Tele2 AB announces significant customer intake driving strong operating results for the 12 months ended december 31, 200

TELE2 AB ANNOUNCES SIGNIFICANT CUSTOMER INTAKE DRIVING STRONG OPERATING RESULTS FOR THE 12 MONTHS ENDED DECEMBER 31, 2000 · 53% Annualized increase in Group Operating Revenue · 133% Annualized increase in Proforma SEC Operating Revenue · 59% Annualized increase in Subscribers to 11.5 million · Increasing profitability per subscriber within SEC · 20% Annualized increase in EBITDA for Tele2 Sweden · New York and Stockholm - February 20, 2001 - Tele2 AB (formerly NetCom AB, "Tele2", "the Group") (Nasdaq Stock Market: TLTO), the leading alternative pan-European telecommunications company, today announced its consolidated results for the quarter and twelve months ended December 31, 2000. Tele2 Financial Summary for the Twelve Months ended December 31, SEK millions 2000 1999 Operating Revenue 12,47 8,17 0 5 Operating Profit before depreciation and amortization (i) 1,841 2,06 2 after depreciation and amortization (ii) 441 1,15 4 Profit after financial items * 186 4,18 6 Profit (loss) after taxes -381 3,76 9 Earnings (loss) per share, after -3.34 36.2 dilution (SEK) 9 (i) EBITDA (ii) EBIT Lars-Johan Jarnheimer, President and CEO of Tele2 AB stated: "Today, Tele2 is the largest pan-European telecoms brand, operating in 20 markets and with a total subscriber base of more than 11.5 million. The fourth quarter saw a strong performance from our operations in Central and Southern Europe which is in line with our objective to reach EBITDA breakeven within three years in each country of operation. Since the acquisition of SEC in the fourth quarter, subscriber intake has been strong, driving revenue growth and EBITDA losses have been reduced. Tele2 is in a unique position of being awarded 3 UMTS licenses in Sweden, Norway and Finland, and will play a pivotal role in the deregulation and development of the telecoms sector in Europe. Our aim is to be a growth company in new markets focused on customer acquisition, churn management and cost control." * The comparative year includes a MSEK 3,228 associated company sale. FINANCIAL AND OPERATING HIGHLIGHTS · Tele2's proforma operating revenues were MSEK 16,273 for the twelve months ended December 31, 2000, an increase of 53% over the same period last year · Tele2 Sweden's operating revenues were MSEK 7,997 for the twelve months ended December 31, 2000, an increase of 21% over the same period last year. EBITDA increased by 20% to MSEK 2,749 over the same period. · The total number of subscribers for the Group at December 31, 2000 was 11.5 million, an increase of 59% over the same period of 1999 · Tele2 Sweden's mobile telephony business reported stable monthly average revenue per subscriber (ARPU) of SEK 219, inclusive of postpaid and prepaid customers, the later represents 59% of total subscribers · In August, Tele2 became the first Mobile Virtual Network Operator (MVNO) in Denmark through an agreement with Sonofon, allowing Tele2 to offer mobile telephony services to its existing fixed line customers. Further MVNO agreements are anticipated · In October, Tele2's acquisition of Société Européenne de Communication SA SEC) was finalized · Operating revenue of MSEK 5,879 for the 12 months, an increase of 133% · EBITDA losses contained and improvement in margins in Q4 increasing profitability per subscriber · Strong Q4 ARPU's for Central Europe of SEK 130 compared to SEK 109 for the year · Strong Q4 ARPU's for Southern Europe of SEK113 compared to SEK 105 for the year · Tele2 France secured more than 2 million customers and 50% market share of customers leaving France Telecom · February 2001, launched fixed telephony services in Spain · In October, Tele2 acquired Baltkom GSM, the second largest mobile telecommunications company in Latvia · In December, Tele2 was awarded a UMTS license in Sweden in addition to its previously awarded licenses in Finland and Norway and in January 2001formed a joint venture with Telia to substantially reduce the cost of developing a UMTS network in Sweden · In January 2001, Tele2 divested its shares in Transcom World Wide S.A · Effective August 2000, Tele2 AB appointed Håkan Zadler as Chief Financial Officer (CFO) · Effective February 16, 2001, NetCom AB changed its name to Tele2 AB to reflect the pan European strength of its Tele2 brand. · FINANCIAL RESULTS (The figures shown in parenthesis correspond to the comparable periods in 1999 and all negative amounts are distinguished with a minus sign) Results for the twelve months ended December 31, 2000 Operating revenue was MSEK 12,470 (8,175) an increase of 53%. Proforma operating revenue increased by 53% to MSEK 16,273 (10,640). There has been strong revenue growth in Mobile Telephony and Fixed Telephony operations and an encouraging performance from SEC. Operating revenue for Tele2 Sweden was MSEK 7,997, an increase of 21% with an encouraging 24% increase in Mobile Telephony in Tele2 Sweden. Operating profit before depreciation and amortization (EBITDA) was MSEK 1,841 (2,062). EBITDA for Tele2 Sweden was MSEK 2,749 (2,290), an annualized increase of 20% and a stable EBITDA margin of 34%. Operating profit after depreciation and amortization (EBIT) was MSEK 441 (1,154). EBIT for Tele2 Sweden was MSEK 2,038 (1,655) an increase of 23%. Net interest expense and other financial items totaled MSEK -211 (-241). The average interest rate applied to debt outstanding remained stable at 4.8% (4.8%). Profit after financial items was MSEK 186 (4,186). The comparative year includes a MSEK 3,228 associated company sale. Profit (loss) after tax was MSEK -381 (3,769). Earnings (loss) per share was SEK -3.34 (36.29), after dilution. Tele2's total assets at December 31, 2000 increased by 194% to MSEK 42,345 compared to MSEK 14,401 reported at December 31, 1999 reflecting the acquisition of SEC. Results for the three months ended December 31, 2000 Operating revenue was MSEK 4,949 (2,362) an increase of 110%. Proforma operating revenues increased by 49% to MSEK 4,949 (3,324). Operating profit (loss) before depreciation and amortization (EBITDA) was MSEK -356 (540). Operating profit (loss) after depreciation and amortization (EBIT) was MSEK -1,006 (293), due to increased sales and marketing activities in addition to increased depreciation. GROUP REVIEW Company name change On February 16, 2001, the company was renamed Tele2 AB from earlier being registered as NetCom AB. Associated Companies Everyday.com Tele2 is the leading Internet service provider or ISP in the Nordic region and its 1,255,000 Internet subscribers are being offered Everyday.com as their starting page in 11 countries. MTG publishes content on the WWW and has significant experience in the mass media, and marketing and advertising sales through TV channels, radio stations and newspapers. The Everyday.com content offering is growing continuously. The service was launched most recently in Denmark in June. Investments Europe In October, Tele2 finalised the offer made on July 24 for Société Européenne de Communication (SEC). Tele2 believes that SEC is a strong and well-funded business that is now fully operational in eight European countries with licences in a further three. SEC has established the Tele2 brand in these markets and it is the belief of the Board that there will be benefits in terms of brand and synergy in combining the businesses and creating a company with significant critical mass. The terms of the offer were one Tele2 Class A share or one Tele2 Class B share, at the seller's election, in exchange for every 11.5 SEC Class A shares and one Tele2 Class B share in exchange for every 11.5 SEC Class A and Class B shares held in combination. The new shares in Tele2 were issued on October 2, 2000 resulting in 40,748,480 new shares, of which 11,911,315 are Class A shares and 28,837,165 are Class B shares. SEC provides national and international long distance telephony services through Tele2 Europe in the Netherlands, Germany, Switzerland, Austria, France, Italy, Luxembourg and Liechtenstein and provides a broad range of mobile telecommunication services through Tango in Luxembourg and Liechtenstein and Tele2 Mobile in Switzerland. The SEC Group also includes 3C Communications, operating public pay telephones and public Internet services; Transac, providing billing and transaction processing services; Everyday.com, the free Internet service provider and portal; C cubed, offering co-branded pre-paid calling cards; and a 37.45% interest in Transcom World Wide, one of Europe's largest call center companies, which was sold after the year end. Latvia In October, Tele2 announced the acquisition of a 100% interest in Baltkom GSM, the second largest and most recent entrant to the mobile telephony market in Latvia which gives Tele2 a complete presence in the Baltics. Tele2 plans to build out the network of this well run operation and is well poised to take advantage of positive developments in the mobile phone usage in the region. Finland Tele2 is the largest shareholder in Suomen Kolmegee OY(3G), which has been granted one of only four nationwide licenses for a third generation mobile telephony network in Finland. The Everyday.com portal and free Internet services have been launched in the capital, Helsinki and expansion will follow throughout the country. In addition, Tele2 is offering an extremely competitive tariff structure through its phone card offering for international and national calls. The cards are distributed through one of the major distribution chains in Finland. Get2net Inc. In the second quarter of 2000, Tele2 sold 4T Solutions, a leader in developing invoicing systems for telecommunications service providers, to Get2net (formerly XSource Corporation) in exchange for 11.88% of Get2net's share capital. Get2net is a global billing company consisting of the following major companies: Savera, Billing Paraguay, Basset, Praesidium and NetCom Consultants, a leading telecoms consultancy firm. Tele2 believes that Get2net will be an attractive investment. OPERATIONAL REVIEW BY MARKET AREA Number of customers December 31, 2000 1999 % By Market Area Nordic 5,472,000 4,192,00 +31 0 Baltics and Eastern 278,000 56,000 +394 Europe Central Europe 2,702,000 1,692,00 +60 0 Southern Europe 2,942,000 1,233,00 +139 0 Luxembourg 160,000 82,000 +95 By Business Area Fixed telephony 7,740,000 4,492,00 +72 0 Mobile telephony 2,559,000 1,775,00 +44 0 Whereof Prepaid 1,396,000 959,000 +46 Dial up Internet 1,255,000 988,000 +27 TOTAL 11,554,00 7,255,00 +59 0 0 Nordic Operating revenue, MSEK 10,946 (8,651), +27% EBITDA, MSEK 2,978 (2,076), +43% The Nordic region encompasses operations in Sweden, Norway, Denmark and Finland. Tele2 Sweden is the main component, representing operating revenues of MSEK 7,997, an increase of 21% over the twelve months ended December 31, 2000. The growth in the number of Mobile prepaid and contract subscribers accelerated during the year due to Tele2's market position as the price- leading operator. Monthly average revenue per subscriber (ARPU), inclusive of postpaid and prepaid customers, remained stable at SEK 219 compared to SEK 219 in the same period in 1999, despite the higher customer intake during the period. In the fourth quarter of 2000, ARPU's inclusive of postpaid and prepaid customers was SEK 220 compared to SEK 218 in the same period of 1999. Prepaid mobile customers accounted for 59% of the total mobile subscriber base and 74% of net new subscriber additions in the period. Fixed telephony customer intake in Sweden was very strong on an annualized basis and this was reflected in increased sales and marketing spend which reduced margins. In December, Tele2 was awarded a UMTS license in Sweden in addition to licenses awarded in Norway and Finland. In January 2001, Tele2 announced a joint venture with Telia to share the cost of developing a UMTS network in Sweden. Denmark and Norway are predominantly fixed telephony operations and reported a total of 990,000 fixed subscribers an increase of 39% over the prior year. In October, Tele2 Denmark became the first mobile virtual network operator (MVNO) in Denmark, allowing the company to offer competitively priced mobile telephony services to its existing customer base. In association with Sonofon, Tele2 will be able to offer prepaid and ultimately post paid contracts without the need to invest in infrastructure. Tele2 in Norway has an agreement with Telenor to lease network capacity enabling Tele2Mobil to offer an equal range of network coverage. Tele2 was the first service provider to offer pre-paid cards in Norway and Tele2Mobil became operational during the second quarter of 2000. In May, Tele2 launched pre-paid international telephony services in Finland to be followed by the launch of international, long distance and Internet services marketed under the Tele2 brand. Baltics and Eastern Europe Operating revenue, MSEK 226 (104), +117% EBITDA, MSEK -37 (-10) The Baltic and Eastern Europe region encompasses operations in the Baltics, Poland and the Czech Republic. At December 30, 2000, Tele2's operations reported 278,000 gross cellular subscribers, an increase of 394% over the prior year, 41% of which were prepaid subscribers. Baltkom GSM, the second largest mobile telecommunications company in Latvia was purchased by Tele2 in October for a SEK 2.2 billion. Central Europe Operating revenue, MSEK 1,081 (-) EBITDA, MSEK -570 (-4) The central European region encompasses operations in Germany, the Netherlands, Switzerland, Austria and the United Kingdom and reported a strong fourth quarter of EBITDA growth reflecting the maturity of certain of the operations and their progress to EBITDA breakeven within the three years from operational launch. Tele2 Germany was launched in March 1998 and is now the country's fifth largest alternative operator, 40% of subscribers are preselect customers. Tele2 Netherlands was launched in October 1997 and is EBITDA breakeven as the second largest fixed telephony operator. Tele2 Switzerland, launched in October 1998, is the second largest operator to Swisscom and has recently launched Tele2 Mobile services. Tele2 Austria is the country's second largest alternative fixed telephony operator and has recently successfully launched ISP services. Southern Europe Operating revenue, MSEK 928 (-) EBITDA, MSEK -433 (-) The southern Europe region includes operations in France and Italy and licenses in Spain and Portugal. This region had a strong fourth quarter in terms of EBITDA growth reflecting the improving profitability of Tele2's operations in France and their significant subscriber base. Tele2 entered the French market in March 1999 and has grown to become the second largest operator with a subscriber base of more than 2 million. Tele2's large customer base gives it a strong foundation to negotiate with mobile network operators to secure MVNO status. Tele2 is now one of Italy's three leading alternative fixed line operators. In February 2001, Tele2 launched fixed telephony services in Spain. Luxembourg Operating revenue, MSEK 148 (-) EBITDA, MSEK -97 (-) The Luxembourg region includes Liechtenstein, Luxembourg and Belgium. In March 2000, Tele2 launched mobile telephony services in Liechtenstein under the Tango brand and in June launched fixed telephony services under the Tele2 brand. In Luxembourg, Tango has a 42% market share. Parent Company Operating revenue, MSEK 8 (10) EBITDA, MSEK 155 (-165) EBITDA in the second quarter of 2000 includes a fully reversed option cost of MSEK 201 following a decision by the Board to resolve the obligation through an increase in the number of shares in issue. The result for 1999 includes an option cost of MSEK -134. In the fourth quarter 2000, Tele2 AB increased its shares in issue by 200,000 relating to shares for the Management Share Option Program and by 40,748,480 relating to the purchase of SEC. Liquidity at both December 31, 2000 and December 31, 1999 was MSEK 7. ACCOUNTING PRINCIPLES In 2000, Tele2 modified its accounting principles to conform to the following recommendation of the Swedish Financial Accounting Standards Council: RR 1:00 Consolidated Accounts, RR 9 Income taxes, RR 11 Revenues, RR 15 Intangible assets, RR 12 Tangible assets and draft recommendation for the Cost of loans. This means that Tele2 follows recommendations RR 1:00 - RR 17. In all other cases, Tele2 has reported its interim report in accordance with the accounting methods and principles used in the Annual Report and Accounts for the 1999 financial year. A further accounting change has been made in the treatment of prepaid cards where revenue is now recognized when a customer commences using the service. These new accounting principles have been introduced with retroactive effect on previously reported figures. The net effect on equity at December 31, 1999 is shown in "Change of Consolidated Shareholders' Equity", and mainly represents the rebooked value of previously capitalized start up costs. COMPANY DISCLOSURE First Quarter of 2001 Results The proposed date for the release of Tele2's financial and operating results for the period ended March 31, 2001is April 25, 2001. Stockholm, February 20, 2001 Board of Tele2 AB REPORT REVIEW The financial and operating results for the period ended December 31, 2000 have not been subject to specific review by the Company's auditor. Tele2 AB, (formerly NetCom AB), formed in 1993, the leading alternative pan-European telecommunications company offering fixed and mobile telephony, data network and Internet services under the brands Tele2, Tango, Comviq, Baltkom GSM and Q-GSM to approximately 12 million people in 20 countries. Tele2 operates Datametrix, which specializes in systems integration, Optimal Telecom, 3C Communications, operating public pay telephones and public Internet services; Transac, providing billing and transaction processing services; C cubed are also part of Tele2 AB. The Group offers cable television services under the Kabelvision brand name. The Company is listed on the Stockholm Stock Exchange, under TEL2A and TEL2B, and on the Nasdaq Stock Market, under TLTO. CONTACTS Lars-Johan Jarnheimer Telephone + 46 8 562 640 00 : President and CEO, Tele2 AB Hakan Zadler Telephone + 46 8 562 640 00 : CFO, Tele2 AB Andrew Best Telephone + 44 (0) 20 7321 5010 : Shared Value Visit us at our homepage: http://www.Tele2.com CONFERENCE CALL DETAILS A conference call to discuss the results will be held at 14.00 (Swedish time) / 08.00 (New York time), on Tuesday, February 20, 2001. The dial in number is: +44 (0) 20 8240 8243 and participants should quote Tele2 AB . A live audio stream of the conference call can also be accessed at www.Tele2.com. Please dial in / log on 10 minutes prior to the start of the conference call to allow time for registration. An instantaneous recording of the conference call will be available for 48 hours on +44 (0) 20 8288 4459, access code 636 612. ------------------------------------------------------------ This information was brought to you by BIT http://www.bit.se The following files are available for download: http://www.bit.se/bitonline/2001/02/20/20010220BIT00020/bit0001.doc The full year-end report http://www.bit.se/bitonline/2001/02/20/20010220BIT00020/bit0001.pdf The full year-end report