	388	560
Assets	4,066	1,418	4,076	773
Shareholders equity	265	903	562	653
Long-term liabilities	3,677	45	3,372	5
Short-term liabilities	124	470	142	115
Shareholders' equity and liabilities	4,066	1,418	4,076	773

NOTE 11 Transactions with related parties

The Invik Group is not included in the group of related parties from Q2 2007 due to Kinnevik no longer holding shares in Invik. Transcom WorldWide Group provides customer services, telemarketing and debt-collection services for Tele2. Apart from transactions with Transcom no other significant related party transactions have been carried out during 2007. Information concerning transactions with major joint ventures is presented in Note 10. Related parties with which the group has transactions with are presented in the 2006 Annual Report, Note 40.

NOTE 12 Parent company

The parent company has in Q4 recieved an anticipated dividend of 13 billion from its subsidiary. In 2007 the parent company have reported a cost of SEK 66 million related to the incentive program 1997–2006. The cost is a result of a decision by the board to compensate the participators in the incentive program for the negative tax consequences connected with the program. The cost has previously been provided for on group level.